NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 2 BASIS OF PREPARATION (CONT’D) 2.3 Use of going concern assumption (cont’d) As at the date of the financial statements, Manulife US REIT, through its indirect wholly-owned subsidiary, Hancock S-REIT LA Corp, has signed the relevant purchase and sale agreement. The Purchaser’s execution of the purchase and sale agreement is contingent upon obtaining the necessary approvals. Once the necessary approvals are obtained, the purchase and sale agreement is expected to be fully executed around May 2026, and the Proposed Divestment is expected to be completed by the Updated Disposal Deadline. Notwithstanding the above, the financial statements of the Group have been prepared on a going concern basis in view of the following factors considered by the Manager: (i) With the completion of the divestment of Capitol, Plaza and Peachtree, the Group has achieved approximately 83% of Net Proceeds Target as at 31 December 2025. The Group anticipates completing the Proposed Divestment of Figueroa by the Updated Disposal Deadline, with the net divestment proceeds enabling the Group to meet the Net Proceeds Target and being partially utilised for the repayment of the Group’s upcoming loan maturities; (ii) Based on the Group’s expectations and cash flow forecast for the next 12 months from the date of issuance of these financial statements, the Manager believes the Group will be able to meet its obligations as and when they fall due. The Group has continued to generate positive cash flows from operating activities during the current and prior years, and is expected to meet its operating cash flow requirements through cash flows from its existing and future lease agreements with tenants; and (iii) The Manager will continue to engage with the lenders to seek their continued support of Manulife US REIT in the implementation of the Growth and Value Up Plan, including matters relating to ongoing compliance with the Group’s loan covenants, and where necessary, the granting of covenant concessions. In the event that the factors described above are not met, including circumstances in which the Group is unable to meet the Net Proceeds Target by the Updated Disposal Deadline or obtain an extension, the majority lenders under each facility agreement would have the contractual right to demand immediate repayment of the outstanding loans. In such circumstances, if the Group is unable to continue as a going concern, it may be unable to discharge its liabilities in the normal course of business and adjustments may have to be made to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded in the statement of financial position. In addition, the Group may have to reclassify non-current assets and liabilities as current assets and liabilities. No such adjustments have been made to these financial statements. 2.4 Functional and presentation currency The financial statements are presented in United States Dollars (“US$” or “USD”), which is the functional currency of the Trust. All financial information presented has been rounded to the nearest thousand (US$’000), unless otherwise stated. 2.5 Use of estimates and judgements The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. / 111 / MANULIFE US REIT
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