alstria office REIT Annual Report 2010

FY2010 Annual Report · alstria office REIT

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alstria Edition 2010

Annual Report 2010
Part II/II – Financial Report

PROFILE

alstria ofﬁ ce REIT-AG is an internally managed Real Estate Investment
Trust (REIT) focused solely on acquiring, owning and managing ofﬁ ce real
estate in Germany. alstria was founded in January 2006 and was con-
verted into the ﬁ rst German REIT in October 2007. Its headquarters are
in Hamburg. alstria ofﬁ ce REIT-AG owns a diversiﬁ ed portfolio of proper-
ties across attractive German ofﬁ ce real estate markets. Its portfolio as of
December 31, 2010 comprises 70 properties with an aggre gate lettable
space of approx. 778,000 sqm and is valued at approx. EUR 1.4 bn.
alstria intends to expand its portfolio in the upcoming years as part of a
sustainable growth strategy. This strategy is based on selective invest-
ments and active asset and portfolio management, as well as on estab-
lishing and maintaining good relationships with key customers and
decision-makers. alstria focuses on long-term real estate value creation.

KEY FIGURES 2010

EUR k

Revenues and earnings

Revenues

Net rental income

Consolidated proﬁ t/loss for the period

FFO

Earnings per share (EUR)

Balance sheet

Investment property

Total assets

Equity

Liabilities

NAV/share (EUR)

NNNAV/share (EUR)

G-REIT key ﬁ gures

G-REIT ratio

Revenues plus other income
from investment properties

Share data

Number of shares (m)

Number of own shares (m)

Total (m)

2010

2009

Change (%)

89,094

81,759

206

27,541

0.00

102,510

91,964

−79,651

32,690

−1.40

Dec. 31, 2010 Dec. 31, 2009

1,348,400

1,425,440

1,542,336

1,766,134

692,408

849,928

11.24

634,185

1,131,949

11.32

−13.1

−11.1

100.3

−15.8

100.3

−5.4

−12.7

9.2

−24.9

−0.7

49.8 %

40.3 %

9.5 pp

100 %

0.0 pp

61.6

0.0

61.6

56.0

0.0

56.0

PROFILE

CONTENTS

Group Management Report (separate content)
Economics and strategy (business overview)
Financial analysis
Report on risks and opportunities
Sustainability report
Mandatory disclosure
Additional Group disclosures
Subsequent events and outlook

Consolidated Financial Statements (separate content)
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 ows
Notes to the consolidated ﬁ nancial statements

Management Compliance Statement

Auditors’ Report

Corporate Governance
Report of the Supervisory Board
Corporate governance statement
Remuneration report

REIT Disclosures
REIT declaration
REIT memorandum

Other Information
Glossary
Financial calendar
Contact/Imprint

5
6
12
17
22
23
25
26

28
30
31
32
34
36
38

80
80
84
90

94
94
95

96
96
100

DETAIL INDEX GROUP MANAGEMENT REPORT

Economics and strategy (business overview)
Economic conditions
Strategy and structure
Corporate management
Portfolio overview

Financial analysis
Earnings position
Financial and asset position

Report on risks and opportunities
Risk reporting
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 2010 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

6
6
7
8
8

12
12
14

17
17
21

25
25
25
26

26
26
27

DETAIL INDEX GROUP MANAGEMENT REPORT

Economics and strategy (business overview)
Economic conditions
Strategy and structure
Corporate management
Portfolio overview

Financial analysis
Earnings position
Financial and asset position

Report on risks and opportunities
Risk reporting
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 2010 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

6
6
7
8
8

12
12
14

17
17
21

25
25
25
26

26
26
27

Group management report

alstria Financial Report 2010

GROUP MANAGEMENT REPORT

ECONOMICS AND STRATEGY
(BUSINESS OVERVIEW)

Economic conditions
In 2010 the German economy enjoyed a strong
rebound in activity after 2009.

Germany’s GDP was up 3.6 % in 2010*. The gov-
ernment stimulus programmes have had a posi-
tive impact. This positive development of the
economy feeds the recovery of the labour market.
The unemployment rate for the full year was 7.7 %**
which reﬂ ects a decrease of 0.5 percentage points
compared to 2009. However, the German economy
is still catching up from the deep recession of 2008
and 2009.

The outcome of the economic crisis is still signi-
ﬁ cant for the national budget. Again the public def-
icits standing reached a record level and therefore
it might possibly exceed the 3 % deﬁ cit limit of the
Maastricht treaty.

Nevertheless all expectations for 2010 have been
exceeded. The fast economic recovery and the con-
ﬁ dence of companies for 2011 is reﬂ ected impres-
sively by the real estate market. Never before have
large single lease-ups of over 20,000 sqm had such
a remarkable inﬂ uence on the revenues for the Ger-
man ofﬁ ce property market as was the case in 2010.
Their share was around 17.0 % for the whole take-
up volume in Germany, the highest level throughout
the last ten years.

More importantly, it is uncertain whether all banks
have been able to strengthen their balance sheets
in a meaningful manner. Granting of loans remained
relatively limited in 2010, and although there was
improved liquidity in the mortgage credit market
towards the end of the year, the volumes on offer
appear far lower than are required to sustain global
recovery in the market. It is also evident that the
Commercial Mortgage Backed Securities (CMBS)
market will remain inactive for the foreseeable future.

Overview of the German
ofﬁ ce property market***
Development of ofﬁ ce rents The overall develop-
ment of rents in the German ofﬁ ce property market
did not mirror the growth of the German economy,
with the rental level remaining ﬂ at over the period
with limited changes of +/– 2 % year on year. During
the ﬁ rst three quarters of 2010, prime rents stabilised
in the largest cities in Germany. They decreased by
around 2 % in Hamburg (EUR 22.50 per sqm) and
in Frankfurt by 3 % (EUR 33.00 per sqm), Berlin
prime rents (EUR 20.50 per sqm) increased by 2.5 %,
Munich (EUR 29.00 per sqm) by 1.8 % and Düs-
seldorf (EUR 23.00 per sqm) by 4.5 % compared
to 2009.

Take-up in major German cities The vacancy rate
of ofﬁ ce properties in German cities increased from
9.9 % in 2009 to 10.6 % in 2010, which represents
total vacancies of 8.47 million sqm. Comparing
the six-biggest German cities, the highest vacancy
rate was noted in Frankfurt (14.7 %), followed by
Düsseldorf (12.9 %), Munich (10.5 %), Hamburg
(9.6 %), Berlin (9.1 %) and Stuttgart (7.1 %). Despite
strong tenant demand and ﬂ uid leasing markets, total
net absorption of ofﬁ ce space in Germany remains
negative, pushing vacancy rates up. This is mainly
the effect of an increasing search for efﬁ ciency by
tenants who tend to rent less but more efﬁ cient space
than previously.

New lease-up New lease contracts for over 2.66 mil-
lion sqm of ofﬁ ce space have been signed in the
six major German cities. This reﬂ ects an increase of
0.56 million sqm or 26.4 % compared to the previ-
ous year. In Munich and Stuttgart the rise ranged
between 11 % and 19 %, in Berlin and Frankfurt
between 25 % and 32 %, whereas the highest per-
centage increase in total new lease-ups was registered
in Düsseldorf (55 %). In Hamburg, new lease-ups
totalled 502,800 sqm, representing an increase of
28 % in comparison with 2009. This high increase
however needs to be taken on a relative basis, as the
year 2009 saw a strong decrease of tenant take-up
as a consequence of ﬁ nancial turmoil.

* 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 Financial Report 2010

Group management report

New ofﬁ ce supply With approx. 1 million sqm,
the delivery of new ofﬁ ce and commercial space
remained at the same level as in 2009. For 2011, it
is expected that newly completed ofﬁ ce space will
decline by around 21 %.

Investment markets The positive trend on the invest-
ment market in the ﬁ rst six months of 2010 contin-
ued for the rest of the year, and even accelerated
during the last quarter of 2010. Total year on year
investment volume was up by approx. 85 % (around
EUR 19.60 bn for commercial assets). In the six most
important German locations for ofﬁ ce space, invest-
ment markets rose by over 90 % from EUR 5.8 bn
to EUR 11.1 bn.

The ﬁ nancial year 2010 was dominated by a number
of transactions up to EUR 50 m. Therewith the aver-
age transaction volume has increased by approx.
94 % to EUR 31 m. In 2010 there were a small
number of completed portfolio transactions, which
represent around 22 % of the total investment mar-
ket. However, despite the strong increase in volumes,
the investment market has continued to focus on
core long-term leased properties, while the mar-
ket for higher-risk properties remained restrained
for the year.

Outlook for 2011 Economic conditions are expected
to be positive in 2011, which will continue to push
tenant demand in the leasing market. The main driver
for the investment market outside of the core area
will most notably be driven by reﬁ nancing needs
which will start to increase from 2011 on.

Overall, the euro debt crisis might have a negative
impact on the general market development as it can
increase economic and political instability over the
eurozone. Whether or not interest rates would be
increased will also be key to the development of the
investment market which as of today is partly fuelled
by the low interest rate environment.

Strategy and structure
The alstria Group consists of the parent company
alstria ofﬁ ce REIT-AG, a real estate company listed on
the Frankfurter stock exchange, and 17 subsidiaries.
Operations are made within the parent company.
Although the major part of the assets is allocated
in the alstria ofﬁ ce REIT-AG, 13 properties are held
by seven subsidiaries.

alstria’s buy-and-manage strategy proved to be the
right track for the changing economic environment.
alstria focused on regular reviews of its business
situation, assets and liabilities, and on its short- and
long-term perspectives. In strengthening its balance
sheet, alstria’s strategy of reducing the balloon pay-
ment of its main credit facility step-by-step and of
selective asset sales paid off.

> alstria has a long-term lease portfolio (around
8.4 years weighted average lease lengths). Some
80 % of rental income derives from a small number
of high-quality tenants. Around 50 % of rental
income is generated from public or public related
entities, which are or were less affected by the
economic changes.

> alstria pursues a non-trading strategy, and focuses
on long-term value creation through asset manage-
ment. The recovery of the investment market will
bring new opportunities for the Company’s buy-
and-manage strategy.

> The operating strategy involves helping alstria’s
tenants to optimise their real estate operating costs.
There is no contradiction in reducing the overall
real estate costs of alstria’s tenants and increasing
the returns of alstria. In fact, the current environ-
ment could create opportunities for alstria at a
time when most German corporations are looking
to reduce costs.

Group management report

alstria Financial Report 2010

In 2010, revenues were down from EUR 102.5 m
to EUR 89 m and funds from operations (FFO)*
were down 15.7 %, from EUR 32,690 k in 2009 to
EUR 27,541 k. These results fulﬁ l the ﬁ nancial guid-
ance of EUR 89 m in revenues and EUR 27 m of FFO.
The announced year-on-year decrease in revenues
and funds from operations was mainly driven by the
disposal of fully let assets, as part of the overall plan
of the Company deleveraging.

Portfolio overview
On December 31, 2010, alstria’s portfolio consisted
of 70 ofﬁ ce buildings with approx. 778,000 sqm of
lettable area and a contractual vacancy rate of 7.6 %.
The portfolio is valued at a yield of 6.4 % and the
remaining weighted average unexpired lease term
is approx. 8.4 years.

THE KEY METRICS FOR THE PORTFOLIO1
AS OF DECEMBER 31, 2010

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

1.4

86.6

6.4 %

778

7.6 %

8.4

10.0

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

Transactions
In 2010, alstria continued to dispose of selected
mature properties at favourable terms. Binding and
notarised sale agreements for six properties were
concluded in 2010. Ownership of these six pro perties
was legally transferred during the ﬁ nancial year.

Corporate management
alstria proactively focuses on the following indicators:
revenues, FFO, LTV, WAULT and the G-REIT equity
ratio. Returns are expected to be realised through the
Company’s active asset management model. In 2010,
the Grosse Bleichen joint venture, the ATOS Origin
letting in the Mundsburg Ofﬁ ce Tower and the AOS
letting in alstria’s headquarters at Bäckerbreitergang,
as well as the letting activities in the Alte Post joint
venture, represent good examples of alstria’s suc-
cessful leasing management. The various refurbish-
ment projects such as Bieberhaus, Mundsburg Ofﬁ ce
Tower and the Alte Post joint venture are more proof
of alstria’s management potential.

After reducing the balloon payment of its main loan
step-by-step in 2008 and 2009, alstria has been
able to complete the reﬁ nancing of its EUR 1.1 bn
credit facility in July 2010 by replacing the remaining
EUR 646 m of loan with a credit facility from a new
banking syndicate. As a result, the Company has no
further reﬁ nancing needs until mid-2014.

By proactive management of its balance sheet, alstria
was able to meet its short-term LTV target on the
new syndicated loan, being below 61 % (Decem-
ber 31, 2010: 57.4 %).

Selective asset sales of EUR 154 m (last valuation) as
well as the successfully executed ﬁ rst capital increase
since the Company’s IPO have put alstria in the posi-
tion to meet the target of restoring the required 45 %
G-REIT equity ratio. At year end the G-REIT equity
ratio was at 49.8 %.

Facing investment opportunities in the upcoming
market, alstria agreed terms and conditions for the
acquisition of four assets. While one asset had been
transferred in January 2011 the remaining trans-
actions are expected to be completed at the end
of the ﬁ rst quarter or the beginning of the second
quarter of 2011.

alstria will stay focused on its buy-and-manage
strategy and will constantly review growth oppor-
tunities if and when they arise. Please refer to the
section “recent development and outlook” for fur-
ther details.

* For further details, please refer to the pages 12 and 13.

alstria Financial Report 2010

Group management report

DISPOSALS IN 2010 SUPPORT
ALSTRIA’S VALUATIONS

DISPOSALS

Assets

City

Portfolio transaction

Hamburg

Portfolio transaction

Hamburg

Portfolio transaction

Hamburg

Total

Number
of assets

Last
valuation
(EUR k)

Annual
rent
(EUR k)

Av. lease
length
(years)

Sales
price
(EUR k)

Yield
(%)

Surplus
(EUR k)

Sur-
plus
(%)

75,825

52,200

25,700

153,725

3,900

2,800

1,500

8,200

5.1

5.4

5.8

5.3

15.8

17.2

11.4

84,200

52,201

29,500

8,375

11.0

0.0

3,800

14.8

165,901

12,176

7.9

ACQUISITIONS 2011

Assets

City

Friedrich-Scholl-Platz 1 Karlsruhe

Portfolio transaction

Hamburg

Suederstrasse 24

Hamburg

Total

Number
of assets

Purchase
price
(EUR k)

Annual
rent
(EUR k)

Av. lease
length
(years)

Yield
(%)

36,200

20,000

11,000

2,600

1,200

800

67,200

4,600

7.2

6.0

7.3

6.8

14.9

3.2

8.1

Investment decisions at alstria are based on the
analysis of the local markets and on adequacy of
a building within its local environment in terms
of location, size and quality. alstria’s strategy is to
enter new markets and build critical mass through
long-term secured assets, which are mainly acquired
through sale-and-leaseback transactions. In light of
this approach alstria signed a binding and notar-
ised agreement for the acquisition of one asset in
Karlsruhe in 2010 which is leased back by the seller
under a 15-year lease. The transfer of beneﬁ ts and
burden of this asset took place at the beginning of
January 2011. No further acquisitions occurred in
2010.

In the ﬁ rst quarter of 2011, alstria agreed on the
acquisition of three more assets. The transfer of bene-
ﬁ ts and burden is expected to take place at the end
of the ﬁ rst, or the beginning of the second, quarter
of 2011.

In January 2010, alstria agreed the terms of a sec-
ond joint venture with the Hamburg-based Quantum
Immobilien AG to refurbish Kaisergalerie in Hamburg.
alstria’s share in this joint venture is 49 %. It is
planned that the joint venture refurbishes the
property after the move of the Hamburg Ohnsorg-
Theater to its new location, in the also alstria-owned
Bieberhaus.

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

> Poststrasse 11, Alte Post, Hamburg

The building permit for the refurbishment of Alte
Post, Hamburg, was granted in the third quarter
of 2009. The Alte Post building is one of the best-
known buildings in the Hanseatic City of Hamburg.
It is located at the corner of Poststrasse and Grosse
Bleichen, and was built between 1845 and 1847
on the basis of plans by the artist and architect
Alexis de Chateauneuf. It was last refurbished in
the 1970s. This ﬁ rst joint venture is part of alstria’s
plans to fund organic growth of the Company.
Whilst alstria’s main contribution to the joint ven-
ture is the building, its two partners mainly contrib-
ute equity funding. The core removal took place at
the beginning of 2010 and the building has, since
then, been rebuilt step by step. About 40 % of the
work is completed. The refurbishment is progress-
ing and is scheduled to be completed on time by
the end of 2011.

> Steinstrasse 5–7, Hamburg

The refurbishment was completed in mid-2010.
Hamburger Hochbahn AG, which pre-let the space,
moved in on time and is now occupying around
13,000 sqm on a 20-year basis.

Group management report

alstria Financial Report 2010

> Bäckerbreitergang 75, Hamburg

The property at Bäckerbreitergang 75 has been
refurbished with the aim of converting the stor-
age facility into a modern ofﬁ ce building. The
refurbishment was completed by mid-2010.
The newly built ﬁ fth ﬂ oor, of which over 70 %
had been pre-let on a ﬁ ve-year basis, has been
equipped for the needs of its new tenant.

> Hamburger Strasse 1–15, Hamburg

The retroﬁ tting of the landmark Mundsburg
Ofﬁ ce Tower in Hamburg started in early 2010.
This building, which was erected in the seventies,
had never been upgraded. The main objective of
this refurbishment project is to create efﬁ cient
ofﬁ ce space and reduce energy consumption and
occupancy costs for the future tenants. It was
therefore one of the ﬁ rst buildings in Germany
to be certiﬁ ed as a sustainable building by the
DGNB (Deutsche Gesellschaft für nachhaltiges
Bauen e.V.) in accordance with the new “mod-
ernisation of ofﬁ ce and administrative build-
ings” certiﬁ cation programme. The DGNB silver
pre-certiﬁ cate demonstrates the project’s sus-
tainability, particularly with regard to space and
energy efﬁ ciency, as well as tenant comfort. The
refurbishment of the Mundsburg Ofﬁ ce Tower is
scheduled to be completed in 2012. Please refer
to page 22 for more information about sustain-
ability within alstria.

> Ernst-Merck-Strasse 9, Hamburg

The building permit for the refurbishment of this
building was granted in the ﬁ rst quarter of 2010.
The refurbishment of the Bieberhaus is on sched-
ule. A great part of this property is refurbished
to move the famous Ohnsorg-Theater from the
Grosse Bleichen asset to the Bieberhaus. By this
means the theatre will get access to a new modern
facility, which it will rent on a long-term basis.
The refurbishment is scheduled to be completed
by summer 2011.

In 2010 alstria invested around EUR 16 m* in on-
going refurbishment projects. The main part of the
2010 capex investment was linked to the refurbish-
ment of the Hamburg building Steinstrasse 5–7. In
the next two years, the Company plans to invest
between EUR 40 and 50 m in the portfolio. These
investments depend on on going lease discussions
with existing and potential tenants. Major projects
are related to the property Hamburger Strasse 1–15
(EUR 13.5 m) in Hamburg and the property

Ernst-Merck-Strasse 9, Bieberhaus, in Hamburg,
which comprises the construction of the new
Ohnsorg-Theater (EUR 7.4 m). This Capex plan is
part of alstria’s on going asset value enhancement
programme.

Lease-ups
Leasing activity in 2010 was very successful. In
2010, alstria signed new leases** totalling approx.
20,000 sqm. The increase of the vacancy rate by
190 basis points (bps) to 7.6 % or 59,300 sqm is due
to the sale of leased properties, the deconsolidation
of the leased asset Grosse Bleichen and strategically
orientated broadening of the vacancy rate. Of these
59,300 sqm, 26,400 sqm represents strategic vacancy
(intended vacancy implemented by alstria as part of
its repositioning process for certain assets), while the
remainder is operational vacancy.

Based on the strong tenant relationship with its
tenants and the strong competence of identifying
the tenants’ needs, alstria was able to sign a lease
agreement with a new tenant for nearly half of the
area in the Mundsburg Ofﬁ ce Tower in Hamburg.
This underlines the strong competence of alstria’s
asset management. The tenant will lease the space
starting in January 2013, following the full refur-
bishment of the asset by alstria.

Further key re-letting achievements are the new
lease agreements within the joint venture Alte Post.
The ofﬁ ce space of around 3,500 sqm has been
leased to the law firm Graf von Westphalen
for 10 years. Moreover, the retailer Tommy Hilﬁ ger
has taken out a long-term lease on around 800 sqm
space, and Abercrombie and Fitch has rented
another 1,750 sqm in order to implement its Ham-
burg ﬂ agship store in the asset. The renovation
work is proceeding on schedule and will probably
be ﬁ nished in the fourth quarter of 2011. The total
annual rental income secured with the 90 % lease-
up on this project amounts to EUR 3.9 m which
represents an incremental yield on cost of 8.9 %.

In the last three months of 2010, the leasing activ-
ities continued on a high level. alstria was able
to let over 70 % of the ﬁ fth ﬂ oor of the recently
refurbished asset Bäckerbreitergang to AOS, a real
estate advisory company, who moved in in Febru-
ary 2011. Around 95 % of this asset is occupied.

* Excluding joint ventures.
** New leases correspond to lease of vacant space.

It does not account for any lease renewal, prolongation or tenant exercise of renewal option.

alstria Financial Report 2010

Group management report

Portfolio valuation
alstria’s portfolio was valued in accordance with the
RICS* Red Book guidance by Colliers International
at December 31, 2010. Following the slow rebound
of the investment market, alstria’s assets trailed the
recovery of the overall property prices. However,
the recovery is making steady but slow progress.

The total valuation result on investment proper-
ties was around EUR –12.8 m for the full year. This
valuation adjustment takes the overall value of all
alstria properties to EUR 1,358 m. For further infor-
mation about the valuation of alstria’s portfolio
please refer to the valuation certiﬁ cate of Colliers
International.

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 2010
portfolio also reﬂ ects the clear focus on the ofﬁ ce
asset class. 93 %** of the total lettable area is dedi-
cated to ofﬁ ces.

TOTAL PORTFOLIO BY UTILISATION

% of total lettable area

Ofﬁ ce

Retail

Residential

Others

ALSTRIA’S CORE TENANTS

% of annual rent

City of Hamburg

Daimler AG

Bilﬁ nger Berger AG

Siemens AG

Barmer GEK

Deutsche Renten -

versicherung Bund

Rheinmetall

Württembergische

Lebensversicherung AG1 3

HUK-COBURG

Others

1 Württembergische Lebensversicherung AG

as of January 4, 2011.

LEASE EXPIRY PROFILE

2011

2012

2013

As at Dec. 31, 2010

5.7

8.3

7.9

* Royal Institution of Chartered Surveyors.
** Ofﬁ ce and storage.

Group management report

alstria Financial Report 2010

FINANCIAL ANALYSIS

The year 2010 was a busy year for alstria, and an
inﬂ exion point where alstria left behind any legacy
from the pre-crisis situation and built a strong foun-
dation for the future. The Company sold around
EUR 154 m worth of properties and was also able
to reﬁ nance the remaining EUR 646 m of debt out-
standing. Another important milestone for alstria
was the executed capital increase in 2010. These
measures made it possible to achieve a strong oper-
ating income, and to get back on to a sustainable
growth path.

Earnings position
Following asset disposals and the deconsolida-
tion of the Grosse Bleichen asset, the revenues
dropped in 2010 compared to the previous year.
Total revenues in this reporting period amount to
EUR 89,094 k (2009: EUR 102,510 k). Real estate
operating expenses decreased to 7.7 % of revenues
or EUR 6,893 k compared to 9.9 % of revenues or
EUR 10,189 k in 2009. Net rental income for 2010
was EUR 81,759 k (2009: EUR 91,964 k).

The following table shows the key operating ﬁ gures
of the audited income statements for the ﬁ nancial
years 2010 and 2009:

EUR k

Gross rental income

Net rental income

2010

2009

89,094

102,510

81,759

91,964

Operational expenses

–11,670

–11,177

Net other income

410

1,258

Net operating income

70,499

82,045

Net result from fair value
adjustments on investment
properties

Net result on disposals of
investment properties

Net operating result before
ﬁ nance costs

–12,804

–85,887

9,278

–25

66,973

–3,867

Operational expenses (including administrative and
personnel expenses) were EUR 11,670 k for the
year, compared to EUR 11,177 k in 2009. Accord-
ingly, total operating expenses represent 13.1 % of
total revenues (compared to 10.9 % for 2009).

Net other income mainly comprises income from the
reversal of accruals (EUR 367 k), income from the
management of assets for third parties (EUR 148 k)
and other income (EUR 1,514 k). On the other
hand, it comprises expenses of EUR 1,619 k, which
represent allowance for doubtful debt (EUR 472 k),
deconsolidation expenses (EUR 181 k) and other
expenses (EUR 966 k).

alstria closed the ﬁ nancial year 2010 with a net
operating result before ﬁ nance costs and taxes of
EUR 66,973 k. This compares to EUR –3,867 k for
the previous year, which was signiﬁ cantly inﬂ u-
enced by the valuation result.

FUNDS FROM OPERATIONS
AT EUR 0.45 PER SHARE

EUR k

Pre-tax income (EBT)

2010

2009

206

–79,541

+/– Net loss from fair value
adjustments on
investment property

+/– Net loss from fair value
adjustments on
ﬁ nancial derivatives

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

12,804

85,887

35,672

23,294

–9,278

+/– Other adjustments1

238

3,025

+/– Net gain from fair value
adjustments on
investment property
of joint ventures

–12,101

Funds from operations (FFO)2

27,541

32,690

1 Non-cash income or expenses and non-recurring effects.
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 to alstria’s FFO.

Funds from operations amount to EUR 27,541 k
in 2010 as against EUR 32,690 k in 2009. As a
result, FFO per share* was EUR 0.45 in the ﬁ nan-
cial year 2010 (2009: EUR 0.58).

* Divided by the number of shares at the end of the reporting period

(December 31, 2010: 61,599,999; December 31, 2009: 56,000,000).

alstria Financial Report 2010

Group management report

The reduction in comparison with 2009 resulted
mainly from the decrease of revenues after the
sale of fully let assets. Non-cash expenses mainly
comprise expenses for depreciation and proﬁ t par-
ticipation rights.

Hedging instruments
The devaluation of the ﬁ nancial derivatives was
driven by the development of the yield curve in
the year 2010. alstria applies hedge accounting on
all qualifying hedges in order to limit the impact
on proﬁ t and loss of the volatility of the interest
rate markets. This allows the losses or gains on the
quali fying part of the derivatives to be recognised
under the equity cash ﬂ ow hedge reserve with no
effect on income.

The implementation of the Group-wide reﬁ nancing
strategy in 2010 resulted in the termination of
existing derivatives and the acquisition of new
derivatives. Hedged forecast transactions are no
longer expected to occur due to pre-drawing in the
loan repayment schedule as a result of the reﬁ nanc-
ing strategy. The cumulative loss that was reported
in the equity’s hedging reserve in these cases was
transferred to the income statement within “Net
loss from fair value adjustments on ﬁ nancial deriva-
tives”. As a result, EUR 33,338 k had been trans-
ferred from equity to the income statement as
expenses. For the EUR 33,338 k expense relating to
the transfer out of equity, the corresponding book-
ing entry is an equity account, which increased by
the same amount. Therefore, this expense entry has
no effect on the Group’s net asset value.

