alstria office REIT Annual Report 2009

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FY2009 Annual Report · alstria office REIT

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REAL ESTATE ...

ANNUAL REPORT 2009

KEY FIGURES

EUR k

Revenues and earnings

Revenues

Net rental income

Consolidated loss / proﬁ t for the period

FFO

Loss per share (EUR)

Balance sheet

Investment property

Total assets

Equity

Equity ratio

Liabilities

NAV/share (EUR)

NNNAV/share (EUR)

REIT key ﬁ gures

REIT ratio

Revenues plus other income from investment properties

Stock ﬁ gures

Number of shares (excluding own shares)

Number of treasury shares

Total

CONTENTS

Letter from the Board of Management

Through Our Eyes

alstria Stock

Group Management Report (separate content)

Economics and strategy

Financial analysis

Report on risks and opportunities

Sustainability report

Mandatory disclosure

Additional Group disclosures

Subsequent events and outlook

2009

2008

Change (%)

102,510

91,964

– 79,651

32,690

– 1.44

1,425,440

1,766,134

634,185

35.9%

102,055

93,222

– 56,000

39,415

– 1.02

1,805,265

1,873,493

729,667

38.9%

1,131,949

1,143,826

11.32

40.3%

100%

13.03

40.3%

100%

55,997,626

54,624,245

2,374

1,375,755

56,000,000

Management Compliance Statement

Auditors’ Report

Corporate Governance

Report of the supervisory board

Corporate governance statement

Remuneration report

REIT Disclosures and Portfolio

REIT declaration

REIT memorandum

Valuation report

List of all properties

Other Information

Glossary

0.4

– 1.4

– 42.2

– 17.1

– 41.2

– 21.0

– 5.7

– 13.1

– 3.0 pp

– 1.0

– 13.1

0.0 pp

2.5

– 99.8

102

108

Consolidated Financial Statements (separate content) 37

Financial calendar/Contact/Imprint

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of ﬁ nancial position

Consolidated statement of changes in equity

Consolidated statement of cash ﬂ ow

Notes to the consolidated ﬁ nancial statements

alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75
20355 Hamburg
Germany
Phone: +49 (0) 40 226341-300
+49 (0) 40 226341-310
Fax:
www.alstria.com

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...
ReAl eStAte ...

AnnuAl RepoRt 2009

KEY FigurEs

EUR k

Revenues and earnings

Revenues

Net rental income

Consolidated loss / profit for the period

FFO

Loss per share (EUR)

Balance sheet

Investment property

Total assets

Equity

Equity ratio

Liabilities

NAV/share (EUR)

NNNAV/share (EUR)

REIT key figures

REIT ratio

Revenues plus other income from investment properties

Stock figures

Number of shares (excluding own shares)

Number of treasury shares

Total

CONTENTs

Letter from the Board of Management

Through Our Eyes

alstria Stock

Group Management Report (separate content)

Economics and strategy

Financial analysis

Report on risks and opportunities

Sustainability report

Mandatory disclosure

Additional Group disclosures

Subsequent events and outlook

2009

2008

Change (%)

102,510

91,964

– 79,651

32,690

– 1.44

1,425,440

1,766,134

634,185

35.9%

102,055

93,222

– 56,000

39,415

– 1.02

1,805,265

1,873,493

729,667

38.9%

1,131,949

1,143,826

11.32

40.3%

100%

13.03

40.3%

100%

55,997,626

54,624,245

2,374

1,375,755

56,000,000

Management Compliance Statement

Auditors’ Report

Corporate Governance

Report of the supervisory board

Corporate governance statement

Remuneration report
REIT Disclosures and Portfolio

REIT declaration

REIT memorandum

Valuation report

List of all properties
Other Information

Glossary

0.4

– 1.4

– 42.2

– 17.1

– 41.2

– 21.0

– 5.7

– 13.1

– 3.0 pp

– 1.0

– 13.1

0.0 pp

2.5

– 99.8

90
92

102
108

108

Consolidated Financial Statements (separate content) 37

Financial calendar/Contact/Imprint

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flow

Notes to the consolidated financial statements

alstria office REIT-AG
Bäckerbreitergang 75
20355 Hamburg
Germany
Phone: +49 (0) 40 226341-300
+49 (0) 40 226341-310
Fax:
www.alstria.com

... THROUGH OUR EYES !

‘ As we see it, the German property market looks very stable at the moment.’

‘ Just recently, we concluded an investment in Frankfurt that we think is
most interesting.’

‘ Ofﬁ ces are relatively easy to manage.’
Germany Real Estate Yearbook 2010, Leading Investors’ Market Commentary, October 2009

Well, we respect anyone’s point of view. But that does not mean we share it.
Take a different view to German real estate.

OPEN MARKET VALUE OF
INVESTMENT PROPERTIES

KEY FACTS 2009

FINANCIAL CALENDAR

PROFILE

alstria ofﬁ ce REIT-AG is an internally managed Real Estate Investment Trust (REIT) solely
focused on acquiring, owning and managing ofﬁ ce real estate in Germany. alstria was
founded in January 2006 and was converted into the ﬁ rst German REIT in October 2007.
Its headquarters are based in Hamburg.

alstria ofﬁ ce REIT-AG owns a diversiﬁ ed portfolio of properties across attractive German
ofﬁ ce real estate markets. Its current portfolio comprises 77 properties with an aggregate
lettable space of approx. 867,000 sqm and is valued at approx. EUR 1.6 bn.

alstria intends to expand its portfolio in the upcoming years as part of a sustainable growth
strategy. This strategy is based on selective investments and active asset and portfolio
management, as well as on establishing and maintaining good relationships with its key
customers and decision-makers.

AS THE FIRST GERMAN REIT, WE HAVE

> a unique business model:

we buy and manage ofﬁ ce real estate

> a clear focus on one country: Germany

> a long-term orientation toward our tenant relationships

> an entrepreneurial view of market opportunities

> Revenues increased to EUR 102,510 k

> Funds from operations at EUR 32,690 k

Hamburg

> Vacancy rate brought down from

5.9% to 5.7%

Hanover

Potsdam

Berlin

Detmold

Magdeburg

Dusseldorf
Neuss

Essen

Dortmund

Wuppertal

Cologne
Bonn

Halle

Leipzig

Dresden

Erfurt

Jena

Zwickau

> Outstanding exposure of its main syndicated
loan facility reduced by around EUR 241 m

> Binding and notarised sales agreements for

14 properties concluded of around EUR 226 m

Wiesbaden

Darmstadt

Frankfurt

Wurzburg

Mannheim

Nuremberg

Stuttgart

Augsburg

Munich

More than EUR 100 m
Between EUR 50 m and EUR 100 m
Between EUR 25 m and EUR 50 m
Between EUR 10 m and EUR 25 m
Between EUR 5 m and EUR 10 m
Between EUR 1 and EUR 5 m

TOTAL PORTFOLIO BY UTILISATION

ALSTRIA’S CORE TENANTS 2009

THE KEY METRICS FOR THE PORTFOLIO

Ofﬁ ce

Retail

Residential

Others

City of Hamburg

Daimler AG

Bilﬁ nger Berger AG

Siemens AG

Barmer EK

Deutsche Renten-
versicherung Bund

Rheinmetall

HUK-COBURG

City of Hanover

Others

as of Dec. 31

Number of properties

Number of joint ventures

Market value (EUR bn)

Contractual rent (EUR m/annum)

Valuation yield (contractual rent/OMV)

Lettable area (k sqm)

Vacancy (% of lettable area)

WAULT (years)

Average rent/sqm (EUR/month)

2009

1.6

97.5

6.2%

867

5.7%

9.6

9.93

2008

–

1.8

106.5

5.9%

944

5.9%

9.41

Date

Feb. 25, 2010

Mar. 16–19, 2010

Mar. 24–25, 2010

Mar. 31, 2010

Apr. 20–21, 2010

May 11, 2010

May 26–27, 2010

Jun. 9, 2010

Jun. 16, 2010

Aug. 11, 2010

Oct. 4–6, 2010

Nov. 10, 2010

Event

Analysts’ Conference
5th HSBC S&M Real Estate and Infrastructure Conference (Frankfurt)

Trade fair
mipim (Cannes)

Analysts’ Conference
10th Annual Pan European Small and Mid Cap Conference (Deutsche Bank) (London)

Publication of Annual Report
Publication of the full year 2009 ﬁ nancial results (Frankfurt)

Annual Press Conference
Annual Press Conference (Frankfurt)

Analysts’ Conference
Global Real Estate Conference (Credit Suisse) (London)

Publication of Q1 Report
Interim Report (Hamburg)

Roadshow
European Property Seminar (Kempen) (Amsterdam)

Analysts’ Conference
Pan European Real Estate Conference (Credit Suisse) (London)

Annual General Meeting
Shareholders’ Meeting (Hamburg)

Publication of Q2 Report
Half-Year Interim Report (Hamburg)

Trade fair
EXPO REAL (Munich)

Publication of Q3 Report
Interim Report (Hamburg)

CONTACT

alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75

20355 Hamburg, Germany

Phone: +49 (0) 40 226341-300

Fax:

+49 (0) 40 226341-310

www.alstria.com

Investor Relations
Phone: +49 (0) 40 226341-329

Fax: +49 (0) 40 226341-310

E-mail: ir@alstria.de

http://investor-relations.alstria.com

IMPRINT

Concept, design and realisation
Kirchhoff Consult AG, Hamburg, Germany

Photography
Denz, Hamburg, Germany

alstria ofﬁ ce REIT-AG is a member of DIRK (Deutscher Investor
Relations Verband, the German Investor Relations Association).

Other reports issued by alstria ofﬁ ce REIT-AG are posted on the
Company’s homepage.

Forward-looking statements
This Annual Report contains forward-looking statements. These
statements represent assessments which we have made on the
basis of the information available to us at the time. Should
the assumptions on which the statements are based not occur,
or if risks should arise – as mentioned in the risk report – the
actual results could differ materially from the results currently
expected.

Note
This report is published in German (original version) and English
(non-binding translation).

OPEN MARKET VALUE OF
INVESTMENT PROPERTIES

KEY FACTS 2009

FINANCIAL CALENDAR

PROFILE

AS THE FIRST GERMAN REIT, WE HAVE

> a unique business model:

we buy and manage ofﬁ ce real estate

> a clear focus on one country: Germany

> a long-term orientation toward our tenant relationships

> an entrepreneurial view of market opportunities

> Revenues increased to EUR 102,510 k

> Funds from operations at EUR 32,690 k

Hamburg

> Vacancy rate brought down from

5.9% to 5.7%

Hanover

Potsdam

Berlin

Detmold

Magdeburg

Dusseldorf
Neuss

Essen

Dortmund

Wuppertal

Cologne
Bonn

Halle

Leipzig

Dresden

Erfurt

Jena

Zwickau

> Outstanding exposure of its main syndicated
loan facility reduced by around EUR 241 m

> Binding and notarised sales agreements for

14 properties concluded of around EUR 226 m

Wiesbaden

Darmstadt

Frankfurt

Wurzburg

Mannheim

Nuremberg

Stuttgart

Augsburg

Munich

More than EUR 100 m
Between EUR 50 m and EUR 100 m
Between EUR 25 m and EUR 50 m
Between EUR 10 m and EUR 25 m
Between EUR 5 m and EUR 10 m
Between EUR 1 and EUR 5 m

TOTAL PORTFOLIO BY UTILISATION

ALSTRIA’S CORE TENANTS 2009

THE KEY METRICS FOR THE PORTFOLIO

Ofﬁ ce

Retail

Residential

Others

City of Hamburg

Daimler AG

Bilﬁ nger Berger AG

Siemens AG

Barmer EK

Deutsche Renten-
versicherung Bund

Rheinmetall

HUK-COBURG

City of Hanover

Others

as of Dec. 31

Number of properties

Number of joint ventures

Market value (EUR bn)

Contractual rent (EUR m/annum)

Valuation yield (contractual rent/OMV)

Lettable area (k sqm)

Vacancy (% of lettable area)

WAULT (years)

Average rent/sqm (EUR/month)

2009

1.6

97.5

6.2%

867

5.7%

9.6

9.93

2008

–

1.8

106.5

5.9%

944

5.9%

9.41

Date

Feb. 25, 2010

Mar. 16–19, 2010

Mar. 24–25, 2010

Mar. 31, 2010

Apr. 20–21, 2010

May 11, 2010

May 26–27, 2010

Jun. 9, 2010

Jun. 16, 2010

Aug. 11, 2010

Oct. 4–6, 2010

Nov. 10, 2010

Event

Analysts’ Conference
5th HSBC S&M Real Estate and Infrastructure Conference (Frankfurt)

Trade fair
mipim (Cannes)

Analysts’ Conference
10th Annual Pan European Small and Mid Cap Conference (Deutsche Bank) (London)

Publication of Annual Report
Publication of the full year 2009 ﬁ nancial results (Frankfurt)

Annual Press Conference
Annual Press Conference (Frankfurt)

Analysts’ Conference
Global Real Estate Conference (Credit Suisse) (London)

Publication of Q1 Report
Interim Report (Hamburg)

Roadshow
European Property Seminar (Kempen) (Amsterdam)

Analysts’ Conference
Pan European Real Estate Conference (Credit Suisse) (London)

Annual General Meeting
Shareholders’ Meeting (Hamburg)

Publication of Q2 Report
Half-Year Interim Report (Hamburg)

Trade fair
EXPO REAL (Munich)

Publication of Q3 Report
Interim Report (Hamburg)

CONTACT

alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75

20355 Hamburg, Germany

Phone: +49 (0) 40 226341-300

Fax:

+49 (0) 40 226341-310

www.alstria.com

Investor Relations
Phone: +49 (0) 40 226341-329

Fax: +49 (0) 40 226341-310

E-mail: ir@alstria.de

http://investor-relations.alstria.com

IMPRINT

Concept, design and realisation
Kirchhoff Consult AG, Hamburg, Germany

Photography
Denz, Hamburg, Germany

alstria ofﬁ ce REIT-AG is a member of DIRK (Deutscher Investor
Relations Verband, the German Investor Relations Association).

Other reports issued by alstria ofﬁ ce REIT-AG are posted on the
Company’s homepage.

Note
This report is published in German (original version) and English
(non-binding translation).

Letter from the Board of Management

alstria Annual Report 2009

Sustainability has been one of the major topics in real estate in 2009. While a lot of companies are linking the
sustain ability concept to green building, we went back to the roots. The United Nations deﬁ nition of sustain-
able development is ‘a development that meets the needs of the present without compromising the ability of
future generations to meet their own needs’. We felt that it was important for real estate companies to look at
the future from a sustainable perspective. From our point of view, it was most important to consider the poten-
tial implications of our actions on existing shareholders, as well as to position alstria for the future. (Re)Acting
under pressure barely leads to sustainable development. Anticipating sometimes does.

We have addressed current issues while trying to build the ground for the future development of the Company.
We have refused radical and value-destructive measures, and adopted a structured step-by-step approach to
reinforce our balance sheet, while keeping the focus on strong asset management. Since mid-2008, we have
been preparing alstria for a continuing downturn in the real estate industry. Our analysis at the time, which still
holds true today, is that unless the banking system is able to recapitalise, and we see the return of Corporate
Mortgage Back Securities (CMBS) to the market, the real estate investment market is heading towards volatile
waters. Our expectations for the investment market development may have looked pessimistic in January 2009,
but proved to be realistic in December. Back in July 2008, we decided to focus on three targets in order to sail
safely towards the next growth opportunity: (i) maintain the Loan To Value (‘LTV’) on our main syndicated
facility close to but below 60%, (ii) reduce the EUR 1.1 bn balloon payment on this facility (which is due at the
end of 2011), and (iii) ﬁ nally, to stay focused on the assets.

We have been able to achieve the ﬁ rst target as we reduced the balloon payment from EUR 1.1 bn in mid-2008
down to EUR 660 m at the end of Q1 2010. This was done through a selective number of reﬁ nancing transac-
tions that extended the overall maturity of alstria’s debt while keeping its ﬁ nancing cost under control, as well
as through selective mature asset disposals. In total, in what is said to be one of the worst years for real estate
investment, alstria has been able to reﬁ nance a total of EUR 241 m and achieved sales of EUR 226 m. More
importantly, alstria was able to value its real estate in each of these transactions at or above its latest balance
sheet valuation, thereby demonstrating the strength and reliability of its valuation process. As a result of these
transactions, the G-REIT equity ratio has substantially improved from 39% to around 43% as of March 31,
2010, but still slightly below the 45% hurdle rate that will be required by year-end 2010.

Market transactions on more than 34% of the portfolio in terms of both asset numbers and values have veriﬁ ed
our property valuations. Nevertheless, the year-end valuation process ended up showing a non-cash valuation
loss of EUR 86 m, which, in turn, led to a non-cash net loss of the same magnitude. While the long-term leased
assets and most of the Hamburg portfolio proved resilient in terms of value, short-term leased assets suffered
from further yield expansion in the market. Although a number of market commentators speak about the stabil-
ity of the German real estate market, we felt that the lack of transactions and the limited bankability of this
asset class should, one way or another, be reﬂ ected in the valuation process. This is in line with little inclination
in the German commercial property market for any kind of risk taking. The anticipation of these market develop-
ments has allowed alstria to keep its main LTV close to but below 60%, as we have used part of the proceeds of
the assets sales to pay down the syndicated loan.

Through Our Eyes

Letter from the Board of Management

alstria Annual Report 2009

More importantly, we have continued our focus on operations and asset management, and delivered on the
guidance to the market. With revenues at EUR 102.5 m, and funds from operations (FFO) at EUR 32.7 m,
alstria has once again demonstrated the strength of its underlying business. The Company has scored a number
of operating successes, which include the grant of a building permit for its landmark Alte Post development in
Hamburg, the lease-up of the full 3,500 sqm of ofﬁ ce space of this development project, as well as the execu-
tion of the largest ofﬁ ce portfolio disposal in Germany. The asset management efforts have led the Company
to record a 1.4% increase on the like-for-like rental income of its investment portfolio. Again, we would like to
defend our view here that a high value creation in the German real estate scene can only come from hard work
on the real estate assets, and their tight management. That is by far the most important thing for a real estate
company, and we are determined to keep our eyes on the ball.

‘ A high value creation in the German real estate scene can only come
from hard work on the real estate assets, and their tight management.’

There is no fundamental reason to expect a material change in the real estate investment market in 2010.
Although the overall sentiment is improving among market participants, from our standpoint, the fundamental
reasons for the lack of transactions are still around. Signiﬁ cant need for de-leveraging and debt overhang are
still there, and looking at the global industry, little progress was made at both ends during the last 24 months.
The sale of mature assets allows alstria to start the year with enough ﬁ repower to look for opportunities in the
investment market, and take advantage of attractive acquisitions that may be spotted. alstria can also rely on its
strong underlying cash ﬂ ow, with revenues expected to be around EUR 89 m and FFO around EUR 27 m for the
year 2010.

We have always looked at alstria as one of the pioneer in the real estate ofﬁ ce scene and are preparing the
Company to position itself as such – and that in a sustainable manner. Restarting the growth of the Company is
one of our key focuses for the future, and we are committed to achieving that goal. This requires that we see
enough opportunities in the market that are correctly priced from a risk-return perspective. At the time we are
writing this letter, this is clearly not the case. Markets, however, have proven in the past that they can change
rapidly, and we should be ready for the change.

Sustainability is also about environment and community engagement – not only about sustainable growth. As
the management of alstria, we are deeply committed to these concepts. We are looking forward to leading the
German market again, and to being among the ﬁ rst German real estate companies to publish a sustainability
report in the near future.

Yours sincerely,

Olivier Elamine

Alexander Dexne

Chief Executive Ofﬁ cer (CEO)

Chief Financial Ofﬁ cer (CFO)

Olivier Elamine

Chief Executive Ofﬁ cer (CEO)

since November 2006

Alexander Dexne

Chief Financial Ofﬁ cer (CFO)

since June 2007

QUALITY PORTFOLIO

alstria owns a diversiﬁ ed portfolio of properties across the
most attractive German ofﬁ ce real estate markets. It mainly
consists of mid-sized prime and long-lease assets, fea-
turing an average unexpired lease term of 9.4 years and an
operational vacancy rate of 6.0%. With more than 80% of
rental income generated from local authorities and blue chip
corporations, our tenant structure is exceptionally good.

ACTIVE MANAGEMENT

With our buy-and-manage strategy, we established a new
approach of real estate management. Our asset manage-
ment is not a static exercise, but a dynamic process. We
not only leverage the value creation potential within our
customer base – with our eyes and ears always open to
the market, we also identify and react to risks and oppor-
tunities early on.

TENANT RELATIONSHIPS

alstria’s aim is to establish and maintain close, long-term
relationships with its tenants. We have proved more than
once that there is no contradiction in reducing overall real
estate costs for our tenants through optimised space util-
isation, and simultaneously increasing alstria’s returns. In
short: We create win-win scenarios. Based on this concept,
we signed two major 15-year lease contracts with one of
our major tenants in 2009.

PASSION AND EXPERTISE

For us, real estate management is not only a question of
know how, it is also a question of passion. Although still a
young company, we combine in-depth knowledge in the
ﬁ elds of high-proﬁ le redevelopments and space optimisation
with the willingness to go the extra mile. Furthermore, alstria
is driven by a vivid culture of corporate responsibility – we
strongly believe in the idea of dialogue and partnership as
the foundation of long-term success.

STEP BY STEP

alstria does not strive for big-bang solutions. We are con-
vinced that sustainable success can be the sum of many
well-reﬂ ected decisions – even more in a difﬁ cult market
environment. In 2009, one of the worst years for real estate
ﬁ nancing, we started by renegotiating our debt covenant
and gradually reduced our syndicated loan from EUR 1.1 bn
to EUR 0.66 bn, executing EUR 226 m of sales of real estate
assets and small portfolios at or above book value and enter-
ing into six new selected reﬁ nancing agreements.

alstria Stock

alstria Annual Report 2009

ALSTRIA STOCK

STOCK MARKETS IN GENERAL

strong recovery began, which resulted in the year’s peak in Octo-

ber 2009. The EPRA indices for Germany and Europe in 2009 gained

In the course of ﬁ rst half of the year 2009 stock markets were charac-

13% and 30%, respectively, and stock prices of individual companies

terised by high volatility on low share price levels. In the third quarter

followed that trend.

of 2009, a rebound began that proved to be stable until the end

of the year. Starting from the 2008 year-end level at 4,800 points,

the DAX decreased to around 3,700 points in March 2009. After a

DEVELOPMENT OF ALSTRIA’S SHARE PRICE

recovery period, a second low point of 4,600 points occured in July

2009. From then on the DAX increased gradually to around 6,000

alstria’s share started with a price of EUR 5.01 in 2009. Following a

points at the year-end of 2009.

low point level of EUR 3.00 at the beginning of March 2009, over the

following months alstria’s share price recovered to above EUR 8 from

The decrease in the ﬁ rst half of the year can be attributed to the

September 2009 onwards. The year-end closing price of alstria’s share

ﬁ nancial crisis that emerged in the previous year. The subsequent

was EUR 7.50. For the whole year this is an increase of 50%, outper-

upswing reﬂ ects the markets’ conviction that the crisis on the ﬁ nancial

forming its key comparables by far.

markets will not affect the business situation of many companies in

such a negative way as was previously estimated. In a year-on-year

The Company’s annual general meeting, held on June 10, 2009,

comparison the DAX improved by 24% in 2009. The MDAX and the

resolved to grant a dividend entitlement of EUR 0.52 per share out-

SDAX exceeded this positive development. The MDAX closed 34%

standing for the 2008 ﬁ nancial year. This represents a total dividend

and the SDAX 27% higher as compared to the beginning of the year.

of EUR 28,423 k, fully covered by the Company’s recurring cash ﬂ ow.

REAL ESTATE STOCKS

alstria was the ﬁ rst German company to give its shareholders the

opportunity to swap their dividend rights for shares. For the purpose of

this dividend exchange offer, the Company provided up to 1,340,134

The development of real estate stocks was not detached from the

of its treasury shares. The stock dividend offer was oversubscribed by

development of the stock markets in general. Real estate stock indices

more than 100%, thus representing broad acceptance by the share-

had been under pressure due to the sub-prime crisis throughout the

holders and making it a favourable success for the Company.

year 2008. The year 2009 started with a downswing. Afterwards, a

SHARE PRICE DEVELOPMENT

December 30, 2008 – EUR 4.95 – indexed to 100

180

160

140

120

100

Dec. 08

Feb. 09

Apr. 09

Jun. 09

Aug. 09

Oct. 09

Dec. 09

alstria

EPRA Europe

EPRA Germany

SDAX

DAX

alstria Annual Report 2009

alstria Stock

SHARE DATA

Stock ID code

AOX

Securities identiﬁ cation number

A0LD2U

ISIN – International Securities
Identiﬁ cation Number

DE000A0LD2U1

Common code

Reuters symbol

Bloomberg symbol

Market segment

Indices

Trading ﬂ oors

028600810

AOXG.DE

AOX GY

Prime Standard

SDAX, EPRA, German REIT Index

XETRA, Frankfurt (Prime Standard);
Open Market in Berlin, Hamburg,
Munich, Stuttgart

Designated Sponsors

Deutsche Bank AG; J.P. Morgan

Total number of shares out -
standing as at Dec. 31, 2009

55,997,626
(56,000,000 less 2,374 own shares)

INTENSE INVESTOR RELATIONS ACTIVITIES

In 2009, alstria’s investor relations activities focussed on informing

investors, ﬁ nancial analysts and the business press about alstria’s

development speciﬁ cally, but also about the general characteristics of

a German REIT-AG. In addition to our press and analyst conferences,

we had numerous interviews with investors and journalists at home

and abroad, and presented the Company at the following investor

conferences:

INVESTOR RELATIONS

Feb. 5, 2009

Feb.10, 2009

Mar. 4, 2009

Roadshow
DZ Bank (Zurich)

Roadshow
DZ Bank (Wien)

Analyst Conference
4th HSBC S&M Real Estate Conference (Frankfurt)

Mar. 5–6,2009

Roadshow
European Property Seminar, Kempen (New York)

COVERAGE BY ANALYSTS

Mar. 10–13, 2009

Trade fair
mipim (Cannes)

Being the ﬁ rst German REIT-AG, alstria is actively accompanied by a

Mar. 31, 2009

number of ﬁ nancial journalists and ﬁ nancial analysts from renowned

investments banks. In a number of reports, alstria’s strategy and real

estate portfolio were analysed.

The following investment banks reported on alstria:

INVESTMENT BANKS AND ANALYSTS

Bankhaus Lampe

Frank Neumann

Bank Sal Oppenheim Jr & Cie

Sven Janssen

Berenberg Bank

Kai Klose

Commerzbank Corporates &
Markets

Burkhard Sawazki

Credit Suisse

Deutsche Bank

DZ Bank

Robert Stassen

Alexander Hendricks

Hasim Sengül

HSBC Trinkaus & Burckardt AG

Thomas Martin

HSH Nordbank

J.P. Morgan

Kempen & Co

Steffen Wollnik

Osmann Malik

Thomas van der Meij

M.M. Warburg & Co

Ralf Dibbern

Rabo Securities

Société Générale

UniCredit

VISCARDI AG

Ruud Van Maanen

Marc Mozzi

André Remke

Peter-Thilo Hasler

Publication of Annual Report
Publication of the full year 2008 ﬁ nancial results
(Frankfurt)

Mar. 31, 2009

Annual Press Conference
Annual Press Conference (Frankfurt)

Apr. 4, 2009

Apr. 7, 2009

Roadshow
REITDay 2009 (Frankfurt)

Roadshow
Société Générale (Paris)

Apr. 15–16, 2009

Roadshow
Rabobank (London)

May 15, 2009

May 20, 2009

May 27–28, 2009

Publication of Q1 report
Interim Report (Hamburg)

Roadshow
Kempen (London)

Analyst Conference
7th Kempen Europena Property Seminar
(Amsterdam)

Jun. 3, 2009

Roadshow
UniCredit (Frankfurt)

Jun. 3–4, 2009

Roadshow
J.P. Morgan (New York + Boston)

Jun. 10, 2009

Jun. 24, 2009

Jul. 2, 2009

Jul. 6–8, 2009

Annual General Meeting
Shareholders’ Meeting (Hamburg)

Analyst Conference
German + Austrian Corporate Conference (Frankfurt)

Analyst Conference
Facets of Real Estate (Frankfurt)

Roadshow
J.P. Morgan (Australia)

alstria Stock

alstria Annual Report 2009

INVESTOR RELATIONS

SHAREHOLDER STRUCTURE

Aug. 14, 2009

Publication of Q2 report
Half-year interim Report (Hamburg)

Aug. 17 –18, 2009

Aug. 20, 2009

Sept. 8 –10, 2009

Sept. 15, 2009

Sept. 17, 2009

Sept. 22, 2009

Oct. 1, 2009

Oct. 5, 2009

Oct. 12 –13, 2009

Oct. 29, 2009

Nov. 4 – 5, 2009

Nov. 13, 2009

Nov. 16 –17, 2009

Nov. 18, 2009

Dec. 1, 2009

Roadshow
J.P. Morgan (London)

Roadshow
Commerzbank (Zurich)

Roadshow
J.P. Morgan (USA)

Roadshow
J.P. Morgan (Paris)

Analyst Conference
Société Générale (New York)

Analyst Conference
UniCredit (Munich)

Analyst Conference
Société Générale (London)

Trade fair
EXPO REAL (Munich)

Roadshow
J.P. Morgan (Benelux)

Roadshow
J.P. Morgan (Switzerland)

Analyst Conference
Berenberg Bank (London)

Publication of Q3 report
Interim Report (Hamburg)

Roadshow
Kempen (London)

Roadshow
Kempen (Paris)

Analyst Conference
Commerzbank (Frankfurt)

As of December 31, 2009, Captiva 2 Alstria Holding S.à r.l. held a

61% stake in alstria ofﬁ ce REIT-AG. The remainder of the shares are

deﬁ ned as free ﬂ oat, out of which Morgan Stanley and Cohen &

Steers held more than 2.5% each. At the balance sheet date, alstria

held no material own shares any more as a result of the stock divi-

dend payment.

SHAREHOLDER STRUCTURE BY INVESTOR

Captiva 2 Alstria Holding S.à r.l. 61.0

Free Float

39.0

KEY FIGURES PER SHARE

EUR

High

Low

Opening price

Year end/closing price

Weighted average number of shares
outstanding

Average trading volume in shares
(XETRA)

Market capitalisation
as at Dec. 31 (EUR m)

2009

8.50

3.00

5.01

7.50

2008

13.69

2.50

10.40

4.95

55,306,000

54,697,000

81,665

85,906

420.00

277.20

Total number of shares as at Dec. 31

56,000,000

Total number of shares outstanding
as at Dec. 31 (excluding own shares)

Dividend per share1

FFO per share

NAV per share

1 For 2009: proposal.

55,997,626

54,624,245

0.50

0.58

11.32

0.52

0.70

13.03

DETAIL INDEX GROUP
MANAGEMENT REPORT

Economics and strategy

Economic conditions

Strategy and structure

Portfolio overview

Financial analysis

Earnings position

Financial and asset position

Report on risks and opportunities

Risk report

Opportunities of the Group

Sustainability report

Mandatory disclosure

Disclosure requirements in accordance with

Section 315 (4) of the German Commercial Code (HGB)

for the ﬁ nancial year 2009 and explanatory report

of the management board

Additional Group disclosures

Employees

Remuneration report

Group and dependent-company report

Subsequent events and outlook

Subsequent events

Outlook

Group Management Report

alstria Annual Report 2009

GROUP MANAGEMENT REPORT

ECONOMICS AND STRATEGY
(BUSINESS OVERVIEW)

Economic conditions
Although the equity capital markets have seen some of the largest

Take up in major German cities The vacancy rate of ofﬁ ce proper-

ties in German cities increased from 8.9 % in 2008 to 9.9 % in 2009,

which represents total vacancies of 7.89 m sqm. Comparing the six

biggest German cities, the highest vacancy rate was noted in Frank-

furt (13.6 %), followed by Dusseldorf (12.3 %), Munich (9.6 %),

gains on record in 2009, the year was, as expected, challenging from

Berlin (9.4 %), Hamburg (8.3 %) and Stuttgart (6.7 %). The highest

a macro economic perspective.

increase of vacant areas in ofﬁ ce properties from 2008 to 2009 was

registered in Dusseldorf (+20.4 %).

Germany’s GDP was down 5.0 %in 2009.* The unemployment rate

for the full year was 8.2 %,** which reﬂ ects an increase of 0.4 per-

New lease-up New lease contracts for over 2.1 m sqm ofﬁ ce space

centage points over 2008. The ﬁ rst signs of an economic rebound

have been signed in the six major German cities. This reﬂ ects a

at the end of the year were mainly driven by economic stimulus

downturn of 0.8 m sqm or 28 % compared to the previous year. In

programmes established by the German government.

Berlin and Stuttgart the downturn ranged between 12 % and 13 %, in

Frankfurt and Munich between 29 % and 32 %, whereas the highest

The government stimulus packages have imposed signiﬁ cant con-

decline in total new lease-up was registered in Dusseldorf (– 40 %). In

straints on the national budget, with public deﬁ cits standing at record

Hamburg, new lease-up totalled 391,800 sqm, representing a decline

levels in 2010 and, therefore, setting limits to the government’s

of 28 % in comparison with 2008.

ﬁ nancial ﬂ exibility if there should be a double-dip recession.

As expected, the real estate market was extremely challenging in

nearing completion, the square meter area of new buildings completed

2009, both for investment and on the leasing front. Tenant demand

in 2009 is higher than in 2008. With approximately 1,100,000 sqm,

was down year on year in all major German cities, and investment

the delivery of new ofﬁ ce and commercial space increased by 23 %

volumes were amongst the lowest since 1990.

in comparison with the previous year. For 2010, it is envisaged that

newly completed ofﬁ ce space will remain at approximately the same

New ofﬁ ce supply As developments launched in 2006 and 2007 are

More importantly, it is uncertain whether all banks have been able

level as in 2009.

to strengthen their balance sheets in a meaningful manner. Granting

of loans remained relatively limited in 2009, and although there was

Investment markets As expected, the total registered investment

improved liquidity in the mortgage credit market towards the end

volume for German commercial real estate in 2009 has been signiﬁ -

of the year, the volumes on offer appear far lower than are required

cantly lower than in the previous year. Total year-on-year investment

to sustain global recovery in the market. It is also evident that the

volume was down by approximately 49 % (around EUR 10.55 bn for

Commercial Mortgage Backed Securities (CMBS) market will remain

commercial assets). In the six most important German locations for

inactive for the foreseeable future.

ofﬁ ce space, investment markets dropped by 37 % from EUR 9.2 bn

to EUR 5.8 bn.

Overview of the German ofﬁ ce property market***
Development of ofﬁ ce rents The overall development of rents in the

The nature of the transactions that have been completed has also

German ofﬁ ce property market mirrored the growth of the German

undergone a fundamental change compared with 2007 and 2008. The

economy. Rents started to decline at the end of 2008 and continued

ﬁ nancial year 2009 was characterised by a number of smaller transac-

to fall throughout 2009. Prime rents fell in almost all large cities in Ger-

tions (less than EUR 50 m), limited to single assets. There were a small

many. Whilst they decreased by around 2 % in Hamburg (EUR 23.00

number of completed portfolio transactions, which represents less than

per sqm), Munich prime rents (EUR 28.50 per sqm) were 7 % lower,

20 % of the total investment market. Real estate investors have also

Frankfurt (EUR 34.00 per sqm) prime rents were 8 % lower and Berlin

focused mainly on long-term leased assets, representing the major

(EUR 20.00 per sqm) prime rents were 9 % lower than in 2008.

share of the commercial real estate transactions. Short-dated assets or

large properties remained under pressure with limited or no demand.

* Statistisches Bundesamt (German Federal Statistics Ofﬁ ce).

** Bundesagentur für Arbeit (German Federal Labour Agency).

*** All numbers referred to in this section are sourced from Jones Lang Lasalle and BNP Paribas.

alstria Annual Report 2009

Group Management Report

Economics and strategy

Outlook 2010 Economic conditions facing the German real estate

of the loan to value (LTV) covenant, and a reduction of the bal-

industry are expected to remain challenging in 2010. The Company

loon payment that will become due in 2011. alstria believes that a

still expects pressure on prime rents, as new stock will be delivered

de-leveraging process in the current market environment could only

to the market, while second-tier rents are expected to remain at the

be achieved by a step-by-step approach. This strategy includes the

same level as in 2009.

renegotiation of the LTV covenants that took place in the ﬁ rst quarter

2009, selected assets sales and selected non-recourse ﬁ nancing of

As mentioned previously, the investment market is highly depend-

assets.

ent on the availability of ﬁ nancing, and the willingness of banks to

provide funding. As long as the banks show limited willingness to

By proactive management of its balance sheet, alstria was able to

ﬁ nance real estate, it is likely that market conditions will remain chal-

meet its short-term LTV target on the main syndicated loan, being

lenging. alstria expects that properties with short-term leases will be

close, but below 60 % despite the strong decline in the value of the

more affected than properties with long-term leases, as banks barely

portfolio. At the same time, this structured step-by-step approach

provide funding for properties with short-term leases.

allowed alstria to reduce the overall balloon payment to EUR 843 m

at the end of the year down from EUR 995 m at the beginning of

Strategy and structure
Against this background of the changing economic environment,

the year.

alstria focused on regular reviews of its business situation, assets and

Despite being faced by the most challenging environment on record

liabilities, and on its short- and long-term perspectives. Considering

for the investment and credit market, the high quality of the portfolio

the conservative nature of alstria’s set-up, analysis of these param-

allowed alstria to reﬁ nance around EUR 126 m at an average spread

eters leads to the conclusion that the Company is well prepared to

of 147 bps, and to dispose selected assets amounting to EUR 141 m.

navigate through the difﬁ cult times ahead.

These transactions valued the real estate involved in line with IFRS

valuations as of December 31, 2008. In addition, alstria agreed terms

> alstria has a long-term lease portfolio (around 9.6 years weighted

and conditions for further reﬁ nancing of around EUR 115 m and

average lease lengths). 80 % of rental income derives from a small

for a further asset sale of around EUR 84 m. These transactions are

number of high-quality tenants. More than 50 % of rental income

expected to be completed in the ﬁ rst quarter of 2010. Further steps

is generated from public or public related entities, which are less

of this strategy will be executed in the course of 2010. See recent

affected by the economical downturn.

development and outlook for further details.

