190 UNITED HAMPSHIRE US REIT Notes to the Financial Statements For the financial year ended 31 December 2025 13 DERIVATIVE FINANCIAL INSTRUMENTS (CONT’D) Interest rate swap contracts The Group entered into floored-interest rate swaps to manage its exposure to interest rate movements on its floating rate interest-bearing borrowings by swapping the interest expense on these borrowings from floating rates to fixed rates. As at the reporting date, the notional principal amount of the financial instruments was US$135,000,000 (2024: US$135,000,000). The changes in fair value of the interest rate swaps and floors are recognised in profit or loss for the financial year. 14 LEASE LIABILITY Group 2025 2024 US$’000 US$’000 Maturity analysis: Due within 1 year 1,452 1,441 Due within 1 - 2 years 1,452 1,452 Due within 2 - 3 years 1,452 1,452 Due within 3 - 4 years 1,452 1,452 Due within 4 - 5 years 1,585 1,452 Due after 5 years 16,112 17,697 23,505 24,946 Analysed as: Current 1,073 1,039 Non-current 18,765 19,773 19,838 20,812 Right-of-use asset (included within Investment Properties) (Note 7) 19,838 20,812 The carrying amount of lease liability and the movement during the financial year is provided in Note 28. The interest expense on lease liability recognised in profit or loss for the financial year is provided in Note 21. The Wallington ShopRite property consists of the leasehold interest under a ground lease between the Group and the landlord, Wallington Plaza, L.L.C., with an initial term that commenced on 30 May 2013 and will expire on 24 June 2040. The tenant has two ten-year renewal options that would take the term through 24 June 2060. The Group does not face significant liquidity risk with regard to its lease liability. Lease liability is monitored within the Group’s finance function.
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