In the ﬁ nancial year 2010, the effective change in
the value of the swaps, which is recorded in equity
as “hedging reserve”, was EUR 4,940 k. The fair
value changes of derivatives not categorised as cash
ﬂ ow hedges are recognised in the income state-
ment under “Net result from fair value adjustments
on ﬁ nancial derivatives”. The interest expenses on
swaps and caps are stated in the ﬁ nancial result.

Financial result
The following table shows the ﬁ nancial result for
the period January 1 to December 31, 2010:

EUR k

2010

2009

Syndicated loan – interest

–17,623

–25,638

Interest loan reﬁ nanced

–7,599

–3,918

Interest result derivatives

–17,902

–22,433

Others

–1

Financial expenses

–43,125

–51,990

Financial income

Other ﬁ nancial expenses

700

–740

593

–720

Net ﬁ nancing costs

–43,165

–52,117

alstria complied with all ﬁ nancial covenants as at
December 31, 2010.

Net ﬁ nancing costs decreased by EUR 8,952 k to
EUR 43,165 k in comparison with the year 2009. The
decrease is partly attributable to a lower average loan
level compared with the previous reporting period,
which results from the extensive reﬁ nancing activities
carried out in 2009 and 2010. On the other hand,
the termination of derivatives with comparably high
swap rates led to a drop in average interest costs.
For details on the reﬁ nancing of the main syndicated
loan, we refer to the section entitled “ﬁ nancial and
asset position” on page 14.

Consolidated net result at EUR 206 k
Although the revenues decreased from 2009 to
2010 by 13.1 %, the consolidated net result for
2010 was EUR 206 k compared to EUR –79,651 k
in 2009. The reason for the improvement is mainly
driven by a signiﬁ cant decline of the net loss from
fair value adjustments in investment property
(2010: EUR 12,804 k, 2009: EUR 85,887 k). The
decrease in real estate operating expenses as well
as the proﬁ t of disposals of investment property of
EUR 9,278 k and a reduction in the ﬁ nancial costs
of EUR 8,952 k also affected the consolidated result
for the year.

The fact that alstria’s debt exposure is fully hedged
by ﬁ nancial derivatives ﬁ xes the current overall cost
of debt for the existing portfolio at 4.3 %.

Result per share is EUR 0.00 for 2010 (2009 result
per share: EUR –1.40).

An overview of the composition and changes is
described in detail in Note 10.8.

Group management report

alstria Financial Report 2010

Financial and asset position
Financial management
In 2010 the Company successfully ﬁ nalised the
ﬁ nancial reﬁ nancing process. In January alstria
entered into a new non-recourse loan amount-
ing to EUR 75.8 m. Starting in September 2008
by following a staggered approach, alstria replaced
its remaining syndicated loan by a new corporate
facility in the amount of EUR 630 m with a new
banking syndicate in the second quarter of 2010.
Thus, the Company has totally reﬁ nanced the
EUR 1.1 bn initial corporate loan which was put
in place at the genesis of the Company 1.3 years
earlier than the agreed maturity.

The new corporate loan was provided by a syn-
dicate of five banks, arranged by UniCredit
Bank AG and underwritten by Berlin-Hannoversche
Hypothekenbank AG, Eurohypo Aktiengesell schaft,
HSH Nordbank AG and Natixis Zweignieder lassung
Deutschland. It has a maturity of ﬁ ve years.

The spread on the loan depends on the LTV ratio
according to the following grid.

MARGIN GRID FOR THE
NEW SYNDICATED LOAN

LTV

65 % < LTV ≤ 70 %

61 % < LTV ≤ 65 %

56 % < LTV ≤ 61 %

51 % ≤ LTV ≤ 56 %

LTV < 51 %

Spread

200 bps p.a.

175 bps p.a.

160 bps p.a.

150 bps p.a.

135 bps p.a.

The current margin amounts to 160 bps basing on
an LTV ratio of 58.4 % at drawdown date. Due to
partial repayments caused by the property dispo-
sals in the third quarter, the LTV ratio was at 57.4 %
as of December 31, 2010. The next test date for
the LTV ratio and the margin is March 31, 2011.
Including the existing non-recourse loans alstria’s
consolidated debt amounts to EUR 796.9 m. The
corporate LTV ratio is therefore 58.7 %. Taking into
account the Company’s free cash of EUR 117 m,
the net LTV stands currently at around 50.1 %.

EXISTING LOAN AGREEMENTS
AS PER DECEMBER 31, 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 at Dec. 31, 2010

Principal
amount
outstanding
(EUR k)

Current
LTV (%)

Maturity

Jul. 20, 2015

572,809

Oct. 19, 2015

Dec. 31, 2014

Jun. 30, 2014

Oct. 20, 2014

Jan. 31, 2017

47,902

37,283

31,552

32,774

74,644

796,964

57.4

74.6

56.5

60.9

59.0

61.6

58.7

Net LTV1
(%)

LTV cov-
enant

(%) Next test date

70.0 Mar. 31, 2011

80.0 Sept. 30, 2012

80.0 Dec. 31, 2011

65.0 Dec. 31, 2011

61.0 Mar. 31, 2011

75.0 Dec. 31, 2011

Total net as at Dec. 31, 2010

680,1312

50.1

1 The net LTV is not a measure under generally accepted accounting

principles, in particular IFRS.

2 Assuming that the free cash at year-end (EUR 117 m) is used to

pay down the loan amount.

alstria Financial Report 2010

Group management report

Cash position is at EUR 120,788 k
The cash ﬂ ow from operating activities for 2010
amounted to EUR 29,274 k, down on the report-
ing period for 2009 (EUR 33,171 k). This is mainly
based on lower rental revenues due to the disposal
of assets, which is only partly compensated by a
decrease in real estate operating expenses.

The cash ﬂ ow from investing activities comprises
the cash inﬂ ow resulting from the sale of real estate
(EUR 163,003 k) and EUR 13,546 k from repay-
ment of loans granted to joint venture companies.
A cash outﬂ ow of EUR 17,331 k relates to pay-
ments for refurbishment measures for re-letting,
subsequent acquisition costs on investment pro-
perties and prepayments on asset acquisition.

The cash ﬂ ow from ﬁ nancing activities reﬂ ects loan
repayments of EUR 950,216 k and payments for
the termination of ﬁ nancial derivatives amounting
to EUR 15,345 k. Cash inﬂ ows of EUR 738,629 k
relate to loans taken out during reﬁ nancing. The
capital increase led to a cash inﬂ ow of EUR 47,378 k
net.

As a result, alstria ended the ﬁ nancial year 2010
with a cash position of EUR 120,788 k (2009:
EUR 146,818 k). The Group is adequately funded
to comply with its ﬁ nancial obligations.

The completion of the debt restructuring sup-
ported alstria’s main ﬁ nancial goal to establish
a long-term ﬁ nance structure which is stable in
respect of maturities and interest burden. An inte-
gral part of this structure is the long-term loans
covered by corresponding hedging instruments,
such as swaps and caps, against the risk of increas-
ing interest rates. As a result of the completed
restructuring process the average debt maturity
increased signi ﬁ cantly to 4.6 years compared to 2.5
years as of December 31, 2009, whereas the aver-
age cost of debt of the Group remained stable at
around 4.3 % p.a. (compared to 4.4 % p.a. in the
previous year). Taking alstria’s long-term lease pro-
ﬁ le into account, the current debt structure signiﬁ -
cantly improves the visibility of alstria’s cash ﬂ ow
for the next ﬁ ve years. alstria has no reﬁ nancing
needs before mid-2014.

alstria intends to add the newly acquired asset in
Karlsruhe to the collateral pool of the syndicated
loan. According to the provisions under the loan
agreement, this would lead to a margin reduc-
tion of 10 bps to 150 bps. This transaction is
planned to be closed before the next test date as
of March 31, 2011.

FINANCIAL DEBT BY MATURITIES1

EUR k

2011

2012

2013

2014

94,200

2015

2016

2017

62,900

As at Dec. 31, 2010

1 Excluding regular amortisation.

620,700

Group management report

alstria Financial Report 2010

Investment properties down by 5.0 %
Total investment property value amounts
to EUR 1,348,400 k* in comparison with
EUR 1,425,440 k at the beginning of the year.
The decline in investment properties reflects
the asset sales realised by alstria during the year
(EUR 78 m)*, the reclassiﬁ cation of assets held
for sale (EUR 0.6 m) and the revaluation of the
remainder of the portfolio (EUR –13 m).

EUR k

Investment properties at Dec. 31, 2009

1,425,440

Capital expenditure

Disposals

Reclassiﬁ cation

Revaluations

14,264

– 77,900

– 600

– 12,804

Investment properties at Dec. 31, 2010

1,348,400

Fair value of owner-occupied properties

Fair value of properties held for sale

Interests in real estate partnerships

8,500

600

32,385

Fair value of immovable assets

1,389,885

Reclassiﬁ cations comprise one asset which has been
classiﬁ ed as investments held for sale following the
conclusion of a binding sale agreement by alstria at
the end of 2010. The fair value of immovable assets
will be used for the G-REIT equity ratio calculation.

Equity ratio of 44.9 % –
G-REIT equity ratio at 49.8 %
The balance sheet reﬂ ects a total equity position
of EUR 692,408 k with an equity ratio of 44.9 %
(December 31, 2009: EUR 634,185 k or 35.9 %).
The G-REIT equity ratio, which is deﬁ ned as total
equity divided by immovable assets, is 49.8 %
(December 31, 2009: 40.3 %). According to the
G-REIT Act (REITG), the minimum requirement for
compliance is a G-REIT equity ratio of 45 % calcu-
lated at year-end.

NNNAV at EUR 11.24 per share
NNNAV (Triple Net Asset Value according to EPRA**)
dropped from EUR 11.32 per share to EUR 11.24
per share. Changes in cashﬂ ow hedges and reclas-
siﬁ cation of loss from equity’s hedging reserve
(EUR 38,278 k), the executed capital increase
(EUR 47,378 k) and the consolidated gain for the
period (EUR 206 k) were primarily respon sible
for the rise in alstria’s equity. In total, this leads
to an increase in equity from EUR 634,185 k to
EUR 692,408 k***. The decrease in NNNAV per
share is the result of a change in the amount of
shares after the capital increase in 2010 (Decem-
ber 31, 2010: 61,599,999; December 31, 2009:
56,000,000).

Anticipation decreases ﬁ nancial debt
In 2010, long-term loans were reduced by
17.0 % to EUR 786,410 k. This is mainly related
to active management under the reﬁ nancing pro-
cess, including measures such as the replacing of
the remaining EUR 646 m syndicated loan with a
credit facility from a new banking syndicate and
over EUR 154 k of selective disposals.

Decrease in current liabilities
Current liabilities amounted to EUR 39,172 k, of
which EUR 7,796 k is categorised as short-term
loans, representing ﬁ nancial liabilities that will be
repaid in the ﬁ rst quarter. Other current liabil-
ities amounting to EUR 6,990 k mainly comprised
accruals for outstanding invoices (EUR 1,268 k),
deferred income (EUR 1,700 k) and other cur-
rent liabilities (EUR 4,022 k). Derivative ﬁ nancial
instruments in the amount of EUR 21,007 k refer
to interest rate swaps not designated in a cash-
ﬂ ow hedge relationship. (Please refer also to sec-
tion 10.8 of the notes for the ﬁ nancial year 2010).

* Excluding assets held for sale.
** EPRA: European Public Real Estate Association, Best Practices Committee, Schiphol Airport, Netherlands.
*** See also the consolidated statement of changes in equity on page 34.

alstria Financial Report 2010

Group management report

REPORT ON RISKS
AND OPPORTUNITIES

Risk reporting
Risk management
alstria has implemented a Group-wide structured
risk management and an early warning system
in accordance with Section 91 (2) of the German
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-
pletely avoid the risks associated with entrepreneur-
ial activity in order to safeguard the Group against
potential losses, and against risks to the Company
as a going concern. The system of the early detec-
tion 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 on an ongoing
basis. Risk mitigation measures are deﬁ ned in order
to undertake any necessary steps to circumvent the
identiﬁ ed risks, i. e., to insure, diversify, manage or
avoid risks. For alstria, risk management means the
targeted securing of existing and future potential for
success, and improving the quality of the Company’s
planning processes.

Organisationally, risk management is assigned to
the controlling group. A risk report is prepared by
the risk manager on a quarterly basis and provided
to the Management Board. The basis for the
pre paration of the risk report are the reports from
the risk owner responsible for a particular risk area.
The risk report presents the organisational measures
and regulations that are to be observed with regard
to risk identiﬁ cation, assessment, response, reporting
and monitoring. At the same time, the comprehen-
sive documentation of this report ensures an orderly
assessment, which is conducted by the responsible
departments and by the Supervisory Board.

Risks are assessed according to their likelihood of
occurrence and their magnitude of impact. Overall
risk is calculated and updated over a speciﬁ c period
of time by linking various parameters. By monitor-
ing the risk management system, alstria is able to
continually advance and adapt its structures and
processes.

Key characteristics of the accounting-related
internal control and risk management system
The objective of the control and risk management
system regarding the (Group) reporting pro cess is to
make sure that the reporting is uniform and in line
with the legal requirements, the generally accepted
accounting principles and the Inter national Finan-
cial Reporting Standards (IFRS), as well as inter-
nal Group guidelines, so as to give recipients of
the annual ﬁ nancial statements true and reliable
information. To this end alstria has implemented
an internal control and risk management system
that combines all relevant principles, pro cesses and
measures.

The internal control system consists of two areas,
namely control and monitoring. In organisational
terms, the treasury, controlling and accounting divi-
sions are responsible for control.

The monitoring measures consist of elements
in corporated in the process and external, independ-
ent elements. Among others, the integrated measures
include manual controls such as the “dual control
principle”, which is applied universally, and tech-
nical controls, essentially software-based checking
mechanisms. In addition, qualiﬁ ed employees with
the appropriate powers as well as specialised Group
departments such as controlling, legal and treasury
perform monitoring and control functions as part of
the various processes.

The Management Board and the Supervisory Board
(in particular the audit committee) as well as a ﬁ rm
of auditors are involved in the monitoring system
with various checks that are independent of the
Company’s processes.

For special technical questions and complex report-
ing issues Group accounting acts as the central
interlocutor. If required external experts (audi-
tors, qualiﬁ ed accounting specialists, etc.) will be
consulted.

In addition, the accounting-related monitoring is
executed by the controlling department of the Com-
pany. All items and main accounts of the income
statement and the balance sheet are reviewed regu-
larly for accuracy and plausibility. This refers both
to the consolidated ﬁ nancial statements and to
the individual ﬁ nancial statements of the Group’s
companies. Accounting-related data is monitored
monthly or on a quarterly basis, depending on the
frequency of preparation.

Group management report

alstria Financial Report 2010

The accounting-related risk management system
forms part of the Group’s risk management system.
Risks that are relevant for the accuracy of account-
ing-related data are monitored by the risk owner
who is responsible for the risk area of ﬁ nance.
Risks are identiﬁ ed quarterly, and assessed and
documented by the risk management committee.
Appropriate action is taken in order to monitor and
optimise accounting-related risks throughout the
alstria Group.

Risk areas
Within the context of its business activities,
the alstria Group faces various risks, which are
explained in greater detail below.

alstria’s risks are divided into four categories:

> strategic risks;
> operational risks;
> compliance risks;
> ﬁ nancial risks.

All material risks to the future development of the
Company’s position and performance are described
in this chapter in accordance with alstria’s risk man-
agement system. The individual risks described
relate to the planning horizon of 2011 to 2013.

Strategic risks
Strategic risk management consists mainly of the
implementation of guidelines contained in the
investment policy, asset management policy and
management rules governing the relationship with
the Group’s core tenants.

Furthermore, risks resulting from the effect of
key market dynamics on alstria’s business are cat-
egorised as strategic risks. In view of the ongoing
stabilisation in the ﬁ nancial markets, the general
strategic risks situation has improved due to the
future macroeconomic environment as compared to
the previous year. As long as there is no material
change in the economic environment, alstria’s stra-
tegic risk situation will remain stable.

Operational risks
alstria’s operational risk management refers to
property-speciﬁ c risks and general business risks.
This includes, among others, vacancy risk, the
credit worthiness of tenants and the risk of falling
market rents. Personnel-related risks such as loss
of know-how and competences are also monitored
in this risk area. The Company uses various early
warning indicators to monitor these risks. Rent pro-
jections, vacancy analyses, the control of the lease
terms and termination clauses, and on going insur-
ance checks are designed to help identify potential
dangers and risks. Operational risks that could arise
as a result of the 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 ten-
ants are public institutions or still highly rated, the
risk of shortfall in payments is currently limited.

alstria realises refurbishment projects to a material
extent. All risks related to these projects, e.g., risk of
not-in-time completion, risk of budget exceedance,
as well as the risk of deﬁ ciencies in the construction,
is encountered with the implementation of an exten-
sive project controlling and a budget management
process.

Employees The skills and motivation of alstria’s
employees are decisive factors in the Group’s suc-
cess. A risk of knowledge loss exists from staff ﬂ uc-
tuations as well as from not recruiting sufﬁ ciently
qualiﬁ ed experts to ﬁ ll vacancies in the Group
in good time. In both cases, this could result in a
shortfall of suitable experts and key personal that
could inﬂ uence the competitive advantages on the
markets as well as the further growth opportun-
ities for the Group. alstria mitigates these risks by
selective, needs-oriented development of skills of
the existing staff, strengthening the image as an
attractive employer, university marketing, promot-
ing employee motivation through strong leadership
and corporate culture and proﬁ t-oriented variable
remuneration schemes. Overall alstria estimates the
described risks to be at a low level.

alstria Financial Report 2010

Group management report

IT security The majority of our business processes
are supported by efﬁ cient IT systems. Any fault
affecting the reliability or security of the IT system
could lead to delays or interruptions to operating
activities. alstria has protected itself against IT risks
by constant examination and enhancement of the
information technology deployed, modern hard-
ware and software solutions and safeguards against
attacks. Structural security measures are in place to
protect the computer centre. All data are backed up
daily in an internal, and once a week in an external,
data depository. Detailed rules on access rights
ensure that employees can only access the systems
they need for their work. Overall, therefore IT risks
are assessed to be unlikely and their possible con-
sequences are assessed to be moderate.

Compliance risks
G-REIT legislation alstria is registered in the com-
mercial register as a German REIT-AG (G-REIT). The
German REIT segment allows alstria to offer a high
proﬁ le to investors and distinguish itself as a REIT
on the capital market. The REIT shares are traded
at the Frankfurt Stock Exchange. The G-REIT status
does not have any inﬂ uence on the admission on
the Regulated Market (Prime Standard).

Certain requirements have to be met by the Com-
pany in order to qualify for and retain its desig-
nation as a G-REIT. The most relevant of these
requirements are as follows: The G-REIT must be
a stock corporation listed on an organised market
and its registered seat and management must be in
Germany. The registered share capital must amount
to at least EUR 15 m, and all shares must be voting
shares of the same class. The free ﬂ oat must be at
least 15 % and no investor may directly hold 10 %
or more of the shares, or shares that represent 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 must be generated from
real estate. At least 90 % of annual proﬁ ts under
German GAAP must be distributed to shareholders
and the G-REIT’s equity may not fall below 45 %
of the fair value of its real estate assets as recorded
under IFRS.

REIT corporations are fully exempted from German
corporate income tax (KSt) and German trade tax
(GewSt). This tax transparency applied with retro-
spective effect starting January 1, 2007.

Capital management Capital management activ-
ities are designed to maintain the Company’s
G-REIT status in order to support its business activ-
ities and maximise shareholder value.

The Company manages its capital structure and
makes adjustments in response to changes in eco-
nomic 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, 2010 and Decem-
ber 31, 2009.

The capital structure is monitored by the Company
using key performance indicators (KPIs) relevant for
classiﬁ cation as a G-REIT. The G-REIT equity ratio,
(the ratio of equity to the fair value of immova-
ble assets) is the most important KPI. Under the
Group’s strategy, the G-REIT equity ratio must be
between 45 % and 55 %.

In particular, the exemption from corporate income
tax (KSt) and trade tax (GewSt) would cease at
the end of the third ﬁ nancial year if the minimum
equity ratio (alstria’s equity must not fall short of
45 % of its immovable assets, based on alstria’s
consolidated ﬁ nancial statements) has not been sat-
isﬁ ed for three consecutive ﬁ nancial years.

The G-REIT equity ratio at the balance sheet date is
49.8 %. Accordingly alstria complied with the min-
imum G-REIT equity ratio requirement according to
section 15 G-REIT-Law (REIT-G) calculated at year-
end of 45 %. Generally the risk remains that alstria
may fail to meet the minimum G-REIT equity ratio
of 45 % in the following three consecutive years
and faces the prospect of losing its status as G-REIT
and its tax exemption. Within a three-year forecast-
ing period until December 31, 2013, it is excluded
that alstria will lose its G-REIT status by reason of
shortfall of the 45 % barrier.

Group management report

alstria Financial Report 2010

Legal risks The Company is not subject to major
legal proceedings arising from any individual or
other kind of legal dispute outside of its day-to-
day business.

Financial risks
With respect to the current overcoming of the
ﬁ nancial crisis and alstria’s reﬁ nancing performed in
2010, the ﬁ nancial risk situation improved as com-
pared to the previous year’s end of the reporting
period.

The Group normally uses ﬁ nancial instruments such
as bank loans and derivative ﬁ nancial instruments.
The main purpose of the bank loans is to ﬁ nance
alstria’s business activities. Derivative financial
instruments include interest swaps and caps. The
purpose of these derivative ﬁ nancial instruments
is to hedge against interest risks arising 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 interest rate risks
and liquidity risks. alstria’s current debt-to-equity
ratio is approx. 55 %. This is a reasonable rate com-
pared to the average leveraging rate of German real
estate companies. alstria’s syndicated loan facility
agreement allows for a loan-to-value ratio (LTV)
of up to 70 %. After the reﬁ nancing of the main
loan in 2010, alstria managed to keep the LTV at
58.7 % at the relevant test date. Together with the
additional measures implemented starting at the
beginning of 2009, the risk of covenant breach was
resolved proactively.

The reﬁ nancing of the main loan in 2010 before
maturity led to the postponement of the next
re ﬁ nancing requirement for the syndicated loan
by 3.5 years from end-2011 to mid-2015. Thus
the risk of reﬁ nancing on unfavourable terms has
decreased for the time being.

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

Interest rate risk
Interest rate risk results from
ﬂ uctu ations in market interest rates. These affect
the amount of interest expenses in the ﬁ nancial
year and the market value of derivative ﬁ nancial
instruments used by the Company.

alstria’s hedging policy uses a combination of plain
vanilla swaps and caps in order to limit the exposure
of the Company to interest rate ﬂ uctuations, but still
provides enough ﬂ exibility to allow the disposal of
real estate assets, avoiding any cost linked to an over-
hedged situation. The interest base for the ﬁ nancial
liability (loan) is the three-month EURIBOR, which
is adjusted every three months. A number of differ-
ent derivative ﬁ nancial instruments were acquired
to manage the interest expense. The maturity of
the derivative ﬁ nancial instruments is based on
the term of the borrowings. The derivative ﬁ nan-
cial instruments relate to interest swaps in which
the Company agrees to exchange with contract-
ing partners, at speciﬁ ed intervals, the difference
between ﬁ xed and variable interest rate amounts
calculated by reference to an agreed notional prin-
cipal amount. The swaps alstria uses to hedge its
interest rate payments qualify as cash ﬂ ow hedges.
Interest caps were also acquired in order to cap the
interest at a set maximum. If the maximum interest
rate is exceeded, the difference between the actual
interest rate and the cap rate will be paid out.

Liquidity risk One of alstria’s core processes is
cash management. The Company manages its
future cash position and monitors progress on a
daily basis. A cash-forecasting tool is used to pre-
vent liquidity risk. This liquidity-planning tool uses
the expected cash ﬂ ows from business activities and
the maturity of the ﬁ nancial investments as a basis
for analysis.

With the reﬁ nancing implemented in 2010, the
major liquidity risk resulting from the balloon repay-
ment on the main syndicated loan facility was suc-
cessfully averted. Since the new syndicated loan
facility will not be due until mid-2015, the liquidity
risk resulting from repayment obligations is currently
mitigated.

alstria Financial Report 2010

Group management report

Overall assessment
Compared to the previous year, the risk situation
of alstria ofﬁ ce REIT-AG has improved. On the one
hand, this is based on the economic environment
recovering after the ﬁ nancial crisis; on the other
hand, the successful reﬁ nancing and the improve-
ment of the G-REIT equity ratio contributes to
signi ﬁ cantly ease the risks still stated as key risks
at the end of the previous year. Sufﬁ cient precau-
tions have been taken against identiﬁ able risks. No
risk speciﬁ c to the Company that would threaten
its continued existence can be identiﬁ ed from past
or future events. This applies as well to the single
Group companies as to the Group.

Opportunities of the Group
The reﬁ nancing activities undertaken by alstria have
safeguarded the Company’s ﬁ nancial position until
mid-2014 at favourable interest rates. On the rev-
enue side, alstria beneﬁ ts from long-term rent
agreements of approx. 8.4 years’ average lease
length and potential rent increases due to consumer
price indexation. The alstria portfolio is well bal-
anced and contains many ﬁ rst-class anchor build-
ings with high-quality tenants.

Therefore, alstria is well positioned to continue
its buy and manage strategy and to beneﬁ t from
future market opportunities using the next growth
cycle of the markets.

alstria’s core competence is asset management. The
asset repositioning and refurbishment alstria is plan-
ning to undertake, both as part of joint ventures
and on its own, will strengthen the basis for organic
value increase across the portfolio.

Valuation risks The fair value of the real estate
properties owned by the Group reﬂ ects the market
value as determined by an independent appraiser,
and can be subject to change. Generally, the market
value of real estate properties depends on a variety
of factors, some of which are exogenous and may
not be under alstria’s control, such as declining rent
levels, decreasing demand or increasing vacancy
rates. Many qualitative factors are also decisive in
the valuation of a property, including a property’s
expected rental stream, its condition and its location.
Finally, the particular assessment of the mandated
appraiser is, to a certain extent, discretionary and
may differ from the opinion of another appraiser.
Should the factors considered or assumptions made
in valuing a property change, in order to reﬂ ect new
developments or for other reasons, subsequent
valu ations of the respective property may result in a
decrease in the market value ascribed to such prop-
erty. If such valuations reveal signiﬁ cant decreases
in market value compared to prior valuations, the
Company would incur signiﬁ cant revaluation losses
with respect to such properties.

By factors such as economic changes, interest rate
ﬂ uctuations and inﬂ ation, the value of the prop-
erties may be adversely affected. To minimise the
risk of regional diversiﬁ cation of investment port-
folios, a consistent focus on the individual needs
of tenants and a detailed market research and ana-
lysis (broker reports) is used. In addition, the market
value of all alstria assets will be determined annually
at year-end by independent, internationally recog-
nised experts.

Counterparty risk alstria hedges a portion of its
risk by using third-party instruments (interest
rate de rivatives, property insurances and others).
alstria’s counterparties in these contracts are inter-
nationally recognised institutions, which are rated
by the leading rating agencies. alstria reviews the
ratings of its counterparties on a regular basis in
order to mitigate any risk of default. The ﬁ nancial
crisis has raised doubts as to the reliability of rating
agencies’ assessments. As a reaction to this objec-
tion, alstria started to perform a review of the main
counterparties in order to reinforce the rating agen-
cies’ assessments.

Group management report

alstria Financial Report 2010

SUSTAINABILITY REPORT

In 2010 alstria published its ﬁ rst sustainability report.
This report was a natural step following alstria’s con-
tinuous engagement in national and international
initiatives with respect to sustainability. The report
contains information about alstria’s economic,
environ mental and social strategy towards sustain-
ability. It is alstria’s aim to incorporate sustain ability
criteria into all its decisions.

