NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2024 36 LEASES Leases as lessee The Group leases hotel properties and office facilities. The leases of hotel properties and office facilities run for periods ranging from 1 to 116 years (2023: 1 to 116 years), with options to renew after lease expiry dates. Some leases provide for additional rent payments that are based on changes in local price indices. For certain leases, the Group is restricted from entering into any sub-lease arrangements. The leases for hotel properties were entered into many years ago as combined leases of land and buildings. The Group also leases IT equipment and motor vehicles under a number of leases. Amounts recognised in profit or loss 2024 2023 $’000 $’000 Interest on lease liabilities 24,811 25,320 Expenses relating to short-term leases 2,822 2,650 Expenses relating to variable lease payments 42,903 41,519 Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets 508 322 Amounts recognised in statement of cash flows 2024 2023 $’000 $’000 Payment of lease liabilities 26,871 24,701 Interest expense 24,811 25,320 Total cash outflow for leases 51,682 50,021 Extension options Some property leases contain extension options up to 30 years (2023: 30 years) exercisable by the Group before the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control. The Group has estimated that the potential future lease payments, should it exercise the extension options, would result in an increase in lease liabilities of $39.5 million (2023: $37.8 million). Leases as lessor The Group leases out its investment properties consisting of its owned properties as well as leased properties (see note 5). All leases are classified as operating leases from a lessor perspective. FINANCIALS CITY DEVELOPMENTS LIMITED 164
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