> alstria pursues a non-trading strategy, and focuses on long-term

value creation through asset management. Therefore the slowdown

The decline in property valuations had an adverse effect on the

in the investment market does not affect the Company’s individual

G-REIT equity ratio, which is below the required 45 % for the second

business plan, nor does it threaten the Company’s cash projection.

year in a row. This should not affect alstria’s tax position in 2010, as

> The operating strategy involves helping alstria’s tenants to optimise

the G-REIT laws provide for a three-year period of grace to correct

their real estate operating costs. There is no contradiction in reduc-

the G-REIT equity ratio.

ing the overall real estate costs of alstria’s tenants and increasing

the returns of alstria. In fact, the current environment could create

In 2009, revenues were stable with around EUR 103 m and funds

opportunities for alstria at a time when most German corporations

from operations (FFO)* were down 17 %, from EUR 39,415 k in 2008

are looking to reduce costs.

to EUR 32,690 k. These results are in line with the ﬁ nancial guidance

of EUR 102 m in revenues and EUR 32 m of funds from operations.

alstria will stay focused on its buy-and-manage strategy. In light of

The planned year-on-year decrease in the FFO is mainly driven by

the overall economic development, and the liquidity squeeze that was

the publicised asset sales, increasing asset management activities and

anticipated in the lending market, alstria has proactively focused its

the restructuring of the main syndicated loan facility, which increased

attention on the management of the maturity proﬁ le of its main syndi-

overall ﬁ nancing costs.

cated loan facility, and in the management of its debt covenants. As a

result, alstria started as early as mid-2008 the proactive management

* For further details, please refer to page 25.

Group Management Report

alstria Annual Report 2009

Portfolio overview
On December 31, 2009, alstria’s portfolio consisted of 77 ofﬁ ce

Investment decisions at alstria are based on analysis of the local mar-

kets and on adequacy of a building within its local environment in

buildings with approximately 867,400 sqm of lettable area and a

terms of location, size and quality. alstria’s strategy is to enter new

contractual vacancy rate of 5.7 %. The portfolio is valued at a yield of

markets and build critical mass through long-term secured assets,

6.2 % and the remaining weighted average unexpired lease term at

which are mainly acquired through sale-and-leaseback transactions.

Once critical mass is achieved, alstria is able to pursue other real

estate opportunities, including repositioning and development of

assets and additional lease-up risks.

Transactions
Throughout 2009, alstria continued to pursue its strategy to dispose

of selected mature properties at favourable terms. Binding and

notarised sales agreements for fourteen properties were concluded

in 2009. Ownership of twelve of these fourteen properties has been

legally transferred during the ﬁ nancial year. The transfer of beneﬁ ts

and burdens for the two remaining properties is expected to take

place in the ﬁ rst quarter of 2010.

approximately 9.6 years.

THE KEY METRICS FOR THE PORTFOLIO1
AS OF DECEMBER 31, 2009

Metric

Number of properties

Number of joint ventures

Market value (EUR bn)

Contractual rent (EUR m/annum)

Valuation yield (contractual rent/OMV)

Lettable area (k sqm)

Vacancy ( % of lettable area)

WAULT (years)

Average rent/sqm (EUR/month)

Value

1.6

97.5

6.2 %

867

5.7 %

9.6

9.93

1 Includes assets held for sale and assets classiﬁ ed under property, plant and equipment.

DISPOSALS IN 2009 SUPPORT ALSTRIA’S VALUATIONS

Asset

Gorch-Fock-Wall 11

Marburger Strasse 10

Eppendorfer Landstrasse 591

Ottenser Marktplatz 10/12

Poststrasse 51

City

Hamburg

Berlin

Hamburg

Portfolio transaction

Pan-Germany

Sub-total
(considering all closed transactions)

Portfolio transaction

Hamburg

Total (considering all signed
transactions)

1 In this transaction 94.9 % of the KG-shares were sold.

Number of
assets

Last valuation
(EUR k)

Avg. lease
length

Sales price
(EUR k)

Surplus
(EUR k)

Surplus
( %)

19,315

12,850

6,440

2,330

5,845

93,800

140,580

75,830

216,410

16.9

6.5

9.4

6.7

3.0

8.1

19,600

12,950

6,622

2,375

6,500

285

100

182

655

93,425

– 375

141,472

16.0

84,200

892

8,370

225,672

9,262

1.5

0.8

2.8

1.9

11.2

– 0.4

0.6

11.0

4.3

alstria Annual Report 2009

Group Management Report

Economics and strategy

In order to meet the requirements of its asset management activi-

In 2009 alstria invested around EUR 14 m in ongoing refurbishment

ties, in the second quarter 2009 alstria concluded the acquisition of

projects. The main part of the 2009 capex investment was linked

a vacant property in Hamburg for total consideration (all-in-cost) of

to the refurbishment of the Hamburg building Steinstrasse 5 – 7. In

around EUR 3.5 m (EUR 1,650 per sqm). The refurbishment process is

the next two years, the Company plans to invest between EUR 30

now completed and a lease agreement with a lease length of 15 years

and 40 m in the portfolio. These investments depend on ongoing

for the entire building was signed in October 2009.

lease discussions with existing and potential tenants. Apart from

Already in 2008, alstria agreed the terms of a joint venture regard-

property Ernst-Merck-Strasse 9 , ‘Bieberhaus’, in Hamburg, which

ing the refurbishment of Alte Post (Poststrasse 11) in Hamburg. The

comprises the construction of the new Ohnsorg Theatre (EUR 12 m),

building permit for the refurbishment of this property was granted

and the property Hamburger Strasse 1 – 15 (EUR 14 m) in Hamburg.

in the third quarter of 2009. The publicised joint venture became

This capex plan is part of alstria’s ongoing asset value enhancement

effective in October 2009. alstria’s share in this joint venture is 49 %.

programme.

the joint venture project Alte Post, major projects are related to the

Please refer to the notes for a detailed description of the above

transactions.

Refurbishment projects
Considerable progress was also made with alstria’s refurbishment

projects.

Lease-ups
Leasing activity in 2009 was satisfactory and the vacancy rate was

stable. The sale of fully let properties and the commencement of

refurbishment of selected assets countervail the deconsolidation of

the vacant ‘Alte Post’ property. In 2009, alstria signed new leases*

totalling approximately 4,800 sqm. These lease-ups result in a slight

decrease of the vacancy rate by 20 bps to 5.7 % or 49,700 sqm. Of

> Poststrasse 11, ‘Alte Post’, Hamburg

these 49,700 sqm, 15,800 sqm represents strategic vacancy (intended

The building permit for the refurbishment of Alte Post, Hamburg,

vacancy implemented by alstria as part of its repositioning process for

was granted in the third quarter of 2009. The Alte Post building is

certain assets), while the remainder is operational vacancy.

one of the best-known buildings in the Hanseatic City of Hamburg.

It is located at the corner of Poststrasse and Grosse Bleichen, and

Based on the strong tenant relationship with its tenants and the strong

was built between 1845 and 1847 on the basis of plans by the

competence of identifying the tenants' needs, alstria was able to

artist and architect Alexis de Chateauneuf. It was last refurbished

sign a lease agreement with an existing tenant for a vacant property

in the 1970s. This ﬁ rst joint venture is part of alstria’s plans to fund

acquired in the second quarter of 2009. This underlines the strong

organic growth of the Company. Whilst alstria’s main contribution

competence of alstria’s asset management. The lease agreement for

to the joint venture will be the building, its two partners will mainly

the entire building with a lease length of 15 years was signed in Octo-

contribute equity funding. The refurbishment is scheduled to be

ber 2009 and commenced in February 2010. alstria fully refurbished

the property in the intermediate period.

completed by the end of 2011.

> Steinstrasse 5 – 7, Hamburg

The building, 13,000 sqm pre-let on a 20-year basis to Hamburger

Hochbahn AG, is currently undergoing extensive refurbishment.

The refurbishment is expected to be completed by April 2010.

> Bäckerbreitergang 75, Hamburg

The property at Bäckerbreitergang 75 is currently being refurbished

and will be completed by mid April 2010.

* New leases correspond to lease of vacant space. It does not account for any lease renewal, prolongation or tenant exercise of renewal option.

Group Management Report

alstria Annual Report 2009

Portfolio valuation
alstria’s portfolio is valued in accordance with the RICS Red Book

guidance by Colliers CRE, at December 31, 2009. Following the

deterioration of the investment market, alstria’s portfolio was not

immune to the overall fall in property prices. However, whilst last

year’s devaluation was characterised by yield expansion across the

board, in 2009 the devaluation has mainly affected speciﬁ c assets for

which the market price discovery process is ongoing.

The total valuation loss on investment properties is around EUR 86 m

for the full year. This valuation adjustment takes the overall value of

all alstria properties to EUR 1,601 m. For further information about

the valuation of alstria’s portfolio please refer to the valuation certiﬁ -

TOTAL PORTFOLIO BY UTILISATION

Ofﬁ ce

Retail

Residential

Others

cate of Colliers CRE.

ALSTRIA’S CORE TENANTS 2009

Tenants
Our key focus on a set number of major tenants is still one of the

main characteristics of the alstria portfolio. More than 80 % of total

revenues are generated by alstria’s top nine tenants. The 2009 port-

folio also reﬂ ects the clear focus on the ofﬁ ce asset class. Of total

lettable area, 93 % is dedicated to ofﬁ ces.

City of Hamburg

Daimler AG

Bilﬁ nger Berger AG

Siemens AG

Barmer EK

Deutsche
Rentenversicherung Bund

Rheinmetall

HUK-COBURG

City of Hanover

Others

LEASE EXPIRY PROFILE

% of annual rent

2012

2011

2010

7.0

7.4

5.9

3.9

4.7

5.2

as per Dec. 31, 2009 as per Dec. 31, 2008

alstria Annual Report 2009

Group Management Report

Economics and strategy
Financial analysis

FINANCIAL ANALYSIS

Earnings position
Despite asset disposals, earnings remained stable for the ﬁ nan-

cial year 2009. Total revenues in this reporting period amount to

alstria closed the ﬁ nancial year 2009 with a net operating result before

ﬁ nance costs and taxes of EUR – 3,867 k, which was signiﬁ cantly

inﬂ uenced by the valuation result. This compares to EUR – 2,738 k

for the previous year.

EUR 102,510 k (2008: EUR 102,055 k). The reason for this stable

FUNDS FROM OPERATIONS AT EUR 0.58 PER SHARE

result is based on the fact that the legal transfer of the publicised

transactions became mainly effective in Q4 2009 or later. Real estate

EUR k

2009

2008

operating expenses represented 9.9 % of revenues or EUR 10,189 k.

Net rental income for 2009 was EUR 91,964 k (2008: EUR 93,222 k).

The following table shows the key operating ﬁ gures of the audited

income statements for the ﬁ nancial years 2009 and 2008:

EUR k

Gross rental income

Net rental income

Operational expenses

Net other income

Net operating income

Net result from fair value adjustments
on investment properties

Net result on disposals of investment
properties

Net operating result before
ﬁ nance costs

2009

102,510

91,964

– 11,177

1,258

82,045

2008

102,055

93,222

– 11,553

2,259

83,928

– 85,887

– 88,116

Pre-tax income (EBT)

– 79,541

– 55,925

+/– Net loss from fair value adjust-
ments on investment property

+/– Net loss from fair value adjust-
ments on ﬁ nancial derivatives

+/– Proﬁ t/loss on disposal of
investment property

+/– Non-cash expenses

Funds from operations (FFO)2

85,887

88,116

23,294

7,403¹

3,025

32,690

– 1,450

1,271

39,415

1 Fair value loss disregarding realised fair value gains of EUR 2,328 k.
2 FFO is not a measure of operating performance or liquidity under generally accepted

accounting principles, in particular IFRS, and should not be considered as an alternative

to the Company’s income or cash-ﬂ ow measures as determined in accordance with

IFRS. Furthermore, no standard deﬁ nition exists for FFO. Thus, the FFO or measures

with similar names as presented by other companies may not necessarily be comparable

– 25

1,450

to alstria’s FFO.

– 3,867

– 2,738

Funds from operations amount to EUR 32,690 k in 2009 as against

EUR 39,415 k in 2008. As a result, FFO per share was EUR 0.58 in the

ﬁ nancial year 2009 (2008: EUR 0.70).

Favourable effects on recurring expenses due to efﬁ ciency
improvement of administrative processes
alstria started to improve the efﬁ ciency of administrative processes in

The reduction in comparison with 2008 resulted mainly from the

increase in ﬁ nancing costs (EUR 4,005 k) and the rise in operating

2008 and continued this project throughout 2009. This allowed alstria

expenses, which reﬂ ect increasing asset management activities. Non-

to further reduce overhead expenses for external service providers.

cash expenses mainly comprise expenses for stock options and proﬁ t

participation rights.

Operational expenses (including administrative and personnel

expenses) were EUR 11,177 k for the year, compared to EUR 11,553 k

in 2008. Accordingly, total operating expenses represent 10.9 % of

Hedging instruments
The devaluation of the ﬁ nancial derivatives was driven by the devel-

total revenues (compared to 11.3 % for 2008). This improvement

opment of the yield curve in the year 2009. alstria applies hedge

shows that implementation of speciﬁ c measures made it possible to

accounting on all qualifying hedges in order to limit the impact on

enhance efﬁ ciency of overheads.

proﬁ t and loss of the volatility of the interest rate markets. This allows

the losses or gains on the qualifying part of the derivatives to be

Net other income mainly comprises income from deconsolidation

recognised under the equity cash ﬂ ow hedge reserve with no effect

(EUR 1,290 k), the reversal of accruals (EUR 323 k), income from

on income.

project expenses (EUR 327 k) and other income (EUR 1,184 k). On

the other hand, it comprises expenses of EUR 1,866 k, which rep-

resent a provision for a potential liability arising from the real estate

assets sold in 2009 (EUR 1,550 k) and other expenses (EUR 315 k).

Group Management Report

alstria Annual Report 2009

The implementation of the Group-wide reﬁ nancing strategy resulted

alstria complied with all ﬁ nancial covenants as at December 31, 2009.

in the termination of existing derivatives and the acquisition of new

derivatives. Hedged forecast transactions are no longer expected to

Total net ﬁ nancing costs increased by EUR 4,005 k to EUR 52,117 k

occur due to pre-drawing in the loan repayment schedule as a result

in comparison with 2008. EUR 963 k of this increase is based on a

of the reﬁ nancing strategy. The cumulative loss that was reported

higher average loan level compared to the previous reporting period,

in the equity’s hedging reserve in these cases was transferred to the

and higher interest spreads due to the reﬁ nancing and renegotiation

income statement within ‘Net loss from fair value adjustments on

of covenants. EUR 1,136 k relates to additional capitalised transaction

ﬁ nancial derivatives’. As a result, EUR 16,331 k has been transferred

costs for the renegotiation of the terms for the syndicated loan to be

from equity to these income statement as expenses. The contra

allocated under the effective interest method. Another EUR 524 k

booking entry of this expenses is the equity, which increased by the

is derived from the release of transaction costs originally accrued in

same amount. Therefore, this expense entry has no effect on the

relation to the syndicated loan. EUR 1,382 k of the increase in net

Group’s net asset value.

ﬁ nancial costs results from a reduction in ﬁ nancial income.

An overview of the composition and changes is described in detail

in Note 10.8.

Consolidated net result driven by non-cash fair
value adjustments
The resulting loss before tax is EUR 79,541 k for the ﬁ nancial year

In the ﬁ nancial year 2009, the effective change in the value of

2009 (2008 loss before tax: EUR 55,925 k). The consolidated net loss

the swaps, which is recorded in equity as ‘hedging reserve’, was

amounts to EUR 79,651 k (2008 net loss: EUR 56,000 k). The reason

EUR – 9,952 k. The fair value changes of derivatives not categorised

for the decrease in the consolidated net result is a signiﬁ cant increase

as cash ﬂ ow hedges is recognised in the income statement under

of the net loss on ﬁ nancial derivatives (EUR 23,294 k in 2009, against

‘Net result from fair value adjustments on ﬁ nancial derivatives’. The

EUR 5,075 k in 2008). The Company has taken again a high net loss

interest expenses on swaps and caps are stated in the ﬁ nancial result.

from fair value adjustments in investment property of EUR 85,887 k

(2008: EUR 88,116 k). These valuation effects amount together to

The fact that alstria’s debt exposure is fully hedged by ﬁ nancial

EUR – 109,181 k and have, like in 2008, a signiﬁ cant inﬂ uence on the

de rivatives ﬁ xes the current overall cost of debt for the existing port-

consolidated net result.

Loss per share is EUR 1.44 for 2009 (2008 loss per share: EUR 1.02).

folio at 4.4 %.

Financial result
The following table shows the ﬁ nancial result for the period January 1

to December 31, 2009:

EUR k

2009

2008

Syndicated loan – interest and
similar costs

Interest loan reﬁ nanced

Interest result derivatives

Others

Financial expenses

Financial income

Other ﬁ nancial expenses

– 25,638

– 3,918

– 22,433

– 1

– 58,992

– 1,192

10,681

– 1

– 51,990

– 49,503

593

– 720

1,975

– 584

Net ﬁ nancing costs

– 52,117

– 48,112

alstria Annual Report 2009

Group Management Report

Financial analysis

Financial and asset position
Financial management
Financial management of alstria is performed centrally, with individual

As an integral part of the reﬁ nancing strategy, alstria entered into

ﬁ ve new non-recourse loans totalling EUR 126 m in 2009. All of the

proceeds have been used to repay the main facility. Within this reﬁ -

loans being taken out at property and portfolio level. The main goal

nancing, alstria agreed a total amount of EUR 8.2 m of capex lines,

of alstria’s ﬁ nancial policy is the establishment of secured, long-term

which will be used for special refurbishment projects. The average

structures to support the development of its business and to provide

margin of the new reﬁ nancing is 147 bps. The average costs of debt

the required degree of ﬂ exibility. The central management of ﬁ nanc-

of the Group remain stable at around 4.4 %.

ing forms the basis for harmonised capital procurement, optimised

management of interest and liquidity risks and efﬁ ciency improve-

Since October 2008, reﬁ nancing, asset disposals and voluntary pre-

ments for the whole Group.

payments by alstria have reduced the outstanding exposure of its

main syndicated loan facility by around EUR 260 m to EUR 843 m.

alstria started to restructure its balance sheet in mid 2008 and con-

alstria was able to extend the average debt maturity to 2.5 years, as

tinued this strategy in 2009. The Company’s key focus was to manage

most of the reﬁ nancing has a maturity of around ﬁ ve years or more.

the overall balloon payment of its main syndicated loan facility which

As 73 % of the ﬁ nancial debt will mature in 2011, alstria will remain

will become due at the end of 2011. alstria believes that a de-leverag-

focused on downsizing the overall balloon payment of its main syn-

ing process in the current market environment can only be achieved

dicated loan facility. EUR 89 m are ﬁ nancial liabilities, which will be

by a step-by-step approach. Part of this strategy was the disposal of

repaid in 2010 with regard to the publicised transactions. Around

selective assets and selected non-recourse reﬁ nancing of assets. At

9 %, or EUR 96 m, of the outstanding loans will be due in 2014, and

the same time, alstria was able to conclude a renegotiation of its main

an additional EUR 95 m or 9 % is due in 2015.

syndicated loan facility in the ﬁ rst quarter of 2009. This amendment

adjusted the loan to value (LTV) covenant from 60 % to 65 %, and

FINANCIAL DEBT BY MATURITIES

the interest cover ratio (ICR) covenant was reduced from 160 to 130.

EUR k

The applicable margin of 65 bps increased by 20 bps in April 2009.

The contract parties also agreed to a step-up of the margin if the LTV

2015

95,000

is above 60 %. Provided the Company manages to stay at its targeted

capital structure with an LTV below 60 %, this amendment will lead

to an annualised increase in interest expenses of around EUR 2 m.

NEW MARGIN GRID FOR THE MAIN SYNDICATED
LOAN FACILITY

LTV

≤ 60 %

> 60 % ≤ 62.5 %

> 62.5 ≤ 65 %

Margin p.a.

85 bps

135 bps

210 bps

2014

95,519

2013

2,079

2012

2,027

2011

2010

88,573

as per Dec. 31, 2009

758,189

Group Management Report

alstria Annual Report 2009

EXISTING LOAN AGREEMENTS AS PER DECEMBER 31, 2009

Loan

Syndicated loan

non-recourse loan #1

non-recourse loan #2

non-recourse loan #3

non-recourse loan #4

Total as at Dec. 31, 2009

Maturity

Principal amount
outstanding (EUR k)

LTV covenant
( %)

Nov. 29, 2011

Oct. 19, 2015

Dec. 31, 2014

Jun. 30, 2014

Oct. 20, 2014

842,837

95,000

37,283

32,479

33,788

1,041,386

65.0

80.0

65.0

61.0

Cash position is EUR 146,818 k
Cash ﬂ ow from operating activities amounted to EUR 33,171 k. The

reduction since 2008 (EUR 40,946 k) has several causes: it is based

on an increase in working capital, higher payments for real estate

operating expenses and higher interest expenses.

The cash ﬂ ow from investing activities mainly comprises cash inﬂ ow

EUR k

Investment properties at Dec. 31, 2008

Additions

Disposals

Reclassiﬁ cation

Revaluations

resulting from the sale of properties (EUR 132,565 k) and the sale of

Investment properties at Dec. 31, 2009

a KfW (German Development Bank) bond (EUR 25,156 k). A cash

Fair value of development properties

outﬂ ow of EUR 21,295 k refers to the acquisition of one property

(EUR 3,480 k) and payments for refurbishment measures, tenant

incentives and subsequent acquisition costs.

Fair value of properties held for sale

Interests in real estate partnerships

Fair value of immovable assets

Next test date

Jun. 30, 2010

Sept. 30, 2010

Dec. 31, 2010

1,805,265

17,467

– 175,580

– 135,825

– 85,887

1,425,440

5,000

135,825

9,046

1,575,311

The cash ﬂ ow from ﬁ nancing activities reﬂ ects loan repayments

of EUR 153,058 k, payment of dividends (EUR 22,858 k), add-

Reclassiﬁ cations comprise three buildings that have been classiﬁ ed

itional transaction costs for the restructuring of the loan facility

as investments held for sale following the conclusion of binding sale

(EUR 4,357 k) and EUR 6,218 k in payments for the termination and

agreements by alstria at the end of 2009. The fair value of immovable

acquisition of ﬁ nancial derivatives. Cash inﬂ ow of EUR 128,821 k had

assets will be used for the G-REIT equity ratio calculation.

been received from reﬁ nancing.

As a result, alstria ended the ﬁ nancial year 2009 with a cash position

Equity ratio of 35.9 % – G-REIT equity ratio at 40.3 %
The balance sheet reﬂ ects a total equity position of EUR 634,185 k

of EUR 146,818 k (2008: EUR 31,426 k). The substantial increase of

with an equity ratio of 35.9 % (December 31, 2008: EUR 729,667 k

EUR 115,392 k is mainly related to the received disposal price from

or 38.9 %). The G-REIT equity ratio, which is deﬁ ned as total equity

the Pan-German transaction.

Investment properties down by 21.0 %
Total investment property value amounts to EUR 1,425,440 k in

divided by immovable assets, is 40.3 % (December 31, 2008: 40.3 %).

According to the G-REIT Act (REITG), the minimum requirement for

compliance is a G-REIT equity ratio of 45 % calculated at year-end.

The tax position of alstria is unaffected as long as the G-REIT equity

comparison with EUR 1,805,265 k at the beginning of the year. The

ratio at the end of the business year has not been lower than 45 % for

decline in investment properties reﬂ ects the asset sales realised by

three consecutive business years.

alstria during the year (EUR 176 m), the reclassiﬁ cation of assets held

for sale (EUR 136 m) and the revaluation of the remainder of the

portfolio (EUR 86 m).

alstria Annual Report 2009

Group Management Report

Financial analysis
Report on risks and opportunities

NNNAV at EUR 11.32 per share
NNNAV (Triple Net Asset Value according to EPRA*) dropped

Organisationally, risk management is assigned to the controlling

group. A risk report is prepared by the risk manager on a quarterly

from EUR 13.03 per share to EUR 11.32 per share. Dividend pay-

basis and provided to the management board. The risk report presents

ments (EUR – 22,858 k) and the consolidated loss for the period

the organisational measures and regulations that are to be observed

(EUR – 79,651 k) were primarily responsible for the reduction in alstria’s

with regard to risk identiﬁ cation, assessment, response, reporting and

equity. In total, this leads to a reduction in equity from EUR 729,667 k

monitoring. At the same time, the comprehensive documentation of

to EUR 634,185 k.**

this report ensures an orderly assessment, which is conducted by the

responsible departments and by the supervisory board.

Restructuring measures decrease ﬁ nancial debt
In 2009, long-term loans were reduced by 12.8 % to EUR 947,257 k.

Risks are assessed according to their likelihood of occurrence and

This is mainly related to active management under the restructur-

their magnitude of impact. Overall risk is calculated and updated over

ing process, including measures such as selective disposals and

a speciﬁ c period of time by linking various parameters. By monitoring

reﬁ nancing.

the risk management system, alstria is able to continually advance

Increase in current liabilities
Current liabilities amounted to EUR 133,939 k, of which EUR 91,941 k

Within the context of its business activities, the alstria Group faces

is categorised as short-term loans, representing ﬁ nancial liabilities that

various risks, which are explained in greater detail below.

will be repaid in the ﬁ rst quarter. Other current liabilities amounting

to EUR 9,899 k mainly comprised accruals for outstanding invoices

alstria’s risks are divided into four categories:

and adapt its structures and processes.

(EUR 4,128 k), deferred income (EUR 2,410 k) and other accruals

(EUR 2,696 k).

REPORT ON RISKS AND OPPORTUNITIES

> strategic risks;

> operational risks;

> compliance risks;

> ﬁ nancial risks.

Risk report
Risk management
alstria has implemented structured risk management and an early

All material risks to the future development of the Company’s pos-

ition and performance are described in this chapter in accordance

with alstria’s risk management system. The individual risks described

warning system in accordance with Section 91 (2) of the German

relate to the planning horizon of 2010 to 2012.

Stock Corporation Act (AktG). All risks are recorded, evaluated and

monitored on at least a quarterly basis. The goal of alstria Group’s

risk management strategy is to minimise or, where possible, com-

Strategic risks
Strategic risk management consists mainly of the implementation

pletely avoid the risks associated with entrepreneurial activity in order

of guidelines contained in the investment policy, asset management

to safeguard the Group against potential losses and against risks to

policy and management rules governing the relationship with the

the Company as a going concern. The system of the early detection

Group’s core tenants.

of risks is in active use. The Company’s risk identiﬁ cation process

allows the early identiﬁ cation of sources of any potential new risks

Furthermore, risks resulting from the effect of key market dynamics

on an ongoing basis. Risk mitigation measures are deﬁ ned in order to

on alstria’s business are categorised as strategic risks. In view of the

undertake any necessary steps to circumvent the identiﬁ ed risks, i.e.

ongoing constrictions in the ﬁ nancial markets, general strategic risks

to insure, diversify, manage or avoid risks. For alstria, risk manage-

could arise, in particular, if the situation deteriorates once again and

ment means the targeted securing of existing and future potential

the future macroeconomic environment deteriorates correspondingly.

for success, and improving the quality of the Company’s planning

As long as there is no dramatic change in the wider economic picture,

processes.

which seems most likely from today’s point of view, alstria’s strategic

risk situation will remain stable.

* EPRA: European Public Real Estate Association, Best Practises Committee, Schiphol Airport, Netherlands.

** See also the statement of shareholders’ equity in the consolidated ﬁ nancial statements section, page 42.

Group Management Report

alstria Annual Report 2009

Operational risks
alstria’s operational risk management refers to property-speciﬁ c risks

REIT corporations are fully exempted from German corporate income

tax (KSt) and German trade tax (GewSt). Subject to certain condi-

and general business risks. This includes, among others, vacancy risk,

tions, sellers who offered real estate to alstria could beneﬁ t from exit

the creditworthiness of tenants and the risk of falling market rents.

tax, which gives 50 % relief on German income tax (ESt), German

Personnel-related risks such as loss of know-how and competences

corporate income tax (KSt) and the German trade tax (GewSt) pay-

are also monitored in this risk area. The Company uses various early

able on capital gains.

warning indicators to monitor these risks. Rent projections, vacancy

analyses, the control of the lease terms and termination clauses, and

Capital management Capital management activities are designed to

ongoing insurance checks are designed to help identify potential

maintain the Company’s G-REIT status in order to support its business

dangers and risks. Operational risks that could arise as a result of the

activities and maximise shareholder value.

ﬁ nancial crisis are viewed mainly in terms of a potential shortfall of

payment by a major tenant. Due to the fact that all of alstria’s main

The Company manages its capital structure and makes adjustments

tenants are public institutions or still highly rated, the risk of shortfall

in response to changes in economic conditions. In order to maintain

in payments is currently limited.

or adjust the capital structure, the Group can make a capital repay-

ment to its shareholders or issue new shares. No changes were made

In the second quarter 2009, alstria started their refurbishment

to the aims, guidelines and processes as at December 31, 2009 and

projects. All risks related to these projects have increased, e.g. risk of

December 31, 2008.

not-in-time completion, risk of budget exceedance, as well as the risk

of deﬁ ciencies in the construction. The Company installed a project

The capital structure is monitored by the Company using Key Per-

controlling and a budget process to counteract the risks.

formance Indicators (KPIs) relevant for classiﬁ cation as a G-REIT. The

Compliance risks
G-REIT legislation alstria is registered in the commercial register as a

German REIT-AG (G-REIT). The German REIT segment allows alstria

G-REIT equity ratio, (the ratio of equity to investment property) is the

most important KPI. Under the Group’s strategy, the G-REIT equity

ratio must be between 45 % and 55 %.

to offer a high proﬁ le to investors and distinguish itself as a REIT on

The G-REIT equity ratio at balance sheet date is 40.3 %. According to

the capital market. The REIT shares are traded at the Frankfurt Stock

the G-REIT Act (REITG), the minimum compliance requirement is a

Exchange. The G-REIT status does not have any inﬂ uence on the

G-REIT equity ratio calculated at year-end of 45 %.

admission on the Regulated Market (Prime Standard).

Certain requirements have to be met by the Company in order to

2010 and faces the prospect of losing its status as G-REIT and its tax

alstria may fail to meet the minimum equity ratio in the ﬁ scal year

qualify for and retain its designation as a G-REIT. The most relevant

exemption.

of these requirements are as follows: The G-REIT must be a stock

corporation listed on an organised market and its registered seat and

In particular, the exemption from corporate income tax (KSt) and

management must be in Germany. The registered share capital must

trade tax (GewSt) would cease at the end of the third ﬁ nancial year if

amount to at least EUR 15 m, and all shares must be voting shares of

the minimum equity ratio (alstria’s equity must not fall short of 45 %

the same class. The free ﬂ oat must be at least 15 % and no investor

of its immovable assets, based on alstria’s consolidated ﬁ nancial state-

may directly hold 10 % or more of the shares, or shares that repre-

ments) has not been satisﬁ ed for three consecutive ﬁ nancial years.

sent 10 % or more of the voting rights. Furthermore, at least 75 % of

assets must consist of real estate and at least 75 % of gross income

If alstria fails to meet the equity ratio requirement also as at Decem-

must be generated from real estate. At least 90 % of annual proﬁ ts

ber 31, 2010, the Company would lose its tax exemption under the

under German GAAP must be distributed to shareholders and the

G-REIT Act.

G-REIT’s equity may not fall below 45 % of the fair value of its real

estate assets as recorded under IFRS rules.

In order to meet the minimum equity ratio target, alstria would have

to increase its equity and/or reduce its real estate portfolio.

alstria Annual Report 2009

Group Management Report

Report on risks and opportunities

The loss of the tax exemption might trigger various material adverse

Interest rate risk

Interest rate risk results from ﬂ uctuations in market

tax consequences for the Company, in particular the following:

interest rates. These affect the amount of interest expenses in the

ﬁ nancial year and the market value of derivative ﬁ nancial instruments

> alstria would become subject to corporate income tax (KSt) and,

used by the Company.

possibly, trade tax (GewSt) on its taxable proﬁ ts in Germany;

> alstria could only regain tax-exempt status four years after the loss

alstria’s hedging policy uses a combination of plain vanilla swaps and

of the tax exemption;

caps in order to limit the exposure of the Company to interest rate

> alstria’s proﬁ ts generated but not distributed during the tax-exempt

ﬂ uctuations, but still provides enough ﬂ exibility to allow the disposal

period would be subject to taxation at alstria’s tax rate for the ﬁ rst

of real estate assets, avoiding any cost linked to an over-hedged situ-

year for which the tax exemption had been lost.

ation. The interest base for the ﬁ nancial liability (loan) is the 3-month

alstria might also face legal action from real estate vendors who had

ferent derivative ﬁ nancial instruments were acquired to manage the

sold real estate on condition that they will be able to obtain the bene-

interest expense. The maturity of the derivative ﬁ nancial instruments

ﬁ cial tax treatment (exit tax) for vendors who sell their real estate to

is based on the term of the borrowings. The derivative ﬁ nancial

EURIBOR, which is adjusted every three months. A number of dif-

G-REITs.

instruments relate to interest swaps in which the Company agrees to

exchange with contracting partners, at speciﬁ ed intervals, the differ-

Therefore, if alstria fails to meet the minimum equity ratio for the

ence between ﬁ xed and variable interest rate amounts calculated by

third year in a row, alstria could face the potential loss of its tax-

reference to an agreed notional principal amount. The swaps alstria

exempt status and its status as a G-REIT, which could have a material

uses to hedge its interest rate payments qualify as cash ﬂ ow hedges.

adverse effect on alstria’s assets and liabilities, ﬁ nancial condition and

Interest caps were also acquired, where the interest is capped at a set

results of operations.

maximum. If the maximum interest rate is exceeded, the difference

between the actual interest rate and the cap rate will be paid out.

Legal risks The Company is not subject to major legal proceedings

arising from any individual or other kind of legal dispute outside of its

Liquidity risk One of alstria’s core processes is cash management.

day-to-day business.

The Company manages its future cash position and monitors progress

on a daily basis. A cash-forecasting tool is used to prevent liquidity

Financial risks
Assessment of the ﬁ nancial risk situation is challenging due to the

risk. This liquidity-planning tool uses the expected cash ﬂ ows from

business activities and the maturity of the ﬁ nancial investments as a

ﬁ nancial crisis.

basis for analysis.

The Group normally uses ﬁ nancial instruments such as bank loans

The main liquidity risk arises from the balloon payment of the main

and derivative ﬁ nancial instruments. The main purpose of the bank

syndicated facility which will be due by the end of November 2011.

loans is to ﬁ nance alstria’s business activities. Derivative ﬁ nancial

Although this risk is being addressed proactively by the Company,

instruments include interest swaps and caps. The purpose of these

a further deterioration in ﬁ nancial markets, or further restriction in

derivative ﬁ nancial instruments is to hedge against interest risks arising

lending by banks, could result in liquidity constraints.

from the Company’s business activities and its sources of ﬁ nance. The

main risks arising from the Group’s ﬁ nancial instruments are cash ﬂ ow

Valuation risks The fair value of the real estate properties owned by

interest rate risks and liquidity risks. alstria’s current debt-to-equity

the Group reﬂ ects the market value as determined by an independent

ratio is approximately 64 %. This is a reasonable rate compared to

appraiser, and can be subject to change. Generally, the market value

the average leveraging rate of German real estate companies. alstria’s

of real estate properties depends on a variety of factors, some of

syndicated loan facility agreement allows for a loan-to-value ratio

which are exogenous and may not be under alstria's control, such

(LTV) of 65 %. After loan restructuring, alstria managed to keep the

as declining rent levels, decreasing demand or increasing vacancy

LTV at 59.8 % at the relevant test date. With the additional measures

rates. Many qualitative factors are also decisive in the valuation of a

implemented at the beginning of 2009, the risk of covenant breach

property, including a property’s expected rental stream, its condition

was resolved proactively.

and its location. Finally, the particular assessment of the mandated

appraiser is, to a certain extent, discretionary and may differ from

The Group is not otherwise exposed to any signiﬁ cant credit risks.

the opinion of another appraiser. Should the factors considered or

Group Management Report

alstria Annual Report 2009

assumptions made in valuing a property change, in order to reﬂ ect

The accounting-related risk management system forms part of the

new developments or for other reasons, subsequent valuations

Group’s risk management system. Risks that are relevant for the

of the respective property may result in a decrease in the market

accuracy of accounting-related data are monitored by the risk owner

value ascribed to such property. If such valuations reveal signiﬁ cant

who is responsible for the risk area of ﬁ nance. Risks are identiﬁ ed

decreases in market value compared to prior valuations, the Com-

quarterly, and assessed and documented by the risk management

pany would incur signiﬁ cant revaluation losses with respect to such

committee. Appropriate action is taken in order to monitor and opti-

properties.

mise accounting-related risks throughout the alstria Group.

By factors such as economic changes, interest rate ﬂ uctuations and

inﬂ ation, the value of the properties may be adversely affected. To

Overall assessment
Compared to the previous year, the risk situation of alstria ofﬁ ce

minimise the risk of regional diversiﬁ cation of investment portfolios,

REIT-AG remains unchanged. No risk speciﬁ c to the Company that

a consistent focus on the individual needs of tenants and a detailed

would threaten its continued existence, can be identiﬁ ed from past or

market research and analysis (broker reports) is used. In addition, the

future events. Any possible negative impact on alstria’s risk situation

market value of all alstria assets will be determined annually at year-

arising from adverse developments in the ﬁ nancial markets has been

end by independent, internationally recognised experts.

subject to thorough analysis. Although alstria has clearly not escaped

Counterparty risk alstria hedges a portion of its risk by using third-

necessary to minimise the adverse implications that the crisis has had

party instruments (interest rate derivatives, property insurances and

on alstria’s business situation. Sufﬁ cient precautions have been taken

the effects of the ﬁ nancial crisis, the Group has taken all measures

others). alstria’s counterparties in these contracts are internationally

against identiﬁ able risks.

recognised institutions, which are rated by the leading rating agen-

cies. alstria reviews the rating of its counterparties on a regular basis

in order to mitigate any risk of default. The ﬁ nancial crisis has raised

Opportunities of the Group
The reﬁ nancing activities undertaken by alstria have safeguarded

doubts as to the reliability of rating agencies’ assessments. As a reac-

the Company’s medium-term ﬁ nancial position at favourable inter-

tion to this objection, alstria started to perform a review of the main

est rates. On the revenue side, alstria beneﬁ ts from long-term rent

counterparties in order to reinforce the rating agencies’ assessments.

agreements of approximately 9.6 years’ average lease length and

potential rent increases due to consumer price indexation. The alstria

Key characteristics of the accounting-related internal control and risk

portfolio is well balanced and contains many ﬁ rst-class anchor build-

management system alstria has an accounting-related internal

ings with high-quality tenants.

control and risk management system in place. The accounting-related

monitoring is executed by the controlling department of the Company.