The ﬁ rst sustainability report produced by the
Company emphasises alstria’s interest in improv-
ing its environmental and social behaviour towards
stakeholders, such as investors, tenants, employees
and the community. alstria’s approach towards sus-
tainability is based on the three-pillar model, basing
the impact of business on the following pillars: eco-
nomy, environment and social. The day-to-day
business decisions can impact each and every one
of alstria’s stakeholders through one or the other pil-
lar. Being sustainable is trying to strike the right bal-
ance for every stakeholder, and every pillar. There-
fore, alstria has built up a sustainability framework
which deﬁ nes the main values for each and every
stakeholder group and its operational impacts.

Investors
> Promote transparency
> Retain reliability
> Create long-term value

Tenants
> Maintain long-term tenant relationship
> Improve transparency and property management
> Provide efﬁ cient and sustainable ofﬁ ce space

Employees
> Support entrepreneurship
> Encourage initiative
> Promote equal chances

Community
> Be responsible citizens
> Support local economy
> Remain fair and open partner

To monitor its performance and the performance of
its assets alstria started compiling data with respect
to the three pillars. The outcome is a different view
on the economic performance, more information
about the performance of alstria’s assets and the
diversity of alstria’s team.

In 2010, the asset Mundsburg Ofﬁ ce Tower was
among the ﬁ rst buildings to receive the German
Sustainable Building Council Silver (DGNB) pre-cer-
tiﬁ cate for the new certiﬁ cation standard. The main
objective of this refurbishment project is to create
efﬁ cient ofﬁ ce space and reduce energy consump-
tion and occupancy costs for the future tenants. In
particular, primary energy consumption will be cut
by approx. 80 % or 2.5 MWh annually compared to
the existing situation, leading to a reduction in CO2
emission by approx. 875 tons p.a.

Being part of the community, alstria feels respon-
sible for supporting projects which improve our
social and cultural environment. As a real estate
company, alstria always has vacant space available
for a limited amount of time which can be offered
on a temporary basis to organisations which need
it while it is being marketed.

alstria is also engaged in a number of national and
international initiatives where the Company actively
participates in industry discussions and positioning
with regard to issues ranging from accounting,
regulation and investor relations to sustainable
reporting. Among others, alstria is a member of
the German Sustainable Building Council (DGNB),
EPRA (European Public Real Estate Association),
ZIA (Zentraler Immobilienausschuss), the Real
Estate Share Initiative, NAREIT (National Associ-
ation of Real Estate Investment Trusts) and DIRK
(Deutscher Investor Relations Verband e.V.).

On a company level, the diversity of alstria’s team
mirrors the Company’s awareness of its role as a sus-
tainably acting company. As of December 31, 2010,
alstria employed 13 men and 26 women, showing
a female to male ratio of 200 %. More than half of
the employees are dedicated to the management,
the acquisition and the development of real estate.
The remainder of alstria’s workforce is spread
between supportive departments such as ﬁ nance
reporting and controlling, legal and compliance and
administration. A total of 50 % of the management
positions* are ﬁ lled by female employees.

* Management positions are deﬁ ned as employees who report directly to the Management Board.

alstria Financial Report 2010

Group management report

Although alstria published its ﬁ rst sustainability
report in 2010, a sustainability approach to real
estate has always been embedded in the DNA of
alstria.

alstria will be able to create a signiﬁ cant value for its
shareholders. The ﬁ nancial beneﬁ t of the refurbish-
ment will overtake by far the costs of moving the
theatre to its new location.

The Company draws attention to some of the fol-
lowing actions implemented or supported by alstria
where decision-making was partly driven by sustain-
ability considerations:

The move will also enhance the whole area around
the Central Station by creating additional cultural
life in the neighbourhood.

Property Management
In January 2010, alstria started to incorporate
Property Management within the Company’s struc-
ture. The aim is to better serve alstria’s tenants and
increase the control over the assets by integrating the
team that performs the day-to-day management of
the assets. The objective is to expand the Company’s
direct communication approach to better understand
tenants’ needs and more quickly be able to deliver
adequate solutions, as well as to recognise improve-
ment potential.

Bäckerbreitergang
In 2009, alstria started the refurbishment of the
asset at Bäckerbreitergang 75 in Hamburg. alstria
occupies around half of the asset as its headquar-
ters, while the rest of the asset is or will be rented
out to other tenants. The Company has used the
oppor tunity of the refurbishment to install a new
technology of a solar energy-producing roof where
solar panels are embedded into the roof cover. The
installation of a rain water harvesting system was
also part of the sustainable refurbishment of this
asset as well as shower facilities, lockers and a secure
cycle storage, which facilitate bicycle commuting.

Ohnsorg-Theater
In 1936, the famous Ohnsorg-Theater moved into
its current location at Grosse Bleichen in Hamburg,
an alstria asset. While the area has developed as a
prime A retail street, what used to be a great space
for a theatre has trouble adapting to new techno l-
ogy and audience demands. There was a common
interest shared by alstria and the Ohnsorg-Theater.
Moving the theatre out of its current location to
the vicinity of the Central Station achieves the most
sustainable result for all stakeholders involved. The
Ohnsorg-Theater will get access to a new modern
facility, which it will rent on a long-term basis, thus
securing its future for the coming years.

The ﬁ rst sustainability report produced by the Com-
pany is the starting point for alstria’s continuous
reporting to the market on CSR key performance
indicators, in order to demonstrate the Company’s
improvement and commitment to its values over
time. For more information about sustainability
within alstria please see the sustainability report
2010 on alstria’s website.

MANDATORY DISCLOSURES

Disclosure requirements in accordance with
Section 315 (4) of the German Commercial
Code (HGB) for the ﬁ nancial year 2010 and
the explanatory report of the Management
Board
Composition of subscribed capital, voting
rights and special rights
As per the balance sheet date of Decem-
ber 31, 2010, the share capital of alstria is
EUR 61,599,999.00, divided into 61,599,999 no
par value bearer shares. All shares have equal rights
and obligations. Each share entitles the bearer to
one vote at general shareholders’ meetings and is
decisive for the shareholder’s share in the proﬁ t of
the Company. This does not include treasury shares
held by alstria, which do not entitle the Company
to any rights. The individual rights and duties of
the shareholders result from the provisions of the
German Stock Corporation Act (AktG), in particular
Sections 12, 53a et seq., 118 et seq. and 186.

Restrictions on the transfer
of shares or voting rights
There are no restrictions as to the transfer of shares
or voting rights or, as far as they arise from agree-
ments between shareholders, they are not known
to the Management Board. The exercise of voting
rights and the transfer of shares are based on the
general statutory requirements and alstria’s articles
of association, which do not restrict either of these
activities.

Group management report

alstria Financial Report 2010

Shareholders with a shareholding
of more than 10 %
As per the balance sheet date of December 31,
2010, alstria was not aware of any shareholders
whose direct shareholding exceeded 10 % of the
share capital. Captiva 2 Alstria Holding S.à r.l. holds
an indirect participation of approx. 56 % in alstria.
None of these companies has a direct shareholding
of more than 10 % of alstria’s share capital.

Holders of shares with special rights
alstria has not issued any shares with special rights
that grant control 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 may be appointed or dis-
missed by the Supervisory Board in accordance with
Sections 84 and 85 of the German Stock Corpor-
ation Act (AktG). The articles of association do not
contain any special provisions in this respect. Pursu-
ant to Section 84 of the German Stock Corporation
Act (AktG), members of the Management Board are
appointed for a maximum term of ﬁ ve years. Re-
appointment or extension of the term of ofﬁ ce is
permitted, in each case for a maximum of ﬁ ve years.

Amendments to the articles of association may be
made pursuant to Sections 179 and 133 of the
German Stock Corporation Act (AktG). The Super-
visory Board is also authorised to make changes in
and amendments to the articles of association that
merely affect the wording without a resolution of
the shareholders at the general meeting. Pursuant to
Section 15 (5) of the articles of association in conjunc-
tion with Sections 179 (2) and 133 of the German
Stock Corporation Act, shareholders may make
resolu tions regarding such amendments at a general
meeting with a simple majority of the votes cast and
a simple majority of the share capital represented.
Insofar as a larger majority is prescribed by law, such
majority shall be decisive. The articles of association
were last amended in the annual general meeting

held on June 16, 2010: Conditional Capital II was
reduced. The provisions regarding Conditional Cap-
ital 2009/A and Conditional Capital 2009/B were
replaced by the provision regarding Conditional
Capital 2010. In addition, the English version of the
articles of association as a component of the articles
of association in a legal sense was rescinded.

Authority of Management Board regarding
issuance and buyback of shares
1. Authorised Capital

The articles of association authorise the Man-
agement Board, with the approval of the
Supervisory Board, to increase the share cap-
ital until March 14, 2012 by issuing new bearer
shares against contribution in cash and/or kind
once or repeatedly up to a total amount of
EUR 21,900,001.00.

2. Conditional Capital

alstria has three conditional capital (pursuant to
Sections 192 et seq. of the German Stock Cor-
poration Act, AktG), which are regulated in Sec-
tions 5 (5) to (8) of the Company’s articles of
association.

a) Conditional Capital 2010

The share capital is conditionally increased
by an amount of up to EUR 26,500,000.00
by the issuance of up to 26,500,000 no par
value bearer shares. The Management Board is
authorised to stipulate the proﬁ t entitlement for
the new shares issued on the basis of the exer-
cise of options or conversion rights or the fulﬁ l-
ment of a conversion obligation at variance from
Section 60 (2) of the German Stock Corporation
Act. The conditional capital increase is only car-
ried out insofar as the holders of option rights
or conversion rights, or those holders with con-
version obligations from bonds with warrants or
convertible bonds, proﬁ t participation rights or
participating bonds issued or guaranteed on the
basis of the authorisation resolved by the share-
holders in general meeting on June 16, 2010,
utilise their option rights or conversion rights or,
insofar as such holders have conversion obliga-
tions, such holders fulﬁ l their conversion obli-
gations, unless a cash settlement is granted or
treasury shares or shares of another listed com-
pany are used to fulﬁ l the option rights or con-
version rights.

alstria Financial Report 2010

Group management report

b) Conditional Capital II

The share capital is conditionally increased by an
amount of up to EUR 515,625 by the issuance
of up to 515,625 no par value bearer shares.
The sole purpose of the conditional capital
increase is to grant shares to the holders of sub-
scription rights (stock options) which 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.
c) Conditional Capital III

Change of control clauses in key agreements
entered into by the Company
A signiﬁ cant syndicate loan agreement of alstria
entitles the creditor to declare the loan due for
payment in the event alstria’s shares are no longer
admitted for trading on an organised market within
the EU and the current majority shareholder is not
in a position to control alstria, or a person other
than the current majority shareholder holds a larger
shareholding in alstria than the current majority
shareholder.

Compensation agreements with Management
Board members and employees in case of a
takeover bid
There are no compensation agreements with Man-
agement Board members or employees in case of
a takeover bid.

The share capital is conditionally increased by
an amount of up to EUR 500,000 by the issu-
ance of up to 500,000 no par value bearer
shares. The conditional capital increase shall
be used solely to grant shares to the holders
of convertible proﬁ t participation certiﬁ cates
which are issued by the Company in accordance
with the authorisation of the general meeting
held on March 15, 2007. The conditional cap-
ital increase shall only be carried out insofar as
issued convertible proﬁ t participation certiﬁ cates
are converted into shares of the Company and
no treasury shares are used to satisfy the certiﬁ -
cates. 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
as a result of the conversion of certiﬁ cates.

3. Purchase of treasury shares

The shareholders at the general meeting on June
16, 2010 authorised the Management Board
to acquire shares up to a total of 10 % of the
Company’s share capital at the time of the issu-
ance of the authorisation until June 15, 2015.
The acquired shares and other treasury shares
that are in the possession of, or to be attributed
to, alstria pursuant to Sections 71a et seq. of
the German Stock Corporation Act (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 means of a public
offer to all shareholders or by using derivatives
(put or call options or a combination of both).

These provisions comply with statutory require-
ments or are reasonable and common practice by
comparable publicly listed companies. They are not
intended to hinder potential takeover bids.

ADDITIONAL GROUP DISCLOSURES

Employees
As of December 31, 2010, alstria had 39 employ-
ees (December 31, 2009: 32). The annual aver-
age number of employees was 37 (previous year:
31). These ﬁ gures exclude Management Board
members.

Remuneration report
Management Board members’ compensation com-
prises a ﬁ xed and a variable component linked to
the Company’s operating performance. In addition
to the bonus, members of the Management Board
received share-based remuneration as a long-term
incentive component of remuneration.

Members of the Supervisory Board receive ﬁ xed
remuneration.

The remuneration report (pages 90 to 93), con-
taining details of the principles for the deﬁ nition
of the Management Board and Supervisory Board
remuneration, forms an integral part of the audited
Group management report.

Group management report

alstria Financial Report 2010

Group and dependent-company report
Captiva Capital II S.à r.l., Luxembourg, holds a
majority interest in alstria. In accordance with Sec-
tion 290 of the German Commercial Code (HGB),
alstria is required to prepare consolidated statements
and a Group management report with respect to the
Group companies controlled by alstria. Therefore,
alstria ofﬁ ce REIT-AG and all associated companies
as stated in the notes are consolidated in the alstria
Group.

Due to the majority interest in alstria held by
Captiva Capital II S.à r.l, Luxembourg, we issued a
separate dependent-company report with afﬁ liated
com panies, in accordance with Section 312 of the
German Stock Corporation Act (AktG). This report
includes the following statement:

“Our Company received appropriate remuneration
for all the legal transactions stated in the report on
related party relationships. This appraisal is based
on the circumstances, which were known to us at
the time when the events, which are subject to
reporting, occurred.”

SUBSEQUENT EVENTS
AND OUTLOOK

Subsequent events
In the last quarter of 2010, alstria signed a binding
and notarised agreement about the acquisition of
one asset in Karlsruhe. The transfer of beneﬁ ts and
burden took place in January 2011. alstria intends
to add the newly acquired asset in Karlsruhe to
the collateral pool of the syndicated loan. Accord-
ing to the provisions under the loan agreement,
this would lead to a margin reduction of 10 bps to
150 bps. This transaction is planned to be closed
before the next test date as of March 31, 2011.

Binding and notarised agreements for three more
assets, all located in Hamburg, were signed at the
beginning of 2011. The transfer of beneﬁ ts and
burden is expected to take place at the end of the
ﬁ rst quarter or the beginning of the second quar-
ter of 2011.

THE KEY METRICS OF THE

PORTFOLIO1 POST TRANSACTIONS2

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

1.4

91.2

6.4 %

820

7.6 %

8.5

10.0

1 Includes assets classiﬁ ed under property, plant and equipment.
2 Includes the publicised acquisitions of one property in Karlsruhe

and three properties in Hamburg.

alstria Financial Report 2010

Group management report

Outlook
Based on the expected closing of the latest trans-
actions and the contracted rent for 2011, alstria
expects revenues of around EUR 86 m and funds
from operations of EUR 30 m. This projection could
be impacted by changes in interest rates and further
property disposals or acquisitions in 2011.

Since the Company pays out a signiﬁ cant part of its
funds from operations as dividends, future external
growth largely depends on the Company’s ability to
raise additional equity. Consequently, further port-
folio growth is highly dependent on the develop-
ment of the global equity markets and therefore
difﬁ cult to predict over a longer period of time. On
a like-for-like basis, however, the Company expects
revenues and funds from operations to be stable in
2012. Again, these results may be impacted by fur-
ther disposals or interest rate changes.

The management report contains statements relat-
ing to anticipated 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.

Hamburg, February 18, 2011

DETAIL INDEX

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 ows
Notes to the consolidated ﬁ nancial statements

30
31
32
34
36
38

1
2
3
4
5
6
7
8
9
9.1
9.2

9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
10

10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9

38
38
39
41
42
43
43
49
50
50

Corporate information
Basis of preparation
Changes in accounting policy and disclosures
Basis of consolidation
Key judgments and estimates
Seasonal or economic effects on business
Summary of signiﬁ cant accounting policies
Segment reporting
Notes to the consolidated income statement
Revenues
Income and expenses from passed-on
50
operating expenses
50
Real estate operating expenses
50
Administrative expenses
50
Personnel expenses
51
Other operating income
51
Other operating expenses
Financial and valuation result
51
Gain or loss on disposal of investment property 52
Income taxes
52
Notes to the consolidated statement
of ﬁ nancial position – assets
Investment property
Equity accounted investment
Property, plant and equipment
Intangible assets
Financial assets
Assets held for sale
Receivables and other assets
Derivative ﬁ nancial instruments
Cash and cash equivalents

52
52
53
53
54
54
54
54
55
57

CONSOLIDATED FINANCIAL STATEMENTS

11.1
11.2
11.3
11.4
11.5
11.6
11.7
12
12.1

12.2
12.3
13
13.1
13.2
13.3
14
15
16
17
18
19

20
21

22
23

Notes to the consolidated
statement of ﬁ nancial position –
equity and liabilities
Equity
Financial liabilities
Other provisions
Trade payables and other liabilities
Trust assets and liabilities
Deferred taxes
Liabilities of current tax
Other notes
Compensation of Management Board
and Supervisory Board
Commitments and contingencies
Consolidated cash ﬂ ow statement
Related party relationships
Preliminary remarks
Remuneration of key management personnel
Related party transactions
Earnings per share
Dividends paid
Employees
Stock option programme
Share-based remuneration
Convertible proﬁ t participation rights
programme
Financial risk management
Signiﬁ cant events after the end of the
reporting period
U tilisation of exempting provisions
Disclosures pursuant to Wertpapierhandels -
gesetz [German Securities Trading Act]
Declaration of compliance pursuant to
Section 161 AktG [Aktiengesetz:
German Stock Corporation Act]
Auditor’s fees

25
26 Management Board
27

Supervisory Board

57
57
58
59
60
60
60
60
60

60
61
61
62
62
62
62
62
63
63
63
64

64
65

71
71

76
76
76
76

Consolidated ﬁ nancial statements

alstria Financial Report 2010

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT
for the period from January 1 to December 31, 2010

EUR k

Revenues

Income less expenses from passed on operating expenses

Real estate operating expenses

Net rental income

Administrative expenses

Personnel expenses

Other operating income

Other operating expenses

Net loss from fair value adjustments on investment property

Gain/loss on disposal of investment property

Net operating result

Net ﬁ nancial result

Share of the result of joint venture accounted for
using the equity method

Net loss from fair value adjustments on ﬁ nancial derivatives

Pre-tax result (EBT)

Income tax expense

Consolidated proﬁ t or loss for the period

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

2010

89,094

– 442

– 6,893

81,759

– 6,073

– 5,597

2,029

– 1,619

2009

102,510

– 358

– 10,189

91,964

– 6,187

– 4,990

3,124

– 1,866

– 12,804

– 85,887

9,278

66,973

– 25

– 3,867

– 43,165

– 52,117

12,070

– 35,672

206

– 264

– 23,294

– 79,541

– 110

– 79,651

206

– 79,651

0.00

– 1.40

alstria Financial Report 2010

Consolidated ﬁ nancial statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period from January 1 to December 31, 2010

EUR k

Consolidated proﬁ t or loss for the period

Fair value gain on available-for-sale ﬁ nancial assets

Cash ﬂ ow hedges

Reclassiﬁ cation from cash ﬂ ow hedging reserve

Other comprehensive income for the period:

Total comprehensive income for the period:

Total comprehensive income attributable to:

Owners of the Company

Notes

10.8

2010

206

4,940

33,338

38,278

38,484

2009

– 79,651

123

– 9,952

16,331

6,502

– 73,149

38,484

– 73,149

Consolidated ﬁ nancial statements

alstria Financial Report 2010

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at December 31, 2010

ASSETS

EUR k

Non-current assets

Investment property

Equity-accounted investments

Property, plant and equipment

Intangible assets

Financial assets

Derivatives

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

2010

2009

10.1

10.2

10.3

10.4

10.5

10.8

10.6

10.7

10.8

10.7

10.9

1,348,400

1,425,440

32,385

7,826

319

181

9,046

5,897

311

351

1,389,112

1,441,045

600

4,117

1,967

17,615

8,137

120,788

3,955

153,224

136,621

135,825

796

5,694

1,855

615

33,483

146,818

61,848

325,089

Total assets

1,542,336

1,766,134

alstria Financial Report 2010

Consolidated ﬁ nancial statements

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

Derivatives

Other current liabilities

Total current liabilities

Total liabilities

Notes

11.1

2010

2009

61,600

700,036

– 4,922

– 26

– 64,280

692,408

786,410

21,842

2,180

324

56,000

685,897

– 43,200

– 26

– 64,486

634,185

947,257

48,859

1,550

344

810,756

998,010

7,796

3,024

355

21,007

6,990

39,172

28,176

91,941

3,692

231

9,899

133,939

849,928

1,131,949

11.2

10.8

11.3

11.4

10.6

11.2

11.4

10.8

11.4

Total equity and liabilities

1,542,336

1,766,134

Consolidated ﬁ nancial statements

alstria Financial Report 2010

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period from January 1 to December 31, 2010

EUR k

As of Jan. 1, 2010

Changes in the
ﬁ nancial year 2010

Total comprehensive
income

Reclassiﬁ cation to
retained earnings

Proceeds from shares
issued

Transaction costs of
issue of shares

As of Dec. 31, 2010

Payments of dividends

Share-based remuneration

Notes

Share
capital

Capital
surplus

Hedging
reserve

Treasury
shares

Retained
earnings

Total
equity

56,000

685,897

– 43,200

– 26

– 64,486

634,185

38,278

– 27,999

360

11.1

5,600

43,400

11.1

– 1,622

206

38,484

27,999

– 27,999

360

49,000

– 1,622

61,600

700,036

– 4,922

– 26

– 64,280

692,408

alstria Financial Report 2010

Consolidated ﬁ nancial statements

for the period from January 1 to 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

11.1

Changes in the
ﬁ nancial year 2009

Total comprehensive
income

Payment of dividends

Reclassiﬁ cation to 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

17, 19

123

– 28,423

– 13,076

1,744

– 14,820

388

6,379

– 79,651

– 73,149

– 28,423

28,423

14,957

3,821

5,702

– 1,744

5,565

14,957

137

388

As of Dec. 31, 2009

11.1

56,000

685,897

– 43,200

– 26

– 64,486

634,185

Consolidated ﬁ nancial statements

alstria Financial Report 2010

CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 2010

EUR k

1. Cash ﬂ ows from operating activities

Consolidated proﬁ t or loss for the period

Unrealised valuation movements

Interest income

Interest expense

Result from income taxes

Other non-cash expenses (+)

Gain (–)/loss (+) on disposal of investment properties

9.8

9.10

9.9

Depreciation and impairment of ﬁ xed assets (+)

10.3, 10.4

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

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

Cash generated from operations

Interest received

Interest paid

Income tax paid

Net cash generated from operating activities

2. Cash ﬂ ows from investing activities

Acquisition of investment properties

Proceeds from the sale of ﬁ nancial assets

Acquisition of other property, plant and equipment

Proceeds from the disposal of interests in joint ventures and
ﬁ nancial instruments

Proceeds from the sale of ﬁ nancial assets

Proceeds from the repayment of loans granted to joint ventures

Proceeds from the disposal of Group companies

Notes

2010

2009

206

36,646

– 700

43,865

732

– 9,278

570

– 79,651

109,180

– 593

52,710

110

545

473

2,858

– 4,356

270

75,169

4,202

82,645

700

593

– 46,595

– 49,957

29,274

– 110

33,171

– 17,331

163,003

– 2,508

2,710

13,546

– 21,295

132,565

– 2,421

25,156

6,622

140,627

Net cash generated from investing activities

12.3

159,420

alstria Financial Report 2010

Consolidated ﬁ nancial statements

EUR k

3. Cash ﬂ ows from ﬁ nancing activities

Cash received from equity contributions

Payment of transaction costs of issue of shares

Proceeds from the disposal of own shares

Proceeds from the issue of bonds and borrowings

Notes

2010

2009

49,000

– 1,622

738,629

– 27,999

– 15,345

137

128,821

– 22,858

– 6,218

Payments of dividends

Payments for the acquisition and termination of ﬁ nancial derivatives

Payments of the redemption of bonds and borrowings

– 950,216

– 153,058

Payments of transaction costs

Net cash used in ﬁ nancing activities

– 6,950

12.3

– 214,503

– 4,357

– 57,533

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 3,955 k; previous year: EUR 61,848 k

thereof cash in disposal group

Cash and cash equivalents reported on
the consolidated statement of ﬁ nancial position

– 25,809

– 555

147,152

120,788

116,264

– 538

31,426

147,152

334

10.9

120,788

146,818

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

1 Corporate information
The consolidated ﬁ nancial statements of alstria
ofﬁ ce REIT-AG (hereinafter also referred to as the
“Compan” or “alstria ofﬁ ce REIT-AG”) as at Decem-
ber 31, 2010 were authorised for issue by resolution
of the Management Board on February 18, 2011.

alstria ofﬁ ce REIT-AG was transformed into a German
Real Estate Investment Trust (G-REIT) in the ﬁ nancial
year 2007 and was registered as a REIT corporation
(hereinafter also referred to as a “REIT-AG”) in the
commercial register on October 11, 2007.

REIT-AGs are fully exempt from German corporate
income tax and trade tax. Hence, alstria ofﬁ ce REIT-AG
has been exempt from tax with retrospective effect
since January 1, 2007.

The Company is a real estate property company
within the meaning of the G-REIT Act. Pursuant
to Section 2 of its Articles of Association, the Com-
pany’s objective is the acquisition, management,
operation and sale of owned real estate property,
as well as the holding of participations in enter-
prises, which acquire, manage, operate and sell
owned property. All of the aforementioned objec-
tives are subject to the conditions of the G-REIT Act
legislation.

The Company’s registered ofﬁ ce and address is
Bäckerbreitergang 75, 20355 Hamburg, Germany.
Registration was made in the commercial register at
the local court of Hamburg under HRB No. 99204.

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

2 Basis of preparation
The consolidated ﬁ nancial statements of alstria
ofﬁ ce REIT-AG and its subsidiaries (together “the
Group”) have been prepared in accordance with
the International Financial Reporting Standards
(IFRS) of the International Accounting Standards
Board (IASB), including the interpretations of the
standards (IFRIC). All IFRS and IFRIC were observed
as adopted and prescribed by the EU as of the
reporting date.

The consolidated ﬁ nancial statements have been
prepared under the historical cost convention
method except for investment property (land and
buildings) and ﬁ nancial instruments that have been
measured at fair value through proﬁ t or loss.

The preparation of ﬁ nancial statements in con-
formity with IFRS requires the use of certain critical
accounting estimates. It also requires management
to exercise its judgement in the process of applying
the Group’s accounting policies. The areas involv-
ing a higher degree of judgement or complexity, or
areas where assumptions and estimates are signiﬁ -
cant to the consolidated ﬁ nancial statements, are
disclosed in Note 5.

The consolidated ﬁ nancial statements are presented
in euros. All values are rounded to the nearest thou-
sand (EUR k) except when otherwise indicated.

These consolidated ﬁ nancial statements are ﬁ nan-
cial statements for the period from January 1 to
December 31, 2010.

Items are summarised in the consolidated state-
ment of ﬁ nancial position and income statement
and commented on in the notes to the ﬁ nancial
statements.

