Notes to the Financial Statements For the financial year ended 31 December 2025 4. INVESTMENT PROPERTIES (CONT’D) Details of the investment properties are shown in the Investment Properties Portfolio Statements. Investment properties are leased to unrelated third parties under operating leases. Investment properties are stated at fair value based on valuations performed by independent professional valuers as at 31 December 2025 and 31 December 2024. Investment properties held for divestment are stated at fair value based on recently agreed selling price for the subject property between unrelated third party in an arm’s length transaction. Information on the fair value assessment of investment properties and investment properties held for divestment are disclosed in Note 30. As at 31 December 2025, $38.3 million (2024: $40.0 million) of investment property is under redevelopment. Security As at 31 December 2025, three investment properties (2024: three) with a total carrying value of $1,351.5 million (2024: $1,367.8 million) are pledged as securities to secure bank loans (see Note 14). 5. INVESTMENTS IN SUBSIDIARIES Trust 2025 2024 $’000 $’000 Unquoted equity investments, at cost 3,212,725 3,227,743 Impairment losses (1,475,169) (1,372,934) 1,737,556 1,854,809 Impairment losses During the year, the Trust assessed the recoverable amount of its investment in subsidiaries for indicators of impairment. The recoverable amount takes into consideration the fair values of the underlying assets and the liabilities of the subsidiaries. The fair value measurement was categorised as a Level 2 and 3 in the fair value hierarchy based on the inputs to the valuation technique used. Based on the assessment, the Trust recognised an impairment loss of $102.2 million (2024: $269.6 million) against its investments in subsidiaries. This amount relates predominantly to the decrease in fair value of investment properties held indirectly through certain subsidiaries. The impairment loss has no impact on distributable income. Information on the fair value assessment of underlying investment properties and investment property held for divestment are disclosed in Note 30. 173 ESR-REIT ANNUAL REPORT 2025
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