NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 6 INVESTMENT PROPERTIES (CONT’D) Measurement of fair value (cont’d) (ii) Level 3 fair value 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 Inter-relationship between key unobservable inputs and fair value measurement Discounted cash flow approach Rental rate per square foot per year 2025: US$15.00 – US$52.00 (2024: US$15.00 – US$55.00) Discount rate 2025: 8.00% – 10.50% (2024: 8.25% – 11.25%) Terminal capitalisation rate 2025: 6.00% – 7.75% (2024: 6.00% – 8.25%) Higher rental rate would result in a higher fair value, while lower rates would result in a lower fair value. Higher discount rate or terminal capitalisation rate would result in a lower fair value, while lower rates would result in a higher fair value. Direct capitalisation method Rental rate per square foot per year 2025: US$15.00 – US$52.00 (2024: US$15.00 – US$55.00) Capitalisation rate 2025: 7.00% – 8.00% (2024: 6.50% – 8.25%) Higher rental rate would result in a higher fair value, while lower rates would result in a lower fair value. Higher capitalisation rate would result in a lower fair value, while lower rates would result in a higher fair value. Market or Direct comparison approach Price per square foot 2025: US$129 – US$430 (2024: US$96 – US$410) Higher price per square foot would result in a higher fair value, while a lower price per square foot would result in a lower fair value. The table below presents the sensitivity analysis of the valuation to changes in the most significant assumptions underlying the valuation of investment properties excluding Figueroa which is measured at the estimated net sale consideration: Group 2025 US$’000 2024 US$’000 Fair value of investment properties as at 31 December Increase in discount and terminal capitalisation rate of 25 basis points (34,936) (49,061) Decrease in discount and terminal capitalisation rate of 25 basis points 37,640 52,767 / 125 / MANULIFE US REIT
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