Assets and liabilities are classiﬁ ed as non-current –
for items due in more than one year – or current.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

3 Changes in accounting policy

and disclosures

New and amended IFRS adopted by the Group
The following new standards and amendments to
standards are mandatory for the ﬁ rst time for the
ﬁ nancial year beginning January 1, 2010:

> Revised IFRS 1 “First-time adoption of inter-
national ﬁ nancial reporting standards (rev. 2008)”
> Amendments to IFRS 1 “Additional exemptions

> Revised IFRS 3 “Business combinations (rev.
2008)” and IAS 27 “Consolidated and separate
ﬁ nancial statements (rev. 2008)”

> Amendment to IAS 39 “Financial instruments:
recognition and measurement: eligible hedged
items (amendment 2008)”

> IFRIC 12 “Service concession arrangements”
> IFRIC 15 “Agreements for the construction of real

estate”

> IFRIC 16 “Hedges of a net investment in a for-

for ﬁ rst-time adopters (amendment 2009)”

eign operation”

> Amendment to IFRS 1 “First-time adoption of
IFRS”, and IAS 27, “Consolidated and separate
ﬁ nancial statements” on the cost of an invest-
ment in a subsidiary, jointly controlled entity or
associate

> Amendment to IFRS 2 and IFRIC 11 “Group cash-
settled and share-based payment transactions
(amendment 2009)”

> IFRIC 17 “Distributions of non-cash assets to

owners”

> IFRIC 18 “Transfers of assets from customers”
> Improvements to IFRSs (Improvement project

2009)

In the course of the annual improvements project
“improvement to IFRS” (published in April 2009),
the IASB approved revisions to IFRS that are listed
in the following table:

IFRS

Subject of amendment

IFRS 2 Share-based payment

Scope of IFRS 2 and revised IFRS 3

IFRS 5 Non-current
assets held for sale and
discontinued operations

Disclosures of non-current assets (or disposal groups)
classiﬁ ed as held for sale or discontinued operations

IFRS 8 Operating segments

Disclosure of information about segment assets

IAS 1 Presentation of
ﬁ nancial statements

Current/non-current classiﬁ cation of
convertible instruments

IAS 7 Statement of cash ﬂ ows Classiﬁ cation of expenditures on unrecognised assets

Classiﬁ cation of leases of land and buildings

IAS 17 Leases

IAS 18 Revenue

Effective for annual
period beginning

Jul. 1, 2009

Jan. 1, 2010

Determining whether an entity is acting as a principal
or as an agent

None – amendment to
non-mandatory guidance

IAS 36 Impairment of assets Unit of accounting for goodwill impairment test

IAS 38 Intangible assets

IAS 39 Financial
instruments: recognition
and measurement

IFRIC 9 Reassessment of
embedded derivatives

IFRIC 16 Hedges of a net
investment in a foreign
operation

Additional consequential amendments arising from
revised IFRS 3
Measuring the fair value of an intangible asset acquired
in a business combination

Treating loan prepayment penalties as closely related
embedded derivatives
Scope exemption for business combination contracts
Cash ﬂ ow hedge accounting

Scope of IFRIC 9 and revised IFRS 3

Amendment to the restriction on the entity the entity
that can hold hedging instruments

The initial application of the adopted IFRS had no
material effect on the Group and the presentation
of the consolidated ﬁ nancial statements.

Jan. 1, 2010

Jul. 1, 2009

Jan. 1, 2010

Jul. 1, 2009

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

New and amended IFRS to existing standards
which are not yet effective and have not been
early adopted by the Group
In its 2010 consolidated ﬁ nancial statements, alstria
ofﬁ ce REIT-AG did not apply the following account-
ing standards or interpretations which have already
been adopted by the IASB but were not required to
be applied for the ﬁ nancial year 2010.

Standard/Interpretation

IFRS 1
(amendment)

Limited exemption from compara-
tive IFRS 7 disclosures for ﬁ rst-time
adopters

IFRS 9
(new standard)

Financial instruments – classiﬁ cation
and measurement

Issued by
the IASB

Effective date

Adopted
by the EU

Expected
effects

Jan. 28, 2010

Jul. 1, 2010 Yes

None

Nov. 12, 2009

Jan. 1, 2013 No

No material
effects

Notes
disclosure

IAS 24
(revised)

IAS 32
(amendment)

IFRIC 14
(amendment)

IFRIC 19

Improvements
to IFRS

IFRS 1
(amendment)

IFRS 3
(amendment)

Related party disclosures – revised
deﬁ nition of related parties

Nov. 4, 2009

Jan. 1, 2011 Yes

Classiﬁ cation of rights issues

Oct. 8, 2009

Feb. 1, 2010 Yes

None

IAS 19 – The limit on a deﬁ ned beneﬁ t
asset, minimum funding requirements
and their interaction

Extinguishing ﬁ nancial liabilities with
equity instruments

Improvement project 2010

First-time adoption of IFRSs –
accounting policy changes
in the year of adoption

Nov. 26, 2009

Jan. 1, 2011 Yes

None

Nov. 26, 2009

Jul. 1, 2010 Yes

None

May 6, 2010 Various, earliest
Jul. 1, 2010

No material
effects

May 6, 2010

Jan. 1, 2011 No

None

Revaluation basis as deemed cost

May 6, 2010

Jan. 1, 2011 No

None

May 6, 2010

Jan. 1, 2011 No

None

May 6, 2010

Jul. 1, 2010 No

None

Use of deemed cost for operations
subject to rate regulation

Business combinations – transition
requirements for contingent consid-
eration from a business combination
that occurred before the effective date
of the revised IFRS measurement of
non-controlling interests

IFRS 3
(amendment)

Measurement of non-controlling
interests

Unreplaced and voluntarily replaced
share-based payment awards

IFRS 7
(amendment)

Financial instruments: disclosures –
clariﬁ cation of disclosures

IAS 1
(amendment)

IAS 27
(amendment)

Presentation of ﬁ nancial statements
clariﬁ cation of statement of changes
in equity

Consolidated and separate ﬁ nancial
statements – transition requirements
for amendments arising as a result of
IAS 27

May 6, 2010

Jul. 1, 2010 No

None

May 6, 2010

Jul. 1, 2010 No

None

May 6, 2010

Jan. 1, 2011 No

Notes
disclosure

May 6, 2010

Jan. 1, 2011 No

None

May 6, 2010

Jul. 1, 2010 No

None

IAS 34
(amendment)

Interim ﬁ nancial reporting – signiﬁ cant
events and transactions

May 6, 2010

Jan. 1, 2011 No

No material
effects

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

4 Basis of consolidation
The consolidated ﬁ nancial statements comprise the
ﬁ nancial statements of alstria ofﬁ ce REIT-AG and its
subsidiaries as at December 31, 2010. The ﬁ nan-
cial statements of the subsidiaries are prepared for
the same reporting year as for the parent company,
using consistent accounting policies.

Subsidiaries are entities over which the Group has
the power to govern the ﬁ nancial and operating
policies, generally accompanying a shareholding of
more than one half of the voting rights.

Subsidiaries are fully consolidated from the date on
which the Group obtains control, which generally
coincides with the date of acquisition. Inclusion in
the consolidated ﬁ nancial statements ends on the
date on which the Group ceases to have control.

All intra-Group balances, transactions, income
and expenses and proﬁ ts and losses resulting from
intra-Group transactions are eliminated in full upon
consolidation.

In accordance with IFRS 3, all business combinations
are accounted for using the acquisition method. The
recognised assets and the acquired liabilities are
measured in full at their fair value regardless of the
ownership interest. The carrying values on the date
on which control over the subsidiary was obtained
are relevant. Any remaining debit difference is recog-
nised 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 car-
ried forward, amortised or released, depending on
the treatment of the corresponding assets.

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 consoli-
dation are recognised as an increase or decrease in
capital surplus.

Signiﬁ cant companies where alstria ofﬁ ce REIT-AG
is able, directly or indirectly, to signiﬁ cantly inﬂ u-
ence ﬁ nancial and operating policy decisions (asso-
ciates), or directly or indirectly shares control (joint
ventures), are accounted for using the equity
method.

Fully consolidated subsidiaries
The following subsidiaries are included in the con-
solidated ﬁ nancial statements:

Group entity

alstria Bamlerstrasse GP GmbH, Hamburg

alstria Gänsemarkt Drehbahn GP GmbH,
Hamburg

alstria Grundbesitz 2 GP GmbH, Hamburg

alstria Halberstädter Strasse GP GmbH,
Hamburg

alstria Hamburger Str. 43 GP GmbH,
Hamburg

alstria Ludwig-Erhard-Strasse GP GmbH,
Hamburg

alstria Mannheim/Wiesbaden GP GmbH,
Hamburg

alstria ofﬁ ce Bamlerstrasse GmbH & Co. KG,
Hamburg

alstria ofﬁ ce Gänsemarkt Drehbahn GmbH &
Co. KG, Hamburg

alstria ofﬁ ce Grundbesitz 2 GmbH & Co. KG,
Hamburg

alstria ofﬁ ce Halberstädter Str. GmbH &
Co. KG, Hamburg

alstria ofﬁ ce Hamburger Str. 43 GmbH &
Co. KG, Hamburg

alstria ofﬁ ce Ludwig-Erhard-Strasse GmbH &
Co. KG, Hamburg

alstria ofﬁ ce Mannheim/Wiesbaden GmbH &
Co. KG, Hamburg

alstria ofﬁ ce Steinstrasse 5 GmbH & Co. KG,
Hamburg

alstria solutions GmbH, Hamburg

alstria Steinstrasse 5 GP GmbH, Hamburg

Share in
capital
(%)

100

Due to a joint venture agreement closed in 2010,
a former subsidiary is treated as a joint venture as
at the reporting date. alstria ofﬁ ce REIT-AG holds
a share of 49 % in the joint venture company
accounted for in the consolidated ﬁ nancial state-
ments using the equity method. Accordingly, the
subsidiary was deconsolidated and is no longer
included in the consolidated group. The result from
deconsolidation amounted to EUR –181 k.

Two former Group companies were wound up dur-
ing the reporting period. The companies served as
general partners and had insigniﬁ cant total assets
and results.

The Group of consolidated companies includes 18
companies as well as two joint venture companies
accounted for using the equity method.

There have been no further changes to the consoli-
dated Group since the consolidated ﬁ nancial state-
ments as at December 31, 2009.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

EFFECTS FROM DISPOSAL
OF GROUP COMPANIES

EUR k

2010

2009

Total disposal consideration

13,722

15,932

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 of

6,622

556

100

Investment property

60,000

41,440

Trade receivables

Other

Liabilities in the subsidiaries
disposed of

Bank loans

Shareholder loans

Trade payables

Other

32,835

13,546

227

24,750

1,854

The amounts shown in 2010 have been stated
under assets held for sale and liabilities associated
with the sale of non-current assets held for sale.

Interests in joint ventures
By means of a capital contribution from a joint ven-
ture partner into the former subsidiary Alstria IV.
Hamburgische Grundbesitz GmbH & Co. KG, Ham-
burg, at the beginning of the reporting period and
the contractual agreement of a joint control, this
company is treated as a joint venture. Together with
the joint venture Alstria VII. Hamburgische Grund-
besitz GmbH & Co. KG, Hamburg, at the end of the
reporting period the Group holds interests in two
joint ventures resulting in a carrying amount at the
end of the reporting period of EUR 32,385 k. alstria
ofﬁ ce REIT-AG holds a share of 49 % in each of the
two joint ventures.

The following carrying amounts are attributable
to the Group from its proportionate interest in the
joint ventures.

EUR k

Dec. 31,
2010

Dec. 31,
2009

Non-current assets

62,749

17,807

Current assets

4,085

4,028

Non-current liabilities

34,515

12,065

Current liabilities

939

Proﬁ t or loss for the period

12,070

1,103

– 264

5 Key judgments and estimates
The preparation of the consolidated ﬁ nancial state-
ments in accordance with IFRS requires assump-
tions and estimates to be made for various items
which have an effect on the amount and disclosure
of the assets and liabilities, as well as income and
expenses. Actual amounts may differ from these
estimates.

Judgements
In the process of applying the Group’s account-
ing policies, management has made the follow-
ing judgement, apart from those involving estima-
tions, which has the most signiﬁ cant effect on the
amounts recognised in the ﬁ nancial statements.

Operating lease commitments – Group as lessor The
Group has 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 in
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 signiﬁ cant 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:

> determine the fair value of investment property;
> determine the fair value of ﬁ nancial instruments;
> determine the fair value of virtual shares granted

to management; and

> determine the fair value of convertible proﬁ t

participation certiﬁ cates.

In particular, in determining the fair value of the
investment property, alstria ofﬁ ce REIT-AG must
apply and take account of numerous factors. A fair
value measurement was performed by an inde-
pendent third party (Colliers International UK plc,
London; see Note 7). If the future development 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.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

The external assessors have carried out sensitiv-
ity analyses on their fair value assessments, which
show the effect of the changes to capitalisation
rates on fair market values.

The assets, liabilities and equity instruments stated
above, which are particularly exposed to estimation
uncertainty, had the following impact on the con-
solidated statement of ﬁ nancial position as at the
end of reporting period:

VALUE OF THE PROPERTIES (EUR M)

Capitalisation rates

– 0.25 %

0.00 %

0.25 %

2010

1,420

1,349

1,289

2009

1,676

1,601

1,533

A fair value measurement of the derivative ﬁ nan-
cial instruments was performed by an independent
third party and the market data compiled thereof
were included in the standard measurement
models. Thus, the usual estimation uncertainties
exist regarding possible deviations from the market
data used. We consider the models used to be ade-
quate and believe that they do not engender any
uncertainty as to their applicability.

The fair value of virtual shares granted to the Man-
agement Board is measured at each balance sheet
date until settlement and is classiﬁ ed as provisions.
The expense of the period comprises the addition
to, and the reversal of, the provision between two
reporting dates and the dividend equivalent paid
during the period. This valuation requires the Com-
pany to make estimates about certain parameters,
and hence they are subject to uncertainty. The fair
value of the virtual shares granted as at March 2,
2010, is allocated to the vesting period accord-
ing to the determinations in the underlying Long
Term Incentive Plan (LTIP). The resulting person-
nel expenses caused an addition to provisions of
EUR 351 k (December 31, 2009: EUR 0 k) in the
consolidated ﬁ nancial statements as at Decem-
ber 31, 2010.

The fair value of convertible proﬁ t participation cer-
tiﬁ cates granted to the employees of the Group was
estimated at the respective granting dates using a
binary barrier option model based on the Black-
Scholes model; assumptions since the conversion
will be affected automatically once the barrier has
been reached. The model takes into account the
terms and conditions upon which the instruments
were granted. This valuation requires the Company
to make estimates about these parameters, and
hence they are subject to uncertainty.

EUR k

Dec. 31,
2010

Dec. 31,
2009

Investment property

1,348,400

1,425,440

Positive fair values
of derivatives

Negative fair values
of derivatives

Valuation of stock options,
convertible proﬁ t participation
rights and virtual shares

17,796

615

42,849

48,859

830

466

6 Seasonal or economic effects on business
The activities of alstria ofﬁ ce REIT-AG (primarily
the generation of revenues from investment prop-
erties) are not generally affected by seasonal fac-
tors. However, the sale of one or more large prop-
erties may have a signiﬁ cant impact on revenues
and operating expenses.

Experience shows that the real estate market tends
to ﬂ uctuate as a result of factors such as the net
income of consumers or GDP, changes in interest
rates, consumer conﬁ dence, and demographic and
other factors inherent to the market. The change of
the interest rate might lead to a lower valuation of
the investment property and derivatives.

7 Summary of signiﬁ cant
accounting policies

The following accounting and valuation methods
have been used to prepare the consolidated ﬁ nan-
cial statements of alstria ofﬁ ce REIT-AG.

Investment property
Investment property comprises all property that is
held in order to generate rental income or long-
term value increases in assets and is used neither in
production nor for administrative purposes. It is rec-
ognised at acquisition costs at the time of addition.
The costs include the transaction costs which have
to be capitalised (particularly real estate transfer
tax). In accordance with IAS 40.17, costs incurred
subsequently for dismantling, replacing in parts or
maintenance of property are also included; how-
ever, no costs of this kind had been incurred as of
the end of reporting period.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

Costs of debt which can be directly allocated to the
acquisition or production of investment property
are capitalised in the year in which they arise.

> the capitalisation rates reﬂ ecting the individual
risk of the property as well as market activity
(comparable transactions); and

For subsequent measurement, the Company uses
the fair value model according to IAS 40.33 et
seq., which reﬂ ects market conditions at the end of
reporting period.

All market values were determined by Colliers Inter-
national UK plc, London, a renowned appraiser and
brokerage ﬁ rm, as at December 31, 2010.

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.

The method used is a hard-core and top-slice
method, whereby rental income is horizontally seg-
mented, with the hard-core portion representing
the prevailing contractual rent. The top slice repre-
sents the difference between market rent and con-
tractual rent. This method fulﬁ ls the requirements
of the Red Book, a set of international valuation
standards set forth by the Royal Institution of Char-
tered Surveyors. The method used by Colliers Inter-
national UK plc is also appropriate and suitable for
determining market values in accordance with the
provisions of the International Valuation Standards
(IVS, or the White Book).

In order to derive the fair value, the properties
were divided into two groups and valued accord-
ingly. Group 1 contained properties with anchor
lease terms of ﬁ ve years or less and Group 2 held
prop erties with anchor lease terms of more than
ﬁ ve years.

Group 1 is for properties with leases set to expire in
ﬁ ve years or less: Hard-core and top-slice method,
taking account of

> the contractual rent for the remaining term of

the lease;

> a vacancy period of at least 18 months following

expiry of the lease;

> the necessary maintenance costs to re-let the

properties at a comparable rent level;

> re-lets at market rents;

> non-allocable operating costs in the amount of

5 % of rental income p.a.

Group 2 is for properties with anchor leases that are
leased on a long-term basis to tenants with strong
credit ratings: Hard-core and top-slice method, tak-
ing account of

> the contractual rent for the remaining term of

the lease;

> re-lets at market rents (accounting for the differ-
ence between market rent and contractual rent);

> the capitalisation rates reﬂ ecting the individual
risk of the 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.

Gains or losses arising from changes in the fair
values of investment property are disclosed in the
item “Net gain from fair value adjustments on
investment property” in the income statement in
the year in which they arise.

Investment properties are derecognised when either
they have been disposed of or when the investment
property is permanently withdrawn from use and
no future economic beneﬁ t is expected from its dis-
posal. Any gains or losses on the retirement or dis-
posal of an investment property are recognised in
proﬁ t or loss in the year of retirement or disposal.

Leases
The lessee is considered to be the beneﬁ cial owner
of leased assets when the lessee bears all of the
risks and rewards incidental to the assets (ﬁ nance
lease) in accordance with IAS 17. If the lessee is
deemed the beneﬁ cial owner, the leased asset is
recognised at fair value or the lower present value
of the minimum lease payments at the inception
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. Accordingly, alstria
ofﬁ ce REIT-AG is lessor in numerous different types
of operating lease agreements for investment prop-
erties. These leases generate the majority of pro-
ceeds and income for alstria ofﬁ ce REIT-AG.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Impairment of assets
Intangible assets with indeﬁ nite useful lives are not
amortised; they are tested for impairment on an
annual basis.

Assets that are amortised are tested for impairment
whenever triggering events or changes in circum-
stances indicate that the carrying amount may no
longer be recoverable.

recognition, intangible assets are carried at cost less
any accumulated amortisation and any accumu-
lated impairment losses. Internally generated intan-
gible assets are not capitalised and expenditure is
reﬂ ected in proﬁ t or loss in the year in which the
expenditure is incurred.

The useful lives of intangible assets are assessed to
be either ﬁ nite or indeﬁ nite.

An impairment loss is charged in the amount of the
excess of the carrying amount over the recover-
able amount. If the reasons for an impairment loss
cease to apply, the impairment loss is reversed as
appropriate.

Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and accumulated impair-
ment losses. Such cost includes the cost of replac-
ing part of the plant and equipment when that cost
is incurred, if the recognition criteria are met. All
other repair and maintenance costs are recognised
in proﬁ t or loss as incurred.

Depreciation of plant and equipment is calculated
on a straight-line basis over the useful life of the
asset (three to 15 years). The useful life of own
occupied property is estimated at 50 years. While
the building is depreciated on a scheduled basis, the
land is not part of a scheduled depreciation.

An item of property, plant and equipment is derec-
ognised upon disposal or when no future economic
beneﬁ ts are expected from its use or disposal. Any
gain or loss arising on derecognition of the asset
(calculated as the difference between the net dis-
posal proceeds and the carrying amount of the
asset) is included in proﬁ t or loss in the year the
asset is derecognised.

The assets’ residual values, useful lives and methods
of depreciation are reviewed, and adjusted if appro-
priate, at each ﬁ nancial year end.

Cost of debt items which can be directly allocated
to the acquisition or production of property, plant
and equipment are capitalised in the year in which
they arise.

Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is the fair
value as at the date of acquisition. Following initial

Intangible assets with ﬁ nite lives are amortised over
the useful economic life and assessed for impair-
ment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an intan-
gible asset with a ﬁ nite useful life are reviewed at
least at each ﬁ nancial year end.

Changes in the expected useful life or the expected
pattern of consumption of future economic beneﬁ ts
embodied in the asset are accounted for by chang-
ing the amortisation period or method, as appro-
priate, and are treated as changes in accounting
estimates. The amortisation expense on intangible
assets with ﬁ nite lives is recognised in proﬁ t or loss
in the expense category consistent with the func-
tion of the intangible asset.

Depreciation of licences is calculated on a straight-
line basis over the useful life of the asset (three to
eight years).

Currently, the Company does not have intangible
assets with indeﬁ nite useful lives.

Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carry-
ing amount of the asset and are recognised in proﬁ t
or loss when the asset is derecognised.

Taxes
Current tax assets and liabilities for the current and
prior periods are measured at the amount expected
to be recovered from or paid to the taxation author-
ities. The tax rates and tax laws used to compute
the amount are those that are enacted or substan-
tively enacted by the end of the reporting period.

There are no deferred taxes because, according to
the REIT status, the whole Group is tax transparent
and exempt from income taxation.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

Financial instruments
Pursuant to IAS 39, a ﬁ nancial instrument is any
contract that gives rise to both a ﬁ nancial asset to
one entity and a ﬁ nancial liability or equity instru-
ment to another entity. Financial assets comprise in
particular cash and cash equivalents, trade receiv-
ables, as well as other loans and receivables orig-
inated by the enterprise, held-to-maturity invest-
ments and original and derivative ﬁ nancial assets
held for trading. Financial liabilities frequently
underlie a claim to their return in cash or another
ﬁ nancial asset. These include in particular liabilities
to banks and other creditors, trade payables and
derivative ﬁ nancial liabilities. Financial assets and
liabilities are generally not offset.

Financial assets
The recognition and measurement of ﬁ nancial
assets are subject to the provisions of IAS 39.
Depending on the classification prescribed by
IAS 39:

> held-to-maturity;
> measured at fair value through proﬁ t or loss;
> available-for-sale; or
> loans and receivables

ﬁ nancial assets are either measured at amortised
cost or at fair value and recognised as at the end of
the reporting period.

The fair value of quoted investments is based on
current bid prices. If the market for a ﬁ nancial asset
is not active (and for unlisted securities), the Group
determines fair value by using valuation techniques.
These include the use of recent arm’s length trans-
actions, reference to other instruments that are sub-
stantially the same, discounted cash ﬂ ow analyses
and option pricing models, making maximum use
of market inputs and relying as little as possible on
entity-speciﬁ c inputs.

When ﬁ nancial assets are recognised initially, they
are measured at fair value plus transaction costs
for all ﬁ nancial assets not carried out at fair value
through proﬁ t or loss. Management decides on the
classiﬁ cation of ﬁ nancial assets on initial recognition
and reviews the classiﬁ cation at the end of each
reporting period. A ﬁ nancial asset is derecognised
when the entity loses control of the contractual
rights that comprise the ﬁ nancial instrument.

All regular way purchases and sales of ﬁ nancial
assets are recognised on the trade date, which is
the date that the Group commits to purchase or
sell the asset. A purchase or sale of ﬁ nancial assets
is customary when it requires the delivery of assets
within the period generally established by regula-
tion or convention in the marketplace.

Financial assets measured at fair value through
proﬁ t or loss are ﬁ nancial assets held for trading.
A ﬁ nancial asset is classiﬁ ed in this category if it
is acquired principally for the purpose of selling
in the short term. Derivatives are also categorised
as held for trading unless they are designated as
hedges. Assets in this category are classiﬁ ed as cur-
rent assets.

Derivative ﬁ nancial instruments which are not part
of an effective hedge pursuant to IAS 39 must be
classiﬁ ed as held for trading and recognised in proﬁ t
or loss at fair value. If their fair value is negative, the
instruments are disclosed under ﬁ nancial liabilities.

Available-for-sale ﬁ nancial assets are non-deriva-
tives that are either designated in this category or
not classiﬁ ed in any of the other categories. They
are included in non-current assets unless the invest-
ment matures or management intends to dispose of
it within twelve months of the end of the reporting
period, or unless the maturity at the end of report-
ing period is less than twelve months. The avail-
able-for-sale ﬁ nancial assets are initially recognised
at fair value and subsequently carried at fair value.
Changes in the fair value of ﬁ nancial assets classi-
ﬁ ed as available for sale are recognised in equity;
when they are sold or impaired their accumulated
fair value adjustments are included in the income
statement.

The Group holds no ﬁ nancial assets which are clas-
siﬁ ed as held to maturity according to the classi-
ﬁ cation prescribed by IAS 39 classiﬁ ed as held to
maturity.

Financial assets have not been designated as “at
fair value through proﬁ t or loss”.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Receivables
Receivables are classiﬁ ed as loans and receivables as
deﬁ ned by IAS 39 and measured initially at fair value
and subsequently at amortised cost, if ne cessary
after deduction of any impairment. Amortised costs
are computed using the effective interest method
less any allowance for impairment. The calculation
takes into account any premium or discount on
acquisition and includes transaction costs and fees
that are an integral part of the effective interest rate.

Within the scope of the measurement of trade
receivables, a solvency check was performed on
the tenants (risk associated with the legal validity of
receivables) and certainty gained that there were no
reasons for a rent reduction (delcredere risk). This
is done for each individual property and portfolio
basis, respectively.

Derivative ﬁ nancial instruments and
hedge accounting
The Group uses derivative ﬁ nancial instruments
such as interest rate swaps and caps to hedge its
risks associated with interest rate ﬂ uctuations. Such
derivative ﬁ nancial instruments are initially recog-
nised at fair value on the date on which a deriva-
tive contract is entered into and are subsequently
remeasured at fair value. Derivatives are carried as
assets when the fair value is positive and as liabil-
ities when the fair value is negative.

The instruments were measured as at December 31,
2010 by an independent third party. The fair value
of derivative ﬁ nancial instruments is determined by
discounting the expected future cash ﬂ ows over the
remaining life of the agreement based on current
market rates or term structures of interest rates.

Non-interest bearing receivables due in more than
one year are discounted.

Gains and losses are recognised in proﬁ t or loss
when the receivables are derecognised or impaired
as well as through the amortisation process.

The Group assesses whether embedded derivatives
are required to be 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 of the contract that signiﬁ cantly modiﬁ es the
cash ﬂ ows that would otherwise be required.

If there is objective evidence that an impairment loss
has been incurred, the amount of the loss is meas-
ured as the difference between the asset’s carrying
amount and the present value of estimated future
cash ﬂ ows discounted at the ﬁ nancial asset’s orig-
inal effective interest rate (i. e. the effective interest
rate computed at initial recognition). The carrying
amount of the asset is reduced directly. The amount
of the loss is recognised in proﬁ t or loss.

If, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be
related objectively to an event occurring after the
impairment was recognised, the previously recog-
nised impairment loss is reversed to the extent that
the carrying value of the receivable does not exceed
its amortised cost at the reversal date. Any subse-
quent reversal of an impairment loss is recognised
in proﬁ t or loss.

Provision for impairment is made when there is
objective evidence (such as the probability of
insolv ency or signiﬁ cant ﬁ nancial difﬁ culties of the
debtor) that the Group will not be able to collect all
of the amounts due under the original terms of the
invoice. The carrying amount of the receivable is
reduced directly. Impaired assets are derecognised
when they are assessed as uncollectable.

The method used for recording gains and losses
depends upon whether the derivative was assigned
to an underlying transaction as a hedge. To this
end, ﬁ nancial management deﬁ nes the hedge rela-
tionship between the hedging instrument and the
hedged item and the aim of the risk management
measure and underlying strategy when concluding
the hedge transaction.

Any gains or losses arising from changes in fair
value on derivatives during the period that do not
qualify for hedge accounting are recognised imme-
diately in proﬁ t or loss.

For the purpose of hedge accounting, hedges are
classiﬁ ed as cash ﬂ ow hedges when hedging expos-
ure to variability in cash ﬂ ows is attributable to a
particular risk associated with a recognised liability.

At the inception of a hedge relationship, the Group
formally designates and documents the hedge rela-
tionship to which the Group wishes to apply hedge
accounting and the risk management object ive and
strategy for undertaking the hedge. The documen-
tation includes identiﬁ cation of the hedging instru-
ment, the hedged item, the nature of the risk being
hedged and how the entity will assess the hedging
instrument’s effectiveness in offsetting the expo-
sure to changes in the hedged item’s cash ﬂ ows

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

attributable to the hedged risk. Such hedges are
expected to be highly effective in achieving offset-
ting changes in fair value or cash ﬂ ows, and are
assessed on an ongoing basis to determine their
effectiveness throughout the ﬁ nancial reporting
periods for which they were designated.

Cash ﬂ ow hedges which meet the strict criteria for
hedge accounting are accounted for as follows:

> The effective portion of the gain or loss on the
hedging instrument is recognised directly in
equity, while any ineffective portion is recognised
immediately in proﬁ t or loss.

> 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 ﬁ nancial income
or ﬁ nancial expense is realised.

The Group uses no ﬁ nancial derivatives that qual-
ify for the hedging of the fair value of recognised
assets or liabilities or a ﬁ rm commitment (fair value
hedges), nor such ﬁ nancial derivatives that qualify
for the hedging of a net investment in a foreign
operation (net investment hedge).

Cash and cash equivalents
Cash and short-term deposits in the consolidated
statement of ﬁ nancial position comprise current
bank balances.

For the purposes of the consolidated cash ﬂ ow
statement, cash and cash equivalents include the
cash and cash equivalents deﬁ ned above, other
short-term highly liquid investments with origin al
maturities of three months or less, and bank
overdrafts.

Current bank balances are recognised in the nom-
inal amount.

Treasury shares
Company equity instruments which are reacquired
(treasury shares) are deducted from equity. No gain
or loss is recognised in proﬁ t or loss on the pur-
chase, sale, issue or cancellation of the Group’s own
equity instruments.

Liabilities
Financial liabilities, in particular trade payables, are
stated at the amount repayable and are, if non-cur-
rent and non-interest bearing, discounted.

The fair values are determined by discounting the
future contractually agreed cash ﬂ ows at the inter-
est rates from the term structure of interest rates to
the end of the reporting period.

The recognition and measurement of ﬁ nancial liabil-
ities is subject to the provisions of IAS 39. Depend-
ing on the classiﬁ cation prescribed by IAS 39:

> at amortised cost or
> measured at fair value through proﬁ t or loss

ﬁ nancial liabilities are either measured at amortised
cost or at fair value and recognised as at the end of
reporting period.

All loans and borrowings are initially recognised
at fair value less directly attributable transaction
costs, and have not been designated as “at fair
value through proﬁ t or loss”. After initial recog-
nition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using
the effective interest method. Gains and losses are
recognised in proﬁ t or loss when the liabilities are
derecognised as well as through the amortisation
process.

The component of the convertible proﬁ t participa-
tion rights (Wandelgenussrechte) which exhibits
characteristics of a liability is recognised as a liabil-
ity in the balance sheet, net of transaction costs. On
issuance of the jouissance shares, the fair value of
the liability component is determined using a mar-
ket rate for an equivalent non-convertible bond,
and this amount is classiﬁ ed as a ﬁ nancial liability
measured at amortised cost until it is extinguished
on conversion or redemption.

A ﬁ nancial liability is derecognised when the obli-
gation underlying the liability is discharged or can-
celled or expires. When an existing ﬁ nancial liabil-
ity is replaced with another liability from the same
lender under substantially different terms, or the
terms of an existing liability are substantially mod-
iﬁ ed, such an exchange or modiﬁ cation is treated as
a derecognition of the original liability and the rec-
ognition of a new liability, and the difference in the
respective carrying amounts is recognised in proﬁ t
or loss.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Revenue recognition
Revenue is recognised to the extent that it is prob-
able that the economic beneﬁ ts will ﬂ ow to the
Group and the revenue can be reliably measured.
Revenue is measured at the fair value of the consid-
eration received, excluding discounts, rebates and
other sales taxes or duty. The following speciﬁ c rec-
ognition criteria must also be met before revenue
is recognised:

Rental income Rental income arising from operat-
ing leases on investment properties is accounted for
on a straight-line basis over the lease terms.

Interest income Revenue is recognised as interest
accrues (using the effective interest rate that is the
rate that discounts estimated future cash receipts
through the expected life of the ﬁ nancial instru-
ment to the net carrying amount of the ﬁ nancial
asset).

Income taxes
REIT-AGs are fully exempt from German corporate
income tax and trade tax. Hence, alstria ofﬁ ce REIT-AG
has been exempt from tax with retrospective effect
since January 1, 2007.

8 Segment reporting
IFRS 8 requires a “management approach”, under
which segment information is presented on the
same basis as that used for internal reporting
purposes.

As the type of services offered by alstria ofﬁ ce REIT-
AG is comprised exclusively of lessor activities for
commercial property tenants in Germany, accord-
ing to IFRS 8, a single reporting segment can be
identiﬁ ed that is comprised of the Groups’ total
operations.

This reporting segment is reported in a manner con-
sistent with the internal reporting provided to the
chief operating decision-maker. The chief operating
decision-maker has been identiﬁ ed as the Manage-
ment Board.

Provisions
Provisions are recognised where a present obliga-
tion exists to third parties as a result of a past event,
where a future outﬂ ow of resources is probable and
where a reliable estimate of that outﬂ ow can be
made. Provisions are measured, taking account of
all risks, at the best estimate of future cash outﬂ ows
required to meet the obligation, and – if non-cur-
rent – are discounted. Provisions are not offset with
reimbursements.

Share-based payment transactions
Share-based payment comprises cash-settled liabil-
ity awards and equity-settled equity awards.

The fair value of equity awards is generally deter-
mined by using a modiﬁ ed Black-Scholes option
pricing model at the grant date and represents the
total payment expense to be recognised during
the service period with a corresponding increase in
equity (paid-in capital).

Liability awards are measured at fair value at each
balance sheet date until settlement and are classi-
ﬁ ed as provisions. The expense of the period com-
prises the addition to, and the reversal of, the provi-
sion between two reporting dates and the dividend
equivalent paid during the period.

Further details on the share-based payment
schemes are given in Notes 17, 18 and 19, and in
the remuneration report, respectively.

Minority interests in partnerships
Under IAS 32.16 and IAS 32.19, a ﬁ nancial instru-
ment is an equity instrument if, and only if, an
entity has no conditional or unconditional obliga-
tion to deliver cash or another asset. In addition,
IAS 32.18 (b) states that the right of a partner to
return their investment to the partnership for com-
pensation at any time must be disclosed as a lia-
bility, even when, in legal terms, the partner is an
investor. Speciﬁ cally, equity must be reclassiﬁ ed as
liability 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 expense (ﬁ nancial result) in
accordance with IAS 32.35.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

9 Notes to the consolidated

9.4 Administrative expenses

income statement

9.1 Revenues

EUR k

Revenues from
investment property

EUR k

Legal and consulting fees

2010

2009

Communication and marketing

2010

2,332

621

2009

2,066

800

89,094

102,510

Revenues from investment property chieﬂ y include
rents from investment property.

9.2 Income and expenses from passed-on

operating expenses

EUR k

2010

2009

Audit fees (audit and
audit-related services)

Depreciation

Supervisory Board
compensation

Travel expenses

Leasing costs

IT maintenance

Insurances

Recruitment

Stock exchange

580

485

305

270

175

125

113

427

359

299

264

185

122

162

13,902

17,202

Other

955

6,073

1,387

6,187

Income from passed-on
operating expenses

Income from passed-on
operating expenses related
to the prior year

Expenses from passed-on
operating expenses

Expenses from passed-on
operating expenses related
to the prior year

Income less expenses
from passed-on operating
expenses

1,781

2,031

15,683

19,233

9.5 Personnel expenses

– 13,902

– 17,202

EUR k

Salaries and wages

– 2,223

– 2,389

Social insurance contribution

– 16,125

– 19,591

Bonuses

– 442

– 358

Expenses for share-based
compensation

thereof relating to stock
options and virtual shares

thereof relating to the
convertible proﬁ t
participation certiﬁ cates

Amounts for retirement
provisions and disability
Management Board

The expenses from passed-on operating expenses
which are directly attributable to investment prop-
erty include, in particular, operating costs, main-
tenance and property-based taxes.

9.3 Real estate operating expenses

Other

2010

2,823

363

1,228

830

351

2009

2,477

312

1,320

466

479

375

144

209

131

284

5,597

4,990

EUR k

Maintenance and
refurbishment

Vacancy

Running repairs

Property management

Tax on land and building

Non-deductable VAT

Depreciation of own occupied
property

Other

2010

2009

2,244

1,558

1,366

858

284

105

393

4,778

2,076

1,149

869

275

408

114

520

6,893

10,189

Convertible proﬁ t participation rights granted to
employees entitle not only a conversion when
the conditions apply, but also an annual payment
equiva lent to the dividend per share. Therefore,
expenses for share-based compensation resulting
from the convertible proﬁ t participation rights are
to be recognised in equity (for the conversion right)
as well as against liabilities (for the dividend entitle-
ment). Out of the EUR 479 k expense in relation to
the proﬁ t participation rights, EUR 360 k was recog-
nised in equity (2009: EUR 297 k) while EUR 119 k
was reﬂ ected in the liabilities (2009: EUR 78 k).

Within the course of 2010 the Group had 37
employees on average (2009: 31).

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

9.6 Other operating income

9.8 Financial and valuation result
The ﬁ nancial result breaks down as follows:

EUR k

2010

2009

Income in relation to
development projects

Income from the reversal
of accrued liabilities

Property management services

Income from insurance
compensation

Payments on provisions
on doubtful debts

Car use

Proﬁ t on deconsolidation

Income from the consumption
of accrued liabilities

Other

727

367

148

123

571

2,029

327

323

221

1,290

170

669

3,124

Income in relation to development projects relates
to compensation received from tenants in individual
cases for the restructuring of leased premises and
can vary each year.

9.7 Other operating expenses

EUR k

Legal and consulting fees

Impairment on trade
receivables

Loss on deconsolidation

Impairment on ﬁ nancial assets

Allocation to provision for
rental guarantees

Other

2010

868

472

181

2009

311

1,550

1,619

1,866

Legal and consulting fees were incurred as a result
of a non-recurring strategic project related to the
further development of the Group.

EUR k

Financial income

2010

700

2009

593

Syndicated loans – interest

– 17,623

– 25,638

Interest non-recourse loans

– 7,599

– 3,918

Interest result derivatives

– 17,902

– 22,433

Bank overdraft

– 1

Financial expenses

– 43,125

– 51,990

Bank charges

– 292

– 80

Expense resulting from net
present value adjustments due
to the discount of provisions

Transaction costs

Commitment fees

Other

Other ﬁ nancial expenses

– 278

– 170

– 740

– 524

– 75

– 40

– 720

Net ﬁ nancing result

– 43,165

– 52,117

Total interest income and expenses for ﬁ nancial
assets and liabilities which are not ﬁ nancial deriva-
tives were EUR 700 k (interest income; 2009:
EUR 593 k) and EUR 25,222 k (interest expenses;
2009: EUR 29,557 k), respectively.

Total interest expenses calculated using the effect-
ive interest method for ﬁ nancial liabilities that
are not recognised at fair value through proﬁ t or
loss were EUR 5,545 k (interest expenses; 2009:
EUR 2,362 k).

Net losses from ﬁ nancial assets available for sale
amounted to EUR 91 k (2009: EUR 0 k).

The net loss from the fair value loss from the fair
value adjustments on ﬁ nancial derivatives is shown
below:

EUR k

2010

2009

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 nan-
cial derivatives not qualifying
as a cash ﬂ ow hedge

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

– 33,338

– 16,331

– 961

– 6,002

– 1,373

– 961

– 35,672

– 23,294

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

In 2010, EUR 33,338 k relates to cumulative loss in
the fair value of cash ﬂ ow hedge derivatives which
was reported in equity and for which a forecast
transaction is no longer expected to occur.

Further details and explanation on derivatives are
shown under Note 10.8.

9.9 Gain or loss on disposal

of investment property

EUR k

Investment property
disposal proceeds

Carrying value of investment
property disposals

2010

2009

163,003

134,115

– 153,725

134,140

9,278

– 25

The loss from objects and portfolios sold below
their carrying value amounts to EUR 248 k in 2010
and EUR 375 k in 2009.

9.10 Income taxes
Because of obtaining the G-REIT status, alstria
ofﬁ ce REIT-AG was subject to ﬁ nal taxation on the
effective date of the transfer into a G-REIT in 2007
and is tax-exempt with regard to corporate tax and
trade tax effective as of January 1, 2007.

Deferred income tax Due to the REIT tax exemp-
tion, there were no impacts on proﬁ t and loss, the
ﬁ nancial statements, or equity or proﬁ t and loss in
2009 and 2010.

10 Notes to the consolidated statement

of ﬁ nancial position – assets

10.1 Investment property
This item, which comprises all investment proper-
ties held by the Company, breaks down as follows:

alstria ofﬁ ce REIT-AG uses the fair value model pur-
suant to IAS 40.33 et seq. for subsequent meas-
urement of investment property. External apprais-
als were obtained for measurement. For a detailed
description of the valuation of assets, please see
Note 7.

alstria ofﬁ ce REIT-AG concluded the acquisition
of one investment property located in Karls ruhe
in 2010. This property was transferred to alstria
ofﬁ ce REIT-AG on January 4, 2011. At the end of
the reporting period, prepayments in an amount
of EUR 2,961 k have been made on the acquisi-
tion. They are stated under “other receivables” (see
Note 10.7).

In the course of the meanwhile completed property
disposal process, the transfer of possession, beneﬁ ts
and burden of seven properties took place in 2010.
One of them has been transferred in the course of
deconsolidation of a former Group company. This
object was already reclassiﬁ ed to the disposal group
in the previous year (see Note 4).

Due to a probable sale transaction, one property
in a total amount of EUR 600 k was categorised as
“held for sale” in the consolidated ﬁ nancial state-
ments as at December 31, 2010.

Capital expenditure (EUR 14,264 k) is made up
of subsequent acquisition and production costs in
relation to property acquisitions and refurbishment
projects.

Borrowing costs have been capitalised as construc-
tion cost of an asset in an amount of EUR 71 k
during the reporting period. The capitalisation rate
used to determine the amount of borrowing costs
eligible for capitalisation was 2.5 %.

2010

2009

Expenses/income disclosed in the income statement
pursuant to IAS 40.75 (f):

EUR k

Fair values

As of Jan. 1

Changes in the
consolidated Group

Property acquisition

Capital expenditure

Disposals

1,425,440

1,805,265

– 41,440

3,480

14,264

13,987

– 77,900

– 134,140

Transfers to held for sale

– 600

– 135,825

Net result from the adjust-
ment of the fair value of
investment property

As of Dec. 31

– 12,804

– 85,887

1,348,400

1,425,440

> EUR 89,094 k (2009: EUR 102,510 k) rental

income from investment property;

> EUR 5,335 k (2009: EUR 8,166 k) operating
expenses (including repairs and maintenance)
directly allocable to investment property from
which rental income was generated during the
period under review; and

> EUR 1,558 k (2009: EUR 2,023 k) operating
expenses (including repairs and maintenance)
arising from investment property which did not
generate rental income during the period under
review.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Investment properties (including held-for-sale
investment properties) have been used as security
for bank loans in the amount of EUR 1,349,000 k
(2009: EUR 1,561,265 k).

10.2 Equity accounted investment
At the end of the reporting period, two com panies
in which alstria ofﬁ ce REIT-AG holds a share of
49 % were treated as joint ventures and accounted
for using the equity method. The carrying amount
of the joint ventures at the end of the reporting
period was EUR 32,385 k. For further information
please refer to Note 4.

10.3 Property, plant and equipment

EUR k

Acquisition and production cost

As at Jan. 1, 2010

Additions

Disposals

As at Dec. 31, 2010

Accumulated amortisation,
depreciation and write-downs

As at Jan. 1, 2010

Additions

Disposals

As at Dec. 31, 2010

Net book values as at Dec. 31, 2010

EUR k

Acquisition and production cost

As at Jan. 1, 2009

Additions

Disposals

As at Dec. 31, 2009

Accumulated amortisation,
depreciation and write-downs

As at Jan. 1, 2009

Additions

Disposals

As at Dec. 31, 2009

Net book values as at Dec. 31, 2009

Furni-
ture and
ﬁ xtures

Own
occupied
property

202

385

– 25

562

101

– 18

142

420

5,655

1,858

7,513

114

199

7,314

Furni-
ture and
ﬁ xtures

Own
occupied
property

159

202

101

3,381

2,274

5,655

114

5,541

Plant

1,100

1,101

846

164

1,010

Plant

1,100

659

187

846

254

Total
2010

6,957

2,244

– 25

9,176

1,060

308

– 18

1,350

7,826

Total
2009

4,640

2,317

6,957

717

343

1,060

5,897

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

The useful life of the assets is estimated to be
between three to 15 years for plant, furniture and
ﬁ xtures and 50 years for the own occupied property
by the Group.

The plants consist of miscellaneous items such as
ﬁ re extinguishers or a control panel for a closed-
circuit television system.

alstria ofﬁ ce REIT-AG occupies one of its ofﬁ ce
buildings in Hamburg for its own use. Therefore the
property is categorised as owner-occupied prop-
erty according to IAS 16. In order to secure Group
li abilities, the property is pledged with a land charge
as security.

10.4 Intangible assets

The assets and liabilities of the disposal Group were
as follows:

EUR k

Assets

Dec. 31,
2010

Dec. 31,
2009

Investment property

600

135,825

Receivables and other assets

Cash and cash equivalents

Total assets

462

334

600

136,621

Liabilities

Short-term loans

Other liabilities

Total liabilities

27,500

676

28,176

Licences

2010

2009

10.7 Receivables and other assets
Due to the speciﬁ c nature of the business, the
Group considers receivables due up to one year to
be current. The following table presents an over-
view on the receivables of the Group:

EUR k

Acquisition and
production cost

As of Jan. 1

Additions

Disposals

As of Dec. 31

Accumulated amortisation,
depreciation and write-downs

As of Jan. 1

Additions

Disposals

As of Dec. 31

Net book values
as at Dec. 31

580

270

– 1

849

269

262

– 1

530

319

475

105

580

139

130

269

311

The useful life of the intangible assets is estimated
to be between three to eight years.

The intangible assets consist of software licences
and licences to other rights in an amount of
EUR 175 and EUR 144 k, respectively.

10.5 Financial assets
A minority interest in a former Group company is
stated in this line item.

10.6 Assets held for sale
Assets held for sale as shown refer to an investment
property which has been sold in January 2011.

Assets held for sale as shown in the previous year’s
end of the reporting period refer mainly to invest-
ment properties which have been sold in 2010.

EUR k

Trade receivables

Rent receivables

Accounts receivable
from afﬁ liates

Tax receivables

Other receivables

Prepayments

“Rent-free period” receivables

Deposit account

Receivables from
disposal group

Other assets

Other receivables

Dec. 31,
2010

Dec. 31,
2009

4,117

5,694

1,967

1,855

3,367

2,755

1,550

2,361

1,831

1,550

465

27,500

241

8,137

33,483

All receivables except EUR 1,550 receivables against
a deposit account are due within one year from the
end of the reporting period. The fair value of all
receivables is equal to their carrying amount in the
balance sheet.

Trade receivables were written down by EUR 472 k
(2009: EUR 311 k) due to rent payments in arrears.
Other receivables, other than trade receivables,
were not impaired.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

As of December 31, 2010, trade receivables of
EUR 869 k (2009: EUR 724 k) were past due but
not impaired. These relate to a number of inde-
pendent customers for whom there is no recent his-
tory of default. The ageing analysis of these trade
receivables is as follows:

EUR k

Trade receivables

Up to 3 months

3 to 6 months

Over 6 months

Total

Dec. 31,
2010

Dec. 31,
2009

367

217

285

869

648

724

To secure the loans of the Group, all receivables
from rental and property purchase agreements, as
well as insurance receivables and derivative ﬁ nan-
cial instruments, were assigned to the lenders
(Note 11.2).

A total of EUR 2,755 k of the other receivables is
made up of accruals resulting from the recognition
of total rental revenues on a straight-line basis over
the term of the lease agreements (rent smoothing).

Prepayments in an amount of EUR 2,961 k relate
to payments that have been made on the acquisi-
tion of a property (compare Note 10.1) and annual
insurance premiums that are payable in advance.

10.8 Derivative ﬁ nancial instruments
The following derivative ﬁ nancial instruments existed
as at the end of reporting period:

Reverse swap

3.6165

Nov. 29, 2011

– 625,000

17,595

Product

Cap

Swap

Interest rate derivatives –
held for trading

Cap

Swap

Dec. 31, 2010

Dec. 31, 2009

Strike p.a.

(%) Maturity date

Notional
(EUR k)

Fair value
(EUR k)

Notional
(EUR k)

Fair value
(EUR k)

4.9000

Dec. 20, 2012

75,000

100

4.1160

Jul. 10, 2013

47,902

– 3,412

100,000

– 7,331

3.6165

Nov. 29, 2011

625,000

– 17,595

– 7,231

383

132

3.3000 Oct. 20, 2014

25,139

3.3000

Oct. 20, 2014

8,649

– 3,392

135

25,139

8,649

3.6165 Nov. 29, 20111

3.9087

Jan. 20, 20121

4.9000 Dec. 20, 20121

3.1925 Nov. 29, 20111

625,000

– 27,895

148,785

– 7,828

34,100

– 3,170

21,880

– 781

2.1940

Dec. 31, 2014

37,283

– 420

4.6000 Oct. 20, 2015

95,000

– 3,346

95,000

– 1,854

2.9900

Jul. 20, 2015

472,500

– 18,076

Interest rate derivatives –
cash ﬂ ow hedges

Total

1 Meanwhile terminated before original maturity date.

The changes of the derivatives result from various
effects. The following table shows the changes of
alstria ofﬁ ce REIT-AG’s ﬁ nancial instruments since
December 31, 2009 by category:

– 21,661

– 25,053

– 41,013

– 48,244

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

CHANGES IN FINANCIAL DERIVATIVES

EUR k

Hedging instruments as at Dec. 31, 2009

Effective change in fair value cash ﬂ ow hedges

Ineffective change in fair value 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

Financial derivatives

Cash ﬂ ow
hedge
reserve

– 43,200

4,940

Financial
assets

615

– 70

– 7,514

Financial
liabilities

– 48,859

5,010

6,553

Total

– 48,244

4,940

– 961

– 81

– 1,292

– 1,373

33,338

3,316

21,530

1,924

– 43,060

36,875

– 42,849

5,240

– 21,530

36,875

– 25,053

Hedging instruments as at Dec. 31, 2010

– 4,922

17,796

The notional amount of the ﬁ nancial derivatives,
which includes cash ﬂ ow hedges and derivatives
not qualifying for cash ﬂ ow hedging, effective at
the end of the reporting period is EUR 638,571 k
(December 31, 2009: EUR 1,039,553 k). One swap
with a notional amount of EUR 95,000 k will not
become effective before July 10, 2013. Derivatives
with a notional amount of EUR 122,902 k (Decem-
ber 31, 2009: EUR 175,000 k) are not designated
as a cash ﬂ ow hedge.

In total, EUR 4,940 k of changes in the fair values of
derivatives effective in a cash ﬂ ow hedge have been
recognised in the hedging reserve.

The ineffective portion recognised in the proﬁ t or
loss that arises from cash ﬂ ow hedges amounts to a
loss of EUR 961 k (2009: EUR 6,002 k).

Losses totalling EUR 1,373 k (2009: loss of
EUR 961 k) due to the market valuation of
de rivatives not included in hedge accounting were
recorded in the income statement in the period of
the ﬁ nancial statements to December 31, 2010.

A loss of EUR 33,338 k (2009: 16,331 k) relates to
the cumulative losses that were reported in equity
and for which the forecast transaction is no longer
expected to occur. It was immediately transferred to
the income statement within net loss of fair value
adjustments on ﬁ nancial derivatives (see Note 9.8).

Together, this results in a loss of EUR 35,672 k
(2009: EUR 23,294 k) shown as net loss from fair
value adjustments on ﬁ nancial derivatives. For

the EUR 33,338 k expense relating to the trans-
fer out of equity, the corresponding booking entry
is an equity account, which increased by the same
amount. Therefore this expense entry in the amount
of EUR 33,338 k has no effect on the Group’s net
asset value.

On April 15, 2010, alstria ofﬁ ce REIT-AG entered
into an interest swap with a notional amount of
EUR 37,283 k at a swap rate of 2.1940 %, expiring
on December 31, 2014. This transaction became
effective as per April 20, 2010. The hedging rela-
tionship was concluded with a fair value of EUR 0
at the inception.

In line with its hedging strategy, alstria ofﬁ ce
REIT-AG entered into a new interest rate swap with
a notional amount of EUR 472,500 k and a swap
rate of 2.99 %, expiring on July 20, 2015. This
transaction became effective as at July 20, 2010.

The aforementioned swap replaced an exist-
ing interest rate swap with a notional value of
EUR 625,000 k, which was terminated with effect
from July 20, 2010. The new interest rate swap,
which has a notional value of EUR 472,500 k and
hedges the new syndicated loan, started with a
negative fair value of EUR 21,530 k, which cor-
responds to the negative termination value of the
old interest rate swap with a notional value of
EUR 625,000 k. The switchover was cash-neutral
since the new swap stepped into the negative fair
value of the terminated swap.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

In total, interest rate swaps with a notional value
of EUR 881,863 k were terminated in 2010.
This reduced ﬁ nancial liabilities from the nega-
tive fair value of these swaps by EUR 36,875 k.
EUR 21,530 k of this amount was attributed to the
new swap with a notional value of EUR 472,500 k,
leaving a EUR 15,345 k ﬁ nancial liability reduction
for which cash outﬂ ow was provided.

One interest rate swap with a notional amount of
EUR 625,000 k and a corresponding reverse interest
rate swap with the same notional amount had been
entered into for technical reasons in the course of
reﬁ nancing. All terms and conditions of the two
derivatives are identical, except the fact that the
ﬂ oating rate payer of the one interest rate swap
is the ﬁ xed rate payer of the reverse interest rate
swap.