Therefore, alstria is well positioned to cope with the future competitive

All items and main accounts of the income statement and the balance

market environment and for the next growth cycle of the markets.

sheet are reviewed regularly for accuracy and plausibility. This refers

both to the consolidated ﬁ nancial statements and to the individual

alstria’s core competence is asset management. The asset reposition-

ﬁ nancial statements of the Group’s companies. Accounting-related

ing and refurbishment alstria is planning to undertake, both as part

data is monitored monthly or on a quarterly basis, depending on the

of joint ventures and on its own, will strengthen the basis for value

frequency of preparation.

increase across the portfolio.

alstria Annual Report 2009

Group Management Report

Report on risks and opportunities
Sustainability report
Mandatory disclosure

SUSTAINABILITY REPORT

3. Improvement of market transparency: In 2009, alstria and its

partner IPD (Investment Property Datenbank) launched the sec-

alstria manages a portfolio with around 867,400 sqm of ofﬁ ce space

ond German Reversion Index. Its aim is to measure the reversion

located all over Germany. Day by day, alstria’s properties host thou-

potential in the various German markets. One of the Company’s

sands of civil servants and corporate employees. Day by day, these

goals in setting up this index was to increase market understanding

tenants and alstria use electricity and water, and produce waste and
CO2 emissions.

of one of the most sensitive items when it comes to understanding

German real estate.

As alstria’s assets form an integral part of the local socio-economic

4. Sponsoring: alstria has sponsored several modern art exhibitions

network in which they are embedded, alstria’s actions and decisions

in Hamburg, making vacant retail space within its portfolio freely

as a landlord have an effect on the daily life of hundreds of sharehold-

available to organisers.

ers, workers, fellow citizens and neighbours.

As a real estate owner, alstria has a corporate responsibility towards

development can be attained by implementing a strong corporate

those citizens and the cities in which they live, as real estate is a

responsibility culture to be implemented by the Company’s employ-

fundamental part of urban living space. As a long-term real estate

ees, tenants and contractors on a daily basis, rather than just within

owner, alstria has a direct interest in the sustainable development of

one-off public projects.

The management of alstria remains convinced that sustainable

these cities.

alstria believes that sustainability is a combination of economic, envir-

Initiative (GRI) Construction and Real Estate (CRE) working Group,

onmental and social parameters. Therefore, promoting sustainability

which is working on deﬁ nition of a sustainable reporting framework

affects every part of the Company’s business and its relationships.

for real estate companies (www.globalreporting.org). alstria’s man-

alstria has joined, and is actively participating in, the Global Reporting

agement has made a medium-term commitment to publish a GRI-

Creating sustainable relationships between landlord and tenants is

compliant sustainability report.

one of the key elements of alstria’s business model, which is based

on the principle that there is no contradiction between improving

tenant beneﬁ t and simultaneously improving long-term returns for

MANDATORY DISCLOSURE

the Company.

alstria ofﬁ ce REIT-AG draws attention to some of the following

actions implemented or supported by the Company where decision-

making was partly driven by sustainability considerations:

1. Energy efﬁ ciency and security improvement: As part of its regular

Disclosure requirements in accordance with Section 315 (4)
of the German Commercial Code (HGB) for the ﬁ nancial
year 2009 and explanatory report of the management board
Composition of subscribed capital,
voting rights and special rights
At the balance sheet date December 31, 2009, the share capital of

maintenance programme, alstria has prioritised work that improves

alstria ofﬁ ce REIT-AG is EUR 56,000 k, divided into 56,000,000 no par

the energy efﬁ ciency of its buildings, and/or the overall secur-

value bearer shares. All shares have equal rights and obligations. Each

ity of the properties. alstria also prepared Energy Performance

share gives one vote at the shareholders’ annual general meeting.

Certiﬁ cates for more than half of its portfolio in order to monitor

the energy consumption of the assets. The result was that for all

inspected properties the measured energy efﬁ ciency ranges fell

Restrictions on disposal of shares or voting rights
There are no restrictions as to the disposal of shares or exercise of

within the green band that represents the most energy-efﬁ cient

voting rights or, as far as they arise from agreements between share-

buildings on the scale. Work carried out for energy efﬁ ciency and

holders, are not known to the management board. The exercise of

security improvement purposes amounted to around EUR 3,600 k

voting rights and the transfer of shares is based on general statutory

in 2009.

requirements and alstria’s articles of association, which do not restrict

either of these activities.

2. Research and development: In partnership with the Hamburg

Institute of International Economics, alstria commissioned an

economic study on the impact of rising energy and transportation

costs for the future development of urban landscapes.

Group Management Report

alstria Annual Report 2009

Shareholders with a shareholding of more than 10 %
As per the balance sheet date December 31, 2009, alstria was not

aware of any shareholders whose direct shareholding exceeded 10 %

Authority of management board regarding issuance
and buyback of shares
1. Authorised Capital

of the share capital. Captiva 2 Alstria Holding S.à r.l. holds an indirect

The articles of association authorise the management board,

participation of more than 50 % in alstria through wholly owned sub-

with the approval of the supervisory board, to increase the share

sidiaries. None of these companies has a direct shareholding of more

capital until March 14, 2012 by issuing new bearer shares against

than 10 % of alstria’s share capital.

contribution in cash and/or kind once or repeatedly up to a total

Holders of shares with special rights
alstria has not issued any shares with special rights that grant control

2. Conditional Capital

amount of EUR 27,500 k.

rights.

Nature of voting rights control if employees have a share in
capital and do not directly exercise their right of control
This arrangement does not exist at alstria.

Appointment and dismissal of management board and
supervisory board members and amendments to the
articles of association
alstria’s management board consists of one or more members who

The Company disposes of certain conditional capital (pursuant to

sections 192 et seq. AktG), which are regulated in Sections 5 (5)

to (8) of the Company’s articles of association.

a) Conditional Capital 2009/A

The share capital is conditionally increased by up to EUR 12,750 k

by issuance of up to 12,750,000 new no par value bearer shares

with entitlement to share in proﬁ ts from the beginning of the

ﬁ nancial year in which they come into existence. The conditional

capital increase shall be carried out only to the extent that the hold-

may be appointed or dismissed by the supervisory board in accord-

ers of partial debentures with conversion rights or obligations, or

ance with Sections 84 and 85 of the German Stock Corporation Act

option rights, proﬁ t participation rights or participating bonds, or

(AktG). The articles of association do not contain any special provi-

a combination of these instruments issued in accordance with the

sions in this respect. Pursuant to Section 84 AktG, members of the

resolution of the general meeting of June 10, 2009, exercise their

management board are appointed for a maximum term of ﬁ ve years.

conversion or option rights or fulﬁ l their conversion obligations and

Reappointment or extension of the term of ofﬁ ce is permitted, in

that no treasury shares are being used to satisfy such claims.

each case for a maximum of ﬁ ve years.

b) Conditional Capital 2009/B

Amendments to the articles of association may be made pursuant to

The share capital is conditionally increased by up to EUR 12,750 k

Sections 179 and 133 AktG. The supervisory board is also authorised,

by issuing up to 12,750,000 new no par value bearer shares with

without a resolution by the general meeting, to make changes in

entitlement to share in proﬁ ts from the beginning of the ﬁ nancial

and amendments to the articles of association that merely affect the

year in which they come into existence. The conditional capital

wording. In accordance with Section 15 (5) of the articles of associa-

increase shall be carried out only to the extent that holders of partial

tion, in conjunction with Sections 179 (2) and 133 AktG, sharehold-

debentures with conversion rights or obligations, or option rights,

ers may make resolutions regarding such amendments at a general

proﬁ t participation rights or participating bonds, or a combination

meeting with a simple majority of the votes cast and a simple major-

of these instruments issued in accordance with the resolution of

ity of the share capital represented. Where the law requires a larger

the general meeting of June 10, 2009, exercise their conversion

majority for amendments to the articles of associ ation, that majority

or option rights or fulﬁ l their conversion obligations and that no

shall be decisive. The articles of association were last amended by the

treasury shares are being used to satisfy such claims.

shareholders in the annual general meeting held on June 10, 2009:

the provisions regarding the convocation to and participation in the

c) Conditional Capital II

annual general meeting were amended with regard to the law gov-

The share capital is conditionally increased in an amount of up to

erning implementation of the shareholders’ rights directive (ARUG).

EUR 2,000 k by the issuance of up to 2,000,000 no par value bearer

The provision regarding conditional capital I was also replaced by pro-

shares. The purpose of the conditional capital increase is to grant

visions regarding new conditional capital (conditional capital 2009/A

shares to the holders of subscription rights (stock options) which

and conditional capital 2009/B).

are issued by alstria in accordance with the authorisation of the

annual general meeting held on March 15, 2007. The conditional

capital increase is only carried out insofar as the holders exercise

their stock options and no treasury shares are used to fulﬁ l the

stock options. The new shares shall participate in the Company's

proﬁ ts from the beginning of the ﬁ nancial year in which they come

into existence to satisfy the exercise of the stock options.

alstria Annual Report 2009

Group Management Report

Mandatory disclosure
Additional Group disclosures

d) Conditional Capital III

ADDITIONAL GROUP DISCLOSURES

The share capital is conditionally increased in an amount of up to

EUR 500 k by the issuance of up to 500,000 no par value bearer

shares. The conditional capital increase shall be used only to grant

Employees
As of December 31, 2009, alstria had 32 employees (December 31,

shares to the holders of convertible participation certiﬁ cates which

2008: 29). The annual average number of employees was 31 (previ-

are issued by the Company in accordance with the authorisation

ous year: 28). These ﬁ gures exclude management board members.

of the general meeting held on March 15, 2007. The conditional

capital increase shall only be carried out insofar as issued con-

vertible participation certiﬁ cates are converted into shares of the

Remuneration report
Management board members’ compensation comprises a ﬁ xed and a

Company and no treasury shares are used to satisfy the certiﬁ -

variable component linked to the Company’s operating performance.

cates. The new shares shall participate in the Company's proﬁ ts

In addition to the bonus, members of the management board received

from the beginning of the ﬁ nancial year in which they come into

share options as a long-term incentive component of remuneration.

existence as a result of the conversion of certiﬁ cates.

3. Purchase of treasury shares

Members of the supervisory board receive ﬁ xed remuneration.

The general meeting on June 10, 2009 authorised the man-

The remuneration report (pages 90 to 91), containing details of the

agement board to acquire shares up to a total of 10 % of the

principles for the deﬁ nition of the management board and super-

Company’s share capital until December 9, 2010. The acquired

visory board remuneration, forms an integral part of the audited

shares and other treasury shares that are in the possession of, or

Group management report.

to be attributed to, alstria pursuant to Sections 71a et seq. AktG

may at no point in time amount to more than 10 % of the share

capital. Shares may be purchased through a stock exchange, by

Group and dependent-company report
Captiva Capital II S.à r.l., Luxembourg, holds a majority interest in

means of a public offer to all shareholders or by using derivatives

alstria. In accordance with Section 290 of the German Commercial

(put or call options or a combination of both).

Code (HGB), alstria is required to prepare consolidated statements and

Change of control clauses in key agreements entered
into by the Company
A signiﬁ cant syndicated loan agreement of alstria contains an entitle-

ment of the lender to require repayment of the loan if there is a

a Group management report with respect to the Group com panies

controlled by the Group. Apart from this, alstria ofﬁ ce REIT-AG and

all associated companies as stated in the notes are consolidated in the

alstria Group.

change of control. In this agreement, a change of control is deﬁ ned as

Due to the majority interest in alstria held by Captiva Capital II S.à r.l,

the takeover of more than 50 % of the voting rights in alstria.

Luxembourg, we issued a separate dependent-company report with

Compensation agreements with management board
members and employees in case of a takeover bid
There are no compensation agreements with management board

afﬁ liated companies, in accordance with Section 312 of the German

Stock Corporation Act (AktG). This report includes the following

statement:

members or employees in case of a takeover bid.

‘Our Company received appropriate remuneration for all legal trans-

These provisions comply with statutory requirements or are reason-

related parties. This appraisal is based on the circumstances which

able and common practice by comparable publicly listed companies.

were known to us at the time when the events which are subject to

They are not intended to hinder potential takeover bids.

reporting occurred.’

actions and all the transactions stated in the report on relations with

Group Management Report

alstria Annual Report 2009

SUBSEQUENT EVENTS AND OUTLOOK

Subsequent events
In January 2010, alstria agreed the terms of a joint venture with the

Hamburg-based developer and fund manager Quantum Immobil-

In January 2010, alstria made a voluntary down payment on its main

credit facility of EUR 20 m in order to decrease the LTV ratio to below

60 % on the relevant test date. This down payment secures the mar-

gin of 85 bps for the next two interest periods.

ien AG regarding the reinstatement of the Kaisergalerie at Grosse

Taking into consideration the closing of all announced transactions

Bleichen 23– 27 in Hamburg. It is the second joint venture between

in the ﬁ rst quarter of 2010, the G-REIT equity ratio will increase to

Quantum and alstria as part of the overall strategy to fund organic

43.6 % in comparison with 40.3 % at year-end.

growth opportunities. This joint venture, which values the building

in line with its latest valuation (fair value of EUR 60 m, passing rent

EUR 2.8 m), allows alstria to free up around EUR 14.3 m of liquidity.

Outlook
Based on the latest transactions and the contracted rent for 2010,

alstria expects revenues of EUR 89 m and funds from operations

THE KEY METRICS OF THE PORTFOLIO POST TRANSACTIONS

of EUR 27 m. This projection could be impacted by further reﬁ -

Metric

Number of properties

Number of joint ventures

Market value (EUR bn)

Contractual rent (EUR m/annum)

Valuation yield (contractual rent/OMV)

Lettable area (k sqm)

Vacancy ( % of lettable area)

WAULT (years)

Average rent/sqm (EUR/month)

nancing, disposals or acquisitions in 2010. alstria expect its 2011

revenues and results to be inﬂ uenced positively or negatively by
the reﬁ nancing of its main syndicated loan facility that matures in

November 2011, as well by the development of the underlying real

estate markets.

The management report contains statements relating to antici-

pated future developments. These statements are based on current

assessments and are, by their very nature, exposed to risks and

uncertainty. Actual developments may differ from those predicted

in these statements.

Value

1.4

90.8

6.4 %

821

6.0 %

9.4

9.81

In January 2010, alstria entered into a new credit facility on a non-

Hamburg, February 12, 2010

recourse basis as an additional step towards decreasing the bal-

loon payment of the syndicated loan facility. The credit facility is a
EUR 76 m, seven-year non-recourse loan to reﬁ nance four properties

in Hamburg, Essen and Leipzig with an average lease term of seven

years. The interest rate on this loan is ﬁ xed until maturity at 4.62 %.

After this reﬁ nancing, the remaining main syndicated loan facility

exposure is EUR 660 m, which is in line with alstria’s target.

EXISTING LOAN AGREEMENTS AS PER JANUARY 20, 2010

Loan

Syndicated loan

Non-recourse loan #1

Non-recourse loan #2

Non-recourse loan #3

Non-recourse loan #4

Non-recourse loan #5

Total as of Jan. 20, 2010

1 LTV as per covenant test date.

Maturity

Nov. 29, 2011

Oct. 19, 2015

Dec. 31, 2014

Jun. 30, 2014

Oct. 20, 2014

Jan. 31, 2017

Principal amount
outstanding
(EUR k)

LTV covenant
( %)

660,410

95,000

37,283

32,479

33,534

75,794

934,500

65.0

80.0

65.0

61.0

75.0

LTV
( %)

59.81

76.1

64.3

62.9

60.8

62.1

Next test date

Jun. 30, 2010

Sept. 30, 2010

Dec. 31, 2010

DETAIL INDEX CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of ﬁ nancial position

Consolidated statement of changes in equity

Consolidated statement of cash ﬂ ow

Notes to the consolidated ﬁ nancial statements

1 Corporate information

2 Basis of preparation

11 Notes to the consolidated balance sheet

– equity and liabilities

11.1 Equity

11.2 Financial liabilities

11.3 Other provisions

11.4

Trade payables and other liabilities

11.5 Trust assets and liabilities

11.6 Deferred taxes

11.7 Liabilities of current tax

Changes in accounting policy and disclosures 44

12 Other notes

4 Basis of consolidation

Key judgments and estimates

Seasonal or economic effects on business

Summary of signiﬁ cant accounting policies

8 Segment reporting

Notes to the consolidated income statement

9.1 Revenues

9.2

Income and expenses from passed on

Operating expenses

9.3 Real estate operating expenses

9.4 Administrative expenses

9.5 Personnel expenses

9.6 Other operating income

9.7 Other operating expenses

9.8 Financial and valuation result

9.9

Disposal proceeds

9.10

Income taxes

Notes to the consolidated balance sheet

– assets

10.1

Investment property

10.2 Equity accounted investment

10.3 Property, plant and equipment

10.4

Intangible assets

10.5 Financial assets

10.6 Assets held for sale

10.7 Receivables and other assets

10.8 Derivative ﬁ nancial instruments

10.9 Cash and cash equivalents

12.1 Compensation of management board

And supervisory board

12.2

Commitments and contingencies

12.3 Consolidated cash ﬂ ow statement

Related party relationships

13.1 Preliminary remarks

13.2

Remuneration of key management personnel

13.3

Related party transactions

14 Earnings per share

15 Dividends paid

16 Employees

17 Stock option programme

Convertible proﬁ t participation

rights programme

19 Financial risk management

Signiﬁ cant events after the end of the

Reporting period

Utilisation of exempting provisions

Disclosures pursuant to Wertpapier handels -

gesetz [German Securities Trading Act]

Declaration of compliance pursuant to

Section 161 AktG [‘Aktiengesetz’: German

Stock Corporation Act]

24 Auditor’s fees

25 Management board

26 Supervisory board

Consolidated Financial Statements

alstria Annual Report 2009

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT
for the year ended December 31, 2009

EUR k

Revenues

Income less expenses from passed-on operating expenses

Real estate operating costs

Net rental income

Administrative expenses

Personnel expenses

Other operating income

Other operating expenses

Net loss from fair value adjustments on investment property

Loss /gain on disposal of investment property

Net operating result

Net ﬁ nancial result1

Share of the result of joint venture

Net loss from fair value adjustments on ﬁ nancial derivatives

Pre-tax result (EBT)

Income tax expense

Consolidated loss for the year

Attributable to:

Shareholder

Earnings per share in EUR

Basic earnings per share

Diluted earnings per share

Notes

9.1

9.2

9.3

9.4

9.5

9.6

9.7

10.1

9.9

9.8

9.10

2009

102,510

– 358

– 10,189

91,964

– 6,187

– 4,990

3,124

– 1,866

– 85,887

– 25

– 3,867

– 52,117

– 264

– 23,294

– 79,541

– 110

– 79,651

2008

102,055

– 8,833

93,222

– 6,878

– 4,675

2,774

– 516

– 88,116

1,450

– 2,738

– 48,112

– 5,075

– 55,925

– 75

– 56,000

– 79,651

– 56,000

– 1.44

– 1.02

1 The gross presentation of the net ﬁ nancial result was given in the 2008 income statement. For reason of clarity and comparability, this presentation was changed to a

net presentation in the income statement. For further details, please see Note 9.8.

alstria Annual Report 2009

Consolidated Financial Statements

Consolidated income statement
Consolidated statement of comprehensive income

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period from January 1 to December 31, 2009

EUR k

Consolidated loss for the period

Fair value gain / loss on available-for-sale ﬁ nancial assets, net of tax

Cash ﬂ ow hedges, net of tax

Other comprehensive result for the period

Total comprehensive loss for the period

Total comprehensive loss attributable to:

Owners of the Company

Notes

10.8

2009

– 79,651

123

6,379

6,502

2008

– 56,000

– 123

– 49,579

– 49,702

– 73,149

– 105,702

– 73,149

– 105,702

Consolidated Financial Statements

alstria Annual Report 2009

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at December 31, 2009

ASSETS

EUR k

Non-current assets

Investment property

Equity-accounted investments

Property, plant and equipment

Intangible assets

Financial assets

Total non-current assets

Current assets

Assets held for sale

thereof investment property held for sale

thereof other assets held for sale

Trade receivables

Accounts receivable from joint ventures

Derivatives

Tax receivables

Other receivables

Cash and cash equivalents

thereof restricted

Total current assets

Notes

2009

2008

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.7

10.9

1,425,440

1,805,265

9,046

5,897

311

351

3,923

336

1,441,045

1,809,524

136,621

135,825

796

5,694

1,855

615

33,483

146,818

61,848

325,089

4,099

176

28,266

31,426

63,969

Total assets

1,766,134

1,873,493

alstria Annual Report 2009

Consolidated Financial Statements

Consolidated statement of ﬁ nancial position

EQUITY AND LIABILITIES

EUR k

Equity

Share capital

Capital surplus

Hedging reserve

Treasury shares

Retained earnings

Total equity

Non-current liabilities

Long-term loans, net of current portion

Derivatives

Other provisions

Other liabilities

Total non-current liabilities

Current liabilities

Liabilities associated with the sale of non-current assets held for sale

Short-term loans

Trade payables

Proﬁ t participation rights

Liabilities of current tax

Other current liabilities

Total current liabilities

Total liabilities

Total equity and liabilities

Notes

11.1

2009

2008

56,000

685,897

– 43,200

– 26

– 64,486

634,185

947,257

48,859

1,550

344

56,000

726,885

– 49,579

– 14,983

11,344

729,667

1,086,801

28,626

998,010

1,115,497

28,176

91,941

3,692

231

9,899

133,939

12,609

4,561

11,085

28,329

1,131,949

1,143,826

1,766,134

1,873,493

11.2

10.8

11.3

11.4

10.6

11.2

11.4

11.7

11.4

Consolidated Financial Statements

alstria Annual Report 2009

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended December 31, 2009

EUR k

As of Jan. 1, 2009

Notes

Share capital

Capital
surplus

Hedging
reserve

Treasury
shares

Retained
earnings

Total equity

56,000

726,885

– 49,579

– 14,983

11,344

729,667

Changes in ﬁ nancial year 2009

Total comprehensive income

Payments of dividends

Reclassiﬁ cation of retained earnings

Result of disposal of treasury shares

Intrinsic value of exchange option
for treasury shares

Exchange of cash dividend claims
for shares in the Company

Disposal of treasury shares

Share-based payments

As of Dec. 31, 2009

for the year ended December 31, 2008

11.1

123

– 28,423

– 13,076

1,744

– 14,820

388

6,379

11.1

56,000

685,897

– 43,200

14,957

– 26

– 79,651

– 73,149

– 28,423

28,423

3,821

5,702

– 1,744

5,565

137

388

– 64,486

634,185

EUR k

As of Jan. 1, 2008

Notes

Share capital

Capital
surplus

Hedging
reserve

Treasury
shares

Retained
earnings

Total equity

56,000

754,647

– 7,115

67,344

870,876

Changes in ﬁ nancial year 2008

Total comprehensive income

Payment of dividends

Reclassiﬁ cation of retained earnings

Share-based payments

Acquisition of treasury shares

Other contributions to capital surplus

– 123

– 49,579

– 28,400

768

– 7

– 7,868

– 56,000

– 105,702

– 28,400

28,400

768

– 7,868

– 7

As of Dec. 31, 2008

11.1

56,000

726,885

– 49,579

– 14,983

11,344

729,667

alstria Annual Report 2009

Consolidated Financial Statements

Consolidated statement of changes in equity
Consolidated statement of cash ﬂ ow

CONSOLIDATED STATEMENT OF CASH FLOW
for the period from January 1 to December 31, 2009

EUR k

1. Operating activities

Consolidated loss for the year

Unrealised valuation movements

Interest income

Interest expense

Result from income taxes

Other non-cash income ( – )/expenses (+)

Loss (+)/gain ( – ) on disposal of investment properties

Depreciation and impairment of ﬁ xed assets

Increase ( – )/decrease (+) in trade receivables and other assets
that are not attributed to investing or ﬁ nancing activities

Increase (+)/decrease ( – ) in trade payables and other liabilities
that are not attributed to investing or ﬁ nancing activities

Interest received

Interest paid

Income tax paid

Cash ﬂ ows from operating activities

2. Investing activities

Acquisition of investment properties

Proceeds from sale of investment properties

Acquisition of other property, plant and equipment

Proceeds from sale of ﬁ nancial assets

Acquisition of ﬁ nancial assets

Proceeds from the disposal of Group companies

Cash ﬂ ows used in investing activities

3. Financing activities

Repurchase of own shares

Proceeds from the disposal of own shares

Proceeds from the issue of bonds and borrowings

Payments of dividends

Payments for the acquisition and termination of ﬁ nancial derivatives

Payment of the redemption of bonds and borrowings

Payments of transaction costs

Cash ﬂ ows used in ﬁ nancing activities

4. Cash and cash equivalents at the end of the period

Change in cash and cash equivalents (subtotal of 1 to 3)

Effect of changes in consolidated Group on cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

thereof restricted: EUR 61,848 k; previous year: EUR 0 k

thereof cash in disposal group

Notes

2009

2008

9.8, 10.1

9.8

9.10

9.9

10.3, 10.4

– 79,651

109,180

– 593

52,710

110

545

473

– 56,000

93,191

– 12,656

60,184

1,271

– 1,450

507

– 4,356

3,912

4,202

82,645

593

– 49,957

– 110

33,171

– 21,295

132,565

– 2,421

25,156

6,622

– 1,467

87,567

11,556

– 53,112

– 5,065

40,946

– 228,036

17,950

– 160

– 25,000

12.3

140,627

– 235,246

12.3

137

128,821

– 22,858

– 6,218

– 153,058

– 4,357

– 57,533

116,264

– 538

31,426

147,152

334

146,818

– 7,972

104

266,453

– 28,400

– 107,495

122,690

– 71,610

103,036

31,426

Cash and cash equivalents reported on the balance sheet

10.9

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS

Group’s accounting policies. The areas involving a higher degree of

judgement or complexity, or areas where assumptions and estimates

are signiﬁ cant to the consolidated ﬁ nancial statements, are disclosed

1 Corporate information
The consolidated ﬁ nancial statements of alstria ofﬁ ce REIT-AG (here-

in Note 5.

inafter also referred to as the ‘Company’ or ‘alstria ofﬁ ce REIT-AG’) as

The consolidated ﬁ nancial statements are presented in euros. All

at December 31, 2009 were authorised for issue by resolution of the

values are rounded to the nearest thousand (EUR k) except when

management board on February 12, 2010.

otherwise indicated.

alstria ofﬁ ce REIT-AG was transformed into a German Real Estate

These consolidated ﬁ nancial statements are ﬁ nancial statements for

Investment Trust (G-REIT) in ﬁ nancial year 2007. The Company was

the period from January 1 to December 31, 2009.

registered as a REIT corporation (hereinafter also referred to as a

‘REIT-AG’) in the commercial register on October 11, 2007.

For the sake of clarity, items are summarised in the consolidated

balance sheet and income statement and commented on in the notes

REIT-AGs are fully exempt from German corporate income tax and

to the ﬁ nancial statements.

trade tax. Hence, alstria ofﬁ ce REIT-AG has been exempt from tax with

retrospective effect since January 1, 2007.

Assets and liabilities are classiﬁ ed as non-current – for items due in

The Company is a real estate property company in the meaning of the

G-REIT Act. Pursuant to Section 2 of its Articles of Association, the

Company’s objective is the acquisition, the management, the operation

and the sale of owned real estate property as well as the holding of

3 Changes in accounting policy and disclosures
New and amended IFRS adopted by the Group
The Group has adopted the following new and amended IFRS as of

more than one year – or current.

participations in enterprises, which acquire, manage, operate and sell

January 1, 2009:

owned property. All the aforementioned objectives are subject to the

conditions of the G-REIT Act legislation.

> Amendments to IAS 1: ‘Presentation of Financial Statements’

> Amendments to IAS 23: ‘Borrowing Costs’ concerning elimination

The Company is a stock corporation which was founded in Germany

of the option to capitalise borrowing costs

and has its registered ofﬁ ce in Hamburg. The Company is registered

> Amendments to IAS 32: ‘Financial Instruments: Presentation’ and

in the commercial register at the local court of Hamburg under

follow-up amendment to IAS 1: ‘Presentation of Financial

HRB No. 99204. The Company’s address is Bäckerbreitergang 75,

Statements’ concerning puttable ﬁ nancial instruments and

20355 Hamburg, Germany.

obligations arising on liquidation

> Amendments to IAS 39 and IFRS 7: ‘Reclassiﬁ cation of ﬁ nancial

The ﬁ nancial year ends on December 31 of each calendar year.

instruments: Effective date and transitional provisions’

> Annual Improvements Project ‘Improvements to IFRS’

2 Basis of preparation
The consolidated ﬁ nancial statements of alstria ofﬁ ce REIT-AG and its

> Amendments to IFRS 1: ‘First-Time Adoption of IFRS’ and IAS 27:

‘Consolidated and Separate Financial Statements’ concerning

subsidiaries (together ‘the Group’) have been prepared in accordance

determination of the acquisition costs of an investment, a joint

with the International Financial Reporting Standards (IFRS) of the

venture or an associated company

International Accounting Standards Board (IASB), including the inter-

> Amendments to IFRS 2: ‘Share-Based Payment’ concerning vesting

pretations of the standards (IFRIC). All IFRS and IFRIC were observed

conditions and cancellations

as adopted and prescribed by the EU.

> Amendments to IFRS 7: ‘Improving Disclosures about Financial

The consolidated ﬁ nancial statements have been prepared under the

> IFRS 8: ‘Operating Segments’

historical cost convention method except for investment property

> Amendments to IFRIC 9 and IAS 39: ‘Embedded Derivatives’

(land and buildings) and ﬁ nancial instruments that have been meas-

> IFRIC 11 – IFRS 2: ‘Group and Treasury Share Transactions’

ured at fair value through proﬁ t or loss.

> IFRIC 13: ‘Customer Loyalty Programmes’

> IFRIC 14: ‘IAS 19 – The Limit on a Deﬁ ned Beneﬁ t Asset,

The preparation of financial statements in conformity with IFRS

Minimum Funding Requirements and their Interaction’

Instruments’

requires the use of certain critical accounting estimates. It also requires

management to exercise its judgement in the process of applying the

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

1 Corporate information
2 Basis of preparation
3 Changes in accounting policy and disclosures

In the course of the annual improvements project ‘improvement to

According to IAS 1 (revised) ‘presentation of ﬁ nancial statements’,

IFRS’ the IASB approved revisions to IFRS in May 2008 that are listed

alstria ofﬁ ce REIT-AG presented the summary of comprehensive

income for the ﬁ rst time in an annual report and implemented the

adjustments to presentation that resulted from the revised standard.

The initial application of the remaining adopted IFRS had no material

effect on the presentation of the consolidated ﬁ nancial statements.

New and amended IFRS to existing standards which are not yet
effective and have not been early adopted by the Group
In its 2009 consolidated ﬁ nancial statements, alstria ofﬁ ce REIT-AG

did not apply the following accounting standards or interpretations

which have already been adopted by the IASB but were not required

to be applied for ﬁ nancial year 2009.

in the following table.

Amendments to IFRS 7

Presentation of ﬁ nance costs

Amendments to IAS 1

Current/non-current classiﬁ cation
of derivatives

Amendments to IAS 8

Status of implementation guidance

Amendments to IAS 10

Amendments to
IAS 16 and IAS 7

Dividends declared after the
balance sheet date

Sale of assets held for rental

Amendments to IAS 16

Recoverable amount

Amendments to IAS 18

Costs of originating a loan

Amendments to IAS 19

Miscellaneous amendments

Amendments to IAS 20

Government loans with a below-market rate
of interest

Amendments to IAS 23

Components of borrowing costs

Amendments to IAS 27

Measurement of a subsidiary held for sale
in separate ﬁ nancial statements

Amendments to IAS 28

Impairment of investment in an associate

Amendments to IAS 28

Required disclosures when interest in jointly
controlled entities are accounted for at fair
value through proﬁ t or loss

Amendments to IAS 29

Description of measurement basis
in ﬁ nancial statements

Amendments to IAS 34

Earnings per share disclosures in interim
ﬁ nancial reports

Amendments to IAS 36

Disclosure of estimates used to determine
recoverable amount

Amendments to IAS 38

Advertising and promotional activities and
units to production method of amortisation

Amendments to IAS 39

Miscellaneous amendments

Amendments to IAS 40

Property under construction or development
for future use as investment property

Amendments to IAS 41

Additional biological transformation as well as
discount rate for fair value calculations

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

Standard/Interpretation

Issued by
the IASB

Effective date

Adopted by
the EU

Expected
effects

IFRS 1 (amendment)

First time adoption of IFRS

Nov. 27, 2009

Jan. 1, 2009 Yes

IFRS 1 (amendment)

Additional exemptions for ﬁ rst time adopters

Jul. 23, 2009

Jan. 1, 2010 No

IFRS 2 (amendment)

Group cash-settled and share-based payment transactions

Jun. 18, 2009

Jan. 1, 2010 No

IFRS 2 (amendment)1

Scope of IFRS 2 and IFRS 3 (revised)

Apr. 16, 2009

Jul. 1, 2009 No

IFRS 3 (revised)

Business combinations

IFRS 5 (amendment)1

Disclosure of non-current assets (or disposal groups)
classiﬁ ed as held for sale or discontinued operations

Jan. 10, 2008

Jul. 1, 2009 Yes

Apr. 16, 2009

Jan. 1, 2009 No

None

No material
effects

IFRS 8 (amendment)1

Disclosure of information about segment assets

Apr. 16, 2009

Jan. 1, 2010 No

None

IFRS 9
(new standard)

IAS 1 (amendment)1

Financial Instruments – Classiﬁ cation and Measurement

Nov. 12, 2009

Jan. 1, 2013 No

Current/non-current classiﬁ cation of convertible
instruments

Apr. 16, 2009

Jan. 1, 2010 No

No material
effects

IAS 7 (amendment)1

Classiﬁ cation of expenditures on unrecognised assets

Apr. 16, 2009

Jan. 1, 2010 No

IAS 17 (amendment)1

Classiﬁ cation of leases of land and buildings

Apr. 16, 2009

Jan. 1, 2010 No

IAS 181

IAS 24 (revised)

Determining whether an entity is acting as a principal
or as an agent (guidance to appendix)

Related Party Disclosures – Revised deﬁ nition of related
parties

Apr. 16, 2009 N/A (appendix) No

Nov. 4, 2009

Jan. 1, 2011 No

IAS 27 (revised)

Consolidated and separate ﬁ nancial statements

Jan. 10, 2008

Jul. 1, 2009 Yes

IAS 32 (amendment)

Classiﬁ cation of rights issues

Oct. 8, 2009

Feb. 1, 2010 Yes

IAS 36 (amendment)1

Unit of accounting for goodwill impairment test

Apr. 16, 2009

Jan. 1, 2010 No

IAS 38 (amendment)1

Measuring the fair value of an intangible asset acquired
in a business combination

Apr. 16, 2009

Jul. 1, 2009 No

IAS 38 (amendment)1

Additional consequential amendments arising from IFRS 3

Apr. 16, 2009

Jul. 1, 2009 No

IAS 39 (amendment)1

Treating loan pre-payment penalties as closely related
derivatives

Apr. 16, 2009

Jan. 1, 2010 No

IAS 39 (amendment)1

Cash ﬂ ow hedge accounting

Apr. 16, 2009

Jan. 1, 2010 No

IAS 39 (amendment)1

Scope exemption for business combination contracts

Apr. 16, 2009

Jan. 1, 2010 No

IAS 39 (amendment)

Eligible hedged items

Jul. 31, 2008

Jul. 1, 2009 Yes

IFRIC 9 (amendment)1

Scope of IFRIC 9 and revised IFRS 3

Mar. 12, 2009

Jul. 1, 2009 No

IFRIC 12

Service Concession Arrangements

Nov. 30, 2006

Apr. 1, 2009 Yes

IFRIC 14 (amendment)

IAS 19 – The limit on a Deﬁ ned Beneﬁ t Asset, Minimum
Funding Requirements and their interaction

Nov. 26, 2009

Jan. 1, 2011 No

IFRIC 15

IFRIC 16

Agreements for the construction if real estate

Jul. 3, 2008

Jan. 1, 2010 Yes

Hedges of a Net Investment in a Foreign Operation

Jul. 3, 2008

Jul. 1, 2009 Yes

IFRIC 16 (amendment)1

Amendment to the restriction on the entity that holds
hedging instruments

Apr. 16, 2009

Jul. 1, 2009 No

IFRIC 17

IFRIC 18

IFRIC 19

Distribution of non-cash assets to owners

Nov. 27, 2008

Nov 1, 2009. No

Transfers of assets from customers

Jan. 29, 2009

Nov. 1, 2009 No

Extinguishing Financial Liabilities with Equity Instruments

Nov. 26, 2009

Jul. 1, 2009 No

1 Amendment is part of the annual improvements project published in April 2009.

None

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

3 Changes in accounting policy and disclosures
4 Basis of consolidation

4 Basis of consolidation
The consolidated ﬁ nancial statements comprise the ﬁ nancial state-

The Group of consolidated companies includes 21 companies as well

as one joint venture company accounted for using the equity method.

ments of alstria ofﬁ ce REIT-AG and its subsidiaries as at December 31,

2009. The ﬁ nancial statements of the subsidiaries are prepared for

the same reporting year as for the parent company, using consistent

Fully consolidated subsidiaries
The following subsidiaries are included in the consolidated ﬁ nancial

accounting policies.

statements:

Share in capital
( %)

Subsidiaries are entities where the Group controls their business pol-

Group entity

icies. Among other criteria, it is possible to exercise control with more

alstria Bamlerstrasse GP GmbH, Hamburg ¹

than 50 % of voting rights.

Subsidiaries are fully consolidated from the date of acquisition, i.e.

the date on which the Group obtains control. Inclusion in the consoli-

dated ﬁ nancial statements ends as soon as the parent ceases to have

control.

All intra-Group balances, transactions, income and expenses and

proﬁ ts and losses resulting from intra-Group transactions that are

alstria Gänsemarkt Drehbahn GP GmbH, Hamburg

alstria Grundbesitz 2 GP GmbH, Hamburg ¹

alstria Halberstädter Strasse GP GmbH, Hamburg ¹

alstria Hamburger Str. 43 GP GmbH, Hamburg ¹

Alstria IV. Hamburgische Grundbesitz GmbH & Co. KG,
Hamburg

alstria Ludwig-Erhard-Strasse GP GmbH, Hamburg ¹

alstria Mannheim/Wiesbaden GP GmbH, Hamburg ¹

recognised in the carrying amounts of assets are eliminated in full.

alstria ofﬁ ce Bamlerstrasse GmbH & Co. KG, Hamburg ¹

In accordance with IFRS 3, all business combinations are stated using

alstria ofﬁ ce Gänsemarkt Drehbahn GmbH & Co. KG,
Hamburg

the acquisition method. The recognised assets and the acquired liabil-

alstria ofﬁ ce Grundbesitz 2 GmbH & Co. KG, Hamburg ¹

ities are measured in full at their fair value regardless of the ownership

alstria ofﬁ ce Halberstädter Str. GmbH & Co. KG, Hamburg ¹

interest. The carrying values on the date on which control over the

subsidiary was obtained are relevant. Any remaining debit difference

is recognised as goodwill. After reassessment, any remaining credit

difference is recognised immediately as proﬁ t. In the periods following

the business combination, the disclosed hidden reserves and charges

are carried forward, amortised or released, depending on the treat-

ment of the corresponding assets.

alstria ofﬁ ce Hamburger Str. 43 GmbH & Co. KG, Hamburg ¹

alstria ofﬁ ce Ludwig-Erhard-Strasse GmbH & Co. KG,
Hamburg ¹

alstria ofﬁ ce Mannheim/Wiesbaden GmbH & Co. KG,
Hamburg ¹

alstria ofﬁ ce Steinstrasse 5 GmbH & Co. KG, Hamburg ¹

Alstria Sechste Hamburgische Grundbesitz GmbH & Co. KG,
Hamburg

The Company generally applies IFRS 3 to account for transactions

under common control. However, for transactions under common

control, any credit and debit differences resulting from capital con-

solidation are recognised as an increase or decrease in capital

alstria solutions GmbH, Hamburg ¹

alstria Steinstrasse 5 GP GmbH, Hamburg ¹

Kaisergalerie General Partner GmbH, Hamburg ¹

surplus.

