155
ANNUAL REPORT 2014
27 FINANCIAL RISK MANAGEMENT (CONT’D)
Interest rate risk (cont’d)
H-REIT Group and
Stapled Group
Total return
Unitholders’ funds
100 bp 100 bp 100 bp 100 bp
increase decrease increase decrease
$’000
$’000
$’000
$’000
2014
Variable rate instruments
Loans and borrowings
(5,575)
5,575
–
–
Interest rate swap
1,003
(1,003)
6
(374)
Cashflow sensitivity (net)
(4,572)
4,572
6
(374)
2013
Variable rate instruments
Loans and borrowings
(4,050)
4,050
–
–
Interest rate swap
1,054
(1,054)
231
(268)
Cashflow sensitivity (net)
(2,996)
2,996
231
(268)
Foreign currency risk
The H-REIT Manager’s investment strategy includes investing, directly or indirectly, in a diversified portfolio of
income-producing real estate which is primarily used for hospitality and/or hospitality-related purposes, whether
wholly or partially, and real estate-related assets. In order to manage the currency risk involved in investing in
assets outside of Singapore, the H-REIT Manager may adopt currency risk management strategies that may include
the use of foreign currency denominated borrowings to match the currency of the asset investment as a natural
currency hedge.
The exposure of the HBT Group, the H-REIT Group and the Stapled Group to foreign currencies is as follows based
on notional amounts:
United States dollar
Japanese yen
2014
2013
2014
2013
$’000
$’000
$’000
$’000
HBT Group
Trade and other receivables
2,351
–
450
–
Cash and cash equivalents
3,743
253
85
–
Trade and other payables
(3,824)
–
(456)
–
2,270
253
79
–
NOTES TO THE FINANCIAL STATEMENTS