10.9 Cash and cash equivalents

registered in the commercial register on September
23, 2010. The nominal amount was paid in on Sep-
tember 24, 2010.

In the balance sheet of the consolidated ﬁ nan-
cial statements as at December 31, 2010, the
share capital of alstria ofﬁ ce REIT-AG amounts to
EUR 61,600 k. Captiva 2 Alstria Holding S.à r.l.,
Luxembourg, directly and indirectly holds a majority
of the shares in the Company, the remaining shares
are free ﬂ oat.

Treasury stock

Non-par value bearer shares
(quantity)

Non-par value bearer shares
(amount in EUR k)

Dec. 31,
2010

Dec. 31,
2009

2,374

EUR k

Bank balances

Dec. 31,
2010

Dec. 31,
2009

120,788

146,818

On December 31, 2010, the Company held 2,374
non-par value bearer shares, each with a value of
EUR 1.

Bank balances earn interest at ﬂ oating rates based
on daily bank deposit rates. As at the end of the
reporting period, EUR 3,955 k (December 31, 2009:
EUR 61,848 k) of the cash and cash equivalents
were restraint on disposal. The amount corresponds
to accrued interest obligations and amounts on
other bank accounts for which the Company does
not have free disposition.

11 Notes to the consolidated statement of
ﬁ nancial position – equity and liabilities

11.1 Equity
For detailed information on equity we refer to the
consolidated statement of changes in consolidated
equity.

Share capital

Thousand

Dec. 31,
2010

Dec. 31,
2009

Ordinary share of EUR 1 each

61,600

56,000

By partially using its authorised capital, the share
capital was increased against contribution in cash
in the amount of EUR 5,599,999 as part of an
accelerated book-building process. The share cap-
ital increased from EUR 56,000,000 in 2009 to
EUR 61,599,999 in 2010. This capital increase was

By resolution of the Annual General Meeting held
on June 16, 2010, the Company’s authorisation to
acquire treasury shares was renewed. According to
the resolution, alstria ofﬁ ce REIT-AG is authorised
to acquire up to 10 % of the capital stock until June
15, 2015. There is no intention to make use of this
authorisation as at the reporting date.

Capital surplus The capital surplus changed as
follows during the ﬁ nancial year:

EUR k

As of Jan. 1

Contributions to capital
surplus

Transaction costs of issue of
shares

Reclassiﬁ cation to retained
earnings

2010

2009

685,897

726,885

43,400

– 1,622

– 27,999

– 28,423

Share-based payments

360

Valuation of available-for-sale
ﬁ nancial assets

Result of the disposal of
treasury shares

Intrinsic value of exchange
option for treasury shares

Disposal of treasury shares

388

123

– 13,076

1,744

– 14,820

As of Dec. 31

700,036

685,897

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

The new shares generated from the capital increase
were placed at a price of EUR 8.75 per share. The
issue proceeds by which the nominal share capital
was exceeded amounted to EUR 43,400 k and were
booked to the capital surplus. The placement of the
shares resulted in an increase in the capital surplus
of EUR 41,778 k, thereof contributions amounting
to EUR 43,400 k and expenses to EUR 1,622 k.

An increase of EUR 360 k (2009: EUR 297 k)
resulted from the vesting of the convertible proﬁ t
participation certiﬁ cates granted to employees
of the Group. In 2009, there was an additional
increase of EUR 91 k from the allocation of the fair
values of the granted stock options (Note 17) over
the respective vesting period.

In the course of dividend payments, in 2010
the Company distributed dividends totalling
EUR 27,999 k (EUR 0.50 per outstanding share) out
of retained earnings to their shareholders.

Hedging reserve

EUR k

Hedging reserve

Dec. 31,
2010

Dec. 31,
2009

– 4,922

– 43,200

For further details on the change in hedging reserve
please refer to Note 10.8.

11.2 Financial liabilities

EUR k

Loans

Syndicated loan (new)

Non-recourse loans

Total

EUR k

Loans

Syndicated loan (old)

Non-recourse loans

Total

Non-current

566,891

219,519

786,410

Current

Accrued
interest

3,674

541

4,215

Loan

3,581

Total

Total current

Dec. 31, 2010

3,674

4,122

7,796

570,565

223,640

794,206

Non-current

Current

Accrued
interest

Loan

Total

Total current

Dec. 31, 2009

751,387

195,870

947,257

86,632

1,930

88,562

2,716

663

3,379

89,348

2,593

91,941

840,735

198,463

1,039,198

The table shows the long-term loans, net of the
current portion as stated under non-current liabil-
ities and the current amount that is due within one
year, and shown as short-term loans under current
liabilities.

As at December 31, 2010, the loans used by
alstria office REIT-AG are repayable in the
amount of EUR 796,964 k (December 31, 2009:
EUR 1,041,387 k). The lower carrying amount of
EUR 794,206 k (EUR 786,410 k non-current and
EUR 7,796 k current) takes into account interest
li abilities and transaction costs to be allocated under
the effective interest method upon the raising of
liabilities. Financial liabilities with a maturity of up to
one year are recognised as current loans.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

alstria successfully reﬁ nanced its main credit facility
on July 20, 2010. A new syndicate consisting of ﬁ ve
banks has provided a new credit facility totalling
EUR 630 m (“syndicated loan (new)”). Together
with EUR 16 m of alstria’s own cash, this reﬁ nanc-
ing has entirely replaced the previous syndicated
loan facility (“syndicated loan (old)”, EUR 646 m),
which was due to mature in November 2011. The
new loan agreement has a maturity of ﬁ ve years.
As a result of the completed restructuring proc-
ess the average debt maturity increased signiﬁ -
cantly to 4.6 years compared to 2.6 years as of
December 31, 2009. The new loan was arranged
by UniCredit Bank AG and underwritten by Ber-
lin-Hannoversche Hypothekenbank AG, Eurohypo
Aktiengesellschaft, HSH Nordbank AG and Natixis.

The terminated syndicated loan (old) was arranged
with J.P. Morgan Plc., Natixis Banques Populaires,
German Branch, and HSH Nordbank AG for a nom-
inal amount of EUR 1,139,800 k. Out of this nom-
inal amount, EUR 842,837 k had been drawn as
of December 31, 2009. The carrying amount due
to deducted transaction costs to be allocated under
the effective interest method upon raising the liabil-
ities was EUR 838,019 k as of December 31, 2009.

To secure the liabilities concerning the syndicated
loan (old) as well as the syndicated loan (new),
receivables from rental and property purchase
agreements as well as insurance receivables and
derivative ﬁ nancial instruments were assigned to
the lenders, liens were granted on bank accounts
and the registration of land charges was agreed
(Notes 10.3 and 10.7).

The variable interest of the loans is payable on a
quarterly basis, with the standard margin and bor-
rowing costs for the market added to the respective
EURIBOR rate.

Due to the variable interest rate, there are no signiﬁ -
cant differences between the carrying amounts and
fair value with the exception of transaction costs.

A total of EUR 105,661 k (December 31, 2009:
EUR 32,540 k) in ﬁ nancial liabilities from non-
recourse loans relates to a ﬁ xed interest rate loan.
As at the end of the reporting period, this loan has
a fair value of EUR 106,758 (December 31, 2009:
EUR 32,872 k).

As at December 31, 2010, loans were reduced by
transaction costs of EUR 6,974 k (December 31,
2009: EUR 5,568 k).

The carrying amounts of the loans are all denom-
inated in euros; the fair value of all financial
li abilities, with the exception of the transaction cost
and the ﬁ xed interest rate loan, approximates their
nominal value at the end of the reporting period.

The liabilities exposed to an interest rate risk are
due as follows:

EUR k

Up to 1 year

More than 1 year

Total

Dec. 31,
2010

Dec. 31,
2009

1,014

88,562

689,754

914,717

690,768

1,003,279

The following loans are secured by land charges:

EUR k

Financial liabilities secured by
land charges

thereof on investment
property

Dec. 31,
2010

Dec. 31,
2009

794,206

1,035,819

786,891

1,030,278

11.3 Other provisions
In respect of the sale of properties, the Group has
accepted the commitment to compensate the buyer
for possible rent income shortfalls in case of non-
extension of rental agreements existing with certain
tenants at the disposal date. A provision amount of
EUR 1,829 k was calculated as the net present value
of possible cash outﬂ ow due to this rental guaran-
tee for which a realisation is expected more likely
than not. The commitment relates to a six-year
rental period starting in 2014. The same circum-
stances led to contingent liabilities (see Note 12.2).
At December 31, 2009, the provision for the rental
guarantees amounted to EUR 1,550 k. The increase
in this provision is solely based on the change in the
net present value of EUR 279 k due to the time shift
and discount rate changes.

In addition EUR 351 k is recognised as provision for
awarding the Long Term Incentive Plan (Note 18).

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

11.4 Trade payables and other liabilities

EUR k

Trade payables

Other trade payables

Other current liabilities

Accruals for outstanding invoices

Advance rent payments received

Accrued bonuses

Received deposits

Supervisory Board compensation

Liability for real estate transfer tax

Auditing costs

Consultancy costs

VAT liabilities

Security deposit

Miscellaneous other liabilities

Due

Total

Due

Total

Up to
1 year

In more
than
1 year

3,024

2,408

1,700

900

462

305

214

210

166

625

6,990

324

Up to
1 year

In more
than
1 year

3,692

4,134

2,410

1,320

434

299

220

137

316

110

519

344

2009

3,692

4,134

2,410

1,320

434

299

220

137

316

110

344

519

2010

3,024

2,408

1,700

900

462

305

214

210

166

324

625

7,314

9,899

344

10,243

The disclosed carrying amounts approximate their
fair values.

Other trade payables relate to operating costs
not yet invoiced of EUR 1,706 k (December 31,
2009: EUR 2,981 k), liabilities from third-party real
estate management services and rental activities of
EUR 725 k (December 31, 2009: EUR 711 k) and
tenant payables of EUR 593 k (December 31, 2009:
EUR 0 k).

The liabilities for real estate transfer tax result from
the acquisition of properties in 2008 and 2009.

11.5 Trust assets and liabilities
As at the end of the reporting period, alstria ofﬁ ce
REIT-AG had trust assets worth an amount of
EUR 2,050 k (December 31, 2009: EUR 1,550 k)
and liabilities of EUR 462 k (December 31, 2009:
EUR 434 k), in particular from rent deposits.

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, at the
end of reporting period, as well as at the end of
the prior years’ reporting period, deferred taxes do
not exist.

11.7 Liabilities of current tax
As at the reporting date, as well as at the end of
the prior year’s reporting period, no liabilities for
current tax existed.

12 Other notes
12.1 Compensation of Management Board

and Supervisory Board

Management Board
In 2010, the overall compen-
sation of the members of the Management Board
totalled EUR 2,458 k (2009: EUR 1,529 k). As at the
reporting date, liabilities for the compensation of
the members of the Management Board amounted
to EUR 300 k (2009: EUR 550 k). Under the stock
option programme of alstria ofﬁ ce REIT-AG, mem-
bers of the Management Board held non-trans-
ferable stock options for 375,000 shares of alstria
ofﬁ ce REIT-AG as at December 31, 2010 and 2009,
respectively. Details of the stock option programme
are also included in these notes (see Note 17). Out
of the new Long Term Incentive Plan implemented
in 2010, 99,009 virtual shares were granted to the
members of the Management Board as at Decem-
ber 31, 2010 (see Note 18).

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Supervisory Board Pursuant to the Articles of
Association, Supervisory Board members’ ﬁ xed
annual payment amounted to EUR 305 k (2009:
EUR 299 k).

Further information on disclosures according to
Section 314 paragraph 1 no. 6a HGB (German
Commercial Code) and IAS 24.16 is provided in the
remuneration report (see pages 90 to 93) that is an
integral part of these notes and, at the same time,
presented in the corporate governance chapter.

12.2 Commitments and contingencies
Other ﬁ nancial obligations from refurbishment
projects and ongoing maintenance amounted to
EUR 13,955 k (2009: EUR 3,862 k).

In respect of the sale of properties, at the disposal
date the Group accepted the commitment to com-
pensate the buyer for possible rent income short-
falls in case rental agreements existing with certain
tenants are not extended. Contingencies out of this
commitment amounted to EUR 5,486 k (Decem-
ber 31, 2009: EUR 4,768 k). The commitment
relates to a six-year rental period starting in 2014.
According to the details of the rental guarantees
and the lettability of the objects, the Company does
not expect a claim to come out of the rental guar-
antees. The same circumstances led to provisions
(see Note 11.3). The increase in this commitment
from EUR 4,768 k to EUR 5,486 k is solely based on
the change in net present value of EUR 718 k due
to the time shift and discount rate changes.

As at December 31, 2010, there was no rental
agreement for the administrative premises with a
minimum lease length. Out of other leasing agree-
ments, future ﬁ nancial obligations arose in an
amount of EUR 260 k.

Operating lease commitments – Group as lessor The
Group has entered into commercial property leases
on its investment property portfolio, consisting of
the Group’s surplus ofﬁ ce and manufacturing build-
ings. These non-cancellable leases have remaining
terms of between one and 25 years. Most leases
include an indexation clause, i. e. the rental charges
may be raised annually according to prevailing mar-
ket 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,
2010

Dec. 31,
2009

79,048

91,707

258,189

309,248

367,996

519,158

705,233

920,113

12.3 Consolidated cash ﬂ ow statement
The cash ﬂ ow statement shows how the cash
and cash equivalents of 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 dis-
tinction is made between cash ﬂ ows from operating
activities and cash ﬂ ows from investing and ﬁ nanc-
ing activities.

The cash flows from investing and financing
activities are calculated on the basis of payments,
whereas the cash ﬂ ows from operating activities are
derived indirectly based on the consolidated proﬁ t
for the year.

Cash ﬂ ows from operating activities for 2010
amounted to EUR 29,274 k, which represents a
decrease to the 2009 reporting period amount of
EUR 33,171 k. The decrease resulted mainly from
lower rental revenues due to the disposal of assets
that were only partly compensated by lower real
estate operating expenses.

The cash ﬂ ows from investing activities are mainly
comprised of the cash inﬂ ows resulting from the
sale of investment properties (EUR 163,003 k) and
EUR 13,546 k from repayments of loans granted
to joint ventures. A cash outﬂ ow of EUR 17,331 k
relates to payments for refurbishment measures
for re-letting, subsequent acquisition costs on
investment properties and prepayments on asset
acquisition.

The cash ﬂ ows from ﬁ nancing activities reﬂ ect loan
repayments of EUR 950,216 k and payments for the
termination of ﬁ nancial derivatives amounting to
EUR 15,345 k. Cash inﬂ ows of EUR 738,629 k relate
to loans taken out during reﬁ nancing. The capital
increase led to a net cash inﬂ ow of EUR 47,378 k.

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 balances.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

13 Related party relationships
13.1 Preliminary remarks
Related parties are members of the management
of alstria ofﬁ ce REIT-AG (Management Board and
Supervisory Board) and close family members of
these persons. Related parties also include en tities
with controlling inﬂ uence over the Group and
en tities with joint control over, or signiﬁ cant inﬂ u-
ence on, alstria ofﬁ ce REIT-AG.

Captiva 2 Alstria Holding S.à r.l. (the parent com-
pany), Captiva Capital Partners II SCA and Captiva
Capital II S.à r.l. (ultimate parent company) are con-
sidered to have a controlling inﬂ uence over alstria
ofﬁ ce REIT-AG. There was no group of entities with
joint control or signiﬁ cant inﬂ uence, with which
business was conducted in the ﬁ nancial year.

14 Earnings per share
Basic earnings per share are calculated as the quo-
tient of the proﬁ t attributable to the shareholders
and the weighted average number of shares out-
standing during the ﬁ nancial year – except for the
average number of treasury shares held by the
Company itself.

Diluted earnings per share amounts are calculated
by dividing the proﬁ t attributable to ordinary own-
ers of the parent company by the weighted aver-
age number of ordinary shares outstanding during
the year – except for the treasury shares held by
the Company itself – plus the weighted average
number of ordinary shares that would be issued on
the conversion of all the dilutive potential ordinary
shares into ordinary shares.

Joint ventures in which alstria ofﬁ ce REIT-AG has
joint control over are also related parties.

The following reﬂ ects the income and share data
used in the earnings per share computations:

Three members of the Supervisory Board of alstria
ofﬁ ce REIT-AG are also executive managers of
Natixis Capital Partners Limited and Natixis Capital
Partners GmbH. Therefore, related parties during
the ﬁ nancial year also included Natixis Capital Part-
ners Limited and Natixis Capital Partners GmbH.

In the view of alstria ofﬁ ce REIT-AG’s manage-
ment, all transactions with related parties have been
entered into on arm’s length terms or under condi-
tions in alstria ofﬁ ce REIT-AG’s favour.

13.2 Remuneration of

key management personnel

For a detailed description of the remuneration of
key management personnel, please refer to Note
12.1 and the remuneration report (see pages 90 to
93 in the corporate governance chapter).

13.3 Related party transactions
At the end of the reporting period, the Group had
receivables of EUR 1,967 k (December 31, 2009:
EUR 1,855 k) against the joint ventures. Further-
more, alstria ofﬁ ce REIT-AG received EUR 168 k
(2009: EUR 327 k) from the joint venture as com-
pensation for services connected to real estate.

Natixis Corporate and Investment Bank S.A. is one
of the lenders under the new syndicated loan and
provides up to EUR 60 million out of the up to
EUR 630 m available under the syndicated loan.

Further transaction with related parties did not arise
during the reporting period.

Proﬁ t attributable to the
shareholders (EUR k)

Average number of shares
outstanding (thousands)

Basic earnings per share
(EUR per share)

2010

2009

206

– 79,651

57,525

56,833

0.00

– 1.40

There were no dilution effects resulting from the
granted stock options or the convertible proﬁ t par-
ticipation rights during the period under review, as
the related vesting conditions were not satisﬁ ed as
at the end of the reporting period.

For further information concerning granted stock
options and convertible proﬁ t participation rights,
please see Notes 17 and 19.

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.

alstria ofﬁ ce REIT-AG is authorised to issue up to
EUR 27,516 k shares as conditional capital. These
contingently issuable shares could potentially dilute
basic earnings per share in the future, but were not
included in the calculation of diluted earnings per
share because they are non-dilutive for the period
presented.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

15 Dividends paid

EUR k

2010

2009

Equity dividends on ordinary
shares1 not recognised as a
liability as at Dec. 31, 2010

Dividend per share
(without treasury shares)

27,999

28,423

0.50

0.52

1 Refers to all shares except treasury shares at the date of

distribution.

The Annual General Meeting of alstria ofﬁ ce REIT-AG
held on June 16, 2010, resolved to distribute divi-
dends totalling EUR 27,999 k (EUR 0.50 per out-
standing share). The dividend was distributed
on June 17, 2010. The dividends paid out in
2009 totalled EUR 28,423 k (EUR 0.52 per share
outstanding).

16 Employees
During the period from January 1, 2010 to Decem-
ber 31, 2010, the Company had an average of 37
employees (January 1, 2009 to December 31, 2009:
on average 31 employees). The average was calcu-
lated by the fourth part of the total of employed
people at the end of each quarter. On Decem-
ber 31, 2010, 39 people (December 31, 2009: 32
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 pro-
gramme for the members of the Management
Board. The Supervisory Board ﬁ xed the details of
the stock option programme in accordance with the
authorisation granted by the General Meeting of
Shareholders of March 15, 2007, and granted a ﬁ rst
tranche of stock options to the Management Board.

The main terms of the stock option programme
resolved by the Supervisory Board can be summa-
rised as follows:

Under the stock option programme, up to
2,000,000 options entitling to the subscription
of a maximum of 2,000,000 shares of the Com-
pany with a total nominal value of EUR 2,000 k
may be granted to members 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 condi-
tions below. The exercise price for the stock options
granted in 2007 is EUR 16. The Supervisory Board

did not grant any stock options in 2010. In 2010
the stock option programme was replaced by a new
long-term incentive plan that is described in detail
in Note 18.

At the beginning of the reporting period, 515,625
stock options outstanding existed. Therefore, the
amount of stock options outstanding as at the end
of reporting period remained unchanged. None of
these stock options are exercisable. The personnel
expenses resulting from the allocation of the fair
values of the stock options at the granting date
over the vesting period amounted to EUR 0 k in
2010 (2009: EUR 91 k; Note 9.5).

The fair values of the options outstanding were
estimated at the respective granting dates using
a Black-Scholes model and partial-time barrier
options, taking into account the terms and condi-
tions upon which the instruments were granted.
The following table lists the inputs to the model
used for the determination of the fair value of the
stock options granted:

Fair value of stock options
granted on

Mar. 27,
2007

Sept. 5,
2007

Dividend yield (%)

Risk-free interest rate (%)

Expected volatility (%)

Expected life of option (years)

Exercise share price (EUR)

Labour turnover rate (%)

Stock price as of valuation
date (EUR)

Estimated fair value of one
stock option at the granting
date (EUR)

3.60

4.21

30.00

4.50

16.00

0.00

3.60

4.29

30.00

4.50

16.00

0.00

16.00

13.93

3.17

2.28

Expected volatility is based on the historical volatil-
ity of comparative listed companies and was calcu-
lated as an average of these comparables.

The term of each stock option is seven years
beginning with the respective issue date. The
stock options may only be exercised if the cur-
rent stock exchange price of the Company’s shares
exceeds the stock exchange price of the Com pany’s
shares on the issue date by 20 % or more for at
least seven non-subsequent trading days of the
Frankfurt Stock Exchange prior to the commence-
ment of the respective exercise period. The stock
options may only be exercised after the expiration
of a vesting period of two years, and then during
the four exercise periods each year. Each exercise

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

period lasts 30 days, commencing with the day of
announcement of the results for the ﬁ rst, second
and third quarter, and the day of the Company’s
Annual General Meeting. There are no cash settle-
ment alternatives.

18 Share-based remuneration
On March 2, 2010, the Company’s Supervisory
Board resolved to establish a new share-based
remuneration system, the Long Term Incentive Plan
(LTIP), for members of the Management Board and
granted the ﬁ rst tranche of virtual shares to the
Management Board.

Under the LTIP, alstria ofﬁ ce REIT-AG grants virtual
shares which give an entitlement to conversion into
cash payments after four years.

The amount of the conversion payment is based
on the number of virtual shares, multiplied by the
average stock market price of alstria’s shares on the
Frankfurt Stock Exchange during the last 60 trad-
ing days prior to the relevant maturity date, plus an
amount equal to the sum of the dividend per share
paid by the Company to its shareholders between
the grant date and the maturity date, but in no
event higher than 250 % of the average stock mar-
ket price of alstria’s shares on the Frankfurt Stock
Exchange in the last 60 trading days prior to the
relevant grant date, multiplied by a speciﬁ ed dis-
cretionary factor.

The discretionary factor shall be a multiplier that
can vary between 0.8 and 1.2, and is subject to the
individual performance of each participant during
the respective holding period.

The determination of virtual shares that vest will
depend, on a 50/50 basis, on the achievement of
the alstria share price (absolute total shareholder
return) and on the relative performance of alstria’s
share in relation to the EPRA REIT Index Continental
Europe (relative total shareholder return).

Since payment per vested virtual share depends on
the quoted 60 trading days average price of alstria’s
shares, the quoted average price of the last 60 trad-
ing days prior to the end of the reporting period
essentially represents the fair value of each virtual
share.

At the end of the reporting period, there were
99,009 virtual shares that were granted on
March 2, 2010.

In 2010, this generated remuneration expenses
amounting to EUR 351 k, which equals the provi-
sion set aside for virtual shares. The Group recog-
nises the liabilities arising from the vested virtual
shares under other provisions.

19 Convertible proﬁ t participation

rights programme

On September 5, 2007, the Supervisory Board of
the Company resolved the issuance of convertible
proﬁ t participation certiﬁ cates (“certiﬁ cates”) to
employees of the Company and to employees of
companies in which alstria ofﬁ ce REIT-AG, directly
or indirectly, holds a majority interest. Members of
alstria ofﬁ ce REIT-AG’s Management Board are not
considered employees of the Company in terms
of this convertible proﬁ t participation rights pro-
gramme. With its resolution, the Supervisory Board
ﬁ xed the details of the convertible proﬁ t partici-
pation rights programme in accordance with an
authorisation granted by the general meeting of
shareholders of March 15, 2007.

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 pro-
gramme, 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, 114,000 certiﬁ cates on June 11, 2009 and a
further 61,500 certiﬁ cates on June 17, 2010. Total
expenses relating to convertible proﬁ t participation
rights were EUR 479 k in 2010 (Note 9.5). In 2010,
3,100 participation rights have been terminated
(2009: 1,100 participation rights).

None of the convertible proﬁ t participation rights
expired during the reporting period. At the end of
the reporting period, 216,900 convertible proﬁ t
participation rights were outstanding.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

The certiﬁ cates are issued as non-transferable rights
and are neither sellable nor pledgeable or otherwise
chargeable.

the 61,500 certiﬁ cates issued on June 17, 2010, this
market condition was fulﬁ lled until the end of the
ﬁ nancial year 2010.

The maximum term of each certiﬁ cate is ﬁ ve years.

During its term, each certiﬁ cate entitles the holder
to a preferred disbursement from the Company’s
annual net proﬁ t. The proﬁ t share corresponds 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 business year of
the Company, the proﬁ t share is reduced pro rata
temporis.

Each certiﬁ cate shall be converted into one non-
par-value bearer share of the Company on the sec-
ond, third, fourth or ﬁ fth anniversary date of the
issue date if the then current stock exchange price
of the Company’s shares has exceeded the stock
exchange price of the Company’s shares on the
issue date by 5 % or more on at least seven non-
subsequent trading days (market condition). For the
114,000 certiﬁ cates issued on June 11, 2009, and

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 proportion-
ate amount in the Company’s share capital of the
shares each certiﬁ cate entitles the holder to sub-
scribe for and shall be payable in addition to the
offer price.

The fair values of the inherent options for conver-
sion were estimated at the respective granting dates
using a binary barrier option model based on the
Black-Scholes model, since the conversion will be
affected automatically once the barrier has been
reached. The model takes into account the terms
and conditions upon which the instruments were
granted.

The following table lists the inputs to the model
used for the determination of the fair value of the
options for conversion:

Granting date of tranche

Dividend yield (%)

Risk-free interest rate (%)

Expected volatility (%)

Expected life of option (years)

Exercise share price (EUR)

Labour turnover rate (%)

Stock price as of valuation date (EUR)

Estimated fair value of one option for conversion
at the granting date

Expected volatility is based on the historical volatil-
ity of comparative listed companies and was calcu-
lated as an average of these comparables.

20 Financial risk management
The ﬁ nancial instruments chieﬂ y used by the Group
are bank loans 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
Company also has various ﬁ nancial assets, such as
cash and short-term deposits, which arise directly
from business activities.

Sept. 6,
2007

Jun. 6,
2008

Jun. 11,
2009

Jun. 17,
2010

3.70

4.20

30.00

2.00

10.00

13.18

4.70

4.65

35.00

2.00

10.00

11.03

8.68

1.71

73.00

2.00

10.00

5.99

6.06

0.47

58.00

2.00

10.00

8.25

10.77

8.76

4.01

6.19

Derivative ﬁ nancial instruments include interest
swaps and caps. The purpose of these derivative
ﬁ nancial instruments is to hedge against interest
risks arising from the Company’s business activities
and its sources of ﬁ nancing.

