184 UNITED HAMPSHIRE US REIT Notes to the Financial Statements For the financial year ended 31 December 2025 7 INVESTMENT PROPERTIES AND INVESTMENT PROPERTY HELD FOR DIVESTMENT (CONT’D) When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: • Level 1: for unadjusted price quoted in active markets for identical assets or liabilities, • Level 2: for inputs, other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices), and • Level 3: for inputs that are based on unobservable market data. These unobservable inputs reflect the Group’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances (which might include the Group’s own data). If inputs of different levels are used to measure an asset’s or liability’s fair value, the classification within the hierarchy is based on the lowest level input that is significant to the fair value measurement. Valuation techniques and significant unobservable inputs The following table shows the significant unobservable inputs used in the measurement of fair value of investment properties: Valuation techniques Significant unobservable inputs Sensitivity Discounted cash flow approach Grocery & Necessity Properties Discount rate of 6.75% – 9.25% (2024: 6.5% – 9.0%) Terminal capitalisation rate of 6.0% – 7.5% (2024: 6.0% – 8.0%) Self-Storage Properties Discount rate of 7.75% (2024: 8.0%) Terminal capitalisation rate of 5.75% (2024: 5.75%) Increase in discount rate or terminal capitalisation rate would result in a decrease in fair value and vice versa Direct capitalisation method Grocery & Necessity Properties Capitalisation rate of 5.75% – 8.0% (2024: 5.75% – 8.0%) Self-Storage Properties Capitalisation rate of 5.25% (2024: 5.5%) Increase in capitalisation rate would result in a decrease in fair value and vice versa Investment properties with a fair value of approximately US$246,500,000 (2024: US$242,000,000) have been pledged as security for mortgage loan facilities granted by financial institutions to the Group (Note 11). All the investment properties are located in the U.S. 8 INVESTMENT IN SUBSIDIARIES Trust 2025 2024 US$’000 US$’000 Unquoted equity shares, at cost 358,804 363,948
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