Verwaltung Alstria Sechste Hamburgische Grundbesitz GmbH,
Hamburg

100

Signiﬁ cant companies where alstria ofﬁ ce REIT-AG is able, directly or

indirectly, to signiﬁ cantly inﬂ uence ﬁ nancial and operating policy

1 Formation in the reporting period.

decisions (associates), or directly or indirectly shares control (joint

Four companies were deconsolidated in the reporting period. The

ventures), are accounted for using the equity method.

effects of the changes to the Group of consolidated companies are

shown in the table below. The proﬁ t arising on deconsolidation was

EUR 1,290 k.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

EFFECTS FROM DISPOSAL OF GROUP COMPANIES

Operating lease commitments – Group as lessor The Group has

EUR k

Total disposal consideration

Disposal consideration discharged
by means of cash and cash equivalents

Amount of cash and cash equivalents
in the subsidiary disposed of

Assets except cash and cash equivalents
in the subsidiaries disposed

Liabilities in the subsidiaries disposed

2009

15,932

6,622

100

41,544

26,625

Interests in joint ventures
By means of a capital contribution from a joint venture partner into

entered into commercial property leases on its investment property

portfolio. The Group has determined, based on an evaluation of the

terms and conditions of the arrangements, that it retains all the

signiﬁ cant risks and rewards of ownership of these properties and so

accounts for the contracts as operating leases.

Estimates and assumptions
The key assumptions concerning the future and other key sources of

estimation uncertainty at the end of reporting period that have a

significant risk of causing a material adjustment to the carrying

amounts of assets and liabilities within the next ﬁ nancial year are

discussed below. Estimates are required in particular in order to:

the former subsidiary Alstria VII. Hamburgische Grundbesitz GmbH &

> determine the fair value of investment property;

Co. KG at the end of the reporting period and the contractual agree-

> determine the fair value of ﬁ nancial instruments;

ment of a joint control, this company is treated as a joint venture.

> determine the fair value of stock options granted to management;

alstria ofﬁ ce REIT-AG holds a share of 49 % in the joint venture. The

and

carrying amount of the joint venture at the end of the reporting period

> determine the fair value of convertible proﬁ t participation

is EUR 9,046 k.

certiﬁ cates.

The following carrying amounts are attributable to the Group from its

In particular, in determining the fair value of the investment property,

proportionate interest in the joint venture.

alstria ofﬁ ce REIT-AG must apply and take account of numerous

EUR k

Non-current assets

Current assets

Non-current liabilities

Current liabilities

Result for the period

2009

17,807

4,028

12,065

1,103

– 264

factors. A fair value measurement was performed by an independent

third party (Colliers CRE, London; see Note 7). If the future develop-

ment of these properties differs from the estimate, large-scale losses

resulting from the change in the fair value may be incurred. This can

have a negative impact on the future results of operations.

The external assessors have carried out sensitivity analyses on their fair

value assessments, which show the effect of the changes to capitalisa-

tion rates on fair market values.

5 Key judgments and estimates
The preparation of the consolidated ﬁ nancial statements in accordance

Capitalisation rates

with IFRS requires assumptions and estimates to be made for various

– 0.25 %

items which have an effect on the amount and disclosure of the assets

and liabilities, as well as income and expenses. Actual amounts may

0.00 %

0.25 %

differ from these estimates.

Value of the properties
(EUR m)

1,676

1,601

1,533

Judgements
In the process of applying the Group’s accounting policies, manage-

A fair value measurement of the derivative ﬁ nancial instruments was

ment has made the following judgement, apart from those involving

performed by an independent third party and the market data com-

estimations, which has the most signiﬁ cant effect on the amounts

piled thereof were included in the standard measurement models.

recognised in the ﬁ nancial statements:

Thus, the usual estimation uncertainties exist regarding possible devia-

Non income producing assets have been excluded from this analysis.

tions from the market data used. We consider the models used to be

adequate and believe that they do not engender any uncertainty as

to their applicability.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

4 Basis of consolidation
5 Key judgments and estimates
6 Seasonal or economic effects on business
7 Summary of signiﬁ cant accounting policies

The fair value of stock options granted to the management board has

been determined as at the granting date. This valuation requires the

7 Summary of signiﬁ cant accounting policies
The following accounting and valuation methods have been used to

Company to make estimates about these parameters, and hence they

prepare these consolidated financial statements of alstria office

are subject to uncertainty. The fair value of the stock options granted

REIT-AG.

as at April 3, 2007 and September 5, 2007, respectively, is allocated

to the vesting period according to the determinations in the underlying

stock option programme. The resulting personnel expenses caused an

Investment property
Investment property comprises all property that is held in order to

addition to capital surplus of EUR 91 k (December 31, 2008:

generate rental income or long-term value increases in assets and is

EUR 654 k) in the consolidated ﬁ nancial statements as at Decem-

used neither in production nor for administrative purposes. It is recog-

ber 31, 2009.

nised at acquisition costs at the time of addition. The costs include the

transaction costs which have to be capitalised (particularly real estate

The fair value of convertible proﬁ t participation certiﬁ cates granted to

transfer tax). In accordance with IAS 40.17, costs incurred subsequently

the employees of the Group were estimated at the respective granting

for dismantling, replacing in parts or maintenance of property are also

dates using a binary barrier option model based on the Black Scholes

included; however, no costs of this kind had been incurred as of the

model; assumptions since the conversion will be affected automatically

end of reporting period.

once the barrier has been reached. The model takes into account the

terms and conditions upon which the instruments were granted. This

Cost of debt which can be directly allocated to the acquisition or

valuation requires the Company to make estimates about these

production of investment property are capitalised in the year in which

parameters, and hence they are subject to uncertainty.

they arise.

The assets, liabilities and equity instruments stated above, which are

For subsequent measurement, the Company uses the fair value model

particularly exposed to estimation uncertainty, had the following impact

according to IAS 40.33 et seq., which reﬂ ects market conditions at the

on the consolidated balance sheet as at the end of reporting period:

end of reporting period.

EUR k

Dec. 31, 2009 Dec. 31, 2008

All market values were determined by Colliers CRE, London, a renowned

Investment property

1,425,440

1,805,265

Positive fair values of derivatives

615

176

Negative fair values of derivatives

48,859

28,626

Valuation of stock options and conver-
tible proﬁ t participation rights

466

768

appraiser and brokerage ﬁ rm, as at December 31, 2009.

The basis for deriving the fair values as deﬁ ned by IAS 40.33 should

be, where possible, prices in an active market for similar property

(IAS 40.45). An analysis showed that there was not a sufﬁ cient number

of ofﬁ cial comparable transactions to derive any market values. In

accordance with IAS 40.46, therefore, the fair value was determined

on the basis of an income approach.

6 Seasonal or economic effects on business
The activities of alstria ofﬁ ce REIT-AG (primarily the generation of

The method used is a hard-core and top-slice method, whereby rental

revenues from investment properties) are not generally affected by

income is horizontally segmented, with the hard-core portion repre-

seasonal factors. However, the sale of one or more large properties

senting the prevailing contractual rent. The top slice represents the

may have a signiﬁ cant impact on revenues and operating expenses.

difference between market rent and contractual rent. This method

Experience shows that the real estate market tends to ﬂ uctuate as a

standards set forth by the Royal Institution of Chartered Surveyors. The

result of factors such as the net income of consumers or GDP, changes

method used by Colliers CRE is also appropriate and suitable for de-

in interest rates, consumer conﬁ dence, and demographic and other

termining market values in accordance with the provisions of the

factors inherent to the market. The change of the interest rate might

International Valuation Standards (IVS, or the White Book).

fulﬁ ls the requirements of the Red Book, a set of international valuation

lead to a lower valuation of the investment property and derivatives.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

In order to derive the fair value, the properties were divided into two

groups and valued accordingly. Group 1 contained properties with

Leases
The lessee is considered to be the beneﬁ cial owner of leased assets

anchor lease terms of less than ﬁ ve years and Group 2 held properties

when the lessee bears all the risks and rewards incidental to the assets

with anchor lease terms of more than ﬁ ve years.

(ﬁ nance lease) in accordance with IAS 17. If the lessee is deemed

Group 1 for properties with leases set to expire in ﬁ ve years or less:

lower present value of the minimum lease payments at the inception

Hard-core and top-slice method, taking account of:

of the lease.

beneﬁ cial owner, the leased asset is recognised at fair value or the

> the contractual rent for the remaining term of the lease;

> a vacancy period of at least 18 months following expiry of the

lease;

Operating leases
Lease agreements that alstria ofﬁ ce REIT-AG has entered into with

commercial tenants are classiﬁ ed as operating leases under IFRS. Ac-

> the necessary maintenance costs to re-let the properties at a

cordingly, alstria ofﬁ ce REIT-AG is lessor in numerous different types of

comparable rent level;

> re-lets at market rents;

operating lease agreements for investment properties with a carrying

amount of EUR 1,561,265 k (December 31, 2008: EUR 1,805,265 k).

> the capitalisation rates reﬂ ecting the individual risk of the prop-

These leases generate the majority of proceeds and income for alstria

erty as well as market activity (comparable transactions); and

ofﬁ ce REIT-AG.

> non-allocable operating costs in the amount of 5 % of rental

income p.a.

Impairment of assets
Intangible assets with indeﬁ nite useful lives are not amortised; they

Group 2 for properties with anchor leases that are leased on a long-

are tested for impairment on an annual basis.

term basis to tenants with strong credit ratings: Hard-core and top-slice

method, taking account of:

Assets that are amortised are tested for impairment whenever trigger-

ing events or changes in circumstances indicate that the carrying

> the contractual rent for the remaining term of the lease;

amount may no longer be recoverable. An impairment loss is charged

> re-lets at market rents (accounting for the difference between

in the amount of the excess of the carrying amount over the recover-

market rent and contractual rent);

able amount. If the reasons for an impairment loss cease to apply, the

> the capitalisation rates reﬂ ecting the individual risk of the

impairment loss is reversed as appropriate.

property as well as market activity (comparable transactions);

> non-allocable operating costs in the amount of 5 % of rental

income p.a.; and

> the net selling price.

Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated

depreciation and accumulated impairment losses. Such cost includes

the cost of replacing part of the plant and equipment when that cost

Gains or losses arising from changes in the fair values of investment

is incurred, if the recognition criteria are met. Likewise, when a major

property are disclosed in the item ‘Net gain from fair value adjust-

inspection is performed, its cost is recognised in the carrying amount

ments on investment property’ in the income statement in the year in

of the plant and equipment as a replacement if the recognition criteria

which they arise.

are satisﬁ ed. All other repair and maintenance costs are recognised in

proﬁ t or loss as incurred.

Investment properties are derecognised when either they have been

disposed of or when the investment property is permanently with-

Depreciation of plant and equipment is calculated on a straight-line

drawn from use and no future economic beneﬁ t is expected from its

basis over the useful life of the asset (3 to 15 years). The useful life of

disposal. Any gains or losses on the retirement or disposal of an invest-

own occupied property is estimated at 50 years. While the building is

ment property are recognised in proﬁ t or loss in the year of retirement

depreciated on a scheduled basis, the land is not part of a scheduled

or disposal.

depreciation.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

7 Summary of signiﬁ cant accounting policies

An item of property, plant and equipment is derecognised upon

Currently, the Company does not have intangible assets with indeﬁ nite

disposal or when no future economic beneﬁ ts are expected from its

useful lives.

use or disposal. Any gain or loss arising on derecognition of the asset

(calculated as the difference between the net disposal proceeds and

Gains or losses arising from derecognition of an intangible asset are

the carrying amount of the asset) is included in proﬁ t or loss in the

measured as the difference between the net disposal proceeds and the

year the asset is derecognised.

carrying amount of the asset and are recognised in proﬁ t or loss when

The asset’s residual values, useful lives and methods of depreciation

are reviewed, and adjusted if appropriate, at each ﬁ nancial year end.

the asset is derecognised.

Taxes
Current tax assets and liabilities for the current and prior periods are

Cost of debt items which can be directly allocated to the acquisition

measured at the amount expected to be recovered from or paid to the

or production of property, plant and equipment are capitalised in the

taxation authorities. The tax rates and tax laws used to compute the

year in which they arise.

amount are those that are enacted or substantively enacted by the end

of the reporting period.

Intangible assets
Intangible assets acquired separately are measured on initial recogni-

Deferred taxes are not carried forward because according to the REIT

tion at cost. The cost of intangible assets acquired in a business

status the whole Group is tax transparent to income taxes.

combination is the fair value as at the date of acquisition. Following

initial recognition, intangible assets are carried at cost less any

accumulated amortisation and any accumulated impairment losses.

Financial instruments
Pursuant to IAS 39, a ﬁ nancial instrument is any contract that gives

Internally generated intangible assets, excluding capitalised develop-

rise to both a ﬁ nancial asset at one entity and a ﬁ nancial liability or

ment costs, are not capitalised and expenditure is reﬂ ected in proﬁ t

equity instrument at another entity. Financial assets comprise in par-

or loss in the year in which the expenditure is incurred.

ticular cash and cash equivalents, trade receivables, as well as other

loans and receivables originated by the enterprise, held-to-maturity

The useful lives of intangible assets are assessed to be either ﬁ nite or

investments and original and derivative ﬁ nancial assets held for trad-

indeﬁ nite.

ing. Financial liabilities frequently underlie a claim to their return in

cash or another ﬁ nancial asset. These include in particular liabilities to

Intangible assets with ﬁ nite lives are amortised over the useful economic

banks and other creditors, trade payables and derivative ﬁ nancial

life and assessed for impairment whenever there is an indication that

liabilities. Financial assets and liabilities are generally not offset.

the intangible asset may be impaired. The amortisation period and the

amortisation method for an intangible asset with a ﬁ nite useful life are

reviewed at least at each ﬁ nancial year end.

Financial assets
The recognition and measurement of ﬁ nancial assets is subject to the

provisions of IAS 39. Depending on the classiﬁ cation prescribed by

Changes in the expected useful life or the expected pattern of

IAS 39:

consumption of future economic beneﬁ ts embodied in the asset are

accounted for by changing the amortisation period or method, as

> held-to-maturity;

appropriate, and are treated as changes in accounting estimates. The

> measured at fair value through proﬁ t or loss;

amortisation expense on intangible assets with ﬁ nite lives is recognised

> available-for-sale; or

in proﬁ t or loss in the expense category consistent with the function

> loans and receivables,

of the intangible asset.

Depreciation of licences is calculated on a straight-line basis over the

and recognised as of the end of reporting period.

useful life of the asset (3 to 8 years).

ﬁ nancial assets are either measured at amortised cost or at fair value

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

The fair value of quoted investments is based on current bid prices. If

subsequently carried at fair value. Changes in the fair value of ﬁ nancial

the market for a ﬁ nancial asset is not active (and for unlisted securities),

assets classiﬁ ed as available for sale are recognised in equity; when

the Group determines fair value by using valuation techniques. These

they are sold or impaired their accumulated fair value adjustments are

include the use of recent arm’s length transactions, reference to other

included in the income statement.

instruments that are substantially the same, discounted cash ﬂ ow

analyses and option pricing models, making maximum use of market

The Group holds no ﬁ nancial assets which are classiﬁ ed as held to

inputs and relying as little as possible on entity-speciﬁ c inputs.

maturity according to the classiﬁ cation prescribed by IAS 39 classiﬁ ed

When ﬁ nancial assets are recognised initially, they are measured at fair

as held to maturity.

value plus transaction costs for all ﬁ nancial assets not carried out at

Financial assets have not been designated as ‘at fair value through

fair value through proﬁ t or loss. Management decides on the classiﬁ -

proﬁ t or loss’.

cation of ﬁ nancial assets on initial recognition and reviews the classi-

ﬁ cation at the end of reporting period. A ﬁ nancial asset is derecognised

when the entity loses control of the contractual rights that comprise

Receivables
Receivables are classiﬁ ed as loans and receivables as deﬁ ned by IAS 39

the ﬁ nancial instrument.

and measured initially at fair value and subsequently at amortised

cost, if necessary after deduction of any impairment. Amortised costs

All regular way purchases and sales of ﬁ nancial assets are recognised

are computed using the effective interest method less any allowance

on the trade date, which is the date that the Group commits to pur-

for impairment. The calculation takes into account any premium or

chase or sell the asset. A purchase or sale of ﬁ nancial assets is custom-

discount on acquisition and includes transaction costs and fees that

ary when it requires the delivery of assets within the period generally

are an integral part of the effective interest rate.

established by regulation or convention in the marketplace.

Financial assets at fair value through proﬁ t or loss are ﬁ nancial assets

check was performed on the tenants (risk associated with the legal

held for trading. A ﬁ nancial asset is classiﬁ ed in this category if it is

validity of receivables) and certainty gained that there were no rea-

acquired principally for the purpose of selling in the short term.

sons for a rent reduction (del credere risk). This is done for each indi-

Derivatives are also categorised as held for trading unless they are

vidual property and portfolio basis, respectively.

Within the scope of the measurement of trade receivables, a solvency

designated as hedges. Assets in this category are classiﬁ ed as current

assets.

Non-interest bearing receivables due in more than one year are

Derivative ﬁ nancial instruments which are not part of an effective

discounted.

hedge pursuant to IAS 39 must be classiﬁ ed as ‘held for trading’ and

Gains and losses are recognised in proﬁ t or loss when the receivables

recognised in proﬁ t or loss at fair value. If their fair value is negative,

are derecognised or impaired as well as through the amortisation

the instruments are disclosed under ﬁ nancial liabilities.

process.

Available-for-sale ﬁ nancial assets are non-derivatives that are either

If there is objective evidence that an impairment loss has been in-

designated in this category or not classified in any of the other

curred, the amount of the loss is measured as the difference between

categor ies. They are included in non-current assets unless the invest-

the asset’s carrying amount and the present value of estimated future

ment matures or management intends to dispose of it within twelve

cash ﬂ ows discounted at the ﬁ nancial asset’s original effective interest

months of the end of the reporting period, or unless the maturity at

rate (i.e. the effective interest rate computed at initial recognition).

the end of reporting period is less than twelve months. The available-

The carrying amount of the asset is reduced directly. The amount of

for-sale financial assets are initially recognised at fair value and

the loss is recognised in proﬁ t or loss.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

7 Summary of signiﬁ cant accounting policies

If, in a subsequent period, the amount of the impairment loss

Any gains or losses arising from changes in fair value on derivatives

decreases and the decrease can be related objectively to an event

during the period that do not qualify for hedge accounting are taken

occurring after the impairment was recognised, the previously recog-

directly to proﬁ t or loss.

nised impairment loss is reversed to the extent that the carrying value

of the receivable does not exceed its amortised cost at the reversal

For the purpose of hedge accounting, hedges are classiﬁ ed as cash

date. Any subsequent reversal of an impairment loss is recognised in

ﬂ ow hedges when hedging exposure to variability in cash ﬂ ows is

proﬁ t or loss.

attributable to a particular risk associated with a recognised liability.

Provision for impairment is made when there is objective evidence

At the inception of a hedge relationship, the Group formally desig-

(such as the probability of insolvency or signiﬁ cant ﬁ nancial difﬁ culties

nates and documents the hedge relationship to which the Group

of the debtor) that the Group will not be able to collect all of the

wishes to apply hedge accounting and the risk management objective

amounts due under the original terms of the invoice. The carrying

and strategy for undertaking the hedge. The documentation includes

amount of the receivable is reduced directly. Impaired assets are

identiﬁ cation of the hedging instrument, the hedged item, the nature

derecognised when they are assessed as uncollectable.

of the risk being hedged and how the entity will assess the hedging

Derivative ﬁ nancial instruments and hedge accounting
The Group uses derivative ﬁ nancial instruments such as interest rate

hedged item’s cash ﬂ ows attributable to the hedged risk. Such hedges

are expected to be highly effective in achieving offsetting changes in

swaps and caps to hedge its risks associated with interest rate ﬂ uctu-

fair value or cash ﬂ ows and are assessed on an ongoing basis to de-

ations. Such derivative ﬁ nancial instruments are initially recognised at

termine that they actually have been highly effective throughout the

fair value on the date on which a derivative contract is entered into

ﬁ nancial reporting periods for which they were designated.

instrument’s effectiveness in offsetting the exposure to changes in the

and are subsequently remeasured at fair value. Derivatives are carried

as assets when the fair value is positive and as liabilities when the fair

Cash ﬂ ow hedges which meet the strict criteria for hedge accounting

value is negative.

are accounted for as follows:

The instruments were measured as at December 31, 2009 by an inde-

The effective portion of the gain or loss on the hedging instrument is

pendent third party. The fair value of derivative ﬁ nancial instruments

recognised directly in equity, while any ineffective portion is recog-

is determined by discounting the expected future cash ﬂ ows over the

nised immediately in proﬁ t or loss.

remaining life of the agreement based on current market rates or term

structures of interest rates.

Amounts taken to equity are transferred to proﬁ t or loss when the

hedged transaction affects proﬁ t or loss, such as when the hedged

The Group assesses whether embedded derivatives are required to be

ﬁ nancial income or ﬁ nancial expense is realised.

separated from host contracts when the Group ﬁ rst becomes party to

the contract. Reassessment only occurs if there is a change in the terms

The Group uses no ﬁ nancial derivatives that qualify for the hedging

of the contract that signiﬁ cantly modiﬁ es the cash ﬂ ows that would

of the fair value of recognised assets or liabilities or a ﬁ rm commitment

otherwise be required.

(fair value hedges), nor such ﬁ nancial derivatives that qualify for the

hedging of a net investment in a foreign operation (net investment

The method used for recording gains and losses depends on whether

hedge).

the derivative was assigned to an underlying transaction as a hedge. To

this end, ﬁ nancial management deﬁ nes the hedge relationship between

the hedging instrument and the hedged item and the aim of the risk

management measure and underlying strategy when concluding the

hedge transaction.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise current

bank balances.

The component of the convertible proﬁ t participation rights (Wandel-

genussrechte) which exhibits characteristics of a liability is recognised

as a liability in the balance sheet, net of transaction costs. On issuance

of the jouissance shares, the fair value of the liability component is

For the purposes of the consolidated cash ﬂ ow statement, cash and

determined using a market rate for an equivalent non-convertible

cash equivalents include the cash and cash equivalents deﬁ ned above,

bond, and this amount is classiﬁ ed as a ﬁ nancial liability measured at

other short-term highly liquid investments with original maturities of

amortised cost until it is extinguished on conversion or redemption.

three months or less, and bank overdrafts.

A ﬁ nancial liability is derecognised when the obligation under the liabil-

Current bank balances are recognised in the nominal amount.

ity is discharged or cancelled or expires. When an existing ﬁ nancial

Treasury shares
Company equity instruments which are reacquired (treasury shares)

liability is replaced by another from the same lender under substantially

different terms, or the terms of an existing liability are substantially

modiﬁ ed, such an exchange or modiﬁ cation is treated as a derecogni-

are deducted from equity. No gain or loss is recognised in proﬁ t or loss

tion of the original liability and the recognition of a new liability, and

on the purchase, sale, issue or cancellation of the Group’s own equity
instruments.

the difference in the respective carrying amounts is recognised in proﬁ t

or loss.

Liabilities
Financial liabilities, in particular trade payables, are stated at the

Provisions
Provisions are recognised where a present obligation exists to third

amount repayable and are, if non-current and non-interest bearing,

parties as a result of a past event, where a future outﬂ ow of resources

discounted.

is probable and where a reliable estimate of that outﬂ ow can be made.

The provisions are measured, taking account of all risks at the best

The fair values are determined by discounting the future contractually

estimate of future cash outﬂ ows required to meet the obligation,

agreed cash ﬂ ows at the interest rates from the term structure of

and – if non-current – discounted. They may not be offset against

interest rates to the end of reporting period.

reimbursements.

The recognition and measurement of ﬁ nancial liabilities is subject to

the provisions of IAS 39. Depending on the classiﬁ cation prescribed

by IAS 39

> at amortised cost

Share-based payment transactions
The members of the management board as well as employees of the

Group receive remuneration in the form of share-based payment

transactions, whereby employees render services as consideration for
equity instruments (‘equity-settled transactions’). The cost of equity-

> measured at fair value through proﬁ t or loss;

settled transactions is measured by reference to the fair value at the

date on which they are granted. The fair value is determined using

ﬁ nancial liabilities are either measured at amortised cost or at fair value

an appropriate pricing model, further details of which are given in

and recognised as of the end of reporting period.

Notes 17 and 18 and in the remuneration report, respectively.

All loans and borrowings are initially recognised at fair value less

The cost of equity-settled transactions is recognised, together with a

directly attributable transaction costs, and have not been designated

corresponding increase in equity, over the period in which the

as ‘at fair value through proﬁ t or loss’. After initial recognition, interest-

performance and/or service conditions are fulﬁ lled, ending on the

bearing loans and borrowings are subsequently measured at amortised

date on which the relevant assignee becomes fully entitled to the

cost using the effective interest method. Gains and losses are recog-

award (‘the vesting date’). The cumulative expense recognised for

nised in proﬁ t or loss when the liabilities are derecognised as well as

equity-settled transactions at each reporting date until the vesting

through the amortisation process.

date reﬂ ects the extent to which the vesting period has expired and

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

7 Summary of signiﬁ cant accounting policies
8 Segment reporting

the Group’s best estimate of the number of equity instruments that

will ultimately vest. The proﬁ t or loss charge or credit for a period

Revenue recognition
Revenue is recognised to the extent that it is probable that the eco-

represents the movement in cumulative expense recognised as at the

nomic beneﬁ ts will ﬂ ow to the Group and the revenue can be reliably

beginning and end of that period.

measured. Revenue is measured at the fair value of the consideration

received, excluding discounts, rebates and other sales taxes or duty.

No expense is recognised for awards that do not ultimately vest,

The following speciﬁ c recognition criteria must also be met before

except for awards where vesting is dependent upon a market condi-

revenue is recognised:

tion, which are treated as vesting irrespective of whether or not the

market condition is satisﬁ ed, provided that all other performance

Rental income Rental income arising from operating leases on invest-

and/or service conditions are satisﬁ ed.

ment properties is accounted for on a straight-line basis over the lease

Where the terms of an equity-settled award are modiﬁ ed, the min-

terms.

imum expense recognised is the expense as if the terms had not been

Interest income Revenue is recognised as interest accrues (using the

modiﬁ ed. An additional expense is recognised for any modiﬁ cation,

effective interest rate that is the rate that exactly discounts estimated

which increases the total fair value of the share-based payment ar-

rangement, or is otherwise beneﬁ cial to the assignee as measured at

future cash receipts through the expected life of the ﬁ nancial instru-
ment to the net carrying amount of the ﬁ nancial asset).

the date of modiﬁ cation.

Where an equity-settled award is cancelled, it is treated as if it had

Income taxes
REIT-AGs are fully exempt from German corporate income tax and

vested on the date of cancellation, and any expense not yet recog-

trade tax. Hence, alstria ofﬁ ce REIT-AG has been exempt from tax

nised for the award is recognised immediately. However, if a new

with retrospective effect since January 1, 2007.

award is substituted for the cancelled award, and designated as a

replacement award on the date that it is granted, the cancelled and

new awards are treated as if they were a modiﬁ cation of the original

8 Segment reporting
IFRS 8 replaces IAS 14, ‘Segment reporting’. It requires a ‘manage-

award, as described in the previous paragraph.

ment approach’, under which segment information is presented on

the same basis as that used for internal reporting purposes.

The dilutive effect of outstanding options is reﬂ ected as additional

share dilution in the computation of earnings per share as far as at the

As the type of services offered by alstria ofﬁ ce REIT-AG is comprised

end of reporting period the related contingencies are achieved (further

exclusively of lessor activities for commercial property tenants in

details are given in Note 14).

Minority interests in partnerships
Under IAS 32.16 and IAS 32.19, a ﬁ nancial instrument is an equity

Germany, there were no reportable segments within the meaning of
IAS 14. According to IFRS 8, one reporting segment can be identiﬁ ed

that is comprised of the Groups’ total operations.

instrument if, and only if, an entity has no conditional or unconditional

This reporting segment is reported in a manner consistent with the

obligation to deliver cash or another asset. In addition, IAS 32.18(b)

internal reporting provided to the chief operating decision-maker. The

states that the right of a partner to return his investment to the partner-

chief operating decision-maker has been identiﬁ ed as the manage-

ship for compensation at any time must be disclosed as a liability, even

ment board.

when, in legal terms, the partner is an investor. Speciﬁ cally, equity must

be reclassiﬁ ed as liabilities when the shareholders have a right of ter-

mination and the exercise of that right justiﬁ es a settlement claim

against the company. Therefore minority interests in fully consolidated

partnerships are disclosed under liabilities. The minority interests’ share

in net proﬁ t or loss is recorded in the income statement as income or

an expense (ﬁ nancial result) in accordance with IAS 32.35.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

9 Notes to the consolidated income statement
9.1 Revenues

9.4 Administrative expenses

EUR k

2009

2008

Legal and consulting fees

Revenues from investment property

102,510

105,055

Communication and marketing

Revenues from investment property chieﬂ y include net rents from

Audit fee

Depreciation

investment property.

Supervisory board compensation

Travel expenses

Leasing costs

Stock exchange

Insurances

IT maintenance

Recruitment costs

Other

9.2 Income and expenses from passed-on

operating expenses

EUR k

2009

2008

Income from passed-on operating
expenses

Income from passed-on operating
expenses prior year

Expenses from passed-on operating
expenses

Expenses from passed-on operating
expenses prior year

17,202

17,057

2,031

19,233

17,057

– 17,202

– 17,057

9.5 Personnel expenses

– 2,389

EUR k

– 19,591

– 17,057

Salaries and wages

Income less expenses from passed-on
operating expenses

– 358

Social insurance contribution

Bonuses

Expenses for share-based compensation

The expenses from passed-on operating expenses which are directly

thereof relating to stock options

attributable to investment property include, in particular, operating
costs, maintenance and property-based taxes.

thereof relating to the convertible
proﬁ t participation certiﬁ cates

2009

2,066

2008

3,061

800

427

359

292

264

185

162

122

1,394

6,187

2009

2,477

312

1,320

466

375

131

284

574

538

506

299

237

309

139

996

6,878

2008

2,380

256

895

776

654

122

367

9.3 Real estate operating expenses

EUR k

Maintenance and refurbishment

Vacancy

Running repairs

Property management

Non-deductable VAT

Depreciation of own occupied property

Other

2009

4,778

2,076

1,149

869

408

114

795

10,189

Amounts for retirement provisions
and disability management board

Other

2008

3,793

1,412

469

956

294

4,990

4,675

Convertible proﬁ t participation rights granted to employees entitle not

only a conversion when the conditions apply, but also an annual pay-

ment equivalent to the dividend per share. Therefore, expenses for

share-based compensation resulting from the convertible profit

participation rights are to be recognised also in equity (for the conver-

1,909

8,833

sion right) as well as against liabilities (for the dividend entitlement).

Out of the EUR 375 k expense in relation to the proﬁ t participation

rights, EUR 297 k was recognised in equity (2008: EUR 114 k) while

EUR 78 k were reﬂ ected in the liabilities (2008: EUR 8 k).

Within the course of 2009 the Group had 31 employees on average

(2008: 28).

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

9 Notes to the consolidated income statement

9.6 Other operating income

EUR k

Proﬁ t on deconsolidation

Income from development projects

From the reversal of liabilities

Payments on provisions on doubtful
debts

Income from the consumption of accrued
liabilities

From insurance compensation

Car use

Compensation payment (rent)

Other

2009

1,290

327

323

221

170

669

2008

456

710

1,000

476

3,124

2,774

9.8 Financial and valuation result
The ﬁ nancial result breaks down as follows:

EUR k

Financial income

2009

593

2008

1,975

Syndicated loan – interest

– 25,638

– 58,992

Interest non-recourse loans

Interest result derivatives

Bank overdraft

Financial expenses

Commitment fees

Bank charges

Guarantee fees

Transaction costs

Other

Other ﬁ nancial expenses

– 3,918

– 22,433

– 1

– 1,192

10,681

– 1

– 51,990

– 49,503

– 75

– 80

– 524

– 40

– 720

– 238

– 82

– 2

– 262

– 584

Other operating income includes the proﬁ t that arose on the decon-

Net ﬁ nancing result

– 52,117

– 48,112

solidation of two former Group companies. Income from the consump-

tion of accrued liabilities resulted from lower than expected payments

on the prior year-end’s accruals.

9.7 Other operating expenses

EUR k

Rental guarantees

Impairment on trade receivables

Off period expenses

Other

Total interest income and expenses for ﬁ nancial assets and liabilities

which are not recognised at fair value through proﬁ t or loss were

EUR 593 k (interest income; 2008: EUR 1,975 k) and EUR 29,557 k

(interest expenses; 2008: EUR 60,184 k).

Total interest income and expense calculated using the effective inter-

est method for ﬁ nancial assets and liabilities that are not recognised

at fair value through proﬁ t or loss was EUR 2,362 k (interest expenses;

2008: EUR 1,145 k).

No net gains/losses arose from ﬁ nancial assets and liabilities available

for sale.

2009

1,550

311

1,866

2008

255

251

516

The rental guarantees relate to the sale of properties. The buyer was

Change in presentation

In the split-up of the consolidated ﬁ nancial

granted a rental guarantee; the rental guarantee is limited in time and

statements 2008, the interest result out of derivatives (EUR 10,681 k)

can only be drawn if existing tenants make use of a break option.

was included in ﬁ nancial income and was not offset from the ﬁ nancial

expenses as presented above. Therefore ﬁ nancial income in the 2008

annual report was stated with EUR 12,656 k and ﬁ nancial expenses

with EUR – 60,184 k. This change in presentation does not affect the

net ﬁ nancial result. The reason for the change in presentation is that

the interest result out of derivatives is used to hedge the variable inter-

est loans. It belongs to the ﬁ nancing side and, in order to improve the

comparability, should be recognised under ﬁ nancial expenses as it is

now presented.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

The net loss from the fair value loss from the fair value adjustments

Deferred income tax Due to the REIT tax exemption, there were no

on ﬁ nancial derivatives is shown below:

impacts on the ﬁ nancial statements, equity or proﬁ t and loss in 2008

EUR k

2009

2008

and 2009.

– 16,331

10 Notes to the consolidated balance sheet – assets
10.1 Investment property
This item, which comprises all investment properties held by the

– 6,002

– 5,544

Company, breaks down as follows:

Transfer of cumulated loss from cash
ﬂ ow hedge reserve to income statement

Ineffective change of the fair value of
cash ﬂ ow hedges

Change in fair value of ﬁ nancial deriva-
tives not qualifying to a cash ﬂ ow hedge

Net loss from fair value adjustments on
ﬁ nancial derivatives

– 961

469

– 23,294

– 5,075

EUR k

Fair values

As of Jan. 1

Changes in the consolidated group

In 2009, EUR 16,331 k relates to cumulative loss in the fair value of
cash ﬂ ow hedge derivatives which were reported in equity and for

Property acquisition

Capital expenditure

which a forecast transaction is no longer expected to occur.

Disposals

Further details and explanation on derivatives are shown under Note

10.8.

9.9 Disposal proceeds

Transfers to held for sale

– 135,825

– 2,754

Net result from the adjustment of the fair
value of investment property

As of Dec. 31

– 85,887

– 88,116

1,425,440

1,805,265

EUR k

2009

2008

alstria ofﬁ ce REIT-AG uses the fair value model pursuant to IAS 40.33

Investment property disposal proceeds

134,115

17,950

et seq. for subsequent measurement. External appraisals were ob-

tained for measurement. For a detailed description of the valuation of

Carrying value of investment property
disposals

– 134,140

– 16,500

assets, please see Note 7.

– 25

1,450

The loss from objects and portfolios sold below their carrying value

amounts to EUR 375 k.

alstria ofﬁ ce REIT-AG in 2009 concluded the acquisition of one invest-

ment property located in Hamburg. This property has been transferred
to alstria ofﬁ ce REIT-AG in the third quarter of 2009.

9.10 Income taxes
Because of obtaining the G-REIT status, alstria ofﬁ ce REIT-AG was

sion, beneﬁ ts and burden of thirteen properties took place in 2009.

Two of them have been transferred in the course of deconsolidation

subject to ﬁ nal taxation on the effective date of the transfer into a

of former Group companies (see Note 4).

In the course of the property disposal process, the transfer of posses-

G-REIT in 2007. For a detailed description of the transformation into

a G-REIT, please see Note 1 of the 2007 consolidated ﬁ nancial state-

Due to probable sale transactions, three properties in a total amount

ments. alstria ofﬁ ce REIT-AG is tax-exempt effective as of January 1,

of EUR 135,825 k were categorised as ‘held for sale’ in the consoli-

2007. Deferred tax liabilities and assets had to be released to income

dated ﬁ nancial statements as at December 31, 2009.

in 2007. A total of EUR 110 k in tax expenses in 2009 refer to trade

taxes levied retrospectively for the 2007 ﬁ nancial year on a subsidiary

Capital expenditure (EUR 13,987 k) is made up of subsequent acquisi-

of alstria ofﬁ ce REIT-AG. The EUR 75 k of tax expenses in 2008 refer

tion and production costs in relation to property acquisitions and

to corporate tax levied retrospectively for the ﬁ nancial year 2006.

refurbishment projects.

2009

2008

1,805,265

1,693,718

– 41,440

3,480

13,987

218,917

– 134,140

– 16,500

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

9 Notes to the consolidated income statement
10 Notes to the consolidated balance sheet – assets

Expenses/income disclosed in the income statement pursuant to

Investment properties have been used as security for bank loans in the

IAS 40.75 (f):

amount of EUR 1,561,265 k (2008: EUR 1,805,265 k).

> EUR 102,510 k (2008: EUR 102,055 k) rental income from invest-

ment property;

10.2 Equity accounted investment
By means of a capital contribution from a joint venture partner, into

> EUR 8,166 k (2008: EUR 7,487 k) operating expenses (including

the former subsidiary Alstria VII. Hamburgische Grundbesitz GmbH

repairs and maintenance) directly allocable to investment property

& Co. KG at the end of the reporting period, this company is treated

from which rental income was generated during the period under

as a joint venture and it is stated as an equity-accounted investment.

review; and

alstria ofﬁ ce REIT-AG holds a share of 49 % in the joint venture. The

> EUR 2,023 k (2008: EUR 1,346 k) operating expenses (including

carrying amount of the joint venture at the end of the reporting

repairs and maintenance) arising from investment property which did

period is EUR 9,046 k.

not generate rental income during the period under review.