The main risks arising from the Group’s ﬁ nancial
instruments are cash ﬂ ow interest rate risks and
liquidity risks. The Group is not exposed to any sig-
niﬁ cant credit risks. The amount that best presents
the maximum credit risk is the carrying amount of
ﬁ nancial assets. The Management Board decides on
strategies and processes for managing speciﬁ c risk
types. These are presented on the following pages.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

Risks that could arise as a result of the ﬁ nancial cri-
sis are seen mainly in a potential default of payment
by a major tenant. Due to the fact that all of the
Company’s main tenants are public institutions or
still highly rated, the risk of default of payments is
currently limited.

alstria ofﬁ ce REIT-AG’s syndicated loan facility
agreement allows for a loan to value (LTV) ratio
of up to 70 %. After the loan restructuring, the
Company managed to keep the LTV ratio on the
relevant test date at 58.73 %. With the measures
implemented since the beginning of 2010, the risk
of a breach of covenant was effectively countered.

EXISTING LOAN AGREEMENTS
AS PER DECEMBER 31, 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 on Dec. 31, 2010

Principle amount
outstanding
(EUR k)

LTV
covenant
(%)

Maturity

Jul. 20, 2015

572,809

Oct. 20, 2015

Dec. 31, 2014

Jun. 30, 2014

Oct. 20, 2014

Jan. 31, 2017

47,902

37,283

31,552

32,774

74,644

796,964

70.0

80.0

65.0

61.0

75.0

LTV
(%)

57.38

74.63

56.49

60.85

58.98

61.64

58.73

Apart from this, the Group is not exposed to any
commodity or currency risks.

Interest rate risk The following table sets out the
carrying amount, by maturity, of the Group’s ﬁ nancial
instruments which are exposed to interest rate risk:

EUR k

< 1 year

1–2 years

2–3 years

3–4 years

> 4 years

Total

Financial year as at Dec. 31, 2010

Variable interest

Syndicated loan

Non-recourse loans

Total

EUR k

Financial year as at Dec. 31, 2009

Variable interest

Syndicated loan

Non-recourse loans

Total

1,014

572,809

67,016

47,902

117,959

67,016

620,711

690,768

< 1 year

1–2 years

2–3 years

3–4 years

> 4 years

Total

86,632

751,387

927

971

87,559

752,358

1,013

1,065

838,019

161,517

165,493

161,517

1,003,512

Due to the extensive portfolio of non-current ﬁ nan-
cial liabilities with a variable interest risk, alstria
ofﬁ ce REIT-AG is exposed to risks from ﬂ uctu ations
in market interest rates. The interest base for the
ﬁ nancial liability (loan) is the three-month EURIBOR
rate, 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 instruments relate to interest

swaps in which the Company agrees to exchange
with contracting partners, at speciﬁ ed intervals, the
difference between ﬁ xed and variable interest rate
amounts calculated by reference to an agreed-upon
notional principal amount. In addition, interest caps
were acquired; that is, the interest is capped at a
predetermined maximum. If the maximum interest
rate is exceeded, the difference between the actual
interest rate and the cap rate is paid out.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

The derivative ﬁ nancial instruments of alstria ofﬁ ce
REIT-AG are presented below:

Reverse swap

3.6165

Nov. 29, 2011

−625,000

17,595

Product

Cap

Swap

Interest rate derivatives –
held for trading

Cap

Swap

Dec. 31, 2010

Dec. 31, 2009

Strike p.a.
(%)

Maturity date

Notional
(EUR k)

Fair value
(EUR k)

Notional
(EUR k)

Fair value
(EUR k)

4.9000

Dec. 20, 2012

75,000

100

4.1160

Jul. 10, 2013

47,902

−3,412

100,000

−7,331

3.6165

Nov. 29, 2011

625,000

−17,595

−7,231

383

132

3.3000 Oct. 20, 2014

25,139

3.3000 Oct. 20, 2014

8,649

−3,392

135

25,139

8,649

3.6165 Nov. 29, 20111

3.9087

Jan. 20, 20121

4.9000 Dec. 20, 20121

3.1925 Nov. 29, 20111

625,000

−27,895

148,785

−7,828

34,100

−3,170

21,880

−781

2.1940

Dec. 31, 2014

37,283

−420

4.6000 Oct. 20, 2015

95,000

−3,346

95,000

−1,854

2.9900

Jul. 20, 2015

472,500

−18,076

Interest rate derivatives –
cash ﬂ ow hedges

Total

1 Meanwhile terminated before original maturity date.

−21,661

−25,053

−41,013

−48,244

These interest rate swaps and interest rate caps are
used to hedge the obligation underlying the loans.

a) Impact on equity

The following table shows the sensitivity of the
Company’s loans on consolidated proﬁ t or loss and
equity accordingly to a reasonably possible change
in the interest rates (due to the effect on the ﬂ oat-
ing interest loans). All variables remain constant;
the effects from the derivative ﬁ nancial instruments
were not factored into this calculation.

FINANCIAL DERIVATIVES QUALIFYING FOR
CASH FLOW HEDGE ACCOUNTING

EUR k

+ 80 bps

– 100 bps

2010

2009

18,222

11,670

– 23,810

– 14,794

b) Impact on income statement

INTEREST EXPENSES P.A.

EUR k

+ 80 bps

– 100 bps

2010

5,733

2009

6,674

– 7,938

– 12,764

FINANCIAL DERIVATIVES NOT QUALIFYING FOR
CASH FLOW HEDGE ACCOUNTING

EUR k

+ 80 bps

– 100 bps

2010

1,011

2009

5,797

– 1,230

– 7,555

The fair market value of derivative ﬁ nancial instru-
ments is also subject to interest rate risks. A change
in the interest rate would give rise to the following
changes of the respective fair market values:

Liquidity Risk The Company continually monitors
the Group-wide 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 analy-
sis. The long-term reﬁ nancing strategy of the Group

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

ensures the medium and long-term liquidity require-
ments. Such forecasting takes into consideration the
Group’s debt ﬁ nancing plans, covenant compliance,
compliance with internal balance sheet targets and,
if applicable, external regulatory or legal require-
ments – for example, G-REIT equity ratio.

As at the end of the reporting period, the nominal
ﬁ nancial liabilities had the following maturities in
line with their contractual maturity (the basis is the
three-month EURIBOR as at December 31, 2010
plus the weighted average margin of 154 basis
points for the Group’s loans).

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, 2010

Interests

Loans

22,709

22,431

22,485

21,505

12,468

3,255

104,853

3,581

3,698

3,829

97,352

622,630

65,876

796,965

Financial derivatives

26,503

11,314

12,398

13,596

8,542

Trade payables

Other current liabilities

3,024

4,222

72,353

3,024

4,222

60,039

37,443

38,712

132,453

643,640

69,131

981,417

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

88,573

758,189

Financial derivatives

25,386

18,923

Trade payables

Other current liabilities

3,692

6,599

6,447

2,027

3,274

6,681

2,079

2,070

6,269

3,042

65,968

95,519

95,000

1,041,387

1,917

51,570

3,692

6,599

144,307

800,584

11,747

10,831

103,705

98,042

1,169,216

The most signiﬁ cant liability consists of syndicated
loans from ﬁ ve banks with a nominal amount of
EUR 572,809 k. The second major part of liabilities
is made up of loans entered into with several banks
as a result of the Group’s reﬁ nancing strategy, with
a nominal amount of EUR 224,156 k (December
31, 2009: EUR 198,550 k). The entire amount of
the loans has been utilised as at the end of the
reporting period. To secure these liabilities, receiva-
bles from rental and property purchase agreements
as well as insurance receivables and derivative
ﬁ nancial instruments were assigned to the lenders;
liens were granted on bank accounts and charges
on the land registered. The obligations arising from
the ﬂ oating interest bank loans were fully secured.
Land charges for real estate property with a carry-
ing amount of EUR 1,356,314 k were furnished as
security.

Capital management Capital management activ-
ities are aimed at maintaining the Company’s clas-
siﬁ cation as a REIT in order to support its business
activities and maximise shareholder value.

The capital structure is monitored by the Com-
pany using the key performance indicators (KPIs)
re levant for classiﬁ cation as a REIT. The REIT equity
ratio, being the ratio of equity to immovable assets,
is the most important KPI. According to the Group’s
strategy, the REIT equity ratio shall be between
45 % and 55 % within the relevant term provided
by the REIT law. The G-REIT status is unaffected as
long as the G-REIT ratio at the end of the business
year is not below 45 % for three consecutive busi-
ness years.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

The following KPIs are also used to manage capital:

KPIS ACCORDING TO G-REIT LAW

Equity ratio acc. to
G-REIT law

Immovable assets

Revenues gained from
immovable assets

Income gained from
disposal of immovable
assets

2010

2009

G-REIT
covenant

49.82

40.26

90.12

89.20

> 45

> 75

100

> 75

20.34

9.93

< 501

1 Within ﬁ ve years based on the average property value during

this period.

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, 2010

Equity-account-
ed investments

Financial assets

Trade
receivables

Accounts
receivable from
joint ventures

Derivatives

Receivables and
other assets

Cash and cash
equivalents

Total

Liabilities as per
balance sheet
(EUR k)
as of
Dec. 31, 2010

Long-term loans

Derivatives

Short-term loans

Trade payables

Other liabilities

Total

Derivative
hedge
accounting

Available
for sale

Assets at
fair value
through
proﬁ t
and loss

32,385

Loans and
receivables

4,117

1,967

32,385

4,117

1,967

17,796

17,615

181

8,137

5,382

2,755

120,788

185,191

120,788

5,382

129,627

50,000

181

Total

Fair value

32,385

4,117

1,967

17,796

2,755

120,788

179,809

Carrying
amount

Non-
ﬁ nancial
instruments

Financial instruments

Liabilities
at fair value
through
proﬁ t
and loss

Other
liabilities

Derivative
hedge
accounting

Total

Fair value

786,410

42,849

7,796

3,024

7,315

847,394

6,528

793,384

21,007

21,842

42,849

7,796

3,024

787

7,796

3,024

787

7,796

3,024

787

21,007

804,991

21,842

847,840

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

Carrying
amount

Non-
ﬁ nancial
instruments

Financial instruments

Assets as per
balance sheet
(EUR k)
as of
Dec. 31, 2009

Equity-account-
ed investments

Financial assets

Trade
receivables

Accounts
receivable from
joint ventures

Derivatives

Tax receivables

Receivables and
other assets

Cash and cash
equivalents

Total

Liabilities as per
balance sheet
(EUR k)
as of
Dec. 31, 2009

Long-term loans

Derivatives

Short-term loans

Trade payables

Other liabilities

Total

Assets at
fair value
through
proﬁ t
and loss

9,046

100

515

Loans and
receivables

5,694

1,855

9,046

351

5,694

1,855

615

33,483

4,152

29,331

146,818

197,866

146,818

Derivative
hedge
accounting

Available
for sale

Total

Fair value

351

9,046

351

9,046

351

5,694

1,855

615

1,855

615

29,331

146,818

4,152

183,701

9,146

515

351

193,713

Carrying
amount

Non-
ﬁ nancial
instruments

Financial instruments

Liabilities
at fair value
through
proﬁ t
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

The fair value of the derivative ﬁ nancial instruments
and the loans was determined by an independent
expert by discounting the expected future cash
ﬂ ows at prevailing market interest rates.

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Net gains and losses from ﬁ nancial instruments are
as follows:

21 Signiﬁ cant events after the end

of the reporting period

EUR k

2010

2009

Financial instruments at fair
value through proﬁ t or loss

– 35,672

– 23,294

Loans and receivables

– 472

– 311

Total

– 36,144

– 23,605

Net losses during the reporting period resulted from
valuation losses and, in the case of loans and receiv-
ables, from the write-down on trade receivables.

Fair value estimation Financial instruments which
are measured in the balance sheet at fair value
require the disclosure of fair value measurements
by level of the following fair value measurement
hierarchy:

> Quoted prices (unadjusted) in active markets for

identical assets or liabilities (level 1)

> Inputs other than quoted prices included within
level 1 which are observable for the asset or liabil-
ity, 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, unob-
servable inputs) (level 3)

The transfer of the possession, beneﬁ ts and burden
of the property acquisition in Karlsruhe as described
in Note 10.1 took place in January 2011.

Binding and notarised agreements for three more
properties located in Hamburg were signed in Janu-
ary and February 2011. The transfer of the posses-
sion, beneﬁ ts and burden is expected to take place
at the end of the ﬁ rst quarter of 2011.

The transfer of the possession, beneﬁ ts and burden
of the asset held for sale as shown at the end of the
reporting period became effective in January 2011.

22 Utilisation of exempting provisions
The following German subsidiaries included in the
consolidated ﬁ nancial statements of alstria ofﬁ ce
REIT-AG have made use of the exemption granted
in Section 264b HGB:

> alstria ofﬁ ce Bamlerstrasse GmbH & Co. KG,

Hamburg

> alstria ofﬁ ce Gänsemarkt Drehbahn GmbH &

Co. KG, Hamburg

> alstria ofﬁ ce Grundbesitz 2 GmbH & Co. KG,

Hamburg

> alstria ofﬁ ce Halberstädter Str. GmbH & Co. KG,

Hamburg

All of the Group’s ﬁ nancial instruments which are
measured in the balance sheet at fair value are
valued using the level 2 valuation measurement
approach. This only applies to the Group’s ﬁ nancial
derivatives, as there are no other ﬁ nancial instru-
ments that are measured in the balance sheet at
fair value.

> alstria ofﬁ ce Hamburger Str. 43 GmbH &

Co. KG, Hamburg

> alstria ofﬁ ce Ludwig-Erhard-Strasse GmbH &

Co. KG, Hamburg

> alstria ofﬁ ce Mannheim/Wiesbaden GmbH &

Co. KG, Hamburg

> alstria ofﬁ ce Steinstrasse 5 GmbH & Co. KG,

Hamburg

> Alstria Sechste Hamburgische Grundbesitz

GmbH & Co KG, Hamburg

The fair value of ﬁ nancial instruments that are not
traded in an active market (for example, over-the-
counter derivatives) is determined by using valu-
ation techniques. These valuation techniques max-
imise the use of observable market data where it
is available and rely as little as possible on entity-
speciﬁ c estimates. If all signiﬁ cant inputs required to
ascertain the fair value of an instrument are observ-
able, the instrument is included in level 2.

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

23 Disclosures pursuant to

Wertpapier handelsgesetz
[German Securities Trading Act]

1 Ad-hoc announcement

Date

Topic

Jul. 20, 2010

alstria successfully reﬁ nanced EUR 646 m

Language

German/English

Sept. 22, 2010

Capital increase of up to 5,599,999 new shares to ﬁ nance further growth

German/English

Sept. 22, 2010

alstria ofﬁ ce REIT-AG successfully executed capital increase

German/English

2 Directors’ dealings
The following transactions were executed in 2010
and reported to alstria ofﬁ ce REIT-AG:

Name of person – sub ject to
the disclosure requirement

Function

Classiﬁ cation
of the ﬁ nancial
instrument

Olivier Elamine

Alexander Dexne

Member of the Management Board

3 Voting rights notiﬁ cations

No.

Date

Shareholders

Mar. 11, 2010

Mourant Limited

Mar. 11, 2010

Mourant & Co. Limited

Mar. 11, 2010

Juris Limited

Apr. 8, 2010

Mourant Limited

Apr. 8, 2010

State Street AIS Europe LLC

Apr. 8, 2010

State Street Corporation

Sept. 30, 2010

JPMorgan Chase & Co.

Sept. 30, 2010

JPMorgan Chase Bank

Sept. 30, 2010

J.P. Morgan International Inc.

Sept. 30, 2010

Bank One International Holdings Corporation

Sept. 30, 2010

J.P. Morgan International Finance Limited

Sept. 30, 2010

J.P. Morgan Capital Holdings Limited

Sept. 30, 2010

J.P. Morgan Chase (UK) Holdings Limited

Sept. 30, 2010

J.P. Morgan Chase International Holdings

Sept. 30, 2010

J.P. Morgan Securities Ltd.

Sept. 30, 2010

JPMorgan Chase & Co.

Sept. 30, 2010

JPMorgan Chase Bank

Sept. 30, 2010

J.P. Morgan International Inc.

Sept. 30, 2010

Bank One International Holdings Corporation

Sept. 30, 2010

J.P. Morgan International Finance Limited

Sept. 30, 2010

J.P. Morgan Capital Holdings Limited

Sept. 30, 2010

J.P. Morgan Chase (UK) Holdings Limited

Sept. 30, 2010

J.P. Morgan Chase International Holdings

Sept. 30, 2010

J.P. Morgan Securities Ltd.

ISIN

DE000A0LD2U1

Voting rights (new)
(%)

52.04

52.98

7.31

0.07

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

Trans action Place

Trans action date

(EUR) Number of shares

Buy

XETRA

Apr. 7, 2010

8.47

8.55

10,500

8,500

Price per share

Deal volume
(EUR)

88,935

72,670

Strike threshold
(%)

Date of change

Attributed
shares

Disclosure according to

Language

50, 30, 25, 20, 15, 10, 5, 3

Dec. 22, 2008 Yes

50, 30, 25, 20, 15, 10, 5, 3

Dec. 22, 2008 Yes

50, 30, 25, 20, 15, 10, 5, 3

Dec. 22, 2008 Yes

50, 30, 25, 20, 15, 10, 5, 3

Apr. 1, 2010 No

§ 26 (1) WpHG

50, 30, 25, 20, 15, 10, 5, 3

Apr. 1, 2010 Yes

§ 26 (1) WpHG

50, 30, 25, 20, 15, 10, 5, 3

Apr. 1, 2010 Yes

§ 26 (1) WpHG

5, 3

Sept. 23, 2010 Yes

Sept. 23, 2010 No

Sept. 24, 2010 Yes

Sept. 24, 2010 No

§ 26 (1) WpHG

English

German/
English

English

74
74

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

No.

Date

Shareholders

Voting rights (new)
(%)

Oct. 5, 2010

Morgan Stanley Investment Management Limited

Morgan Stanley International Holdings Inc

Morgan Stanley International Limited

Morgan Stanley Group (Europe)

Morgan Stanley Investments (UK)

Morgan Stanley

Oct. 14, 2010

Juris Limited

Oct. 14, 2010

State Street Corporation

Oct. 14, 2010

State Street AIS Europe LLC

Oct. 14, 2010

State Street (Jersey) Limited

Oct. 14, 2010

State Street Administration Services (Ireland) Limited

Jan. 5, 2011

Morgan Stanley

Morgan Stanley International Holdings Inc

Morgan Stanley International Limited

Morgan Stanley Group (Europe)

Morgan Stanley Investments (UK)

Morgan Stanley Investment Management Limited

Jan. 10, 2011

Morgan Stanley

Jan. 10, 2011

Morgan Stanley International Holdings Inc

Jan. 10, 2011

Morgan Stanley International Limited

Jan. 10, 2011

Morgan Stanley Group (Europe)

Jan. 10, 2011

Morgan Stanley Investments (UK)

Jan. 10, 2011

Morgan Stanley Investment Management Limited

Feb. 16, 2011

Morgan Stanley

Feb. 16, 2011

Morgan Stanley International Holdings Inc

Feb. 16, 2011

Morgan Stanley International Limited

Feb. 16, 2011

Morgan Stanley Group (Europe)

Feb. 16, 2011

Morgan Stanley Investments (UK)

Feb. 16, 2011

Morgan Stanley Investment Management Limited

3.22

3.25

48.17

2.99

3.02

2.99

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

75
75

Strike threshold
(%)

Date of change

Attributed
shares

Disclosure according to

Language

Sept. 23, 2010 Yes

50, 30, 25, 20, 15, 10, 5, 3

May 13, 2010 No

Sept. 23, 2010 Yes

Sept. 23, 2010 No

Dec. 23, 2010 Yes

Jan. 3, 2011 Yes

Feb. 9, 2011 Yes

§ 26 (1) WpHG

English

Notes to the consolidated ﬁ nancial statements

alstria Financial Report 2010

24 Declaration of compliance pursuant
to Section 161 AktG [Aktiengesetz:
German Stock Corporation Act]

The declaration of compliance required by Section
161 AktG regarding the recommendations of the
German Corporate Governance Code developed
by the government commission has been submit-
ted by the Management Board and the Super-
visory Board and is made permanently available to
the shareholders on alstria ofﬁ ce REIT-AG’s web-
site (www.alstria.com). It is included in the declar-
ation of corporate management according to Sec-
tion 289a HGB.

25 Auditor’s fees
At June 16, 2010, the general meeting elected
PricewaterhouseCoopers AG Wirtschaftsprüfungs-
gesellschaft, Lise-Meitner-Strasse 1, Berlin, to audit
the separate and consolidated ﬁ nancial statements
for the ﬁ nancial year 2010. The fee expenses
in 2010 are comprised as follows:

EUR k

Audit services

Other audit-related services

2010

419

161

2009

366

27 Supervisory Board
Pursuant to the Company’s Articles of Association
(Section 9), the Supervisory Board consists of six
members, which are elected by the general meet-
ing of shareholders. The expiration of the term of
ofﬁ ce is identical for all members, i. e. the close of
the annual general meeting of shareholders in the
year 2011.

During the ﬁ nancial year 2010, the members of the
Supervisory Board were:

Alexander Stuhlmann (Chairman)
Hamburg, Germany
Management Consultant;
Manager of Alexander Stuhlmann GmbH
> until Jun. 25, 2010: BVV Versicherungsverein

des Bankgewerbes a.G., Member of the
Supervisory Board

> until Jun. 25, 2010: BVV Versorgungskasse des

Bankgewerbes e.V., Member of
the Supervisory Board

> until Jun. 25, 2010: BVV Pensionsfonds des

Bankgewerbes AG, Member of
the Supervisory Board

> Capital Stage AG,

Vice-chairman of the Supervisory Board

26 Management Board
During the ﬁ nancial year, the Company’s members
of the Management Board were:

> Euro-Aviation Versicherungs AG,

Chairman of the Supervisory Board
> Frank Beteiligungsgesellschaft mbH,

Mr Olivier Elamine, Chief Executive Ofﬁ cer (CEO)
Mr Alexander Dexne, Chief Financial Ofﬁ cer (CFO)

The attached remuneration report (see pages 90
to 93) contains details of the principles for the deﬁ -
nition of the Management Board’s and Supervisory
Board’s remuneration.

Chairman of the Advisory Board

> until May 10, 2010: Hamburger Feuerkasse

Versicherung AG,
Vice-chairman of the Supervisory Board

> HASPA Finanzholding,

Member of the Board of Trustees

> HCI Capital AG,

Member of the Supervisory Board

> until Jun. 15, 2010: Jahr Holding GmbH &

Co. KG,
Chairman of the Advisory Board

> LBS Bausparkasse Schleswig-Holstein-

Hamburg AG,
Member of the Supervisory Board

> Ludwig Görtz GmbH,

Member of the Administrative Board

> Otto Dörner GmbH & Co. KG,
Chairman of the Advisory Board

> Siedlungsbaugesellschaft Hermann und

Paul Frank mbH & Co. KG,
Chairman of the Advisory Board

> Studio Hamburg Berlin Brandenburg GmbH,

Member of the Advisory Board

alstria Financial Report 2010

Notes to the consolidated ﬁ nancial statements

John van Oost (Vice Chairman)
Singapore, Singapore
Managing Partner at
Natixis Capital Partners
> agapia Holding GmbH

(formerly Captiva Healthcare Holding GmbH),
Director

> Axiom Asset 1 GmbH & Co. KG, Director
> Axiom Asset 2 GmbH & Co. KG, Director
> Axiom Immo GP GmbH

Richard Mully
Dublin, Ireland
Investment Manager at
Grove International Partners (UK) Ltd.
> Grove International Partners (UK) Ltd,

Managing Partner

> Grove International Partners LLP,

Managing Partner

> until Jul. 12, 2010: Apellas Holdings B.V.,

Director

(formerly Captiva Industrial GP GmbH), Director

> Douglasshire International Holdings B.V.,

> Axiom Immo Holding GmbH

Director

(formerly Captiva Industrial Holding GmbH),
Director

> Axiom Immo Management GmbH, Director
> Captiva Capital LP. Inc., Director
> Captiva Capital Partners Pte Ltd., Director
> Captival International Partners LLP, Director
> CDS Costruzioni SpA, Board Member
> CDS Holding SpA, Board Member
> Fluxus Right Management, Director
> Green Cove Capital Management SaRL,

> Event Hospitality Group B.V., Director
> Hansteen Holdings PLC, Director
> until Nov. 9, 2010: Hellenic Land Holdings B.V.,

Director

> Karta Realty Ltd., Director
> until Jan. 10, 2010: Nowe Ogrody 2 Sp. z o.o.,

Director

> until Jan. 10, 2010: Nowe Ogrody 3 Sp. z o.o.,

Director

> until Jan. 10, 2010: Nowe Ogrody 4 Sp. z o.o.,

Board Member

Director

> Natixis Capital Partners GmbH, Board Member
> Natixis Capital Partners Ltd.,

> until Jan. 10, 2010: Nowe Ogrody Sp. z o.o.,

Director

Managing Partner

> Polish Investment Real Estate Holding B.V.,

> Natixis Capital Partners Srl, Board Member
> Ocala Capital Management LLC, Board Member

Dr Johannes Conradi
Hamburg, Germany
Lawyer and Partner at
Freshﬁ elds Bruckhaus Deringer LLP
> 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
> Elbphilharmonie Hamburg Bau GmbH & Co. KG,

Member of the Supervisory Board

Roger Lee
Paris, France
Real Estate Investment Manager at
Natixis Capital Partners Ltd.
> Natixis Capital Partners Ltd., Director
> Caposition SARL, Director

Director

> Polish Investments Real Estate Holding II B.V.,

Director

> SI Real Estate Holding B.V., Director
> until Jan. 10, 2010: Spazio Industriale II B.V.,

Director

> SREI DI Properties, Inc., Director

Daniel Quai
Crans, Switzerland
Partner at Natixis Capital Partners Ltd.
> Captiva International Partners LLP, Partner
> CDS Costruzioni SpA, Director
> CDS Holdings SpA, Director
> CDS Project Development BV, Director
> Mercurio Asset Management SGR SpA, Director
> Natixis Capital Partners Ltd., Director
> Natixis Capital Partners GmbH, Director

Management compliance statement

alstria Financial Report 2010

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 nancial posi-
tion and results of operations of the Group, and
the Group management report gives a true and
fair view of the business performance 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 18, 2011

The Management Board

Olivier Elamine
CEO

Alexander Dexne
CFO

alstria Financial Report 2010

Auditors’ report

AUDITORS’ REPORT

We have audited the consolidated ﬁ nancial state-
ments prepared by alstria ofﬁ ce REIT-AG, Hamburg,
comprising the statement of financial position,
income statement and statement of comprehen-
sive income, statement of changes in equity, cash
ﬂ ow statement and notes to the consolidated ﬁ nan-
cial statements, together with the group manage-
ment report for the business year from January 1 to
December 31, 2010. The preparation of the consoli-
dated ﬁ nancial statements and the group manage-
ment report in accordance with the IFRSs, as adopted
by the EU, and/or the additional requirements of
German commercial law pursuant to § (Article) 315a
Abs. (paragraph) 1 HGB (“Handelsgesetzbuch”:
German Commercial Code) is the responsibility of
the parent Company’s Board of Managing Directors.
Our responsibility is to express an opinion on the
consolidated ﬁ nancial statements and on the group
management report based on our audit.