10.3 Property, plant and equipment

EUR k

Acquisition and production cost

As at Jan. 1, 2009

Additions

Transfer from investment property

Reclassiﬁ cations

As at Dec. 31, 2009

Accumulated amortisation, depreciation and write-downs

As at Jan. 1, 2009

Additions

As at Dec. 31, 2009

Net book values as at Dec. 31, 2009

EUR k

Acquisition and production cost

As at Jan. 1, 2008

Additions

Transfer from investment property

Reclassiﬁ cations

As at Dec. 31, 2008

Accumulated amortisation, depreciation and write-downs

As at Jan. 1, 2008

Additions

As at Dec. 31, 2008

Net book values as at Dec. 31, 2008

Furniture and
ﬁ xtures

Own occupied
property

Plant

1,100

159

3,381

2,274

Total
2009

4,640

2,317

1,100

202

5,655

6,957

659

187

846

254

101

114

5,541

Furniture and
ﬁ xtures

Own occupied
property

Plant

1,727

– 627

1,100

285

374

659

441

159

101

3,381

717

343

1,060

5,897

Total
2008

1,802

3,381

– 627

4,640

308

409

717

3,381

3,923

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

The useful life of the assets is estimated at 3 to 15 years for plant,

furniture and ﬁ xtures and 50 years for the own occupied property by

10.5 Financial assets
A minority interest in a former Group company is stated in this line

the Group.

item.

The plants consist of miscellaneous items such as ﬁ re extinguishers or

a control panel for a closed-circuit television system.

10.6 Assets held for sale
Assets held for sale as shown refer exclusively to investment properties

alstria ofﬁ ce REIT-AG intends to occupy one of its ofﬁ ce buildings in

Hamburg for its own use. For this purpose, the property will be refur-

The asset held for sale in the disposal group include one property

bished. Therefore the property is categorised as owner-occupied

(carrying amount EUR 60.000 k) which is to be transferred to a joint

which are to be sold in the reporting year 2010.

property according to IAS 16. In order to secure Group liabilities, the

venture in 2010.

property is pledged with a land charge as security.

The main assets and liabilities of the disposal group are as follows:

10.4 Intangible assets

EUR k

Acquisition and production cost

As of Jan. 1, 2009

Additions

As of Dec. 31, 2009

Accumulated amortisation, depreciation and write-downs

As of Jan. 1, 2009

Additions

As of Dec. 31, 2009

Net book values

EUR k

Acquisition and production cost

As of Jan. 1, 2008

Additions

As of Dec. 31, 2008

Accumulated amortisation, depreciation and write-downs

As of Jan. 1, 2008

Additions

As of Dec. 31, 2008

Net book values

Licences
Dec. 31, 2009

EUR k

Assets

Investment property

Receivables and other assets

Cash and cash equivalents

Total assets

Liabilities

Short-term loans

Other liabilities

Total liabilities

475

105

580

139

130

269

311

Dec. 31, 2009

135,825

462

334

136,621

27,500

676

28,176

Licences
Dec. 31, 2008

10.7 Receivables and other assets
Due to the speciﬁ c nature of the business, the Group considers re-
ceivables due up to one year to be current. The following table

presents an overview on the receivables of the Group:

399

475

139

336

EUR k

Trade receivables

Rent receivables

Accounts receivable from afﬁ liates

Tax receivables

Other receivables

Receivables from disposal group

Prepayments

Deposit account

Held-for-sale asset (bond)

Other assets

Other receivables

Dec. 31, 2009 Dec. 31, 2008

5,694

1,855

27,500

2,361

1,550

2,072

33,483

4,099

303

24,878

3,085

28,266

The useful life of the intangible assets is estimated at 3 to 8 years.

The intangible assets mainly consist of software licences, which

amount to EUR 290 k (2008: EUR 324 k).

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

10 Notes to the consolidated balance sheet – assets

All receivables are due within one year from the end of the reporting

To secure the loans of the Group, all receivables from rental and prop-

period. The fair value of all receivables equals to their carrying amount

erty purchase agreements as well as insurance receivables and derivative

in the balance sheet.

ﬁ nancial instruments were assigned to the lenders (Note 11.2).

Trade receivables were written down by EUR 311 k (December 31,

Receivables from the disposal group are related to ‘liabilities associ-

2008: EUR 255 k) due to rent payments in arrears. Other assets than

ated with the sale of non-current assets held for sale’. It is the part

trade receivables were not impaired.

of the syndicated loan of alstria ofﬁ ce REIT-AG which is designated

to the disposal group. The corresponding liability is shown within the

As of December 31, 2009, trade receivables of EUR 724 k (Decem-

‘liabilities associated with the sale of non-current assets held for sale’

ber 31, 2008: EUR 830 k) were past due but not impaired. These relate

on the liabilities side of the Group’s balance sheet.

to a number of independent customers for whom there is no recent

history of default. The ageing analysis of these trade receivables is as

A total of EUR 1.831 k of the other assets are made up of accruals

follows:

EUR k

Trade receivables

Up to 3 months

3 to 6 months

Over 6 months

Total

Dec. 31, 2009 Dec. 31, 2008

648

383

447

724

830

resulting from the recognition of total rental revenues on a straight-

line basis over the term of the lease agreements (rent smoothing).

Prepayments relate to annual insurance premiums that are payable

in advance.

The decline of ﬁ nancial instruments held for sale is the result of the

disposal of a bond.

10.8 Derivative ﬁ nancial instruments
The following derivative ﬁ nancial instruments existed as at the end of

reporting period:

Product

Cap

Swap

Interest rate derivatives – held for trading

Cap

Swap

Dec. 31, 2009

Dec. 31,2008

Strike p.a.

( %) Maturity date

Notional
(EUR k)

Fair value
(EUR k)

4.9000 Dec. 20, 2012

75,000

4.1160

Jul. 10, 2013

100,000

3.3000 Oct. 20, 2014

25,139

3.3000 Oct. 20, 2014

8,649

3.1925 Nov. 29, 2011

21,880

4.6000 Oct. 20, 2015

95,000

4.9000 Dec. 20, 2012

34,100

3.9087

Jan. 20, 2012

148,785

100

– 7,331

– 7,231

383

132

– 781

– 1,854

– 3,170

– 7,828

Notional
(EUR k)

75,000

100,000

80,880

95,000

75,000

148,785

Fair value
(EUR k)

176

– 4,517

– 4,341

– 557

– 1,447

– 5,497

– 4,282

3.6165 Nov. 29, 2011

625,000

– 27,895

625,000

– 12,326

Interest rate derivatives – cash ﬂ ow hedges

Total

– 41,013

– 48,244

– 24,109

– 28,450

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

The changes of the derivatives result from various effects. The follow-

ing table shows the changes of alstria ofﬁ ce REIT-AG’s ﬁ nancial instru-

ments since December 31, 2008 by category:

CHANGES IN FINANCIAL DERIVATIVES

EUR k

Hedging instruments as at Dec. 31, 2008

Effective change in fair values cash ﬂ ow hedges

Ineffective change in fair values cash ﬂ ow hedges

Net loss from fair value changes in ﬁ nancial derivatives
not qualifying for cash ﬂ ow hedging

Reclassiﬁ cation of cumulated loss from equity to income statement

Changes in accrued interests concerning ﬁ nancial derivatives

Acquisitions

Disposals

Hedging instruments as at Dec. 31, 2009

Cash ﬂ ow
hedge
reserve

– 49,579

– 9,952

16,331

– 43,200

Financial derivatives

Financial
assets

Financial
liabilities

Total

176

– 235

– 47

– 29

728

615

– 28,626

– 28,450

– 9,974

– 5,767

– 914

– 9,952

– 6,002

– 961

– 9,068

– 9,097

5,490

728

5,490

– 48,859

– 48,244

The notional amount of the ﬁ nancial derivatives effective at the end

Together, this results in a loss of EUR 23,294 k (2008: EUR 5,075 k)

of the reporting period is EUR 1,039,553 k (December 31, 2008:

shown under net loss from fair value adjustments on ﬁ nancial deriva-

EUR 1,104,665 k). One swap with a notional of EUR 95,000 k will not

tives. For the EUR 16,331 k expense relating to the transfer out of

become effective before July 10, 2013. Derivatives with a notional of

equity, the corresponding booking entry is an equity account, which

EUR 175,000 k are not designated as a cash ﬂ ow hedge.

increased by the same amount. Therefore this expense entry in the

amount of EUR 16,331 k has no effect on the Group’s net asset value.

In total EUR – 9,952 k changes in fair values of effective derivatives

have been recognised in the hedging reserve.

On October 13, 2009, alstria ofﬁ ce REIT-AG entered into two interest

The ineffective portion recognised in the proﬁ t or loss that arises

3.3000 %, expiring on October 20, 2014. This transaction became

from cash ﬂ ow hedges amounts to a loss of EUR 6,002 k (2008:

effective as per October 20, 2009. The fair value of the caps at the

EUR 5,544 k).

inception of the hedging relationship was EUR 728 k.

caps with a notional amount of EUR 33,788 k and a cap strike of

Losses totalling EUR 961 k (2008: proﬁ t of EUR 469 k) due to the

The aforementioned caps partly replaced the EUR 59,000 k notional

market valuation of derivatives not included in hedge accounting were

amount of an existing interest rate swap terminated with the effective

recorded in the income statement in the period of the ﬁ nancial state-

date of July 20, 2009. This resulted in the fair value reduction of

ments to December 31, 2009.

ﬁ nancial liabilities out of this swap by EUR 2,000 k.

A loss of EUR 16,331 k relates to the cumulative losses that were

Further interest rate swaps with a notional amount of EUR 40,900 k

reported in equity and for which the forecast transaction is no longer

have been terminated with the effective date of October 20, 2009.

expected to occur. It was immediately transferred to the income state-

The value reduction out of this termination amounted to EUR 3,490 k.

ment within net loss of fair value adjustments on ﬁ nancial derivatives

(see Note 9.8).

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

10 Notes to the consolidated balance sheet – assets
11 Notes to the consolidated balance sheet – equity and liabilities

10.9 Cash and cash equivalents

Capital surplus The capital surplus changed as follows during the

EUR k

Bank balances

Dec. 31, 2009

Dec. 31, 2008

146,818

31,426

EUR k

ﬁ nancial year:

Bank balances earn interest at ﬂ oating rates based on daily bank de-

posit rates. As at the end of the reporting period, EUR 61,848 k of the

cash and cash equivalents is restraint on disposal; EUR 59,132 k

thereof is dedicated to the repayment on a loan in relation to the

disposal of properties. Another EUR 2,716 k is dedicated to the pay-

ment of interest. The amount corresponds to the accrued interest on

the syndicated loan.

11 Notes to the consolidated balance sheet –

equity and liabilities

11.1 Equity
For detailed information on equity we refer to the consolidated state-

As of Jan. 1

Share-based payments

Contributions to capital surplus

Valuation of available-for-sale ﬁ nancial
assets

Transaction costs of issue of shares

Other contributions to capital surplus

Reclassiﬁ cation of retained earnings
(see also Note 15)

Result of the disposal of treasury shares

Intrinsic value of exchange option
for treasury shares

Disposal of treasury shares

ment of changes in consolidated equity.

As of Dec. 31

Dec. 31, 2009

Dec. 31, 2008

726,885

754,647

388

123

– 28,423

– 13,076

1,744

– 14,820

685,897

768

– 123

– 7

– 28,400

726,885

Share capital

thousand

Dec. 31, 2009

Dec. 31, 2008

board of the Company, and accordingly, stock options with a fair value

A stock option programme was resolved in 2007 by the supervisory

Ordinary share of EUR 1 each

56,000

of EUR 1,997 k were issued to members of the management board of

the Company. As of December 31, 2009, this resulted in a further

increase of the capital surplus of EUR 91 k (2008: EUR 654 k) from

In the balance sheet of the consolidated ﬁ nancial statements as at

the allocation of the fair values of the granted stock options over the

December 31, 2009, the share capital of alstria ofﬁ ce REIT-AG was

respective vesting period. A further increase of EUR 297 k (2008:

unchanged, amounting to EUR 56,000 k. Captiva 2 Alstria Holding

EUR 114 k) resulted from the vesting of the convertible proﬁ t partici-

S.à r.l., Luxembourg, directly and indirectly held a majority of the
shares in the Company, the remaining shares are free ﬂ oat.

pation certiﬁ cates granted to employees of the Group. Together, this
amounts to EUR 388 k shown under share-based payments.

Treasury stock

Dec. 31, 2009

Dec. 31, 2008

dend payments for 2007 and 2008. The Company aligns the disclosure

Reclassiﬁ cations from retained earnings (EUR – 56,823 k) for the years

2008 (EUR – 28,400 k) and 2009 (EUR – 28,423 k) relate to the divi-

Non-par value bearer shares (quantity)

2,374

1,375,755

Non-par value bearer shares
(amount in EUR k)

14,983

carried forward.

to the German GAAP presentation that requires a reposting out of the

capital reserve corresponding its decrease in the German GAAP proﬁ t

alstria ofﬁ ce REIT-AG offered its shareholders to pay out treasury

shareholders to swap their dividend claims for treasury shares. Due to

shares instead of a cash dividend. As a result, 1,337,760 treasury

a granted discount, the intrinsic value of the exchange option for

shares were issued to the shareholders. The distribution date was on

treasury shares amounted to EUR 1,744 k.

In the course of dividend payments, in 2009 the Company offered its

July 7, 2009.

By resolution of the general meeting on June 10, 2009, the authori-

Hedging reserve

sation of the Company to acquire treasury shares has been renewed.

EUR k

Dec. 31, 2009

Dec. 31, 2008

According to the resolution, alstria ofﬁ ce REIT-AG is authorised to ac-

quire up to 10 % of the capital stock until December 9, 2010. For the

time being, it is not intended to make any use of this authorisation.

Hedging reserve

– 43,200

– 49,579

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

11.2 Financial liabilities

EUR k

Loans

Syndicated loan

Non-recourse loans

Total

EUR k

Loans

Syndicated loan

Non-recourse loans

Total

Non-current

751,387

195,870

947,257

Non-current

992,033

94,768

1,086,801

Current

Accrued
interest

Total current

Dec. 31, 2009

2,716

663

3,379

89,348

2,593

840,735

198,463

91,941

1,039,198

Current

Accrued
interest

Total current

Dec. 31, 2008

11,423

1,186

12,609

11,423

1,003,456

1,186

95,954

12,609

1,099,410

Loan

86,632

1,930

88,562

Loan

The table shows the long-term loans, net of the current portion as

The current amount is made up of amortisation, scheduled loan repay-

stated under non-current liabilities and the current amount that is due

ment and accrued interest to be paid on the loans.

within one year, and shown as short-term loans under current

liabilities.

The variable interest of the loans is payable on a quarterly basis, with

the standard margin and borrowing costs for the market added to the

The syndicated loan was arranged with J.P. Morgan Plc., Natixis

respective Euribor rate.

Banques Populaires, German Branch, and HSH Nordbank AG for a

nominal amount of EUR 1,139,800 k. Out of this nominal amount,

Due to the variable interest rate, there are no signiﬁ cant differences

EUR 842,837 k (December 31, 2008: EUR 995,374 k) had been drawn
as of the end of the reporting period. The carrying amount due to

deducted transaction costs to be allocated under the effective interest

between the carrying amounts and fair value with the exception of

transaction costs.

method upon raising the liabilities is EUR 838,019 k (December 31,

A total of EUR 32,540 k in ﬁ nancial liabilities from non-recourse loans

2008: EUR 992,033 k). To secure these liabilities, receivables from

relate to a ﬁ xed interest rate loan. As at the end of the reporting period,

rental and property purchase agreements as well as insurance receiv-

this loan has a fair value of EUR 32,872.

ables and derivative ﬁ nancial instruments were assigned to the lend-

ers, liens were granted on bank accounts and the registration of land

As at December 30, 2009, alstria agreed on a further non-recourse

charges was agreed (Notes 10.3 and 10.7).

loan amount of EUR 33,000 k and an additional CAPEX line of

EUR 6,200 k. This loan has been closed in the course of a joint venture

Furthermore, due to reﬁ nancing activities, non-recourse loans with a

which became effective with the drawdown as at January 20, 2010.

nominal amount of EUR 198,550 k (December 31, 2008:

EUR 95,000 k) existed as at the end of the reporting period. The lower

As at December 31, 2009, loans were reduced by transaction costs of

carrying amount of EUR 197,800 k (December 31, 2008: EUR 94,768 k)

EUR 5,568 k (December 31, 2008: EUR 3,574 k).

takes into account interest liabilities and transaction costs to be

allocated under the effective interest method upon raising the

The carrying amounts of the loans are all denominated in euros; the

liabilities.

fair value of all ﬁ nancial liabilities, with the exception of the transac-

tion cost and the ﬁ xed interest rate loan, approximates their nominal

value at the end of the reporting period.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

11 Notes to the consolidated balance sheet – equity and liabilities

The liabilities exposed to an interest rate risk are due as follows:

Due

Dec. 31, 2009

Dec. 31, 2008

EUR k

up to 1 year

in more
than 1 year

Total
Dec. 31, 2008

EUR k

Up to 1 year

More than 1 year

Total

88,562

Trade payables

914,717

1,086,801

Other trade payables

1,003,279

1,086,801

The following loans are secured by land charges:

EUR k

Dec. 31, 2009

Dec. 31, 2008

Financial liabilities secured by
land charges

1,035,819

1,086,801

thereof on investment property

1,030,278

1,086,801

Other current liabilities

VAT liabilities

Liability for real
estate transfer tax

Miscellaneous other
liabilities

4,561

790

2,147

8,148

11,085

701

4,561

790

2,147

8,218

11,155

¹ This position is shown under non-current liabilities in the consolidated balance sheet.

11.3 Other provisions
In respect of the sale of properties, the Group has accepted the com-

mitment to compensate the buyer for possible rent income shortfalls

The disclosed carrying amounts approximate the fair values.

in case of non-extension of rental agreements existing with certain

Other trade payables relate to operating costs not yet invoiced of

tenants at the disposal date. The provision amount of EUR 1,550 k was

EUR 2,981 k (December 31, 2008: EUR 3,435 k) and liabilities from

calculated as net present value of possible cash outﬂ ow due to this

third-party real estate management services and rental activities of

rental guarantee for which a realisation is expected more likely than

EUR 711 k (December 31, 2008: EUR 1,126 k).

not. The commitment relate to a 6 years rental period starting in 2014.

The same circumstances led to contingent liabilities (see Note 12.2).

The liabilities for real estate transfer tax result from the acquisition of

11.4 Trade payables and other liabilities

properties in 2008.

Due

Miscellaneous other liabilities include outstanding invoices with an

amount of EUR 4,128 k and deferred income of EUR 2,410 k (2008:

EUR k

up to 1 year

in more
than 1 year

Total
Dec. 31, 2009

EUR 2,451 k). Accrued bonuses amount to EUR 1,320 k (2008:
EUR 843 k). It also includes received deposits of EUR 434 k (2008:

Trade payables

Other trade payables

Other current liabilities

VAT liabilities

Liability for real
estate transfer tax

Miscellaneous other
liabilities

3,692

110

220

9,569

9,899

344

3,692

110

220

9,913

10,243

EUR 451 k). Minority interests in partnerships (EUR 10 k) are also

disclosed under miscellaneous other liabilities.

11.5 Trust assets and liabilities
As at the end of the reporting period, alstria ofﬁ ce REIT-AG has trust

assets with an amount of EUR 1,550 k and liabilities of EUR 434 k

(December 31, 2008: EUR 451 k), in particular from rent deposits.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

11.6 Deferred taxes
According to its REIT status, alstria ofﬁ ce REIT-AG has been fully tax

transparent for income taxes starting from January 1, 2007. Therefore,

As at December 31, 2009, there was no rental agreement for the

administrative premises with a minimum lease length.

at the end of reporting period as well as at the end of the prior-years’

Operating lease commitments – Group as lessor The Group has en-

reporting period deferred, taxes do not exist.

tered into commercial property leases on its investment property

11.7 Liabilities of current tax
As at reporting date no liabilities of current tax existed (December 31,

2008: EUR 21 k).

12 Other notes
12.1 Compensation of management board

and supervisory board

Management board

In 2009, the overall compensation of the mem-

bers of the executive board totalled EUR 1,529 k (2008: EUR 1,314 k).
As at the reporting date, liabilities for the compensation of the mem-

bers of the executive board amount to EUR 550 k. Under the stock

option programme of alstria ofﬁ ce REIT-AG, members of the executive

board held non-transferable stock options for 375,000 shares of alstria

ofﬁ ce REIT-AG as at December 31, 2009 and 2008, respectively.

portfolio, consisting of the Group’s surplus ofﬁ ce and manufacturing

buildings. These non-cancellable leases have remaining terms of be-

tween 1 and 26 years. All leases include an indexation clause, i.e. the

rental charges may be raised annually according to prevailing market

conditions.

Future minimum rental charges receivable under non-cancellable

operating leases are as follows:

EUR k

Within 1 year

After 1 year but not longer
than 5 years

More than 5 years

Dec. 31, 2009 Dec. 31, 20081

91,707

101,905

309,248

519,158

352,550

602,754

920,113

1,057,209

Details of the stock option programme are also included in these notes

1 Corrected previous year values.

(see Note 17).

Supervisory board Pursuant to the Articles of Association, supervisory

board members’ ﬁ xed annual payment amounted to EUR 299 k (2008:

12.3 Consolidated cash ﬂ ow statement
The cash ﬂ ow statement shows how the cash and cash equivalents of

EUR 292 k).

the Group changed in the course of the ﬁ nancial year as a result of

cash received and paid. In accordance with IAS 7, a distinction is made

Further information on disclosures according to Section 314 para-

between cash ﬂ ows from operating activities and cash ﬂ ows from

graph 1 no. 6a HGB (German Commercial Code) and IAS 24.16 is

investing and ﬁ nancing activities.

provided in the remuneration report (pages 90 to 91) that is presented
in the corporate governance chapter and is also part of these notes.

The cash and cash equivalents in the cash ﬂ ow statement relate to all

cash disclosed in the balance sheet, i.e. cash on hand and bank

12.2 Commitments and contingencies
alstria ofﬁ ce REIT-AG entered into a general building agreement.

balances.

Future commitments out of this contract amounted to EUR 4,122 k

The cash ﬂ ows from investing and ﬁ nancing activities are calculated

as at the end of the reporting period. Other ﬁ nancial obligations from

on the basis of payments, whereas the cash ﬂ ows from operating

refurbishment projects and ongoing maintenance amount to

activities are derived indirectly based on the consolidated proﬁ t for the

EUR 3,862 k (2008: EUR 6,105 k).

year. Under the indirect method, changes to the balance sheet items

recognised in connection with operating activities are adjusted for

In respect of the sale of properties, at the disposal date the Group

effects arising from changes to the consolidated Group.

accepted the commitment to compensate the buyer for possible rent

income shortfalls in case rental agreements existing with certain ten-

Thus changes to the relevant balance sheet items cannot always be

ants are not extended. Contingencies out of this commitment amount

reconciled to the corresponding amounts from the published consoli-

to EUR 4,768 k. The commitment relates to a 6-year rental period

dated balance sheet.

starting 2014. According to the details of the rental guarantees and

the lettability of the objects, the Company does not expect a claim to

The payments for investing activities with an amount of EUR 140,627 k

come out of the rental guarantees. The same circumstances led to

(2008: EUR – 235,246 k) were funded by additional borrowings and

provisions (see Note 11.3).

by operating cash.

The repayments of borrowings (EUR 153,058 k; 2008: EUR 107,495 k)

were ﬁ nanced by additional borrowings, by operating cash and by using

the cash and cash equivalents.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

11 Notes to the consolidated balance sheet – equity and liabilities
12 Other notes
13 Related party relationships
14 Earnings per share

13 Related party relationships
13.1 Preliminary remarks
Related parties are members of the management of alstria ofﬁ ce

14 Earnings per share
Basic earnings per share are calculated as the quotient of the proﬁ t

attributable to the shareholders and the weighted average number of

REIT-AG (management board and supervisory board) and close family

shares outstanding during the ﬁ nancial year – except for the average

members of these persons. Related parties also include entities with

number of treasury shares held by the Company itself.

controlling inﬂ uence over the Group and entities with joint control

over, or signiﬁ cant inﬂ uence on, alstria ofﬁ ce REIT-AG.

Diluted earnings per share amounts are calculated by dividing the

Captiva 2 Alstria Holding S.à r.l. (the parent company), Captiva Capital

weighted average number of ordinary shares outstanding during the

Partners II SCA and Captiva Capital II S.à r.l. (ultimate parent com-

year – except for the treasury shares held by the Company itself –

pany) are considered to have a controlling inﬂ uence over alstria ofﬁ ce

plus the weighted average number of ordinary shares that would be

REIT-AG. There was no group of entities with joint control or signiﬁ -

issued on the conversion of all the dilutive potential ordinary shares

cant inﬂ uence, with which business was conducted in the ﬁ nancial

into ordinary shares.

proﬁ t attributable to ordinary owners of the parent company by the

year.

The following reﬂ ects the income and share data used in the earnings

As a joint venture in which alstria ofﬁ ce REIT-AG is a joint venturer,

per share computations:

Alstria VII. Hamburgische Grundbesitz GmbH & Co. KG is a related

party.

Two members of the supervisory board of alstria ofﬁ ce REIT-AG are

also executive managers of Natixis Capital Partners Limited and

Proﬁ t attributable to the shareholders
(EUR k)

Average number of shares outstanding
(thousands)

Natixis Capital Partners GmbH. Therefore, related parties during the

ﬁ nancial year also included Natixis Capital Partners Limited and

Basic earnings per share
(EUR per share)

Natixis Capital Partners GmbH.

2009

2008

– 79,651

– 56,000

55,306

54,697

– 1.44

– 1.02

In the view of alstria ofﬁ ce REIT-AG’s management, all transactions

There were no dilution effects resulting from the granted stock options

with related parties have been entered into on arm’s length terms or

or the convertible proﬁ t participation rights during the period under

under conditions in alstria ofﬁ ce REIT-AG’s favour.

review, as the related vesting conditions were not satisﬁ ed as at the

13.2 Remuneration of key management personnel
For a detailed description of the remuneration of key management

For further information concerning granted stock option and convert-

personnel, please see Note 12.1 and the remuneration report (pages

ible proﬁ t participation rights, please see Notes 17 and 18.

end of the reporting period.

90 to 91) in the corporate governance chapter.

13.3 Related party transactions
Transactions with related parties only apply to laid-out expenses in

relation to accounting services for Captiva Capital Partners II SCA in

There have been no other transactions involving ordinary shares or

potential ordinary shares between the reporting date and the date of

completion of these ﬁ nancial statements.

an amount of EUR 24 k (2008: EUR 28 k).

alstria ofﬁ ce REIT-AG is authorised to issue up to EUR 28,000 k shares

as conditional capital. These contingently issuable shares could poten-

At the end of the reporting period, the Group has receivables of

tially dilute basic earnings per share in the future, but were not included

EUR 1,855 k against the joint venture. Furthermore, alstria ofﬁ ce

in the calculation of diluted earnings per share because they are non-

REIT-AG received EUR 327 k from the joint venture as compensation

dilutive for the period presented.

for services connected to real estate.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

15 Dividends paid
The annual general meeting of alstria ofﬁ ce REIT-AG on June 10, 2009

At the beginning of the reporting period, 515,625 stock options out-

standing existed. Therefore, the amount of stock options outstanding

resolved to pay out dividends totalling of EUR 28,423 k (EUR 0.52

as at the end of reporting period remained unchanged. None of these

per share outstanding). The dividends paid out in 2008 totalled

stock options are exercisable. The personnel expenses resulting from

EUR 28,400 k (EUR 0.52 per share outstanding).

the allocation of the fair values of the stock options at the granting date

over the vesting period amounted to EUR 91 k in 2009 (Note 9.5).

Shareholders had been entitled to exchange their cash dividend en-

titlement for a share dividend. The shares have been exchanged into

The fair values of the options outstanding were estimated at the

cash dividend entitlements 2008 for a share price of EUR 4.16. At a

respective granting dates using a Black Scholes model and partial-time

cash dividend entitlement of EUR 0.52, eight dividend entitlements

barrier options, taking into account the terms and conditions upon

equal one share. EUR 15,794 k of the dividend was paid out on June

which the instruments were granted. The following table lists the

29, 2009 as a cash dividend to those shareholders who did not apply

inputs to the model used for the determination of the fair value of the

for the share dividend. A total of EUR 5,565 k in share dividends,

stock options granted:

together with EUR 7,064 k in cash dividends due to the oversubscrip-

tion of the offer, was paid out on July 6, 2009.

The EUR 5,565 k, which reﬂ ects the exchange of cash dividend claims

for shares in the Company, are shown under retained earnings.

Dividend yield ( %)

Risk-free interest rate ( %)

Expected volatility ( %)

16 Employees
During the period from January 1, 2009 to December 31, 2009, the

Expected life of option (years)

Exercise share price (EUR)

Company had an average of 31 employees (January 1, 2008 to De-

Labour turnover rate ( %)

cember 31, 2008: on average 28 employees). The average was calcu-

Stock price as of valuation date (EUR)

3.60

4.21

30.00

4.50

16.00

0.00

16.00

3.60

4.29

30.00

4.50

16.00

0.00

13.93

Fair value of stock options granted on

Mar. 27, 2007

Sept. 5, 2007

lated by the fourth part of the total of employed people at the end of

each quarter. On December 31, 2009, 32 people (December 31,

2008: 29 people) were employed at alstria ofﬁ ce REIT-AG, excluding

the management board.

17 Stock option programme
On March 27, 2007, the supervisory board of the Company resolved
to establish a stock option programme for the members of the man-

Estimated fair value of one stock option
at the granting date (EUR)

3.17

2.28

Expected volatility is based on the historical volatility of comparative

listed companies and was calculated as an average of these compar-

ables.

The term of each stock option is 7 years beginning with the respective

agement board. The supervisory board ﬁ xed the details of the stock

issue date. The stock options may only be exercised if the current stock

option programme in accordance with the authorisation granted by

exchange price of the Company’s shares exceeds the stock exchange

the general meeting of shareholders of March 15, 2007 and granted

price of the Company’s shares on the issue date by 20 % or more for

a ﬁ rst tranche of stock options to the management board.

at least seven non-subsequent trading days of the Frankfurt Stock

Exchange prior to the commencement of the respective exercise

The main terms of the stock option programme resolved by the super-

period. The stock options may only be exercised after the expiration

visory board can be summarised as follows:

of a vesting period of 2 years and then during the four exercise periods

each year. Each exercise period lasts 30 days, commencing with the

Under the stock option programme, up to 2,000,000 options entitling

day of announcement of the results for the ﬁ rst, second and third

to the subscription of a maximum of 2,000,000 shares of the Company

quarter, and the day of the Company’s annual general meeting. There

with a total nominal value of EUR 2,000 k may be granted to members

are no cash settlement alternatives.

of the management board. The stock options will be granted in annual

tranches. The ﬁ rst tranche was granted by the supervisory board in

2007, subject to the conditions below. The exercise price for the stock

options granted in 2007 is EUR 16. Due to the development of the

Company’s share price, the supervisory board did not grant any stock

options in 2008 and 2009.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

15 Dividends paid
16 Employees
17 Stock option programme
18 Convertible proﬁ t participation rights programme
19 Financial risk management

18 Convertible proﬁ t participation rights programme
On September 5, 2007, the supervisory board of the Company

The fair values of the inherent options for conversion were estimated

at the respective granting dates using a binary barrier option model

resolved the issuance of convertible proﬁ t participation certiﬁ cates

based on the Black Scholes model since the conversion will be affected

(‘certiﬁ cates’) to employees of the Company and to employees of

automatically once the barrier has been reached. The model takes into

companies in which alstria ofﬁ ce REIT-AG, directly or indirectly, holds

account the terms and conditions upon which the instruments were

a majority interest. Members of alstria ofﬁ ce REIT-AG’s management

granted.

board are not considered employees of the Company in terms of this

convertible proﬁ t participation rights programme. With its resolution,

The following table lists the inputs to the model used for the deter-

the supervisory board ﬁ xed the details of the convertible proﬁ t partici-

mination of the fair value of the options for conversion:

pation rights programme in accordance with an authorisation granted

by the general meeting of shareholders of March 15, 2007.

Granting date of tranche

Sept. 6, 2007

Jun. 6, 2008

Jun. 11, 2009

The main terms of the programme resolved by the supervisory board

can be summarised as follows:

The nominal amount of each certiﬁ cate is EUR 1.00 and is payable

upon issuance. Under the programme, a maximum of 500,000 certiﬁ -

cates in an aggregate nominal amount of up to EUR 500 k may be

issued; 3,600 certiﬁ cates were issued on September 6, 2007, 42,000

certiﬁ cates on June 6, 2008 and a further 114,000 certiﬁ cates on June

11, 2009. Total expenses relating to convertible proﬁ t participation

rights were EUR 375 k in 2009 (Note 9.5). In 2008 1,100 participation

rights have been terminated.

None of the convertible proﬁ t participation rights expired during the

Dividend yield ( %)

3.70

4.70

8.68

Risk-free interest rate ( %)

4.20

4.65

1.71

Expected volatility ( %)

30.00

35.00

73.00

Expected life of option
(years)

2.00

Exercise share price (EUR)

2.00

Labour turnover rate ( %)

10.00

Stock price as of valuation
date (EUR)

Estimated fair value of
one option for conversion
at the granting date

13.18

11.03

5.99

10.77

8.76

4.01

reporting period. At the end of the reporting period, 158,500 convert-

Expected volatility is based on the historical volatility of comparative

ible proﬁ t participation rights were outstanding.

listed companies and was calculated as an average of these

The certiﬁ cates are issued as non-transferable rights. The certiﬁ cates

are neither sellable nor pledgeable or otherwise chargeable.

comparables.

19 Financial risk management
The ﬁ nancial instruments chieﬂ y used by the Group are bank loans

The maximum term of each certiﬁ cate is ﬁ ve years.

and derivative ﬁ nancial instruments. The main purpose of the bank

loans is to ﬁ nance the business activities of alstria ofﬁ ce REIT-AG. The

During its term, each certiﬁ cate entitles to a preferred disbursement

Company also has various ﬁ nancial assets, such as cash and short-term

from the Company’s annual net proﬁ t. The proﬁ t share corresponds

deposits, which arise directly from business activities.

to the dividend per share of the Company for a full business year of

the Company. For certiﬁ cates held by a beneﬁ ciary for less than a full

Derivative ﬁ nancial instruments include interest swaps and caps. The

business year of the Company, the proﬁ t share is reduced pro rata

purpose of these derivative ﬁ nancial instruments is to hedge against

temporis.

interest risks arising from the Company’s business activities and its

Each certiﬁ cate shall be converted into one non-par-value bearer share

sources of ﬁ nancing.

of the Company on the second, third, fourth or ﬁ fth anniversary date

The main risks arising from the Group’s ﬁ nancial instruments are cash

of the issue date if the then current stock exchange price of the Com-

ﬂ ow interest rate risks and liquidity risks. The Group is not exposed to

pany’s shares has exceeded the stock exchange price of the Company’s

any signiﬁ cant credit risks. The amount that best presents the max-

shares on the issue date by 5 % or more on at least seven non-subse-

imum credit risk is the carrying amount of ﬁ nancial assets. The man-

quent trading days (market condition). For the 114,000 certiﬁ cates is-

agement board decides on strategies and processes for managing

sued on June 11, 2009 this market condition was fulﬁ lled in 2009.

speciﬁ c risk types. These are presented below.

Upon conversion of a certiﬁ cate, the beneﬁ ciary shall pay an additional

conversion price to the Company for each certiﬁ cate to be converted.

The conversion price shall be the aggregate proportionate amount in

the Company’s share capital of the shares each certiﬁ cate entitles to

subscribe for and shall be payable in addition to the offer price.

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

Risks that could arise as a result of the ﬁ nancial crisis are seen mainly

Apart from this, the Group is not exposed to any commodity or

in a potential default of payment by a major tenant. Due to the fact

currency risks.

that all of the Company’s main tenants are public institutions or still

highly rated, the risk of default of payments is currently limited.

Interest rate risk The following table sets out the carrying amount,

by maturity, of the Group’s ﬁ nancial instruments which are exposed

alstria ofﬁ ce REIT-AG’s syndicated loan facility agreement allows for a

to interest rate risk:

loan to value (LTV) ratio of 65 %. After the loan restructuring, the

Company managed to keep the LTV ratio on the relevant test date at

59.8 %. With the measures implemented since the beginning of 2009,

the risk of a breach of covenant was effectively countered.

EUR k

< 1 year

1 – 2 years

2 – 3 years

3 – 4 years

> 4 years

Total

Financial year as at Dec. 31, 2009

Variable interest

Loan facility

Non-recourse loans

Total

Financial year as at Dec. 31, 2008

Variable interest

Loan facility

Non-recourse loans

Total

86,632

751,387

927

971

87,559

752,358

1,013

1,065

161,517

838,019

165,493

161,517

1,003,512

992,033

94,768

1,086,801

Due to the extensive portfolio of non-current ﬁ nancial liabilities with a

difference between ﬁ xed and variable interest rate amounts calculated

variable interest risk, alstria ofﬁ ce REIT-AG is exposed to risks from

by reference to an agreed-upon notional principal amount. In addition,

ﬂ uctuations in market interest rates. The interest base for the ﬁ nancial

interest caps were acquired; that is, the interest is capped at a prede-

liability (loan) is the 3-month EURIBOR, which is adjusted every three
months. A number of different derivative ﬁ nancial instruments were

acquired to manage the interest expense. The derivative ﬁ nancial

termined maximum. If the maximum interest rate is exceeded, the

difference between the actual interest rate and the cap rate is paid out.

instruments relate to interest swaps in which the Company agrees to

The derivative ﬁ nancial instruments of alstria ofﬁ ce REIT-AG are pre-

exchange with contracting partners, at specified intervals, the

sented below:

Product

Cap

Swap

Total

Strike p.a.
( %)

Notional
(EUR k) Maturity date

3.3000

4.9000

3.1925

4.6000

4.9000

4.1160

3.9090

3.6165

25,139 Oct. 20, 2014

8,649 Oct. 20, 2014

75,000 Dec. 20, 2012

21,880 Nov. 29, 2011

95,000 Oct. 20, 2015

34,100 Dec. 20, 2012

100,000

Jul. 10, 2013

148,785

Jan. 20, 2012

Carrying amount/fair value
(EUR k)

2009

383

132

100

– 781

– 1,854

– 3,170

– 7,331

– 7,828

2008

176

– 557

– 1,447

– 5,497

– 4,517

– 4,282

625,000 Nov. 29, 2011

– 27,895

– 12,326

– 48,244

– 28,450

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

19 Financial risk management

These interest swaps and interest caps are used to hedge the obliga-

b) Impact on income statement

tion underlying the loans.

The following table shows the sensitivity of the Company’s loans on

FINANCIAL DERIVATIVES NOT QUALIFYING TO CASH FLOW
HEDGE ACCOUNTING

consolidated proﬁ t or loss and equity accordingly to a reasonably

EUR k

possible change in the interest rates (due to the effect on the ﬂ oating

+80 basis points

interest loans). All variables remain constant; the effects from the

– 100 basis points

derivative financial instruments were not factored into this

2009

5,797

– 7,555

2008

338

– 128

calculation.

INTEREST EXPENSES P. A.

EUR k

+80 basis points

– 100 basis points

2009

6,674

2008

7,050

– 12,764

– 8,812

Liquidity Risk The Company continually monitors the risk of potential

liquidity bottlenecks using a liquidity planning tool, which uses the

expected cash ﬂ ows from business activities and the maturity of the

ﬁ nancial liabilities as a basis for analysis. The long-term reﬁ nancing

strategy of the Group ensures the medium and long-term liquidity

requirements.

The fair market value of derivative ﬁ nancial instruments is also subject

As at the end of the reporting period, the nominal ﬁ nancial liabilities

to interest rate risks. A change in the interest rate would give rise to

had the following maturities in line with their contractual maturity (the

the following changes of the respective fair market values:

basis is the 3-month EURIBOR as at December 31, 2009 plus the

weighted average margin of 94 basis points for the Group’s loans).

a) Impact on equity

FINANCIAL DERIVATIVES QUALIFYING TO CASH FLOW
HEDGE ACCOUNTING

EUR k

+80 basis points

– 100 basis points

2009

11,670

2008

25,308

– 14,794

– 32,963

EUR k

< 1 year

1 – 2 years

2 – 3 years

3 – 4 years

4 – 5 years

> 5 years

Total

Financial year as at Dec. 31, 2009

Interests

Loans

20,057

23,471

6,447

6,681

6,269

3,042

65,967

88,573

758,189

2,027

2,079

95,519

95,000

1,041,387

Financial derivatives

25,386

18,923

3,274

2,070

1,917

51,570

Trade payables

3,692

Other current liabilities

6,599

144,307

800,584

11,747

10,831

103,705

98,042

1,169,215

Financial year as at Dec. 31, 2008

Interests

Loans

52,202

39,591

36,461

3,904

3,893

7,018

143,069

1,341

994,033

95,000

1,090,374

Financial derivatives

9,139

8,715

2,860

1,421

2,966

34,240

Trade payables

4,561

Other current liabilities

7,793

75,036

48,730

1,039,209

6,764

5,315

104,984

1,280,037

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

The most signiﬁ cant liability is a syndicated loan from J.P. Morgan Plc.,

The capital structure is monitored by the Company using the key

Natixis and HSH Nordbank AG for a nominal EUR 1,139,800 k;

performance indicators (KPIs) relevant for classiﬁ cation as a REIT. The

EUR 842,837 k of this nominal amount had been utilised as at the end

REIT equity ratio, being the ratio of equity to immovable assets, is the

of reporting period (December 31, 2008: EUR 995,374 k). The second

most important KPI. According to the Group’s strategy, the REIT equity

major part of liabilities is made up of loans entered into with several

ratio shall be between 45 % and 55 % within the relevant term

banks as result of the Group’s reﬁ nancing strategy, with a nominal

provided by the REIT law. The G-REIT status is unaffected as long as

amount of EUR 198,550 k (December 31, 2008: EUR 95,000 k). The

the G-REIT ratio at the end of the business year is not below 45 % for

entire amount of the loans has been utilised as at the end of reporting

three consecutive business years.

period. To secure these liabilities, receivables from rental and property

purchase agreements as well as insurance receivables and derivative

The following KPIs are also used to manage capital:

ﬁ nancial instruments were assigned to the lenders; liens were granted

on bank accounts and charges on the land registered. The obligations

KPIS ACCORDING TO G-REIT LAW

arising from the ﬂ oating interest bank loans were fully secured. Land

charges for real estate property with a carrying amount of

EUR 1,566,806 k were furnished as security.

Equity ratio according to
G-REIT law

Capital management Capital management activities are aimed at

Immovable assets

maintaining the Company’s classiﬁ cation as a REIT in order to support

its business activities and maximise shareholder value.

The Company manages its capital structure and makes adjustments in

response to changes in economic conditions. In order to maintain or

adjust the capital structure, the Group can make a capital repayment

to its shareholders or issue new shares. No changes were made to the

aims, guidelines and processes as at December 31, 2009 and Decem-

ber 31, 2008.

Revenues gained from
immovable assets

Income gained from
disposal of immovable
assets

2009

2008

G-REIT
Covenant

40.26

89.20

40.34

96.36

100.00

> 45

> 75

9.93

1.24

< 501

1 Within ﬁ ve years based on the average property value during this period.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

19 Financial risk management

Fair value The following table shows the carrying amount and fair

value of all ﬁ nancial instruments disclosed in the consolidated ﬁ nancial

statements.

Carrying
amount

Non-
ﬁ nancial
instruments

Financial instruments

Assets as per balance sheet (EUR k)
as of Dec. 31, 2009

Equity-accounted investments

Financial assets

Trade receivables

Accounts receivable from joint
ventures

Derivatives

Tax receivables

9,046

351

5,694

1,855

615

Loans and
receivables

5,694

1,855

Receivables and other assets

33,483

4,152

29,331

Cash and cash equivalents

Total

146,818

197,866

146,818

Assets at
fair value
through
profit and
loss

9,046

Derivatives
hedge
accounting

100

515

Available
for sale

351

Total

Fair value

9,046

351

5,694

1,855

615

9,046

351

5,694

1,855

615

29,331

146,818

4,152

183,701

9,146

515

351

193,713

Liabilities as per balance sheet (EUR k)
as of Dec. 31, 2009

Long-term loans

Derivatives

Short-term loans

Trade payables

Other liabilities

Total

Carrying
amount

Non-ﬁ nancial
instruments

Financial instruments

Liabilities at
fair value
through profit
and loss

Other
liabilities

Derivatives
hedge
accounting

Total

Fair value

947,257

48,859

91,941

3,692

10,243

1,101,992

9,465

952,825

18,328

30,531

91,941

3,692

778

48,859

91,941

3,692

778

48,859

91,941

3,692

778

18,328

1,049,236

30,531

1,098,095

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

Carrying
amount

Non-ﬁ nancial
instruments

Financial instruments

Assets as per balance sheet (EUR k)
as of Dec. 31, 2008

Trade receivables

Derivatives

Tax receivables

Receivables and other assets

Cash and cash equivalents

Total

4,099

176

28,266

31,426

63,968

Loans and
receivables

4,099

2,291

31,426

37,817

1,097

Assets at fair
value through
profit and
loss

176

Available
for sale

24,878

176

24,878

Total

4,099

176

27,169

31,426

62,871

Fair value

4,099

176

27,169

31,426

62,871

Carrying
amount

Non-ﬁ nancial
instruments

Financial instruments

Liabilities as per balance sheet (EUR k)
as of Dec. 31, 2008

Long-term loans

1,086,801

Derivatives (designated for hedge
accounting)

Short-term loans

Trade payables

Other liabilities

Total

28,626

12,609

4,561

11,156

1,143,753

Liabilities at
fair value
through profit
and loss

Other
liabilities

Derivatives
hedge
accounting

Total

Fair value

3,293

1,090,374

28,626

12,609

4,561

7,863

28,626

12,609

4,561

7,863

28,626

12,609

4,561

7,863

1,115,407

28,626

1,144,033

The fair value of the derivative ﬁ nancial instruments and the loans was
determined by an independent expert by discounting the expected

Fair value estimation Effective as of January 1, 2009, the Group
adopted the amendment to IFRS 7 for ﬁ nancial instruments which are

future cash ﬂ ows at prevailing market interest rates.

measured in the balance sheet at fair value. This requires the disclo-

sure of fair value measurements by level of the following fair value

Net gains and losses from ﬁ nancial instruments are as follows:

measurement hierarchy:

EUR k

Financial instruments at fair value
through profit or loss

Loans and receivables

Total

2009

2008

> Quoted prices (unadjusted) in active markets for identical assets or

liabilities (level 1).

– 23,294

– 5,075

> Inputs other than quoted prices included within level 1 which are

– 311

– 254

– 23,605

– 5,329

observable for the asset or liability, either directly (i.e. as prices) or

indirectly (i.e. derived from prices) (level 2).

> Inputs for the asset or liability which are not based on observable

market data (that is, unobservable inputs) (level 3).

Net losses during the reporting period resulted from valuation losses

and, in the case of loans and receivables, from the write-down on trade

receivables.

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

19 Financial risk management
20 Signiﬁ cant events after the end of the reporting period
21 Utilisation of exempting provisions
22 Disclosures pursuant to Wertpapierhandelsgesetz [German Securities Trading Act]

All of the Group’s ﬁ nancial instruments which are measured in the

In January 2010, three swaps with a notional amount of EUR 203.9 m

balance sheet at fair value are valued using the level 2 valuation

were terminated and a new one with a notional amount of EUR 33.0 m

measurement approach. This only applies to the Group’s ﬁ nancial

(cash ﬂ ow hedge) was closed.

derivatives, as there are no other ﬁ nancial instruments that are meas-

ured in the balance sheet at fair value.

21 Utilisation of exempting provisions
The following German subsidiaries included in the consolidated ﬁ nan-

The fair value of ﬁ nancial instruments that are not traded in an active

cial statements of alstria ofﬁ ce REIT-AG have made use of the exemp-

market (for example, over-the-counter derivatives) is determined by

tion granted in Section 264b HGB:

using valuation techniques. These valuation techniques maximise the

use of observable market data where it is available and rely as little as

> Alstria IV. Hamburgische Grundbesitz GmbH & Co. KG, Hamburg

possible on entity-speciﬁ c estimates. If all signiﬁ cant inputs required

> alstria ofﬁ ce Bamlerstrasse GmbH & Co. KG, Hamburg

to ascertain the fair value of an instrument are observable, the instru-

> alstria ofﬁ ce Gänsemarkt Drehbahn GmbH & Co. KG, Hamburg

ment is included in level 2.

> alstria ofﬁ ce Grundbesitz 2 GmbH & Co. KG, Hamburg

> alstria ofﬁ ce Halberstädter Str. GmbH & Co. KG, Hamburg

20 Signiﬁ cant events after the end of the reporting period
alstria ofﬁ ce REIT-AG agreed the terms of a joint venture regarding the

> alstria ofﬁ ce Hamburger Str. 43 GmbH & Co. KG, Hamburg
> alstria ofﬁ ce Ludwig-Erhard-Strasse GmbH & Co. KG, Hamburg

rebuilding of the Kaisergalerie at Grosse Bleichen 23 – 27 in Hamburg.

> alstria ofﬁ ce Mannheim/Wiesbaden GmbH & Co. KG, Hamburg

While the Company will mainly contribute the building to the joint

> alstria ofﬁ ce Steinstrasse 5 GmbH & Co. KG, Hamburg

venture, the partner will basically contribute equity funding. The envis-

> Alstria Sechste Hamburgische Grundbesitz GmbH & Co. KG,

aged time line for the project is around twelve months, starting in the

Hamburg

middle of 2011.

22 Disclosures pursuant to Wertpapierhandelsgesetz

In January, alstria ofﬁ ce REIT-AG entered into a new credit facility on a

[German Securities Trading Act]

non-recourse basis as an additional step towards decreasing the balloon

1 Ad-hoc announcement

payment of the syndicated loan facility. The credit facility is a EUR 76 m,

7-year non-recourse loan with a ﬁ xed rate over the maturity at 4.62 %.

Date

Topic

In January 2010, the Company made a voluntary down payment on its

main credit facility of EUR 20 m to decrease the LTV ratio below 60 %,

Feb. 11, 2009

alstria ofﬁ ce REIT-AG: Debt covenants
successfully renegotiated and LTV at
year-end below 60 %

Language

German/
English

and to secure the margin of 85 bp for the next two interest periods.

Oct. 29, 2009

alstria ofﬁ ce REIT-AG: alstria agrees to
sell a EUR 93.4 m ofﬁ ce portfolio

German/
English

2 Directors’ dealings
The following transactions were executed in 2009 and reported to

alstria ofﬁ ce REIT-AG:

Name of person
subject to the disclo-
sure requirement

Olivier Elamine

Alexander Dexne

Function

Member of
the manage-
ment board

Classiﬁ cation
of the share

ISIN

Transaction

Place

Transaction
date

Price per
share (EUR)

Number of
Shares

Deal volume
(EUR)

DE000A0L-
D2U1

Buy

DE000A0L-
D2U1

Buy

Over the
counter

Mar. 26,
2009

3.86

22,668

87,498.48

3.86

12,953

49,998.58

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

3 Voting rights notiﬁ cations

No.

Date

Shareholders

Jan. 5,
2009

CCT Corporate Nom-
inees Limited

Mourant Limited

Voting rights
(new) ( %)

0.00

52.04

Mourant & Co. Limited

52.04

Mourant Ireland Limited

52.04

Jan. 5,
2009

Jan. 7,
2009

Morgan Stanley
Investment Management
Limited

Morgan Stanley

Morgan Stanley
International Holdings
Inc.

Jan. 7,
2009

Morgan Stanley
International Limited

Jan. 7,
2009

Morgan Stanley Group
(Europe)

Feb. 2,
2009

Morgan Stanley
Investment Management
Limited

Morgan Stanley

Morgan Stanley
International Holdings
Inc.

Feb. 2,
2009

Morgan Stanley
International Limited

Feb. 2,
2009

Morgan Stanley Group
(Europe)

Feb. 2,
2009

Morgan Stanley
Investment Management
Limited

Morgan Stanley

Morgan Stanley
International Holdings
Inc.

Feb. 2,
2009

Morgan Stanley
International Limited

Feb. 2,
2009

Morgan Stanley Group
(Europe)

Feb. 2,
2009

Morgan Stanley
Investment Management
Limited

Morgan Stanley

Morgan Stanley
International Holdings
Inc.

Strike threshold ( %)

50, 30, 25, 20, 15, 10,
5 , 3

Date of
change

Attributed
shares

Disclosure
according to

Dec. 22,
2008

Dec. 19,
2008

Apr. 12,
2007

Nov. 20,
2007

yes

Jan. 14,
2008

yes

Jan. 14,
2008

yes

§ 26 (1)
WpHG

Language

German/
English

English

4.95

4.96

4.95

3.35

5.03

4.84

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

22 Disclosures pursuant to Wertpapierhandelsgesetz [German Securities Trading Act]

No.

Voting rights
(new) ( %)

Strike threshold ( %)

Date of
change

Attributed
shares

Disclosure
according to

Date

Shareholders

Feb. 2,
2009

Morgan Stanley
International Limited

Feb. 2,
2009

Morgan Stanley Group
(Europe)

Feb. 2,
2009

Morgan Stanley
Investment Management
Limited

Morgan Stanley

Morgan Stanley
International Holdings
Inc.

Feb. 2,
2009

Morgan Stanley
International Limited

Feb. 2,
2009

Morgan Stanley Group
(Europe)

Cohen & Steers Inc.

4.84

5.33

3.10

2.50

Maitre Patrick Foetisch

48.90

30, 25, 20, 15, 10, 5, 3

Maitre Patrick Foetisch

50.20

Maitre Patrick Foetisch

0.00

50, 30, 25, 20, 15, 10,
5, 3

SFCT Investments Ltd

48.90

30, 25, 20, 15, 10, 5, 3

SFCT Investments Ltd

50.20

SFCT Investments Ltd

0.00

50, 30, 25, 20, 15, 10,
5, 3

Citco III Limited

48.90

30, 25, 20, 15, 10, 5, 3

Citco III Limited

50.20

0.00

50, 30, 25, 20, 15, 10,
5, 3

Citco Group Limited

48.90

30, 25, 20, 15, 10, 5, 3

Citco Group Limited

50.20

0.00

50, 30, 25, 20, 15, 10,
5, 3

CBC Holdings NV

48.90

30, 25, 20, 15, 10, 5, 3

CBC Holdings NV

Jun. 29,
2009

Citco Banking
Corporation NV

50.20

0.00

50, 30, 25, 20, 15, 10,
5, 3

48.90

30, 25, 20, 15, 10, 5, 3

Feb. 2,
2009

Mar. 17,
2009

Jun. 29,
2009

Jan. 14,
2008

Feb. 28,
2008

Jan. 28,
2009

Mar. 10,
2009

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

yes

§ 26 (1)
WpHG

Language

English

German/
English

English

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

No.

Date

Shareholders

Jun. 29,
2009

Citco Banking
Corporation NV

Jun. 29,
2009

Citco Banking
Corporation NV

Jun. 29,
2009

Citco C&T
Holdings Limited

Jun. 29,
2009

Citco C&T
Holdings Limited

Jun. 29,
2009

Citco C&T
Holdings Limited

Voting rights
(new) ( %)

50.20

0.00

Strike threshold ( %)

50, 30, 25, 20, 15, 10,
5, 3

48.90

30, 25, 20, 15, 10, 5, 3

50.20

0.00

50, 30, 25, 20, 15, 10,
5, 3

Jun. 29,
2009

CC&T Holdings Limited

48.90

30, 25, 20, 15, 10, 5, 3

CC&T Holdings Limited

50.20

CC&T Holdings Limited

0.00

50, 30, 25, 20, 15, 10,
5, 3

Jun. 29,
2009

Citco Holdings
Denmark ApS

Jun. 29,
2009

Citco Holdings
Denmark ApS

Jun. 29,
2009

Citco Holdings
Denmark ApS

Jun. 29,
2009

Citco C&T Holdings
(Luxembourg S.A.R.L.)

Jun. 29,
2009

Citco C&T Holdings
(Luxembourg S.A.R.L.)

Jun. 29,
2009

Citco C&T Holdings
(Luxembourg S.A.R.L.)

48.90

30, 25, 20, 15, 10, 5, 3

50.20

0.00

50, 30, 25, 20, 15, 10,
5, 3

48.90

30, 25, 20, 15, 10, 5, 3

50.20

0.00

50, 30, 25, 20, 15, 10,
5, 3

Jun. 29,
2009

Citco Nederland B.V.

48.90

30, 25, 20, 15, 10, 5, 3

Citco Nederland B.V.

50.20

Citco Nederland B.V.

0.00

50, 30, 25, 20, 15, 10,
5, 3

Jun. 29,
2009

Citco Corporate Services
(Ireland) Ltd

Jun. 29,
2009

Citco Corporate Services
(Ireland) Ltd

Jun. 29,
2009

Citco Corporate Services
(Ireland) Ltd

Jul. 28,
2009

Morgan Stanley
Investment Management
Limited

Morgan Stanley

Morgan Stanley
International Holdings
Inc.

Jul. 28,
2009

Morgan Stanley
International Limited

Jul. 28,
2009

Morgan Stanley Group
(Europe)

48.90

30, 25, 20, 15, 10, 5, 3

50.20

0.00

2.46

2.52

2.46

50, 30, 25, 20, 15, 10,
5, 3

Date of
change

Attributed
shares

Disclosure
according to

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Sept. 14,
2007

Aug. 21,
2008

Dec. 22,
2008

Jul. 20,
2009

yes

§ 26 (1)
WpHG

Language

English

alstria Annual Report 2009

Notes to the Consolidated Financial Statements

22 Disclosures pursuant to Wertpapierhandelsgesetz [German Securities Trading Act]
23 Declaration of compliance pursuant to Section 161 AktG [‘Aktiengesetz’: German Stock Corporation Act]
24 auditor’s fees
25 Management board
26 Supervisory board

23 Declaration of compliance pursuant to Section 161 AktG

[‘Aktiengesetz’: German Stock Corporation Act]

26 Supervisory board
Pursuant to the Company’s Articles of Association (Section 9), the

The declaration of compliance required by Section 161 AktG regarding

supervisory board consists of six members, which are elected by the

the recommendations of the German Corporate Governance Code

general meeting of shareholders. The expiration of the term of ofﬁ ce

developed by the government commission has been submitted by the

is identical for all members, i.e. the close of the annual general meet-

management board and the supervisory board and is made perma-

ing of shareholders in the year 2011.

nently available to the shareholders on alstria ofﬁ ce REIT-AG’s website

(www.alstria.com). It is included in the declaration of corporate

During the ﬁ nancial year 2009 the members of the supervisory board

management according to Section 289a HGB.

were:

24 Auditor’s fees
At June 10, 2009, the general meeting elected Pricewaterhouse-

Alexander Stuhlmann (chairman), Hamburg, Germany

Management Consultant;

Coopers AG Wirtschaftsprüfungsgesellschaft, Lise-Meitner-Strasse 1,

Manager of Alexander Stuhlmann GmbH

Berlin, to audit the separate and consolidated ﬁ nancial statements for

> BVV Versicherungsverein des Bankgewerbes a.G.,

the ﬁ nancial year 2009. The fee expenses in 2009 are comprised as
follows:

EUR k

Audit services

Other audit-related services

Other Services

2009

366

2008

356

100

member of the supervisory board

> BVV Versorgungskasse des Bankgewerbes e.V,

member of the supervisory soard

> BVV Pensionsfonds des Bankgewerbes AG,

member of the supervisory board

> Capital Stage AG, vice-chairman of the supervisory board

> Frank Beteiligungsgesellschaft mbH,

chairman of the advisory board

> Hamburger Feuerkasse Versicherung AG,

vice-chairman of the supervisory board

25 Management board
During the ﬁ nancial year the Company’s general managers were:

> HASPA Finanzholding, member of the board of trustees

> HCI Capital AG, member of the supervisory board

Mr Olivier Elamine, Chief Executive Ofﬁ cer (CEO)

> LBS Bausparkasse Schleswig-Holstein-Hamburg AG,

> Jahr Holding GmbH & Co. KG, chairman of the advisory board

Mr Alexander Dexne, Chief Financial Ofﬁ cer (CFO)

member of the supervisory boards

> Ludwig Görtz GmbH, Member of the administrative board
> Otto Dörner GmbH & Co. KG, chairman of the advisory board

The attached remuneration report (pages 90 to 91) contains details of

> Siedlungsbaugesellschaft Hermann und Paul Frank mbH & Co. KG,

the principles for the deﬁ nition of the management board’s and

chairman of the advisory board

supervisory board’s remuneration.

> Studio Hamburg Berlin Brandenburg GmbH, member of the

advisory board

Notes to the Consolidated Financial Statements

alstria Annual Report 2009

John van Oost (vice-chairman), London, United Kingdom

Richard Mully, Dublin, Ireland

Managing Partner at Natixis Capital Partners

Investment Manager at Grove International Partners (UK) Ltd.

> Natixis Capital Partners Ltd., managing partner

> Grove International Partners LLP, managing partner

> Axiom Asset 1 GmbH & Co. KG, director

> Axiom Asset 2 GmbH & Co. KG, director

> Axiom Immo Management GmbH, director

> Axiom Immo GP GmbH

> Apellas Holdings B.V., director

> Douglasshire International Holdings B.V., director

> Event Hospitality Group B.V., director

> Hansteen Holdings PLC, director

(formerly Captiva Industrial GP GmbH), director

> Hellenic Land Holdings B.V., director

> Axiom Immo Holding GmbH

> Hypo Real Estate Holdings AG, member of the supervisory board,

(formerly Captiva Industrial Holding GmbH), director

until March 27, 2009

> Captiva Capital Management SaRL, board member

> Karta Realty Limited, director

> Express Holding Srl, board member

> Nowe Ogrody 2 Sp. z o.o., director

> Green Cove Capital Management SaRL, board member

> Nowe Ogrody 3 Sp. z o.o., director

> La Jolla Capital Management SaRL, board member

> Nowe Ogrody 4 Sp. z o.o., director

> Natixis Capital Partners GmbH, board member
> Natixis Capital Partners Srl, board member

> Nowe Ogrody Sp. z o.o., director
> Polish Investment Real Estate Holding B.V, director

> Ocala Capital Management LLC, board member

> Polish Investments Real Estate Holding II B.V., director

Dr. Johannes Conradi, Hamburg, Germany

> Spazio Investments NV, director, until December 3, 2009

> SI Real Estate Holding B.V., director

Lawyer and Partner at Freshﬁ elds Bruckhaus Deringer LLP

> Global head of Real Estate Sector Group

> Managing partner of the Hamburg Ofﬁ ce

> Member of the German Management Group

Roger Lee, London, United Kingdom

> Spazio Industriale II B.V., director

> SREI DI Properties, Inc., director

Daniel Quai, Crans, Switzerland

Banker at NATIXIS Capital Partners

> Natixis Capital Partners Ltd., director

Real Estate Investment Manager at Natixis Capital Partners

> Arman SW03, director

> CDS Costruzioni S.p. A., director

> CDS Holding S.p. A., director

> CDS Project Development BV, director

> Excelsia Otto Srl, director
> Express Holdings Srl, director

> Natixis Capital Partners GmbH, managing director

> Newreal SpA, director

alstria Annual Report 2009

Management Compliance Statement

MANAGEMENT COMPLIANCE STATEMENT

‘We conﬁ rm that, to the best of our knowledge, the consolidated

ﬁ nancial statements give a true and fair view of the net assets, ﬁ nan-

cial position and results of operations of the Group, and the Group

management report gives a true and fair view of business perfor-

mance including the results of operations and the situation of the

Group, and describes the main opportunities and risks and anticipated

development of the Group in accordance with the applicable ﬁ nancial

reporting framework.’

Hamburg, February 12, 2010

The management board

Olivier Elamine

CEO

Alexander Dexne

CFO

Auditors’ Report

alstria Annual Report 2009

AUDITORS’ REPORT

‘We have audited the annual ﬁ nancial statements, comprising the

and signiﬁ cant estimates made by the Company’s Board of Managing

balance sheet, the income statement and the notes to the ﬁ nancial

Directors, as well as evaluating the overall presen tation of the annual

statements, together with the bookkeeping system, and the man-

ﬁ nancial statements and management report. We believe that our

agement report of alstria ofﬁ ce REIT-AG, Hamburg, for the business

audit provides a reasonable basis for our opinion.

year from January 1 to December 31, 2009. The maintenance of the

books and records and the preparation of the annual ﬁ nancial state-

Our audit has not led to any reservations.

ments and management report in accordance with German commer-

cial law are the responsibility of the Company’s Board of Managing

In our opinion, based on the ﬁ ndings of our audit, the annual ﬁ nancial

Directors. Our responsibility is to express an opinion on the annual

statements comply with the legal requirements and give a true and

ﬁ nancial statements, together with the bookkeeping system, and the

fair view of the net assets, ﬁ nancial position and results of operations

management report based on our audit.

of the Company in accordance with [German] principles of proper

accounting. The management report is consistent with the annual

We conducted our audit of the annual ﬁ nancial statements in

ﬁ nancial statements and as a whole provides a suitable view of the

accor dance with Section 317 HGB [Handelsgesetzbuch – German

Company's position and suitably presents the opportunities and risks

Commercial Code] and German generally accepted standards for

of future development.’

the audit of ﬁ nancial statements promulgated by the Institut der

Wirtschaftsprüfer [Institute of Public Auditors in Germany – IDW].

Those standards require that we plan and perform the audit such that

misstatements materially affecting the presentation of the net assets,

Berlin, February 22, 2010

ﬁ nancial position and results of operations in the annual ﬁ nancial state-

ments in accordance with [German] principles of proper accounting

and in the management report are detected with reasonable assur-

PricewaterhouseCoopers

ance. Knowledge of the business activities and the economic and

Aktiengesellschaft

legal environment of the Company and expectations as to possible

Wirtschaftsprüfungsgesellschaft

misstatements are taken into account in the determination of audit

procedures. The effect iveness of the accounting-related internal con-

trol system and the evidence supporting the disclosures in the books

sgd. Gregory Hartman

sgd. ppa. Markus Salzer

and records, the annual ﬁ nancial statements and the management

Wirtschaftsprüfer

report are examined primarily on a test basis within the framework of

(German Public Auditor)

the audit. The audit includes assessing the accounting principles used

alstria Annual Report 2009

Corporate Governance

Report of the supervisory board

CORPORATE GOVERNANCE

REPORT OF THE SUPERVISORY BOARD

dividend. The management board and supervisory board discussed

the possibility of offering Company shares to shareholders in lieu of

Supervision of the Company’s management
During the reporting year, the supervisory board advised and super-

their cash dividend as a way of offering an attractive option for the

shareholders and saving additional liquidity. The supervisory board

vised the management board of the Company in accordance with

resolved on a corresponding proposal to the annual general meeting.

statutory provisions and the Company’s articles of association. The

Furthermore, during its meeting the supervisory board drew up

supervisory board was also involved in matters of material import-

resolutions on its report to the annual general meeting and on the

ance to the Company.

declaration of compliance with the recommendations of the German

Corporate Governance Code. Moreover, it consulted and resolved on

During the meetings of the supervisory board and its committees,

the incentive payments to the members of the management board

the management board regularly reported on the current situation

for ﬁ nancial year 2008.

and development of the Company and on important business events,

current risks, risk management and on Company compliance. The

During the supervisory board meeting following the annual general

management and supervisory board cooperated to set the strategic

meeting on June 10, 2009, ﬁ nancing strategies and management

direction of the Company. Between meetings, the management

board remuneration in the light of the planned German Act on Appro-

board further informed the supervisory board orally and in writing

priateness of the Management Board Compensation ( VorstAG) were

of important events; the chair of the supervisory board regularly met

the principle topics of discussion. As part of the ﬁ nancing strategy, the

with the management board to exchange information and advice.

supervisory board approved of two reﬁ nancing projects. It also dis-

The management board consulted the supervisory board intensively

have the compensation system for the management board reviewed

cussed the short-term variable compensation element and resolved to

on all transactions requiring its approval. After careful examination

by an independent external expert.

and consultation, the supervisory board took decisions on all matters

brought to its attention as the law, the articles of association, or the

During its meeting on September 14, 2009, the supervisory board

rules of procedure of either the management board or the super-

discussed in-depth the German Accounting Law Modernisation Act

visory board dictated. This included the Company’s budget planning.

(BilMoG), the VorstAG which came into force in the meantime and

the amendments to the German Corporate Governance Code and

In ﬁ nancial year 2009 the supervisory board met four times in plenum,

their impact on alstria, resolved to amend the rules of procedure for

once each quarter. All members of the supervisory board were present

the audit committee and the supervisory board in plenum, and drew

for each meeting or participated by teleconference. Moreover, ﬁ ve

up the ﬁ rst rules of procedure for the nomination and remuneration

written resolutions were taken after circulation of detailed documents

committee and the investment committee. Furthermore, the super-

to the members. Two additional plenary meetings of the supervisory

visory board discussed the results of the review of management board

board have taken place in 2010 before the ﬁ nalisation of this report.

remuneration with the external compensation expert in regard to the

new legal conditions. The review determined that the compensation

The ﬁ nancial results of the Company (quarterly and half-year ﬁ nan-

amount is strongly in line with the market and appropriate, and that

cial reports, consolidated ﬁ nancial statements and the ﬁ nancial state-

the system should be adapted to the new legal requirements. More-

ments of alstria ofﬁ ce REIT-AG), the market, the situation and devel-

over, the supervisory board agreed to another reﬁ nancing project as

opment of the Company, the development of risks, and the business

part of the ﬁ nancing strategy.

performance were discussed with the management board during the

meetings of the supervisory board.

Focal points of discussion
During the supervisory board meeting on March 3, 2009, members

During its meeting on November 26, 2009, the supervisory board

approved various measures such as another reﬁ nancing project, the

sale of real estate property, the signing of a cooperation agreement to

develop an asset and a lease project. The supervisory board discussed

discussed the consolidated ﬁ nancial statements and the ﬁ nancial

the very positive results of an examination of the efﬁ ciency of its

statements for 2008, the dependency report and the resolution

work and dealt with and resolved after intensive discussion on the

proposals for the general meeting. After careful examination, the

Company and budget planning for ﬁ nancial year 2010.

supervisory board agreed with the proposal of the management

board regarding the proﬁ t appropriation, because the payment of a

The decisions by way of written circular resolution in ﬁ nancial year

dividend was in the best interest of the Company considering the

2009 dealt with the prolongation of the terms of ofﬁ ce and service

Company’s dividend policy and the signal this would send to the

contracts for members of the management board, with an amend-

capital market. The independent auditors conﬁ rmed that the liquidity

ment to the Company’s syndicated loan, which has raised the

situation of the Company would allow the payment of the proposed

allowed loan-to-value ratio from 60 % to 65 %, with changes to the

Corporate Governance

alstria Annual Report 2009

management board’s recommendation for the proﬁ t appropriation,

which became necessary because of the change in the number of

Committees of the supervisory board
To increase the efﬁ ciency of its work the six-person supervisory board

treasury shares, with the appointment of the management board

formed three committees, each composed of three members. To the

members to managing directors of subsidiaries, and with updating

extent permitted by law, the committees have been given decision-

the declaration of compliance with the recommendations of the Ger-

making powers in some cases, and in some cases they prepare the

man Corporate Governance Code.

resolutions of the supervisory board by making proposals. During the

supervisory board plenary meetings, the committee chairs reported

At the start of 2010, the supervisory board discussed the Company’s

on the results of their committee’s work.

long-term strategic direction with the management board. In March

2010, the supervisory board dealt with the consolidated ﬁ nancial

In ﬁ nancial year 2009, the audit committee met four times to review

statements and the ﬁ nancial statements for the year ending Decem-

the consolidated ﬁ nancial statements and the ﬁ nancial statements,

ber 31, 2009 and, in accordance with the suggestions of the exter-

the management report and the dependency report, discussed these

nal remuneration expert, revised the compensation system and the

with the independent auditors, and conducted a preliminary exam-

service contracts for members of the management board to meet the

ination of these documents and the management board’s proposed

new legal requirements of the VorstAG.

appropriation of the annual net proﬁ t. Additional topics included

the supervisory board’s proposed resolution to the annual general

The compensation for each management board member will in future

meeting regarding the choice of independent auditor, examining the

also be comprised of a ﬁ xed base compensation and a short-term

independence of the external auditor and the additional services per-

and a long-term variable component. The majority of the compensa-

formed by the auditor, granting the audit contract to PwC, setting the

tion will be variable, based primarily or completely on a multi-year

key audit areas, discussing the effectiveness of the internal controlling

assessment. Possibilities of capping were introduced for extraordinary

system and the risk management system, the included main risks and

developments.

the necessity of an internal audit as well as the compliance system.

Finally, the audit committee examined the efﬁ ciency of its own work.

The short-term variable compensation for this ﬁ nancial year will be

The results were very good.

benchmarked against a performance target set by the supervisory

board, the funds from operations (FFO). Only 75 % of the incentive

During the reporting period, the investment committee decided by

payment will be paid in cash to the management board members.

circular written resolution to sell one real estate portfolio.

The remaining 25 % will be converted into virtual shares subject to a

minimum holding period of two years.

The nomination and remuneration committee, which also carries out

the tasks of a nomination committee, met three times during the

As the long-term variable component, the management board’s

reporting period and took one decision by circular written resolution.

former stock option programme is replaced by a new performance

Two issues taken under consideration were the adjustment of man-

share plan. Each year the members of the management board are

agement board compensation to meet the new legal requirements

granted virtual shares with a four-year maturity. The performance

of the VorstAG and the German Corporate Governance Code and

targets set by the supervisory board are comprised in equal measure

the preparation of corresponding advisement and resolutions for the

of the absolute total shareholder return, derived from the weighted

supervisory board. Additional topics included the recommendation to

average cost of capital (WACC), and the relative total shareholder

the annual general meeting to elect Mr Roger Lee as a new member

return as measured against the benchmarked index, the EPRA REIT

of the supervisory board and approval of the consulting services of

Continental Europe.

Freshﬁ elds Bruckhaus Deringer LLP.

The total variable compensation is completed by a discretionary factor

considering the individual performance of the management board

members and additionally ensuring that the amount of compensation

remains appropriate and in line with the market in future as well.

alstria Annual Report 2009

Corporate Governance

Report of the supervisory board

Financial statements and audits
PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungs-

Corporate governance
During the reporting period, the supervisory board also dealt with the

gesell schaft, Berlin, audited the ﬁ nancial statements and manage-

issue of alstria ofﬁ ce REIT-AG fulﬁ lling the recommendations of the

ment report of alstria ofﬁ ce REIT-AG, as well as the consolidated

German Corporate Governance Code. The management board and

ﬁ nancial statements, including the management report of the Group

the supervisory board last issued the annual declaration of compli-

for the ﬁ nancial year running from January 1 until December 31,

ance with the German Corporate Governance Code in March 2010

2009, all prepared by the management board, and issued its unquali-

in accordance with Section 161 of the German Stock Corporation

ﬁ ed opinion on these documents.

Act; it was subsequently made permanently available to shareholders

on the Company website. In this declaration, the management board

The ﬁ nancial statements and management report of alstria ofﬁ ce

and supervisory board explained that most of the recommendations

REIT-AG, the consolidated ﬁ nancial statements including the man-

of the German Corporate Governance Code have been or will be

agement report of the Group, as well as the management board’s

implemented, as well as which recommendations were or will not be

recommendation for the appropriation of the net proﬁ t were immedi-

followed, and the reasons why not. Each member of the supervisory

ately presented to the members of the supervisory board after being

board informs the plenum of potential conﬂ icts of interest and

prepared, as was the auditors’ report. The supervisory board exam-

abstains from voting on the related resolutions – such as the deci-

ined the documents provided by the management board in detail

sions of the supervisory board on contracts with supervisory board

both in its audit committee and at a plenary meeting. The au ditors

members pursuant to Section 114 of the German Stock Corporation

were present for the meeting of the audit committee, reported on the

Act. The members of the supervisory board examined the efﬁ ciency

material ﬁ ndings of their audit and answered questions. The audit

of their work using a survey ﬁ lled out by all members. The results

committee prepared the examination of the supervisory board and,

were that efﬁ ciency is very good.

in the presence of the auditors of the ﬁ nancial statements of alstria

ofﬁ ce REIT-AG and consolidated ﬁ nancial statements, reported to the

plenary session. The plenary meeting examined and discussed both

Changes in the supervisory board
By resolution of the District Court of Hamburg, effective as of Feb-

the documents prepared by the management board and the ﬁ ndings

ruary 24, 2009, Roger Lee was appointed member of the supervi-

of the auditors. Finding no objections, it concurred with the results

sory board of alstria ofﬁ ce REIT-AG until the end of the next general

of the audit and approved the ﬁ nancial statements of alstria ofﬁ ce

meeting. The general meeting conﬁ rmed this on June 10, 2009 and

REIT-AG and consolidated ﬁ nancial statements. The ﬁ nancial state-

elected Roger Lee to the supervisory board. Roger Lee succeeded

ments are thus conﬁ rmed. The supervisory board also concurred with

John van Oost as member of the audit committee, effective as of

the recommendation for the appropriation of the net proﬁ t.

October 1, 2009.

Furthermore, the management board also presented the supervisory

The supervisory board would like to thank the management board

board with a dependency report pursuant to Section 312 of the German

and all employees for their dedication and hard work in ﬁ nancial year

Stock Corporation Act, in which the management board reports

2009.

on the relationships to afﬁ liated companies. Likewise, Pricewater-

houseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesell schaft,

Berlin, presented the supervisory board with its audit report on the

dependency report. The auditors’ opinion is as follows:

Hamburg, March 2010

‘On the basis of our dutiful audit and judgement, we conﬁ rm that

1. the factual statements of the report are correct,

Chairman of the supervisory board

Alexander Stuhlmann

2. the consideration of the Company for the legal transactions

stated in the report was not in-adequately high.’

The supervisory board concurred with the management board’s

dependency report and the related auditors’ report. After conduct-

ing its own examination, the supervisory board concurred with the

report notes of the management board pursuant to Section 312 para-

graph 3 of the German Stock Corporation Act. The supervisory board

found no objections.

Corporate Governance

alstria Annual Report 2009

CORPORATE GOVERNANCE STATEMENT

Nevertheless, within the legal transition period, the Company will

revise the D&O insurance policies for the members of the management

The management board and supervisory board of alstria ofﬁ ce REIT-AG

board to conform to the new legal requirements regarding a deductible

are responsible for the corporate governance of the Company, which is

for D&O insurance for members of the management board.

undertaken with due regard to the Company’s shareholders, employ-

ees and tenants. The conﬁ dence of alstria’s shareholders, employees

and tenants is supported by transparent corporate governance. In this

statement, the management board and supervisory board report on

Possibility of limitation (cap) on stock options, Section 4.2.3
(version dated June 6, 2008)
When setting up the stock option programme for the management

alstria ofﬁ ce REIT-AG’s corporate governance according to no. 3.10

board, the supervisory board did not stipulate any upper limit (cap) in

of the German Corporate Governance Code and Section 289a of the

the event of extraordinary, unforeseen developments. The value of real

German Commercial Code (HGB).

German Corporate Governance Code and
declaration of compliance
Many of the principles of the most recent version of the German

Corporate Governance Code (dated June 18, 2009) have already

become part of our value-oriented corporate management, which

are therefore stricter than the legal requirements. The principles and

recommendations of the Government Commission appointed by the

estate companies was considered relatively stable; no extraordinary or

unforeseen share price increases were anticipated. In March 2010, the

supervisory board introduced a new, variable compensation system

for the members of the management board with the possibility of a

cap for extraordinary developments.

Performance-related compensation for supervisory board
members, Section 5.4.6 (version dated June 18, 2009)
The members of the supervisory board do not receive any perform-

German Federal Ministry of Justice contain internationally and nation-

ance-related remuneration in addition to their ﬁ xed compensation.

ally recognised standards for effective and responsible corporate

This is due to the relatively small size of the Company.

management.

The Company’s declaration of compliance with the recommendations

of the German Corporate Governance Code is published on alstria’s

website (www.alstria.com). After careful consideration, alstria chose

not to follow the recommendations of the Code in regard to a few

Discussion of the half-year and quarterly ﬁ nancial reports
between the supervisory board or its audit committee and the
management board prior to publication, Section 7.1.2 (version
dated June 18, 2009)
Prior to their publication, the half-year and quarterly ﬁ nancial reports

points. These points and the reasons for nonconformity are detailed

will be made available to the supervisory board. Furthermore, the

in the declaration of compliance issued by the management board

ﬁ nancial reports will be discussed with the supervisory board in detail

and the supervisory board on March 2, 2010.

and soon after their publication. In the event that there are consider-

Declaration of compliance dated March 2, 2010
‘The recommendations of the ‘Government Commission of the

supervisory board, the supervisory board will have the opportunity

to discuss the ﬁ gures with the management board before they are

German Corporate Governance Code’ as amended on June 18, 2009

published. The management board and supervisory board consider

and previously in the version dated June 6, 2008, were complied with

this approach appropriate and adequate.’

able differences to the budget or business plan authorised by the

since the prior declaration of compliance, dated May 29, 2009 with

the following exceptions. The Company intends to continue to com-

All other recommendations of the German Corporate Governance

ply with the recommendations of the Code as amended on June 18,

Code dated June 18, 2009 and formerly in the version dated June 6,

2009 to the same extent:

Deductible for D&O insurance for the supervisory board,
Section 3.8 (version dated June 18, 2009)
The D&O insurance for the supervisory board of alstria ofﬁ ce REIT-AG

2008 have been or will be fully implemented. alstria has appointed

a corporate compliance ofﬁ cer in the Company, who will report any

changes in the implementation of the Code to the management

board and the supervisory board at least once per year. In this way,

alstria ensures consistent compliance with these principles. Analysis,

does not include a deductible. The management board and supervisory

supervision and transparency are the tools with which alstria lays the

board believe that the members of the supervisory board carry out

foundation for fair and efﬁ cient corporate management. They will

their duties responsibly without any such deductible.

also remain the key criteria in future.

Deductible for D&O insurance for the management board,
Section 3.8 (version dated June 6, 2008)
The D&O insurance for the management board of alstria ofﬁ ce REIT-AG

Working methods of the management board and the
supervisory board
The management board and the supervisory board cooperate closely

does not presently include a deductible. The management board and

and with conﬁ dence in the interest of the Company. The chair of the

supervisory board believe that the members of the management

supervisory board has regular contact with the management board.

board carry out their duties responsibly without any such deductible.

alstria Annual Report 2009

Corporate Governance

Corporate governance statement

The management board has two members: Olivier Elamine as the

In addition to matters of diversity, nominees to the supervisory board

Chief Executive Ofﬁ cer and Alexander Dexne as the Chief Financial

are considered for how well they have the necessary knowledge,

Ofﬁ cer. The management board is responsible for running alstria in

competence and professional experience to properly discharge their

the interests of the Company with the aim of sustainably increasing

responsibilities. No former members of the management board sit on

the Company’s value. It sets the business targets and – in conjunction

the supervisory board.

with the supervisory board – the strategic direction of the Company.

The work of the management board and the allocation of responsibil-

ities between the individual members of the management board are

Supervisory board committees
The supervisory board has formed three committees. Each committee

stipulated in the rules of procedure and the role sort for the manage-

has its own rules of procedure to specify the concerns and tasks of

ment board. The members of the management board are obligated to

the committee.

immediately disclose any conﬂ icts of interest to the supervisory board.

The members of the management board may only conduct secondary

The audit committee monitors the Company’s ﬁ nancial reporting pro-

activities, particularly membership in the supervisory boards of com-

cess, engages the independent auditors to prepare audit reports, deter-

panies not afﬁ liated with the Group, with the approval of the super-

mines the key audit areas and the independent auditors’ compensation,

visory board. The members of alstria’s management board had no

and is responsible for issues surrounding risk management, internal

conﬂ icts of interest in the reporting year. Major business transactions

control and compliance. The audit committee consists of Dr Johannes

between the Company and members of the management board, or

Conradi, as chairman, as well as Roger Lee and Daniel Quai.

with any persons or companies in close association with them, require

the approval of the supervisory board. All such business transactions

The investment committee decides whether the supervisory board

must be concluded under standard commercial conditions. There

will approve the acquisition or disposal of real estate property or

were no such contracts during the reporting period.

other assets worth between EUR 30 m and EUR 100 m. The entire

The supervisory board appoints the members of the management

is greater than this amount. The investment committee consists of

board and monitors and advises the management board on manage-

John van Oost, as chair, as well as Richard Mully and Alexander

supervisory board is needed to approve such transactions if the value

ment issues. The management board involves the supervisory board

Stuhlmann.

in any decisions of fundamental importance for the Company. The

rules of procedure for the supervisory board stipulate that certain,

The tasks of the nomination and remuneration committee, which also

signiﬁ cant business transactions by the Company are subject to the

carries out the function of a nomination committee, include prepar-

approval of the supervisory board, for example acquiring or disposing

ations for the appointment and dismissal of members of the manage-

of real estate property for a consideration of more than EUR 30 m,

ment board, for the management board’s compensation system and

entering ﬁ nancing agreements with a volume of more than EUR

for the total remuneration of individual members of the membership

30 m, entering or prematurely terminating leasing contracts with an

board, the resolution of or amendments to the rules of procedure of

annual consideration of more than EUR 2 m, or investing in Company

the management board, as well as the approval of certain other activ-

assets (modernisation measures) with an annual total sum of more

ities and primary contracts of members of the management board. It

than EUR 2 m when such investments were not already included

is also responsible for entering into, amending, extending and ter-

in the budget approved by the supervisory board. The supervisory

minating contracts with management board members, as well as for

board reports on its activity in ﬁ nancial year 2009 in its report to the

decisions regarding compensation beyond the terms of the contracts.

annual general meeting on pages 83 to 85 of the annual report.

The executive committee consists of Alexander Stuhlmann, as chair,

Composition of the supervisory board
In accordance with the articles of association, the supervisory board

For information on the activities of the committees of the supervisory

comprises six members. The following are members of the super visory

board during ﬁ nancial year 2009, see its report to the general meeting

board at present: Alexander Stuhlmann as chair of the supervisory

on pages 83 to 85 of the annual report.

as well as Richard Mully and John van Oost.

board, John van Oost as vice-chair, as well as Dr Johannes Conradi,

Roger Lee, Richard Mully and Daniel Quai. The appointments of all

members of the supervisory board are over at the end of the general

meeting which resolves to discharge them in respect to their activities

for ﬁ nancial year 2010.

Remuneration of the management board and
the supervisory board
The compensation system for the management report and the super-

visory report is laid out in the remuneration report for ﬁ nancial year

2009. The remuneration of each member of the management board

and the supervisory board is also broken down there for ﬁ nancial

years 2009 and 2008.

Corporate Governance

alstria Annual Report 2009

Stock option programme and similar securities-oriented
incentive systems
Stock option programme
The stock option programme stipulates the granting of option rights

to members of the management board and is shown on page 91 of

the Remuneration Report.

This refers to the transfer of Company shares as performance incen-

tives for ﬁ nancial year 2008. The Company paid 25 % of performance

incentives with its own shares.

Share ownership by members of management board
and supervisory board
Section 6.6 of the German Corporate Governance Code recommends

Employee proﬁ t participation plan
The employee proﬁ t participation plan regulates the granting of

indicating the ownership of Company shares or related ﬁ nancing

instruments by members of the management board and supervisory

convertible proﬁ t participation rights to employees of alstria and

board if such ownership directly or indirectly exceeds 1 % of the shares

companies directly or indirectly controlled by alstria. Members of the

issued by the Company. If the total shares owned by all members of

management board are not considered employees for the purposes

the management board and supervisory board together exceed 1 %

of this plan.

of the total shares issued by the Company, the total share ownership

is to be broken down by management board and supervisory board.

The nominal amount of each certiﬁ cate is EUR 1. The plan stipulates

that a maximum of 500,000 convertible proﬁ t participation certiﬁ -

No member of the management board or supervisory board of alstria

cates can be issued for a total nominal value of EUR 500,000. To

ofﬁ ce REIT-AG directly or indirectly owns more than 1 % of the

date, 158,600 certiﬁ cates have been issued.

subscribed capital of the Company. The total share ownership of all

members of the management board and the supervisory board does

Each convertible proﬁ t participation certiﬁ cate can be converted into

not exceed 1 % of the total shares issued by the Company.

an alstria bearer share once the share price exceeds the price on the

day the certiﬁ cate was issued by 5 % or more on at least seven non-

consecutive trading days. Conversion is only carried out on prede-

Relationship to the shareholders of the Company
alstria ofﬁ ce REIT-AG respects the rights of its shareholders and sup-

ﬁ ned dates and only when the subscriber pays the conversion price

ports them as much as is possible and legal in the exercise of those

and is still employed at alstria or one of its subsidiaries on the date of

rights. In particular, these include the right to freely purchase and

conversion. The maximum term for a convertible proﬁ t participation

sell shares, appropriate access to information, an adequate number

certiﬁ cate is ﬁ ve years.

Directors’ dealings
The management board and supervisory board of alstria ofﬁ ce

of voting rights per share (one share – one vote) and participation

in our annual general meeting. Shareholders have the possibility to

exercise their voting rights personally or by authorised representative

at the general meeting, or send voting instructions to their proxies.

REIT-AG, as well as related parties (family members) are required pur-

The invitation to the general meeting includes voting instructions.

suant to Section 15a of the German Securities Trading Act to notify

After the agreement of the 2008 general meeting to this effect, it is

the Company of their own transactions involving Company shares.

now possible for shareholders to receive this information electroni-

Every buy or sale transaction related to alstria shares (e.g. the purchase

cally. The agenda and all documents relating to our upcoming general

or sale of options on alstria shares) has to be reported. The Company

meetings, including the ﬁ nancial statements, are available for viewing

shall be informed of such transactions within ﬁ ve working days and

on the Company website and at the Company premises.

publish them immediately. This only applies when the total of the

transactions is EUR 5,000 or more within one calendar year.

The following transactions were reported to alstria in 2009:

Name of person
subject to the disclo-
sure requirement

Olivier Elamine

Alexander Dexne

Function

Member of
the manage-
ment board

Classiﬁ cation
of the share

ISIN

Transaction

Place

Transaction
date

Price per
share (EUR)

Number of
Shares

Deal volume
(EUR)

DE000A0L-
D2U1

Buy

DE000A0L-
D2U1

Buy

Over the
counter

Mar. 26,
2009

3.86

22,668

87,498.48

3.86

12,953

49,998.58

alstria Annual Report 2009

Corporate Governance

Corporate governance statement

Publications and reports
In sharing information with the public, the management board follows

Compliance
In accordance with Section 4.1.3 of the German Corporate Governance

the principles of transparency, promptness, openness, clarity and equal

Code, the supervisory board is responsible for ensuring compliance

treatment of shareholders. In particular, alstria informs its shareholders

with the legal provisions and Company guidelines throughout all of

and the interested public about the situation of the Company and

the consolidated companies. The good reputation of alstria and the

signiﬁ cant business events through ﬁ nancial reports, analyst and

trust of its shareholders, tenants and employees depends entirely on

press conferences, press and ad-hoc announcements and the general

the behaviour of each individual employee.

meeting. The website of alstria includes information on the Company

and its shares, especially the ﬁ nancial reports, share price tracking

For this reason, alstria drew up a code of conduct, listing guidelines

and announcements about the acquisition or disposal of Company

for behaviour, orientation for resolving conﬂ icts (e.g. conﬂ icts of

shares or related ﬁ nancing instruments pursuant to Section 15a of the

interest) and thereby serving as a model of correct behaviour for all

German Securities Trading Act. Moreover, alstria’s ﬁ nancial reports

employees of the Group. The guidelines are published on our website

and website include a ﬁ nancial calendar which indicates all dates of

(www.alstria.com).

importance to shareholders. All announcements and information is

additionally published in English. The Annual Document (pursuant

alstria set up a compliance organisation to communicate the values

to Section 10 of the German Securities Prospectus Act) includes a

inherent in the code of conduct and Company guidelines, and to moni-

detailed list of all capital market-related announcements issued in

tor compliance with these values. The compliance ofﬁ cer is respon-

2009; it can be found on the alstria website.

sible for communicating these values by answering questions on

Financial reporting and auditing
During the ﬁ nancial year, alstria regularly informs shareholders and

the implementation of the code and through in-house training for

all employees. Compliance is monitored through colleagues, super-

visors and the compliance ofﬁ cer, as well as via regular investigation

third parties by publishing its consolidated, half-year and quarterly

by auditors. alstria has also set up a hotline through which employees

ﬁ nancial statements. The consolidated ﬁ nancial statements are pre-

can anonymously report any violations of the code of conduct or the

pared in accordance with the International Financial Reporting Stand-

Company-internal guidelines. Furthermore, the management board

ards (IFRS). For legal reasons (calculating dividends, creditor protec-

regularly discusses Company compliance with the supervisory board’s

tion), ﬁ nancial statements for alstria ofﬁ ce REIT-AG are also prepared

audit committee.

in accordance with the German Commercial Code (HGB).

The consolidated ﬁ nancial statements and the ﬁ nancial statements

fully investigated and the violators punished. This can be anything

of alstria ofﬁ ce REIT-AG are audited by both the independent audi-

from disciplinary measures to dismissal, a claim for damages or even

tor selected by the general meeting, and by the supervisory board.

prosecution.

Violations of the code of conduct will not be tolerated; they will be

The audit committee of the supervisory board appoints an external

auditing ﬁ rm, after examining its independence, to audit the ﬁ nan-

cial statements and negotiates the auditing fees. Pricewaterhouse-

Coopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Berlin,

was appointed to audit the annual and half-year ﬁ nancial statements

of alstria ofﬁ ce REIT-AG and of the Group for ﬁ nancial year 2009. The

auditors participated in the meetings of the audit committee and the

supervisory board in plenum to advise on the consolidated ﬁ nancial

statements and the ﬁ nancial statements of alstria ofﬁ ce REIT-AG and

to present the key ﬁ ndings of the audit.

Corporate Governance

alstria Annual Report 2009

REMUNERATION REPORT*

determines an incentive payment to be paid to individual members

of the management board with respect to the past ﬁ nancial year,

Management board remuneration
The remuneration system for the members of the management

which is paid out partly in Company shares; and, secondly, after

the annual general meeting the supervisory board may issue stock

board is determined by the supervisory board and is reviewed

options with long-term incentives to members of the management

regularly. The supervisory board currently reviews the remuneration

board. alstria further pays for each member of the management

system for the members of the management board and discusses

board premiums for a disability insurance, a risk life insurance and a

amendments with regard to regulations of the German Manage-

Company pension scheme.

ment Board Remuneration Appropriateness Act (VorstAG) which

came into force in summer 2009. The following describes the

Total remuneration for all active members of the management

remuneration system effective at the date of the preparation of this

board in the last ﬁ nancial year amounted to EUR 1,516 k. Members

report and before any of these amendments were resolved upon or

of the management board did not receive any advance salary pay-

came into force.

ments, loans or pension beneﬁ ts. 25 % of the incentive payment

were paid out as shares in the Company. In ﬁ nancial year 2009 no

The structure and amount of management board remuneration is

stock options were issued.

based on customary market terms and conditions. It comprises a

ﬁ xed basic salary and two variable components. These variable com-

Former members of the management board received payments in

ponents (short- and long-term) are performance and result-based:

the ﬁ nancial year 2009 totalling EUR 13 k. No provisions needed to

ﬁ rstly, in the ﬁ rst quarter of a ﬁ nancial year the supervisory board

be set aside for former members of the management board.

INDIVIDUAL MANAGEMENT BOARD REMUNERATION 2009

EUR k

Management board member

Fixed amount

Short-term variable
remuneration 1

Long-term
variable
remuneration

Other
remuneration 2

Total
remuneration

Olivier Elamine, Chief Executive Ofﬁ cer

Alexander Dexne, Chief Financial Ofﬁ cer

Former members of the management board

Total

1 For performance in 2008.
2 Includes beneﬁ ts for Company cars, insurance and pensions.

Cash
component

Share
component

262.5

150

412.5

87.5

137.5

438

360

798

181

882

634

1,529

INDIVIDUAL MANAGEMENT BOARD REMUNERATION 2008

EUR k

Management board member

Fixed amount

Short-term variable
remuneration 1

Long-term
variable
remuneration

Other
remuneration 2

Total
remuneration

Cash
component

Share
component

267.3 3

82.7

345.3

104.7

265

300

250 4

815

632

419

263

1,314

Olivier Elamine, Chief Executive Ofﬁ cer

Alexander Dexne, Chief Financial Ofﬁ cer,
Since Jun. 1, 2007

Former members of the management board

Total

1 For performance in 2007.
2 Includes beneﬁ ts for Company cars.
3 Partly includes promised incentive payments.
4 Lump sum payment.

* This remuneration report forms an integral part of the audited Group management report and notes to the annual ﬁ nancial statements and also forms part of the

corporate governance statement.

alstria Annual Report 2009

Corporate Governance

Remuneration report

If membership of the management board is terminated, members

of the share price. The stock options granted in the ﬁ nancial year 2007

have agreed to a post-contractual non-compete agreement of up to

resulted in an expense in the ﬁ nancial year 2009 of EUR 55.8 k for

twelve months, which may be waived by alstria with a six months

Olivier Elamine and EUR 35.6 k for Alexander Dexne.

notice period. As long as alstria exercises this post-contractual non-

compete obligation, the members of the management board shall

The term of the stock options is seven years from the time they are

receive a compensation payment for this period equivalent to their last

granted. The options may only be exercised if the current share price

ﬁ xed basic salary. Beneﬁ ts to be paid by the company if the appoint-

of the company exceeds the exercise price by 20 % or more on at least

ment is terminated by the death of the board member amount to the

seven non-consecutive trading days of the Frankfurt Stock Exchange

ﬁ xed basic salary for the month in which the member died and for the

before the start of the respective exercise period. The performance

following three months. The incentive payment for this period shall

target for the 2007 stock options amounts to EUR 19.20. The stock

be paid pro rata up to and including the month of death.

options may only be exercised after expiry of a vesting period of two

Stock option scheme
On March 27, 2007, the supervisory board established a stock option

exercise period amounts to 30 days beginning on the date of publica-

tion of the Company’s results for the ﬁ rst, second and third quarters,

programme for members of the management board. The details of

and the date of the Company’s annual general meeting. There are no

this stock option programme were based on the authorisation by the

cash settlement alternatives.

years and during one of the four exercise periods of each year. The

annual general meeting of March 15, 2007, and the ﬁ rst tranche of

stock options was issued to members of the management board.

Remuneration of the supervisory board
Total remuneration for the supervisory board in 2009 amounted to

The details of the stock option programme set up by the supervisory

EUR 299.1 k. Members of the supervisory board each receive an

board are as follows:

annual ﬁ xed remuneration amount of EUR 40 k. The chairman of

the supervisory board also receives an additional annual amount of

Members of the management board may be granted up to 2,000,000

EUR 20 k, the deputy chairman receives an additional EUR 10 k.

options, giving entitlement of up to a maximum 2,000,000 shares

Members who only sit on the supervisory board for part of a year

of the company with a total nominal value of up to EUR 2,000 k.

receive pro rate remuneration. Membership of the audit committee

The stock options shall be issued in annual tranches. The supervisory

entails separate remuneration of EUR 10 k and the chair of the audit

board granted the ﬁ rst tranche in 2007. The exercise price for the

committee receives EUR 15 k. Membership of other committees does

stock options granted in 2007 is EUR 16. The exercise price for future

not give entitlement to any additional remuneration. No advance

options amounts to 100 % of the arithmetic mean of the closing auc-

remuneration payments were made to members of the supervisory

tion in Xetra trading of alstria shares on the Frankfurt Stock Exchange

board, nor were any loans made. No remuneration was paid out for

on the last ten trading days before the options are issued (‘issue date’).

individual services.

No stock options were issued in 2008 and 2009 due to development

INDIVIDUAL SUPERVISORY BOARD MEMBER REMUNERATION

EUR k

Supervisory board member

Supervisory board
membership

Audit committee
membership

Alexander Stuhlmann

Chairman

n.a.

John van Oost

Deputy Chairman

Dr Johannes Conradi

Member

Roger Lee

Richard Mully

Daniel Quai

Dr Christian Olearius

Total

Member since
Feb. 24, 2009

Member

Member until
Aug. 31, 2008

Member until
Sept. 30, 2009

Chairman

Member since
Oct. 1, 2009

n.a.

Member

Member until
Aug. 31, 2008

Remuneration for 2009

Remuneration for 2008

60.0

57.5

55.0

36.6

40.0

50.0

–

299.1

60.0

53.3

55.0

–

40.0

50.0

33.3

291.6

REIT Disclosures and Portfolio

alstria Annual Report 2009

REIT DISCLOSURES AND PORTFOLIO

REIT DECLARATION

Statement of the management board
Regarding the compliance with the requirements of Section 11 to

5. In 2009 a dividend payment of EUR 28.4 m for the prior ﬁ nancial

year was distributed to the shareholders. The ﬁ nancial year 2008

did not result in a net income according to commercial law pursu-

ant to Section 275 of the German Commercial Code.

15 REIT Act (Real Estate Investment Trust Law) as per December 31,

6. alstria ofﬁ ce REIT-AG’s dividend does not derive from already

2009, we declare the following in relation with our ﬁ nancial state-

taxed parts of the proﬁ t.

ment according to Section 264 HGB (German Commercial Code) and

7. Since 2007 the Groups has realised 10 % of the average portfolio

our consolidated ﬁ nancial statement according to Section 315a HGB

of its immovable assets and therefore did not trade with real estate

as per balance sheet date:

according to Section 14 REIT Act.

1. As per balance sheet date, 38.94 % of alstria’s shares were free

dated statements according to Section 12 paragraph 1 REIT Act was

ﬂ oat according to Section 11 paragraph 1 REIT Act. This was stated

EUR 634 m. This equals to 40.3 % of the value of the immovable

to the German Federal Financial Supervisory Authority (BaFin).

assets which are shown in the consolidated statements in conform-

2. In accordance with Section 11 paragraph 4 REIT Act, as per bal-

ance with Section 12 paragraph 1 REIT Act. For the second time, the

ance sheet date, no shareholder owned directly 10 % or more of

equity ratio fell below the threshold pursuant to Section 15 REIT act.

8. On balance sheet date the Group’s equity as shown in the consoli-

our shares or shares of such an amount, that he holds 10 % or

more of the voting rights.

3. In relation to the sum of the assets pursuant to the consolidated

statements less the distribution obligation and the reserves pursu-

Hamburg, February 12, 2010

ant to Section 12 paragraph 2 REIT Act

a) as per the balance sheet date the immovable assets amounted

to EUR 1,575,662 k which equals to 89 % of the assets, there-

fore at least 75 % of the assets belong to the immovable assets;

b) the assets belonging to the property of REIT service companies

which were included in the consolidated statements amount to

Olivier Elamine

Alexander Dexne

a maximum of 20 %, namely EUR 25 k and therefore 0 %.

CEO

CFO

4. For the ﬁ nancial year 2009, the entire sales revenues of the Group

alstria ofﬁ ce REIT-AG

plus other earnings from immovable assets in the meaning of

Section 12 paragraphs 3 and 4 REIT Act amounted to EUR 103 m.

This equals 100 % of total revenues.

alstria Annual Report 2009

REIT Disclosures and Portfolio

REIT declaration
REIT memorandum

REIT MEMORANDUM

Auditors´ Memorandum in Accordance
with Section 1 (4) German REIT Act (REITG)

To alstria ofﬁ ce REIT-AG, Hamburg

ownership per shareholder according to Section 11 (1) and (4), REIT

Act to the announcements made according to Section 11 (5) REIT Act

as of 31 December 2009. Furthermore, we compared the disclosures

according to Section 12 and 15 REIT Act with respective information

contained in the ﬁ nancial statement and the consolidated ﬁ nancial

statements of the company. We believe that our audit provides a

reason able basis for our opinion.

As auditor of the ﬁ nancial statement and the consolidated ﬁ nancial

statement of alstria ofﬁ ce REIT-AG, Hamburg, for the business year

In our opinion based on the ﬁ ndings of our audit, the information

from January 1, to December 31, 2009, we have audited the infor-

given in the REIT declaration concerning the free ﬂ oat ratio and the

mation given in the attached declaration of the management board

maximum stock ownership per shareholder due to Section 11 (1)

members for the compliance with the requirements of Section 11 to

and (4) REIT Act agrees with the announcements made according to

15 of the REIT Act and the composition of the proceeds concerning

Section 11 (5) REIT Act as of December 31, 2009 and the information

qualifying or disqualiﬁ ed proceeds according to Section 19a REIT Act

provided concerning the compliance with Section 12 to 15 REIT Act

as of December 31, 2009 (hereinafter referred to as ‘REIT declara-

and the composition of the proceeds concerning qualifying or dis-

tion’). The information given in the REIT declaration is in the account-

qualiﬁ ed proceeds according to Section 19a REIT Act are appropriate.

ability of the management board of the company. Our responsibility

is to express an opinion on the information given, based on our audit.

This Report is solely provided for the submission to the tax authorities

of the city of Hamburg with the tax declaration according to Section

We conducted our audit considering the audit guidance promulgated

21 (2) REIT Act.

by the Institut der Wirtschaftsprüfer (Institute of Public Auditors

in Germany) (IDW): Particularities concerning the audit of a REIT

stock corporation according to Section 1 (4) REIT Act, a pre-REIT

stock corporation according to Section 2 Clause 3 REIT Act and

Berlin, February 22, 2010

the audit according to Section 21 (3) Clause 3 REIT Act (IDW PH

9.950.2). Therefore we have planned and performed our audit to

conclude with reasonable assurance if the free ﬂ oat ratio and the

PricewaterhouseCoopers

maximum stock ownership per shareholder according to Section 11

Aktiengesellschaft

(1) and (4) REIT Act agrees with the announcements according to

Wirtschaftsprüfungsgesellschaft

Section 11 (5) REIT Act as of December 31, 2009 and if the provided

information concerning the requirements of Section 12 to 15 REIT

Act and the compos ition of the proceeds concerning qualifying or

sgd. Gregory Hartman

sgd. ppa. Markus Salzer

disqualiﬁ ed proceeds according to Section 19a REIT Act is appropri-

Wirtschaftsprüfer

ate. Within our audit, we have compared the disclosures in the REIT

(German Public Auditor)

declaration concerning the free ﬂ oat ratio and the maximum stock

REIT Disclosures and Portfolio

alstria Annual Report 2009

VALUATION REPORT

The Directors
alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75
20355 Hamburg
Germany

Dear Sirs

Colliers CRE
9 Marylebone Lane
London
W1U 1HL

Tel
Fax

020 7935 4499
020 7344 6539

Direct Line 020 7344 6609
Direct Fax 020 7344 6539
Mobile
07768 500 202
chris.fowler-tutt@collierscre.co.uk

The alstria ofﬁ ce REIT-AG portfolio (the company)
valuation as at 31 December 2009
In accordance with the instruction letter dated 30 June 2009, we

Compliance with Rics Valuation Standards
We conﬁ rm that the valuations have been made in accordance with

the appropriate sections of the Practice Statements (‘PS’) and United

have considered the properties owned by the Company referred to

Kingdom Practice Statements (‘UKPS’) contained within the ‘Red

in Appendix II to this report, in order to provide you with our opinion

Book’ prepared by the ‘RICS’.

of the Market Value of the above portfolio, as at 31 December 2009.

The revaluation is required for balance sheet purposes, debt covenant

This is an internationally accepted basis of assessing the value of

calculation and inclusion within your ﬁ nancial year end accounts.

real estate.

We have pleasure in presenting our report.

Our General Assumptions and Deﬁ nitions form Appendix I to this

report.

Inspections and qualiﬁ cations
the properties have been inspected, as detailed below, and valued

The subject portfolio has been inspected at various stages in its com-

by suitably qualiﬁ ed surveyors who fall within the requirements as to

pilation between June 2006 and December 2009 by either Christo-

competence as set out in PS 1.4 and 1.5 of the Valuation Standards

pher J Fowler-Tutt, BSc MRICS, Adrian Camp BSc (Hons) MRICS,

6th Edition (the ’Red Book’) issued by the Royal Institution of

Robert Mayhew BSc (Hons) MRICS, Nick Harris BSc (Hons) MRICS,

Chartered Surveyors (the ‘RICS’).

Charlie Henry BSc (Hons) MRICS, Tom Hughes MRICS, Kristian Eng-

ley MRICS, Robert Pritchard BA (Hons) MSc MRICS or Giles Bendell

We conﬁ rm that Colliers CRE complies with the requirements of inde-

BSc MRICS.

pendence and objectivity under PS 1.6 and that we have no conﬂ ict

of interest in acting on your behalf in this matter.

alstria Annual Report 2009

REIT Disclosures and Portfolio

Valuation report

In October 2009 the following sample of the portfolio, comprising 33

The extent of our investigations and the sources of information on

properties, was re-inspected:

Asset No

Asset

Bertha-von-Suttner-Platz 17

Zellescher Weg 21 – 25a

Johannesstr. 164 – 165/
J.-Gagarin-Ring 133 – 135

Ludwig-Erhard-Straße 49

Halberstädter Straße 17

Arnulfstraße 150

Am Gräslein 12

Helene-Lange-Straße 6/7

City

Bonn

Dresden

Erfurt

Leipzig

Magdeburg

München

Nürnberg

Potsdam

Gathe 78/Karlstraße 13/Friedrichstraße 39

Wuppertal

Lothar-Streit-Straße 10b

Alter Steinweg 4/Wexstraße 7

Steinstraße 10

Garstedter Weg 13

Hammer Steindamm 129

Herthastr. 20

Johanniswall 4

Kaiser-Wilhelm-Straße 79 – 87

Kattunbleiche 19

Kümmellstraße 5 – 7

Lenhartzstraße 28

Ludwig-Rosenberg-Ring 41

Max-Brauer-Allee 89 – 91

Öjendorfer Weg 9 – 11

Rahlstedter Straße 151 – 157

Schloßstraße 60

Steckelhörn 12

Friedrichstraße 19

Harburger Ring 17

Wandsbeker Chaussee 220

Arndtstraße 1

Schweinfurter Straße 4

Grosse Bleichen

Zwickau

Hamburg

Düsseldorf

Hamburg

Hannover

Würzburg

Hamburg

2002

2004

2006

2009

2010

2012

2013

2015

2017

2019

2020

2023

2033

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2050

2051

2052

2054

2055

2056

2057

2059

2062

which we have relied upon are as described in Section 4 – Valuation

Procedures and Assumptions contained within the Red Book.

We conﬁ rm that our valuation complies with the requirements of

IAS 40 – Investment Property. Where an entity opts to account for

investment property using the fair value model, IVSC considers that

the requirements of this model are met by the valuer adopting Mar-

ket Value.

Our General Assumptions and Deﬁ nitions form Appendix I to this

report.

The portfolio and its location
The portfolio comprises 78 ofﬁ ce investment properties located

throughout Germany. The regional location proﬁ le of the portfolio

in terms of Market Value across Germany’s states is illustrated below,

where it can be seen that the largest concentration of investment

property is held in the City of Hamburg. The portfolio also comprises

properties in the cities of Berlin, Bonn, Detmold, Dortmund, Dres-

den, Düsseldorf, Erfurt, Essen, Frankfurt, Halle, Hannover, Jena, Köln,

Leipzig, Magdeburg, Mannheim, Munich, Neuss, Nurnberg, Pots-

dam, Stuttgart, Wiesbaden, Wuppertal, Wurzburg and Zwickau.

ALSTRIA OFFICE REIT-AG

Baden Wuerttemberg

281,540,000

Berlin

Hessen

Hamburg

Brandenburg

52,650,000

43,850,000

866,315,000

5,525,000

Nth Rhine Westphalia

175,440,000

Lower Saxony

Bavaria

Saxony

Saxony Anhalt

Thuringia

35,975,000

79,850,000

40,125,000

9,100,000

10,895,000

REIT Disclosures and Portfolio

alstria Annual Report 2009

Lease expiry analysis
An analysis of the lease expiry terms demonstrates that the majority

Title

Due Diligence Report

of the income is secured for a period of between 10 and 20 years.

Draft Due Diligence Report

Portfolio Lease Expiry Proﬁ le

Gross Rent (€)

Percentage

Expiry less than 1 Yr and open ended
leases

Expiry between 1 Yr and 3 Yrs

Expiry between 3 Yrs & 5 Yrs

Expiry between 5 Yrs & 10 Yrs

Expiry between 10 Yrs & 20 Yrs

Expiry 20 Yrs or more

Total

3,620,520

15,667,740

10,343,136

32,124,276

26,167,524

9,377,736

97,300,932

3.72 %

16.10 %

10.63 %

33.02 %

26.89 %

9.64 %

1.00 %

ALSTRIA OFFICE REIT-AG

€

Expiry less than 1 Yr

3,620,520

Expiry between 1 Yr & 3 Yrs

15,667,740

Expiry between 3 Yrs & 5 Yrs

10,343,136

Expiry between 5 Yrs & 10 Yrs

32,124,276

Expiry between 10 Yrs & 20 Yrs 26,167,524

Expiry 20 Yrs or more

9,377,736

Date

12 December 2005

26 September 2006

27 September 2005

26 September 2006

Summary of Major Findings

Legal Due Diligence Report

Preliminary Legal and tax Due Diligence Report

28 September 2006

Legal Due Diligence Report

Draft Preliminary Key Issues Report
for Legal Due Diligence

24 October 2006

16 July 2007

31 October 2007

14 November 2007

Red Flag List of Legal Due Diligence

14 December 2007

Preliminary Legal Due Diligence Report

1 April 2008

All of the above reports were prepared by your lawyers Messrs Alpers

& Stenger, Freshﬁ elds Bruckhaus Deringer and Lovells. Our valu ations

assume that, with the exception of the matters disclosed within the

aforementioned reports, there are no unusual, onerous or restrictive

covenants in the titles which are likely to affect the value.

Lettings
We have relied upon the letting details contained within the following

reports prepared by your lawyers Messrs Alpers & Stenger, Freshﬁ elds

Bruckhaus Deringer and Lovells.

Floor areas
In accordance with the instruction letter we have not measured the

properties and have relied upon the ﬂ oor areas and car parking stated

in the most recent tenancy schedule provided by the Company. Nev-

Title

Due Diligence Report

Draft Due Diligence Report

Summary of Major Findings

Legal Due Diligence Report

ertheless, during the course of our inspections we did seek to ensure,

Legal Due Diligence Report

where possible, that the areas provided were consistent with the

Legal Due Diligence Report

accommodation inspected. We are not aware of any major inconsist-

Legal Due Diligence Report

encies in this regard but would emphasise that we cannot provide any

warranty as to the accuracy of the ﬂ oor areas provided.

Draft Preliminary Key Issues Report
for Legal Due Diligence

Date

12 December 2005

26 September 2006

27 September 2005

26 September 2006

24 October 2006

16 July 2007

31 October 2007

14 November 2007

Tenure
We have been provided with the following reports, which we have

had regard to in arriving at our opinions of value.

In circumstances where there have been tenant changes we have

Red Flag List of Legal Due Diligence

14 December 2007

relied solely upon the summary letting details provided by the Com-

pany. We have assumed all information provided to be accurate, up-

to-date and complete.

alstria Annual Report 2009

REIT Disclosures and Portfolio

Valuation report

Rent roll
We have been provided with a ﬁ nalised tenancy schedule dated

Title

Technical Due Diligence Report

10 November 2009 by the Company to which we have had regard

in arriving at our opinions of value. We have compared the new rent

Technical and Environmental Due Diligence
Assessment

Date

19 December 2005

25 August 2006

roll with the one provided to us on the 2 December 2008 and have

Intermediate Environmental Bullet Point Report

9 October 2006

enquired about any changes. We have assumed all information pro-

Technical Due Diligence Report

vided to be accurate, up-to-date and complete.

Condition
We have not carried out building surveys of the properties and neither

have we tested the drainage or service installations in the buildings

as this was outside the scope of our instructions. If there is signiﬁ cant

capital expenditure required on a property this sum will have been

deducted from the value reported.

We have been provided with the following reports prepared on your

Technical and Environmental Due Diligence
Assessment Revised Final Report

Technical and Environmental Due Diligence
Assessment

Technical and Environmental Due Diligence
Assessment Reports

Technical and Environmental Due Diligence
Assessments

29 December 2006

7 November 2007

13 November 2007

21 December 2007

22 December 2007

behalf by URS Deutschland GmbH (URS):

Additionally, we have been provided with the following report pre-

pared on your behalf Messrs ARGOS Projektmanagement GmbH.

Title

Date

Technical Due Diligence Report

19 December 2005

Title

Technical and Environmental Due Diligence
Assessment

25 August 2006

Technical Due Diligence Assessment

Date

1 April 2008

Intermediate Environmental Bullet Point Report

9 October 2006

Structural Property Survey

Technical Due Diligence Report

Technical and Environmental Due Diligence
Assessment Revised Final Report

19 October 2006

29 December 2006

7 November 2007

Town planning
We have not made any formal searches or enquiries in respect of the

properties and are, therefore, unable to accept any responsibility in

this connection. We have, however, relied upon the following reports:

Technical and Environmental Due Diligence
Assessment

13 November 2007

Title

Technical and Environmental Due Diligence
Assessment Reports

Technical and Environmental Due Diligence
Assessments

21 December 2007

Due Diligence Report

Draft Due Diligence Report

22 December 2007

Summary of Major Findings

Legal Due Diligence Report

Additionally, we have been provided with the following report, pre-

Legal Due Diligence Report

pared on behalf of the Company, by Messrs ARGOS Projektmanage-

Legal Due Diligence Report

Date

12 December 2005

26 September 2006

27 September 2005

26 September 2006

28 September 2006

16 July 2007

31 October 2007

14 November 2007

ment GmbH.

Title

Draft Preliminary Key Issues Report for
Legal Due Diligence

Date

Red Flag List of Legal Due Diligence

14 December 2007

Technical Due Diligence Assessment

1 April 2008

Preliminary Legal Due Diligence Report

1 April 2008

Environmental matters
We have been provided with the following reports, prepared on your

All of the above were prepared by your lawyers Messrs Alpers &

Stenger, Freshﬁ elds Bruckhaus Deringer and Lovells for formal search

behalf by URS Deutschland GmbH (URS), which we have relied upon

information, town planning and permit issues and we have had

in arriving at our opinions of value.

regard to this information in arriving at our opinions of value.

REIT Disclosures and Portfolio

alstria Annual Report 2009

Market approach
In preparing our valuations we have taken into account market trends

Market value
We are of the opinion that the aggregate Market Value, as at 31

in the locality and except where you have advised us to the contrary,

December 2009, of these 78 freehold and long leasehold proper-

or our other enquiries have alerted us to this, we have assumed that

ties is €1,601,265,000 (one billion six hundred and one million, two

there have been no material changes to any of the properties or their

hundred and sixty ﬁ ve thousand euros).

surroundings that might have a material effect on value, since the

time of our inspection.

This value reﬂ ects the following aggregate net yields.

In arriving at our opinions of value we have had regard to compar-

able investment transactions in determining the net initial yield and

equivalent yield which we have adopted in capitalising the current

income stream. Where properties have less than 5 years of term cer-

tain left we have adopted income void periods which range from 18

to 24 months depending upon the type of property prior to re-letting.

Yield

Initial

Equivalent

Reversion (July 2020)

5.50

5.77

6.21

For properties with a large car parking provision we have adopted a

We conﬁ rm that all of the foregoing opinions of value, with the

structural void ranging from 5 to 20 %, depending on the vacancy

exception of Daimler Chrysler HQ property and the three Berlin

rate at the date of valuation. In the case of properties with small car

City properties, are net of the requisite purchaser’s costs of 5.0 %. In

parking provisions we have adopted a void period of 3 months. In

respect of the Daimler Chrysler HQ investment property in Stuttgart

addition, where appropriate, we have allowed for capital expenditure

purchaser’s costs of 4.25 % were adopted reﬂ ecting the high value

either to undertake works necessary to re-let properties at the end

of this single asset and the relatively low costs associated with its

of the lease or deal with extraordinary items of disrepair that are the

management. For the three Berlin City properties, we have adopted

responsibility of the lessor.

the requisite purchaser’s costs of 6.0 % to reﬂ ect the higher rate of

We are of the opinion that this portfolio as a whole or each of its

land transfer tax.

individual assets would appeal to a wide range of purchasers includ-

The market value of the portfolio is the sum of the individual market

ing funds, property companies and institutions. It would also be of

values of each of its assets. This aggregate ﬁ gure makes no allowance

interest to overseas investors attracted by the high quality income

for any effect that placing the whole portfolio on the market may

stream secured over long unexpired lease terms. We consider that

have on the overall realisation. The market value of the portfolio

demand for the portfolio would be strong.

sold as in a single transaction would not necessarily be the same as

Non-recoverable expenses
In arriving at our opinion of the value we have made a total deduc-

tion of 5 % from the income receivable to allow for non-recoverable

Disclosures
In accordance with UK Practice Statement 5.4 we conﬁ rm the

the aggregate ﬁ gure reported.

costs. Such costs relate to items which cannot be recovered from

following:

the tenant and generally includes the expense of maintaining and

repairing all structural components of the property and associated

i. Colliers CRE have valued this portfolio since 2006.

access roads, as well as being ﬁ nancially responsible for maintenance

ii. The total fees earned in the latest ﬁ nancial year from the Com-

and repair items and management expenses etc. However, it does

pany amounted to substantially less than 5 % of our Company

not include tenant improvement measures that have been taken into

turnover.

consideration. Moreover, when the technical due diligence reports

iii. We do not undertake any non-valuation fee earning work for

showed that additional Capital Expenditure was required, we have

the Company.

deducted all, or part of those additional costs from our valuation on

the basis of a day 1 deduction.

Market rent
In preparing our valuation we have made an analysis of the Market

Rent of the portfolio and compared it to the passing rent. Any differ-

ence between the Market Rent and the passing rent has been taken

into consideration in our valuation.

alstria Annual Report 2009

REIT Disclosures and Portfolio

Valuation report

Liability and publication
This report is private and conﬁ dential and for the sole use of alstria

ofﬁ ce REIT-AG for publication in its reports and accounts and HSH

Nordbank AG for calculation of debt covenant.

HSH Nordbank AG is an agent and security agent under the facility

agreement to be entered into with alstria ofﬁ ce REIT-AG as bor-

rower (the “Facility Agreement”) for and on behalf of itself and

each of HSH Nordbank AG, Natexis Banques Populaires and J. P.

Morgan Plc as mandated lead arrangers under the Facility Agree-

ment. HSH Nordbank AG, Natexis Banques Populaires and J. P.

Morgan Chase Bank N.A. as original lenders under the Facility

Agreement and each of their respective assignees or transferees

(the “Finance Parties”) and to each such Finance Party.

We do not accept any responsibility to any third party for the whole

or any part of its contents.

Neither the whole nor any part of this valuation or any reference

thereto may be included within any published document, circular or

statement or disclosed in anyway without our prior written consent

to the form and context in which it may appear. In breach of this

condition, no responsibility can be accepted to third parties for the

comments or advice contained in this report.

Yours faithfully

Christopher J Fowler-Tutt

Adrian Camp

BSc MRICS

Director

BSc (Hons) MRICS

Director

For and behalf of Colliers CRE

100

REIT Disclosures and Portfolio

alstria Annual Report 2009

Appendix I

General Assumptions and Deﬁ nitions
The valuations have been prepared by a suitably qualiﬁ ed valuer,

4 . Purchase and Sale Costs
In arriving at our opinion of value we have allowed for purchaser’s

costs of 5 %, or 6 % for Berlin assets. This reﬂ ects 3.5 % (4.5 % for

Berlin) for land tax with the remainder being apportioned between

as deﬁ ned by PS1.1 of the Appraisal and Valuation Standards, on

agents and legal fees. Because of the high value of the portfolio we

the basis set out below unless any variations have been speciﬁ cally

consider it appropriate to adopt slightly lower professional fees than

referred to under the heading “Special Remarks”:

usual. In respect of the Daimler Chrysler HQ investment property

1. Market Value (MV)
Where we have been instructed to value the properties on the basis

of Market Value, we have done so in accordance with PS 3.2 of the

Appraisal and Valuation Standards issued by The Royal Institution of

Chartered Surveyors, which is deﬁ ned as follows:

“The estimated amount for which a property should exchange on the
date of valuation between a willing buyer and a willing seller in an

in Stuttgart purchaser’s costs of 4.25 % were adopted reﬂ ecting the

high value of this single asset and the relatively low costs associated

in managing it.

5 . Condition
As this was outside the scope of our instruction, we have not carried

out a building survey, nor have we inspected the woodwork or other

parts of the structure which are covered, unexposed or inaccessible.

arm’s-length transaction after proper marketing wherein the parties

We have been provided with a Technical Due Diligence Report pre-

had each acted knowledgeably, prudently and without compulsion.”

pared by on behalf of the alstria ofﬁ ce REIT-AG as listed in our certiﬁ -

The interpretative commentary on Market Value, as published in

cate which we have had regard to in arriving at our opinion.

International Valuation Standards 1, has been applied.

2. Market Rent (MR)
Valuations based on Market Rent (MR), as set out in PS 3.4 of the

Appraisal and Valuation Standards, adopt the deﬁ nition as settled by

the International Valuation Standards Committee which is as follows:

Where we have noticed items of disrepair during the course of our

inspections, they have been reﬂ ected in our valuation which we com-

ment upon in the individual reports attached hereto.

6. Environmental Matters
We have relied upon the environmental investigation undertaken

‘The estimated amount for which a property, or space within a prop-

in respect of the property as listed in our certiﬁ cate. We have been

erty, should lease (let) on the date of valuation between a willing

provided with a report highlighting the potential risks at the subject

lessor and a willing lessee on appropriate lease terms in an arm’s-

property and have had regard to this report in arriving at our opinion

length transaction after proper marketing wherein the parties had
acted knowledgeably, prudently and without compulsion.’

of value. We comment upon the environmental issue in the report
attached hereto.

MR will vary signiﬁ cantly according to the terms of the assumed lease

contract. The appropriate lease terms will normally reﬂ ect current

7. Fixtures and Fittings
In arriving at our opinions of value we have disregarded the value of

practice in the market in which the property is situated, although for

all process related plant, machinery, ﬁ xtures and ﬁ ttings and those

certain purposes unusual terms may need to be stipulated. Matters

items which are in the nature of tenants’ trade ﬁ ttings and equip-

such as the duration of the lease, the frequency of rent reviews,

ment. We have had regard to landlords’ ﬁ xtures such as lifts, escala-

and the responsibilities of the parties for maintenance and outgoings,

tors, central heating and air conditioning forming an integral part of

will all impact on MR. In certain States, statutory factors may either

the buildings.

restrict the terms that may be agreed, or inﬂ uence the impact of

terms in the contract. These need to be taken into account where

Where the properties are valued as an operational entity and includes

appropriate. The principal lease terms that are assumed when provid-

the ﬁ xtures and ﬁ ttings, it is assumed that these are not subject to

ing MR will be clearly stated in the report.

any hire purchase or lease agreements or any other claim on title.

Rental values are provided for the purpose described in this report and

Electrical Equipment Regulations and Gas Safety Regulations and we

are not to be relied upon by any third party for any other purpose.

assume that where appropriate all such equipment meets the neces-

No equipment or ﬁ xtures and ﬁ ttings have been tested in respect of

3. Rental Assessment
We have been provided with an updated tenancy schedule and rent

roll to which we have had regard in arriving at our opinions of value.

sary legislation. Unless otherwise speciﬁ cally mentioned the valuation

excludes any value attributable to plant and machinery.

alstria Annual Report 2009

REIT Disclosures and Portfolio

101

Valuation report

8. Tenure, Lettings and Reports on Title and/or Tenancies
We have not inspected the title deeds, lease and related legal docu-

14. Insurance
In arriving at our valuation we have assumed that the buildings are

ments and have instead relied upon the Legal Due Diligence as listed

capable of being insured by reputable insurers at reasonable market

in our certiﬁ cate. We conﬁ rm we have relied upon the information

rates. If, for any reason, insurance would be difﬁ cult to obtain or

contained therein in arriving at our opinions of value.

would be subject to an abnormally high premium, it may have an

9. Taxation
Whilst we have had regard to the general effects of taxation on mar-

ket value, we have not taken into account any liability for tax which

15. Liability Cap
We conﬁ rm that the extent of our liability in respect of this valuation

may arise on a disposal, whether actual or notional, and neither have

and report is limited to a maximum sum of £50 million.

effect on value.

16. Standard Terms of Business
We conﬁ rm that this valuation report has been provided in accord-

ance with our Standard Terms of Business.

we made any deduction for Capital Gains Tax, Valued Added Tax or

any other tax.

10. Mortgages
We have disregarded the existence of any mortgages, debentures or
other charges to which the properties may be subject.

11. Operational Entities
Where the properties are valued as an operational entity and refer-

ence has been made to the trading history or trading potential of

the property, reliance has been placed on information supplied to us.

Should this information subsequently prove to be inaccurate or unre-

liable, the valuations reported could be adversely affected.

Our valuations do not make any allowance for goodwill.

12. Local authorities, Statutory Undertakers and Legal Searches
We have relied upon the Legal Due Diligence Report as listed in

our certiﬁ cate with respect of formal searches and enquiries for the

property and are therefore unable to accept any responsibility in the
connection. We have, however, made informal enquiries of the local

planning authority in whose areas the properties are situated as to

whether or not they are affected by planning proposals. We have

not received a written reply and, accordingly, have had to rely upon

information obtained verbally.

We have also relied upon the Legal Due Diligence Report in respect

of all consents, licences and permissions including, inter alia, ﬁ re cer-

tiﬁ cates, enabling the property to be put to the uses ascertained at

the date of our inspection have been obtained and that there are no

outstanding works or conditions required by lessors or statutory, local

or other competent authorities.

13. Arrears
We have assumed that all rents and other payments payable by vir-

tue of the leases have been paid to date. If there are rents or other

arrears, we recommend that we should be informed in order that we

may consider whether our valuation should be revised.

102

REIT Disclosures and Portfolio

alstria Annual Report 2009

LIST OF ALL PROPERTIES

Investment portfolio

Asset name

Berlin

Darwinstrasse 14 – 18/Quedlinburgerstrasse 2

Holzhauser Strasse 175 – 177

Hamburg

Alte Königstrasse 29

Alter Steinweg 4

Amsinckstrasse 28

Amsinckstrasse 34

Basselweg 73

Besenbinderhof 41

Buxtehuder Strasse 9 – 11a

Drehbahn 36

Ernst-Merck-Strasse 9 (Bieberhaus)

Gänsemarkt 36 2

Garstedter Weg 13

Gorch-Fock-Wall 15, 17 2

Grindelberg 62 – 66

Grosse Bleichen 23 – 27 1, 2

Hamburger Strasse 43 – 49

Hammer Steindamm 129

Harburger Ring 17

Herthastrasse 20

Johanniswall 4

Kanalstrasse 44

Kattunbleiche 19

Kümmellstrasse 5 – 7

Lenhartzstrasse 28

Ludwig-Rosenberg-Ring 41

Max-Brauer-Allee 41 – 43

Max-Brauer-Allee 89 – 91

Nagelsweg 41 – 45

Öjendorfer Weg 9 – 11

Rahlstedter Strasse 151 – 157

Schlossstrasse 60

Schopenstehl 24

Steckelhörn 12

Steinstrasse 10

Steinstrasse 5 – 7

Wandsbeker Chaussee 220

City

Berlin

Hamburg

1 Joint venture assets.
2 Assets held for sale.
3 Classiﬁ ed as property, plant and equipment.
4 Year of erection of the building or part thereof. Do not reﬂ ect latest renovation.
5 According to the year-end valuation from Colliers CRE.

Year of construction4

Total
lettable area
(sqm)

Ofﬁ ce area
(sqm)

1992/1993

1997

1992

1962/1970

1991

1993

1912/1986

1927

1868/1940

1915/1982

1909

1926

1964/1970

1910

1953

1909

1969

1929

1976

1960/1997

1943

1982

1997

1952/1983

1960

1986

1900

1874/1878

1987

1950/2004

1983

1923/1955

1908

1930

1939

1926

1986

22,200

7,200

29,400

4,300

32,000

8,100

6,200

2,700

5,000

7,700

25,700

17,500

20,900

3,600

7,700

18,400

18,000

21,900

7,200

3,100

3,300

14,000

8,100

12,400

15,700

1,100

5,000

3,200

9,800

6,200

6,100

2,900

11,900

2,100

14,700

26,800

22,400

3,200

378,900

20,800

7,000

27,800

3,600

28,000

7,800

5,900

1,900

3,500

5,100

20,200

12,500

18,100

2,700

5,800

17,400

13,500

20,600

6,300

1,500

2,700

10,500

7,800

9,800

13,300

900

3,600

2,700

7,000

5,900

2,900

9,500

2,100

12,600

22,200

18,400

2,500

314,700

alstria Annual Report 2009

REIT Disclosures and Portfolio

103

List of all properties

Vacany
(sqm)

Contractual rent
(EUR)

ERV5
(EUR)

OMV5
(EUR)

Δ like-for-like
contractual rent
(2008 vs. 2009) ( %)

Δ OMV 2008 vs.
OMV 2009 ( %)

–

1,800

–

2,400

150

–

200

–

500

–

3,420,000

510,000

3,930,000

560,000

3,950,000

950,000

720,000

260,000

480,000

560,000

3,240,000

2,070,000

3,050,000

340,000

810,000

2,070,000

2,800,000

2,360,000

540,000

275,000

290,000

1,690,000

910,000

1,510,000

1,370,000

100,000

460,000

275,000

900,000

880,000

560,000

290,000

960,000

240,000

1,870,000

3,240,000

3,370,000

385,000

3,040,000

44,500,000

720,000

3,760,000

8,150,000

52,650,000

550,000

4,320,000

990,000

770,000

290,000

480,000

530,000

3,500,000

2,380,000

3,200,000

360,000

800,000

2,140,000

4,470,000

2,900,000

560,000

340,000

320,000

1,790,000

940,000

1,430,000

1,780,000

150,000

530,000

370,000

960,000

680,000

320,000

1,040,000

370,000

1,980,000

3,680,000

2,930,000

370,000

8,250,000

74,000,000

12,150,000

8,950,000

4,700,000

6,000,000

9,000,000

64,185,000

33,470,000

60,625,000

5,570,000

15,200,000

37,145,000

60,000,000

36,750,000

9,280,000

3,250,000

4,780,000

32,785,000

12,570,000

28,500,000

24,100,000

1,600,000

7,400,000

5,350,000

16,540,000

14,265,000

8,850,000

4,650,000

17,200,000

4,450,000

35,000,000

61,400,000

58,000,000

5,200,000

3,250

44,335,000

49,180,000

791,165,000

0.0

6.3

0.8

0.0

40.7

0.0

– 11.3

0.0

0.6

0.0

100.0

0.0

100.0

0.0

– 2.6

1.3

2.8

– 7.3

– 5.8

– 7.1

– 6.3

– 1.2

– 8.3

– 6.0

– 1.1

– 9.4

– 6.7

– 0.9

– 7.0

– 0.9

– 1.0

– 0.9

0.0

– 0.9

– 5.8

– 14.5

– 0.9

– 1.0

– 4.6

– 3.1

– 3.6

– 3.0

– 0.7

– 2.7

– 1.0

– 0.9

– 0.6

– 1.1

14.7

2.2

– 1.4

– 1.0

3.6

– 5.5

– 1.3

104

REIT Disclosures and Portfolio

alstria Annual Report 2009

City

Year of construction4

Total
lettable area
(sqm)

Ofﬁ ce area
(sqm)

Asset name

Hanover

Arndtstrasse 1

Werner-von-Siemens-Platz 1

Munich

Arnulfstrasse 150

Hofmannstrasse 51

Landshuter Allee 174

Hanover

Munich

Rhineland

Benrather Schlossallee 29 – 33/Ludolfstrasse 3

Dusseldorf

Bertha-von-Suttner-Platz 17

Friedrichstrasse 19

Gereonsdriesch 13

Horbeller Strasse 11

Jagenbergstrasse 1

Ruhr

Bamler Strasse 1 – 5

Gathe 78

Max-Eyth-Strasse 2

Saxony

Lothar-Streit-Strasse 10b

Ludwig-Erhard-Strasse 49

Washingtonstrasse 16 – 16a

Zellescher Weg 21 – 25a

Zwinglistrasse 11 – 13

Stuttgart

Epplestrasse 225

Ernsthaldenstrasse 17

Siemensstrasse 33

Bonn

Dusseldorf

Cologne

Neuss

Essen

Wuppertal

Dortmund

Zwickau

Leipzig

Dresden

Stuttgart

Ditzingen

1972

1913/14, 1987

2002

1990

2002

1958

1998

1954/1980

1991

1993

1988

1990/2000/2002

1986

1995

2003

1996

1994

1911/1993

1987 – 1989

1967

1989

10,200

21,700

31,900

5,900

22,100

6,900

34,900

5,000

1,400

2,100

2,400

6,700

24,700

42,300

36,400

8,600

7,000

52,000

1,000

6,300

21,600

6,500

3,000

38,400

107,500

2,500

22,000

132,000

8,400

21,300

29,700

5,600

20,400

6,500

32,500

4,300

1,100

1,200

2,100

6,100

23,900

38,700

29,000

8,500

6,600

44,100

1,000

6,000

18,400

5,400

2,800

33,600

78,000

2,200

7,800

88,000

alstria Annual Report 2009

REIT Disclosures and Portfolio

105

List of all properties

Vacany
(sqm)

Contractual rent
(EUR)

OMV5
(EUR)

Δ like-for-like
contractual rent
(2008 vs. 2009) ( %)

Δ OMV 2008 vs.
OMV 2009 ( %)

ERV5
(EUR)

940,000

1,990,000

2,930,000

1,100,000

2,710,000

1,100,000

4,910,000

530,000

200,000

420,000

350,000

680,000

2,860,000

5,040,000

4,040,000

1,010,000

710,000

5,760,000

100,000

630,000

1,760,000

780,000

220,000

3,490,000

10,975,000

25,000,000

35,975,000

14,250,000

41,600,000

14,200,000

70,050,000

7,150,000

2,300,000

4,950,000

5,240,000

6,500,000

47,750,000

73,890,000

60,700,000

12,200,000

4,000,000

76,900,000

1,050,000

9,925,000

16,000,000

10,950,000

2,200,000

40,125,000

1,030,000

1,860,000

2,890,000

980,000

2,430,000

900,000

4,310,000

535,000

200,000

340,000

350,000

480,000

3,410,000

5,315,000

4,030,000

960,000

185,000

5,175,000

140,000

750,000

1,200,000

830,000

195,000

3,115,000

14,660,000

14,730,000

239,530,000

260,000

1,460,000

16,380,000

240,000

2,110,000

17,080,000

2,860,000

18,000,000

260,390,000

–

300

–

1,700

–

2,000

3,200

600

5,000

8,800

–

6,000

100

6,200

–

5,400

1.0

0.0

0.3

0.0

2.9

0.0

– 15.0

0.0

– 0.8

6.3

4.3

2.8

5.8

0.0

– 2.4

9.2

95.0

4.5

0.0

– 19.8

– 2.2

– 15.4

– 14.2

– 14.5

– 12.3

– 3.3

– 5.3

– 5.7

– 1.4

0.0

– 13.2

0.0

– 3.7

– 10.3

– 8.2

0.3

0.0

0.3

– 25.0

0.0

– 3.1

0.0

– 1.6

– 2.2

– 7.7

– 4.7

– 23.9

– 9.0

106

REIT Disclosures and Portfolio

alstria Annual Report 2009

Asset name

Others

Am Gräslein 12

Am Roten Berg 5

Carl-Reiß-Platz 1 – 5

Doktorweg 2 – 4/Bismarckstrasse 3

Emil-von-Behring-Strasse 2

Goldsteinstrasse 114

Gustav-Nachtigal-Strasse 3

Gustav-Nachtigal-Strasse 4

Halberstädter Strasse 17

Helene-Lange-Strasse 6 – 7

Johannesstrasse 164 – 165

Joliot-Curie-Platz 29 – 30

Schweinfurter Strasse 4

Spitzweidenweg 107

Total

Development asset

Asset name

Bäckerbreitergang 73 – 75 3

Hamburger Strasse 1 – 15

Kaiser-Wilhelm-Strasse 79 – 87

Poststrasse 11 (Alte Post) 1

Disposals

Asset name

Bonner Strasse 351 2

Eppendorfer Landstrasse 59

Eserwallstrasse 1 – 3 2

Gorch-Fock-Wall 11

Marburger Strasse 10

Mecumstrasse 10 2

Ottenser Marktplatz 10/12

Poststrasse 51

Regensburger Strasse 223 – 231 2

Rheinstrasse 23 2

Steubenstrasse 72 – 74 2

Vahrenwalder Strasse 133 2

City

Year of construction4

Total
lettable area
(sqm)

Ofﬁ ce area
(sqm)

Nuremberg

Erfurt

Mannheim

Detmold

Frankfurt am Main

Wiesbaden

Magdeburg

Potsdam

Erfurt

Halle

Wurzburg

Jena

City

Hamburg

City

Cologne

Hamburg

Augsburg

Hamburg

Berlin

Dusseldorf

Hamburg

Nuremberg

Darmstadt

Mannheim

Hanover

1972

1994

1959 – 1979

1959/1960

1988

1996

2000

1981

1996/2002

1995

1998

1996

1992

Year of construction4

1885

1973

1901

1850/1971

Year of construction4

2000

1978

2000

1893/1985

1967

2001

1956/2000

1913

1999

1958

1998

1999

2,700

5,300

17,500

9,800

9,300

8,400

18,500

700

7,600

3,300

5,800

1,100

5,100

2,900

2,500

4,100

14,800

8,600

8,400

7,900

16,500

700

6,900

2,600

4,200

500

4,100

2,500

98,000

84,300

837,800

693,400

Total
lettable area
(sqm)

2,400

21,700

5,500

6,600

36,200

Total
lettable area
(sqm)

10,900

3,300

5,600

8,700

6,200

8,600

1,000

1,700

8,900

2,700

4,100

7,100

Ofﬁ ce area
(sqm)

2,100

9,100

4,200

4,600

20,000

Ofﬁ ce area
(sqm)

9,500

2,600

5,100

7,200

5,700

8,500

1,000

1,200

7,300

2,300

4,100

6,700

68,800

61,200

alstria Annual Report 2009

REIT Disclosures and Portfolio

107

List of all properties

Vacany
(sqm)

Contractual rent
(EUR)

OMV5
(EUR)

Δ like-for-like
contractual rent
(2008 vs. 2009) ( %)

Δ OMV 2008 vs.
OMV 2009 ( %)

ERV5
(EUR)

290,000

300,000

1,710,000

830,000

1,080,000

1,000,000

2,400,000

140,000

660,000

410,000

560,000

120,000

450,000

240,000

3,600,000

2,600,000

21,150,000

11,000,000

12,000,000

13,650,000

30,500,000

1,350,000

7,950,000

5,525,000

6,875,000

1,150,000

6,200,000

1,420,000

800

2,300

1,200

–

600

–

100

200

–

1,300

6,500

225,000

145,000

1,590,000

800,000

1,500,000

1,090,000

2,400,000

110,000

640,000

385,000

530,000

90,000

490,000

140,000

10,135,000

10,190,000

124,970,000

33,950

95,585,000

102,340,000

1,526,115,000

– 10.0

3.6

0.0

4.9

1.3

1.9

12.5

0.0

– 12.5

0.1

1.4

– 10.0

0.0

– 1.3

0.0

– 16.2

– 3.4

– 7.6

– 0.4

0.0

– 5.2

– 4.2

– 3.1

– 23.2

– 5.3

– 4.1

Vacany
(sqm)

2,400

10,950

2,400

6,600

22,350

Contractual rent
(EUR)

–

1,700,000

215,000

–

1,915,000

ERV5
(EUR)

480,000

3,650,000

990,000

3,700,000

8,820,000

OMV5
(EUR)

5,000,000

27,000,000

8,150,000

35,000,000

75,150,000

Δ like-for-like
contractual rent
(2008 vs. 2009) ( %)

Δ OMV 2008 vs.
OMV 2009 ( %)

n.a.

– 15.0

– 20.4

– 100.0

– 38.6

0.0

– 14.3

– 16.2

0.0

– 7.5

Vacany
(sqm)

Contractual rent
(EUR)

ERV5
(EUR)

Disposal price
(EUR)

Δ like-for-like
contractual rent
(2008 vs. 2009) ( %)

Δ OMV 12/2008 vs.
disposal price 2009 ( %)

–

150

–

1,480,000

1,500,000

23,000,000

410,000

710,000

1,030,000

900,000

1,230,000

155,000

380,000

560,000

730,000

980,000

910,000

1,300,000

150,000

450,000

6,622,000

9,925,000

19,600,000

12,950,000

18,400,000

2,375,000

6,500,000

440

1,010,000

1,100,000

15,000,000

–

590

350,000

530,000

1,100,000

9,285,000

330,000

500,000

1,020,000

9,530,000

4,500,000

7,700,000

14,900,000

141,472,000

0.0

7.9

2.9

1.0

0.0

3.3

0.0

9.4

0.0

11.1

2.3

– 0.4

1.9

0.8

0.5

0.8

– 0.5

1.1

10.2

– 0.7

– 2.2

– 0.6

0.0

0.4

108

Other Information

alstria Annual Report 2009

GLOSSARY

Asset management
Value-orientated running and/or optimisation of properties through letting
management, refurbishment, repositioning and tenant man age ment.

CMBS (Commercial mortgage backed securities)
Securities or loans that are backed by commercial real estate mortgages.

Contractual rent
At a given date, the contractual rent reﬂ ects the total annualised rent, taking
into consideration all signed rental contracts.

Derivative ﬁ nancial instruments
Derivative ﬁ nancial instruments or derivatives are contracts to hedge and
compensate ﬁ nancial risk positions. The pricing is based on a market-linked
underlying value (e.g. interest rate, shares or indices).

EPRA index
The EPRA index is the well-known international index which tracks the
performance of the largest European and North American listed property com-
panies. The European Public Real Estate Association (EPRA) is an organisation
that represents the interests of the major European property management
companies and supports the development and market presence of European
public property companies. Its members include companies such as alstria
ofﬁ ce REIT-AG, ﬁ nancial analysts, investors, advisors and auditors.

Fair value (or open market value (OMV))
The estimated amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an arm‘s-length trans-
action after proper marketing, wherein the parties had each acted knowledge-
ably, prudently and without compulsion. The Fair Value for alstria’s investment
properties is reviewed regularly by external appraisers.

Investment property
Property, land and buildings, which are held as ﬁ nancial investments to earn
rents or for growth and not used for the Company’s own purpose. The value
of the investment property is determined according to IAS 40.

Joint venture
Legally independent entity formed between two or more parties to undertake
economic activity together. It is jointly controlled by the parties under a
contractual arrangement whereby decisions on ﬁ nancial and operating policies
essential to the operation, performance and ﬁ nancial position of the venture
require each party’s consent.

LTV (Loan to value)
Means the ratio of loan amount to the fair value of the real estate.

NAV (Net asset value)
Reﬂ ects the economic equity of the Company. It is calculated from the value
of assets less debt.

NNNAV (Triple net asset value)
NAV adjusted for hidden reserves and hidden losses in immovable assets and
ﬁ nancial liabilities.

Prime Standard
Market segment of the Frankfurt Stock Exchange with the greatest relevance
and degree of regulation. Being quoted on the Prime Standard is a prerequisite
for admission to DAX, MDAX, SDAX and TecDAX.

REIT (G-REIT)
Real Estate Investment Trusts are public listed companies, fully tax transpar-
ent, which solely invest in properties.

FFO (funds from operations)
Operating result from real estate management. alstria’s FFO represents the
operating result, excluding valuation effects and other non-cash items.

Sale-and-leaseback transaction
Form of arrangement in which one party sells an asset to another party in
exchange for cash and contracts to lease the asset for a speciﬁ ed term.

ICR (Interest coverage ratio)
The Interest Coverage Ratio is a key ratio which belongs in a loan agree-
ment to the debtor’s contractual assurances (covenants) for the duration of
the loan. It indicates to which proportion the interest payments have to be
covered by the earnings of the Company, respectively, by the earnings of the
investment property.

IFRS (International Financial Reporting Standards)
IFRS are adopted by the International Accounting Standards Board (IASB).
The objective is to achieve uniformity and transparency in the accounting
principles that are used by companies and other organisations worldwide for
the ﬁ nancial reporting. IFRSs have applied to listed companies since January 1,
2005.

Valuation yield
Key performance indicator, which is determined at a given date by the
contractual rent in relation to the fair value of the property.

WAULT (Weighted average unexpired lease term)
The weighted average unexpired lease term shows the average remaining
lease length of a portfolio and is deﬁ ned as the total contractual rent to be
collected in relation to the contractual rent of the date of the report.

OPEN MARKET VALUE OF
INVESTMENT PROPERTIES

KEY FACTS 2009

FINANCIAL CALENDAR

PROFILE

AS THE FIRST GERMAN REIT, WE HAVE

> a unique business model:

we buy and manage ofﬁ ce real estate

> a clear focus on one country: Germany

> a long-term orientation toward our tenant relationships

> an entrepreneurial view of market opportunities

> Revenues increased to EUR 102,510 k

> Funds from operations at EUR 32,690 k

Hamburg

> Vacancy rate brought down from

5.9% to 5.7%

Hanover

Potsdam

Berlin

Detmold

Magdeburg

Dusseldorf
Neuss

Essen

Dortmund

Wuppertal

Cologne
Bonn

Halle

Leipzig

Dresden

Erfurt

Jena

Zwickau

> Outstanding exposure of its main syndicated
loan facility reduced by around EUR 241 m

> Binding and notarised sales agreements for

14 properties concluded of around EUR 226 m

Wiesbaden

Darmstadt

Frankfurt

Wurzburg

Mannheim

Nuremberg

Stuttgart

Augsburg

Munich

More than EUR 100 m
Between EUR 50 m and EUR 100 m
Between EUR 25 m and EUR 50 m
Between EUR 10 m and EUR 25 m
Between EUR 5 m and EUR 10 m
Between EUR 1 and EUR 5 m

TOTAL PORTFOLIO BY UTILISATION

ALSTRIA’S CORE TENANTS 2009

THE KEY METRICS FOR THE PORTFOLIO

Ofﬁ ce

Retail

Residential

Others

City of Hamburg

Daimler AG

Bilﬁ nger Berger AG

Siemens AG

Barmer EK

Deutsche Renten-
versicherung Bund

Rheinmetall

HUK-COBURG

City of Hanover

Others

as of Dec. 31

Number of properties

Number of joint ventures

Market value (EUR bn)

Contractual rent (EUR m/annum)

Valuation yield (contractual rent/OMV)

Lettable area (k sqm)

Vacancy (% of lettable area)

WAULT (years)

Average rent/sqm (EUR/month)

2009

1.6

97.5

6.2%

867

5.7%

9.6

9.93

2008

–

1.8

106.5

5.9%

944

5.9%

9.41

Date

Feb. 25, 2010

Mar. 16–19, 2010

Mar. 24–25, 2010

Mar. 31, 2010

Apr. 20–21, 2010

May 11, 2010

May 26–27, 2010

Jun. 9, 2010

Jun. 16, 2010

Aug. 11, 2010

Oct. 4–6, 2010

Nov. 10, 2010

Event

Analysts’ Conference
5th HSBC S&M Real Estate and Infrastructure Conference (Frankfurt)

Trade fair
mipim (Cannes)

Analysts’ Conference
10th Annual Pan European Small and Mid Cap Conference (Deutsche Bank) (London)

Publication of Annual Report
Publication of the full year 2009 ﬁ nancial results (Frankfurt)

Annual Press Conference
Annual Press Conference (Frankfurt)

Analysts’ Conference
Global Real Estate Conference (Credit Suisse) (London)

Publication of Q1 Report
Interim Report (Hamburg)

Roadshow
European Property Seminar (Kempen) (Amsterdam)

Analysts’ Conference
Pan European Real Estate Conference (Credit Suisse) (London)

Annual General Meeting
Shareholders’ Meeting (Hamburg)

Publication of Q2 Report
Half-Year Interim Report (Hamburg)

Trade fair
EXPO REAL (Munich)

Publication of Q3 Report
Interim Report (Hamburg)

CONTACT

alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75

20355 Hamburg, Germany

Phone: +49 (0) 40 226341-300

Fax:

+49 (0) 40 226341-310

www.alstria.com

Investor Relations
Phone: +49 (0) 40 226341-329

Fax: +49 (0) 40 226341-310

E-mail: ir@alstria.de

http://investor-relations.alstria.com

IMPRINT

Concept, design and realisation
Kirchhoff Consult AG, Hamburg, Germany

Photography
Denz, Hamburg, Germany

alstria ofﬁ ce REIT-AG is a member of DIRK (Deutscher Investor
Relations Verband, the German Investor Relations Association).

Other reports issued by alstria ofﬁ ce REIT-AG are posted on the
Company’s homepage.

Note
This report is published in German (original version) and English
(non-binding translation).

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REAL ESTATE ...

ANNUAL REPORT 2009

KEY FIGURES

EUR k

Revenues and earnings

Revenues

Net rental income

Consolidated loss / proﬁ t for the period

FFO

Loss per share (EUR)

Balance sheet

Investment property

Total assets

Equity

Equity ratio

Liabilities

NAV/share (EUR)

NNNAV/share (EUR)

REIT key ﬁ gures

REIT ratio

Revenues plus other income from investment properties

Stock ﬁ gures

Number of shares (excluding own shares)

Number of treasury shares

Total

CONTENTS

Letter from the Board of Management

Through Our Eyes

alstria Stock

Group Management Report (separate content)

Economics and strategy

Financial analysis

Report on risks and opportunities

Sustainability report

Mandatory disclosure

Additional Group disclosures

Subsequent events and outlook

2009

2008

Change (%)

102,510

91,964

– 79,651

32,690

– 1.44

1,425,440

1,766,134

634,185

35.9%

102,055

93,222

– 56,000

39,415

– 1.02

1,805,265

1,873,493

729,667

38.9%

1,131,949

1,143,826

11.32

40.3%

100%

13.03

40.3%

100%

55,997,626

54,624,245

2,374

1,375,755

56,000,000

Management Compliance Statement

Auditors’ Report

Corporate Governance

Report of the supervisory board

Corporate governance statement

Remuneration report

REIT Disclosures and Portfolio

REIT declaration

REIT memorandum

Valuation report

List of all properties

Other Information

Glossary

0.4

– 1.4

– 42.2

– 17.1

– 41.2

– 21.0

– 5.7

– 13.1

– 3.0 pp

– 1.0

– 13.1

0.0 pp

2.5

– 99.8

102

108

Consolidated Financial Statements (separate content) 37

Financial calendar/Contact/Imprint

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of ﬁ nancial position

Consolidated statement of changes in equity

Consolidated statement of cash ﬂ ow

Notes to the consolidated ﬁ nancial statements

alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75
20355 Hamburg
Germany
Phone: +49 (0) 40 226341-300
+49 (0) 40 226341-310
Fax:
www.alstria.com