We conducted our audit of the consolidated ﬁ nan-
cial statements in accordance with § 317 HGB and
German generally accepted standards for 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 misstate-
ments materially affecting the presentation of the
net assets, ﬁ nancial position and results of opera-
tions in the consolidated ﬁ nancial statements in
accordance with the applicable ﬁ nancial reporting
framework and in the group management report
are detected with reasonable assurance. Knowl-
edge of the business activities and the economic
and legal environment of the Group and expecta-
tions as to possible misstatements are taken into
account in the determination of audit procedures.
The effectiveness of the accounting-related inter-
nal control system and the evidence supporting the
disclosures in the consolidated ﬁ nancial statements
and the group management report are examined
primarily on a test basis within the framework of

the audit. The audit includes assessing the annual
ﬁ nancial statements of those entities included in
consolidation, the determination of the entities to
be included in consolidation, the accounting and
consolidation principles used and signiﬁ cant esti-
mates made by the Company’s Board of Managing
Directors, as well as evaluating the overall presen-
tation of the consolidated ﬁ nancial statements and
the Group management report. We believe that our
audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion based on the ﬁ ndings of our audit
the consolidated ﬁ nancial statements comply with
the IFRSs, as adopted by the EU, and/or the addi-
tional requirements of German commercial law pur-
suant to § 315a Abs. 1 HGB and give a true and
fair view of the net assets, ﬁ nancial position and
results of operations of the Group in accordance
with these requirements. The group management
report is consistent with the consolidated ﬁ nancial
statements and as a whole provides a suitable view
of the Group’s position and suitably presents the
opportunities and risks of future development.

Berlin, February 23, 2011

PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

sgd. Gregory Hartman
Wirtschaftsprüfer
(German Public Auditor)

sgd. i.V. Dr. Kay Lubitzsch
Wirtschaftsprüfer
(German Public Auditor)

Corporate governance

alstria Financial Report 2010

CORPORATE GOVERNANCE

REPORT OF
THE SUPERVISORY BOARD

Supervision and advising of the Company’s
management
During the reporting year, the Supervisory Board
advised and supervised the Management Board of
the Company in accordance with statutory provi-
sions and the Company’s articles of association. The
Supervisory Board was also intensively involved in
matters of material importance to the Company.

During the meetings of the Supervisory Board and
its committees, the Management Board reported
regularly, promptly and in detail on the develop-
ment of the business and ﬁ nancial situation of the
Company, and on important business events, cur-
rent risks, risk management and on company com-
pliance. The Management and Supervisory Boards
cooperated to set the strategic direction of the Com-
pany. Between meetings, the Management Board
further informed the Supervisory Board orally and
in writing of important events. The chairman of the
Supervisory Board regularly met with the Manage-
ment Board to exchange information and advice.

The Management Board consulted the Supervi-
sory Board intensively on all transactions requiring
its approval. After careful examination and consul-
tation, the Supervisory Board voted on all matters
brought to its attention as the law, the articles of
association or rules of procedure of either the Man-
agement Board or the Supervisory Board dictated.
This included the Company’s budget planning.

In the ﬁ nancial year 2010, the Supervisory Board
had four ordinary and two extraordinary meetings.
All members of the Supervisory Board were present
for nearly every meeting or participated by telecon-
ference; the entire Supervisory Board convened in all
but one meeting. Moreover, one written resolution

was adopted after circulation of detailed documents
to the members. Two additional meetings of the
Supervisory Board took place in 2011, before the
ﬁ nalisation of this report.

The ﬁ nancial results of the Company (quarterly and
half-year ﬁ nancial reports, consolidated ﬁ nancial
statements and the ﬁ nancial statements of alstria
ofﬁ ce REIT-AG), the market, the situation and
development of the Company, the development of
risks, and the business performance were discussed
with the Management Board during all ordinary
meetings of the Supervisory Board.

Focal points of discussion
During the extraordinary meeting in February 2010,
the Management Board and Supervisory Board
discussed the long-term strategic direction of the
Company.

During the Supervisory Board meeting in March
2010, the Supervisory Board dealt with the consoli-
dated ﬁ nancial statements and the ﬁ nancial state-
ments for the year ending December 31, 2009, the
management reports and the report on relation-
ships with afﬁ liated companies for the ﬁ nancial year
running from January 1 until December 31, 2009.
After careful examination and due consideration,
the Supervisory Board agreed with the proposal of
the Management Board regarding the proﬁ t appro-
priation in the spirit of a stable dividend policy. Fur-
thermore, during its meeting the Supervisory Board
drew up resolutions on its report to the annual
general meeting and on the Corporate Governance
Statement, including the declaration of compliance
with the recommendations of the German Corpo-
rate Governance Code, and made technical amend-
ments to the employee proﬁ t participation plan. It
debated and resolved on the variable remuneration
for the members of the Management Board for the
ﬁ nancial year 2009 based on the recommendation

alstria Financial Report 2010

Corporate governance

of its nomination and remuneration committee. As
recommended by an external remuneration expert
and the nomination and remuneration committee,
the Supervisory Board adapted the remuneration
system and the service contracts of the Manage-
ment Board members to the new legal requirements
of the German Act on Appropriateness of the Man-
agement Board Compensation. The remuneration
report describes the details of the modiﬁ ed remu-
neration system. It also deals with the parameters
for the variable compensation for the members of
the Management Board for the ﬁ nancial year 2010
on the basis of this new remuneration system.

During its extraordinary meeting in April 2010, the
Supervisory Board discussed the strategic direction of
the Company again and dealt with the agenda and
proposed resolutions for the annual general meeting
of the Company on June 16, 2010, and adopted its
report on the agenda item regarding the sharehold-
ers’ resolution on the approval of the system for the
remuneration of Management Board members.

During the meeting following the annual general
meeting in June 2010, discussions focused on the
strategy to maintain the minimum equity ratio in
accordance with the REIT Act, and the reﬁ nancing
of the existing syndicate loan and the correspond-
ing approval to conclude a loan agreement.

During its meeting in September 2010, the Supervi-
sory Board dealt extensively with the development
and possible strategies to maintain the minimum
equity ratio. The Supervisory Board extensively dis-
cussed with the Management Board the possibility
of carrying out an up to 10 % capital increase under
the exclusion of subscription rights. The Supervisory
Board granted its approval of the acquisition of real
estate situated in Karlsruhe and discussed the mod-
iﬁ cations of the German Corporate Governance
Code, in particular, the requirements regarding the
diverse composition of the Supervisory Board and
the corresponding effects on alstria. The Supervi-
sory Board resolved to assign its nomination and
remuneration committee with the task of estab-
lishing concrete goals for the composition of the
Supervisory Board.

During its meeting in November 2010, the Super-
visory Board resolved after intensive discussions
with the Management Board on the Company and
budget planning for the ﬁ nancial year 2010. As
recommended by its nomination and remuneration
committee, the Supervisory Board speciﬁ ed con-
crete goals for its composition, which, in particu-
lar, include the adequate participation of women,
and resolved to publish the corresponding diver-
sity statement and the status of the implementa-
tion of its goals in the corporate governance report.
Furthermore, the Supervisory Board discussed the
positive results of the review of the efﬁ ciency of its
work, which was carried out by the members of the
Supervisory Board on the basis of a questionnaire.

The decision by way of written circular resolution
in September 2010 dealt with the carrying out of a
possible capital increase by up to 10 % of the share
capital of the Company.

At the start of 2011, the Supervisory Board dis-
cussed the Company’s long-term strategic direc-
tion with the Management Board. At its meeting to
discuss balance sheets in March 2011, the Super-
visory Board dealt with the consolidated ﬁ nancial
statements and the ﬁ nancial statements for the year
ending December 31, 2010, the report on relation-
ships with afﬁ liated companies for the ﬁ nancial
year 2010, the Management Board’s recommen-
dation for the proﬁ t appropriation as well as the
variable compensation of the Management Board.

Committees of the Supervisory Board
To increase the efﬁ ciency of its work, the six-per-
son Supervisory Board formed three standing com-
mittees, each composed of three members. To the
extent permitted by law, the committees have been
given decision-making powers in some cases, and
in some cases they prepare the resolutions of the
Supervisory Board by making proposals. During the
Supervisory Board meetings, the committee chairs
reported on the results of their committees’ work.

Corporate governance

alstria Financial Report 2010

In the ﬁ nancial year 2010, the audit committee
had four meetings, which were always attended
by the Chief Financial Ofﬁ cer. The audit commit-
tee reviewed the consolidated ﬁ nancial statements
and the ﬁ nancial statements for the year ending
December 31, 2009 and the management reports,
discussed these with the independent auditors, and
conducted a preliminary examination of these doc-
uments and the Management Board’s proposed
appropriation of the annual net proﬁ t. Additional
topics included the Supervisory Board’s proposed
resolution on the annual general meeting regard-
ing the choice of independent auditor, examining
the independence of the external auditor and the
additional services performed by the auditor, grant-
ing the audit contract to PwC, setting the key audit
areas and discussing the risk management system
and the included main risks, the effectiveness of the
internal controlling and audit system, and the com-
pliance system. Finally, the audit committee exam-
ined the efﬁ ciency of its own work. The evaluation
showed a high efﬁ ciency.

During the ﬁ nancial year 2010, the investment
committee met once in person and once in a tele-
phone conference in which its members decided on
the sale of a real estate portfolio and discussed the
Company’s investment options.

The nomination and remuneration committee,
which also carries out the tasks of a nomination
committee, met ﬁ ve times during the ﬁ nancial
year 2010. A focus of the consultations was on
the establishment of a new concept for the vari-
able compensation of the members of the Manage-
ment Board together with an external remuneration
expert, the corresponding amendment of the serv-
ice contracts as well as the variable compensation
for the members of the Management Board. The
nomination and remuneration committee provided
the entire Supervisory Board with corresponding
proposed resolutions. The nomination and remu-
neration committee, furthermore, dealt with the
approval of the consulting services of Freshﬁ elds
Bruckhaus Deringer LLP and the new recommen-
dation of the German Corporate Governance Code
for speciﬁ cation of concrete goals for the composi-
tion of the Supervisory Board.

In addition, the Supervisory Board established a
special committee in the ﬁ nancial year 2010: In
September 2010, the entire Supervisory Board
established a committee that was authorised to
issue all necessary approvals and declarations within
the framework of the execution of a capital increase
in return for cash contribution in the amount of up
to 10 % of the share capital under the exclusion
of subscription rights. This special committee met
in three telephone conferences in September 2010
and approved of the execution of a capital increase
in return for cash contribution under the exclu-
sion of subscription rights and all related acts and
resolutions.

Audit of the annual ﬁ nancial statements
and consolidated ﬁ nancial statements
PricewaterhouseCoopers Aktiengesellschaft Wirt-
schaftsprüfungsgesellschaft, Berlin Branch, audited
the ﬁ nancial statements and management report of
alstria ofﬁ ce REIT-AG, as well as the consolidated
ﬁ nancial statements, including the management
report of the Group for the ﬁ nancial year running
from January 1 until December 31, 2009, all pre-
pared by the Management Board, and issued its
unqualiﬁ ed opinion on these documents.

The ﬁ nancial statements and management report
of alstria ofﬁ ce REIT-AG, the consolidated ﬁ nancial
statements including the management report of the
Group, as well as the Management Board’s recom-
mendation for the appropriation of the net proﬁ t
were immediately presented to the members of
the Supervisory Board after being prepared, as was
the auditors’ report. The Supervisory Board exam-
ined the documents provided by the Management
Board in detail, both in its audit committee and at
a plenary meeting. The auditors were present for
the meeting of the audit committee, reported on
the material ﬁ ndings of their audit (including the
audit of the internal control and risk management
system) and answered questions. The audit com-
mittee prepared the examination of the Supervi-
sory Board and, 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 exam-
ined and discussed both the documents prepared

alstria Financial Report 2010

Corporate governance

by the Management Board and the ﬁ ndings of the
auditors. Finding no objections, it concurred with
the results of the audit and approved the ﬁ nancial
statements of alstria ofﬁ ce REIT-AG and the con-
solidated ﬁ nancial statements. The ﬁ nancial state-
ments are thus conﬁ rmed. The Supervisory Board
also concurred with the recommendation for the
appropriation of net proﬁ t.

Furthermore, the Management Board also pre-
sented the Supervisory Board with its report on
the relationships with afﬁ liated companies for the
ﬁ nancial year running from January 1, 2010 until
December 31, 2010 pursuant to Section 312 of the
German Stock Corporation Act, in which the Man-
agement Board reports on the relationships with
afﬁ liated companies. Likewise, Pricewaterhouse-
Coopers Aktiengesellschaft Wirtschaftsprüfungs-
gesellschaft, Berlin Branch, presented the Supervi-
sory Board with its audit report on the dependency
report. The auditors’ opinion is as follows:

“On the basis of our dutiful audit and judgement
we conﬁ rm that

1. the factual statements of the report are correct,
2. the consideration of the Company for the legal
transactions stated in the report was not inad-
equately high.”

The Supervisory Board concurred with the Manage-
ment Board’s dependency report and the related
auditors’ report. After conducting its own exami-
nation, the Supervisory Board concurred with the
report notes of the Management Board pursuant
to Section 312 paragraph 3 of the German Stock
Corporation Act. The Supervisory Board found no
objections.

Corporate governance
During the reporting period, the Supervisory Board
also dealt with the issue of alstria ofﬁ ce REIT-AG
fulﬁ lling the recommendations of the German Cor-
porate Governance Code. The Management Board
and the Supervisory Board last issued the annual
declaration of compliance with the German Corpo-
rate Governance Code in March 2011, in accord-
ance with Section 161 of the German Stock Corpo-
ration Act; it was subsequently made permanently
available to shareholders on the Company web-
site. In its declaration, the Management Board and
Supervisory Board explained that most of the rec-
ommendations of the German Corporate Govern-
ance Code have been, or will be, implemented,
as well as which recommendations were, or will
not be, followed, and the reasons why not. In the
ﬁ nancial year 2010 and thereafter, conﬂ icts of inter-
est arose in two cases. The respective Supervisory
Board members Dr Johannes Conradi and Daniel
Quai informed the plenum of the conﬂ ict of inter-
est and abstained from participating in the related
discussions and voting on the related resolutions.
The Supervisory Board delegated these issues to
committees in which the respective member of the
Supervisory Board does not participate.

The Supervisory Board would like to thank all
employees and the Management Board for their
dedication and hard work in the ﬁ nancial year
2010.

Hamburg, March 2011

Alexander Stuhlmann
Chairman of the Supervisory Board

Corporate governance

alstria Financial Report 2010

CORPORATE GOVERNANCE
STATEMENT

The Management Board and Supervisory Board of
alstria ofﬁ ce REIT-AG are conscious of their respon-
sibility for the corporate governance of the Com-
pany, which is undertaken with due regard to the
Company’s shareholders, employees and tenants.
This sense of responsibility is expressed, among
other things, in transparent corporate govern-
ance with the aim of facilitating the conﬁ dence
of alstria’s shareholders, employees, tenants and
the public in the management and supervision of
the Company. In this statement, the Management
Board and Supervisory Board report on alstria ofﬁ ce
REIT-AG’s corporate governance according to no.
3.10 of the German Corporate Governance Code
(“Code”) and Section 289a of the German Com-
mercial 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
May 26, 2010) have already become part of our
value-oriented corporate management, which are
therefore stricter than the legal requirements. The
principles and recommendations of the Govern-
ment Commission appointed by the German Fed-
eral Ministry of Justice contain internationally and
nationally recognised standards for effective and
responsible corporate management.

The Company’s declaration of compliance with
the recommendations of the German Corporate
Governance Code is published on alstria’s web-
site (www.alstria.com). After careful consideration,
alstria chose not to follow the recommendations of
the Code in regard to a few points. These points
and the reasons for nonconformity are detailed in
the declaration of compliance issued by the Man-
agement Board and the Supervisory Board on
March 3, 2011.

Declaration of compliance
dated March 3, 2011
The recommendations of the “Government Com-
mission of the German Corporate Governance
Code” as amended on May 26, 2010 and previ-
ously in the version dated June 18, 2009, were
complied with since the prior declaration of com-
pliance, dated March 2, 2010 with the following
exceptions. The Company intends to continue to
comply with the recommendations of the Code as
amended on May 26, 2010 to the same extent:

Deductible for D&O insurance
for the Supervisory Board, Section 3.8
The D&O insurance for the Supervisory Board of
alstria ofﬁ ce REIT-AG does not include a deduc tible.
The Management Board and Supervisory Board
believe that the members of the Supervisory Board
carry out their duties responsibly without any such
deductible.

Performance-related compensation for
Supervisory Board members, Section 5.4.6
The members of the Supervisory Board do not
receive any performance-related remuneration in
addition to their ﬁ xed compensation. The Manage-
ment Board and Supervisory Board believe that the
members of the Supervisory Board carry out their
duties responsibly without any such performance-
related compensation.

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
Prior to their publication, the half-year and quar-
terly ﬁ nancial reports will be made available to
the Supervisory Board. Furthermore, the ﬁ nancial
reports will be discussed with the Supervisory Board
in detail and soon after their publication. In the
event that there are considerable differences to the
budget or business plan authorised by the Super-
visory Board, the Supervisory Board will have the
opportunity to discuss the ﬁ gures with the Manage-
ment Board before they are published. The Man-
agement Board and Supervisory Board consider this
approach appropriate and adequate.

All other recommendations of the German Corpo-
rate Governance Code dated May 26, 2010 and
formerly in the version dated June 18, 2009 have
been, or will be, fully implemented. alstria has
appointed a corporate compliance ofﬁ cer within
the Company, who will report any changes of the
Code to the Management Board and the Super-
visory Board at least once per year and whenever
necessary. In this way, alstria ensures consistent
compliance with these principles. Analysis, super-
vision and transparency are the tools with which
alstria lays the foundation for fair and efﬁ cient cor-
porate management. They will also remain the key
criteria in future.

alstria Financial Report 2010

Corporate governance

The Supervisory Board appoints the members of the
Management Board and monitors and advises the
Management Board on management issues. The
Management Board involves the Supervisory Board
in any decisions of fundamental importance for the
Company. The rules of procedure for the Supervi-
sory Board stipulate that certain, signiﬁ cant busi-
ness transactions by the Company are subject to
the approval of the Supervisory Board, for example
acquiring or disposing of real estate property for
a consideration of more than EUR 30 m, entering
ﬁ nancing agreements with a volume of more than
EUR 30 m, entering or prematurely terminating
leasing contracts with an annual consideration of
more than EUR 2 m, or investing in Company assets
(modernisation measures) with an annual total sum
of more than EUR 2 m when such investments were
not already included in the budget approved by the
Supervisory Board. The Supervisory Board reports
on its activity in the ﬁ nancial year 2010 in its report
to the ﬁ nancial general meeting on pages 78 to 81
of the ﬁ nancial report.

Composition of the Supervisory Board
In accordance with the articles of association, the
Supervisory Board comprises six members. The
following are members of the Supervisory Board
at present: Alexander Stuhlmann as Chair of the
Supervisory Board, John van Oost as Vice-chair, as
well as Dr Johannes Conradi, Roger Lee, Richard
Mully and Daniel Quai. The terms of ofﬁ ce of all
members of the Supervisory Board expire at the end
of the general meeting which resolves to discharge
them in respect to their activities for the ﬁ nancial
year 2010.

Working methods of the Management
Board and the Supervisory Board
The Management Board and the Supervisory Board
cooperate closely with conﬁ dence in the interest of
the Company. The chair of the Supervisory Board
has regular contact with the Management Board.

The Management Board has two members:
Olivier Elamine as the Chief Executive Ofﬁ cer and
Alexander Dexne as the Chief Financial Ofﬁ cer.
The Management Board is responsible for running
alstria in the interest of the Company with the aim
of sustainably increasing the Company’s value. It
sets the business targets and – in conjunction with
the Supervisory Board – the strategic direction of
the Company. The work of the Management Board
and the allocation of responsibilities between the
individual members of the Management Board are
stipulated in the rules of procedure and the role sort
for the Management Board. The members of the
Management Board are obligated to immediately
disclose any conﬂ icts of interest to the Supervisory
Board. The members of the Management Board
may only conduct secondary activities, particularly
membership in the Supervisory Boards of compa-
nies not afﬁ liated with the Group, with the approval
of the Supervisory Board. The members of alstria’s
Management Board had no conﬂ icts of interest in
the reporting year. The members of the Manage-
ment Board serve on no more than three Super-
visory Boards of listed companies outside of the
Group or in Supervisory Boards of companies with
comparable requirements. Major business transac-
tions between the Company and members of the
Management Board, or with any persons or com-
panies in close association with them, require the
approval of the Supervisory Board. All such busi-
ness transactions must be concluded at standard
commercial conditions. There were no such con-
tracts during the reporting period. The Manage-
ment Board pays attention to diversity in ﬁ lling its
management positions and aims to adequately con-
sider women for these positions. As of December 31,
2010, 50 % of the management positions at alstria
were held by female employees.

Corporate governance

alstria Financial Report 2010

No former members of the Management Board sit
on the Supervisory Board. The Supervisory Board
is composed of members who have the necessary
knowledge, competence and professional experi-
ence to properly carry out their duties. On Novem-
ber 23, 2010, with due consideration of the speciﬁ c
situation of the Company, the Supervisory Board of
alstria ofﬁ ce REIT-AG speciﬁ ed the following goals
for the composition of the Supervisory Board which
are to be considered in its nominations to the share-
holders in general meeting:

> The members of the Supervisory Board as a group
should possess the diversity of knowledge, com-
petence and experience necessary to successfully
carry out their duties.

> At least one member of the Supervisory Board
should have notable experience gained abroad.
> At least one member of the Supervisory Board
should not serve as a consultant or managing
body at principal tenants, creditors or other busi-
ness partners of the Company.

> At least one independent member of the Super-
visory Board must have expert knowledge in the
area of ﬁ nancial accounting or auditing of ﬁ nan-
cial statements.

> Within the next two appointment periods, at least
one member of the Supervisory Board should be
female.

> Members of the Supervisory Board should, as a

rule, be no older than 70 years old.

It will need to be noted in future nominations to
the shareholders in general meeting that the goals
speciﬁ ed by the Supervisory Board regarding the
representation of women are currently not yet met.
The other goals have, however, currently been met.

Supervisory Board committees
The Supervisory Board has formed three standing
committees. Each committee has its own rules of
procedure to specify the concerns and tasks of the
committee.

The audit committee monitors the Company’s
ﬁ nancial reporting process, engages the independ-
ent auditors to prepare audit reports, determines
the key audit areas and the independent audi-
tors’ compensation, and is responsible for issues
surrounding risk management, internal control
and compliance. The audit committee consists
of Dr Johannes Conradi, as Chairman, as well as
Roger Lee and Daniel Quai.

The investment committee decides whether the
Supervisory Board will approve the acquisition or
disposal of real estate property or other assets worth
between EUR 30 m and EUR 30 m. The entire Super-
visory Board is needed to approve such transactions
if the value is greater than this amount. The invest-
ment committee consists of John van Oost, as chair,
as well as Richard Mully and Alexander Stuhlmann.

The tasks of the nomination and remuneration
committee, which also carries out the function of
a nomination committee, include preparations for
the appointment and dismissal of members of the
Management Board, for the Management Board’s
compensation system and for the total remuneration
of individual members of the Management Board,
the resolution of, or amendments to, the rules of
procedure of the Management Board, as well as
the approval of certain other activities and primary
contracts of members of the Management Board.
It is also responsible for entering into, amending,
extending and terminating contracts with Man-
agement Board members, as well as for decisions
regarding compensation beyond the terms of the
contracts. Finally, the nomination and remunera-
tion committee prepares the resolutions of the
Supervisory Board regarding the proposal of the
appointment of suitable Supervisory Board mem-
bers at annual general meetings. The nomination
and remuneration committee consists of Alexander
Stuhlmann, as chair, as well as Richard Mully and
John van Oost.

alstria Financial Report 2010

Corporate governance

In the ﬁ nancial year 2010, the Supervisory Board
formed a special committee for the execution of a
capital increase as of September 23, 2010. The spe-
cial committee consisted of John van Oost as chair,
as well as Dr Johannes Conradi and Richard Mully.

For information on the activities of the commit-
tees of the Supervisory Board during the ﬁ nancial
year 2010, see its report to the general meeting on
pages 78 to 81 of the ﬁ nancial report.

Remuneration of the Management Board
and Supervisory Board
The compensation system for the Management
Board and the Supervisory Board is laid out in the
remuneration report for the ﬁ nancial year 2010. The
remuneration of each member of the Management
Board and the Supervisory Board is also broken down
there for the ﬁ nancial years 2009 and 2010. By way
of a resolution of the shareholders in general meet-
ing on January 16, 2010, the shareholders approved
the new remuneration system for the members of
the Management Board with a large majority.

Stock option program and similar
securities-oriented incentive systems
Stock option program
and Long Term Incentive Plan
In March 2007, the Supervisory Board adopted a
stock option program for the members of the Man-
agement Board and issued a ﬁ rst and only tranche
of stock option rights to the Management Board
pursuant to the authorisation granted by the share-
holders in general meeting on March 15, 2007. The
stock option program was replaced in March 2010
by a Long Term Incentive Plan as a new long term
remuneration component, but the program contin-
ues in the scope of the tranche granted in 2007.
Within the framework of the Long Term Incentive
Plan, the members of the Management Board will
be issued virtual shares with a four year term each
year starting with the ﬁ nancial year 2010. The stock
option program and Long Term Incentive Plan are
described in the remuneration report on pages 90
to 93.

Employee proﬁ t participation program
The employee proﬁ t participation plan regulates the
granting of convertible proﬁ t participation rights to
employees of alstria and companies directly or indi-
rectly controlled by alstria. Members of the Man-
agement Board are not considered employees for
the purposes of this plan.

The nominal value of each convertible proﬁ t partici-
pation certiﬁ cate is EUR 1. The plan stipulates that
a maximum of 500,000 convertible proﬁ t partici-
pation certiﬁ cates can be issued for a total nominal
value of EUR 500,000. To date, 220,100 certiﬁ cates
have been issued.

Each convertible proﬁ t participation certiﬁ cate can
be converted into 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 predeﬁ ned dates and only when
the subscriber pays the conversion price and is still
employed at alstria or one of its subsidiaries on the
date of conversion. The maximum term for a con-
vertible proﬁ t participation certiﬁ cate is ﬁ ve years.
Presumably 106,000 convertible proﬁ t participation
rights will be converted into shares of the Company
for the ﬁ rst time in June 2011.

Directors’ dealings – securities transactions
subject to reporting requirement
The Management Board and Supervisory Board
of alstria ofﬁ ce REIT-AG, as well as related parties
(family members) are required, pursuant to Section
15a of the German Securities Trading Act, to notify
the Company of their own transactions involving
Company shares. Every buy or sale transaction
related to alstria shares (e.g. the purchase or sale
of options on alstria shares) has to be reported.
The Company shall be informed of such transac-
tions within ﬁ ve working days and publish them
immediately. This only applies when the total of
the transactions is EUR 5,000 or more within one
calendar year.

Corporate governance

alstria Financial Report 2010

The following transactions were reported to alstria
in 2010:

Name of person
subject to the
disclosure
requirement

Olivier
Elamine

Alexander
Dexne

Position

Member
of the
Manage-
ment
Board

Classiﬁ -
cation of
ﬁ nancial
instru ment

ISIN

Trans-
action

DE000A0LD2U1 Buy

Place

XETRA

DE000A0LD2U1 Buy

XETRA

Trans-
action
date

Price per
share
(EUR)

Number
of shares

Total
value
(EUR)

Apr. 7,
2010

8.47

10,500

88,935

8.55

8,500

72,670

These transactions were the transfer of Company
shares as performance incentives for the ﬁ nan-
cial year 2009. The members of the Management
Board each invested approx. 25 % of their perform-
ance incentives in shares of the Company.

Share ownership by members of Manage-
ment Board and Supervisory Board
Section 6.6 of the German Corporate Govern-
ance Code recommends indicating the ownership
of Company shares or related ﬁ nancing instru-
ments by members of the Management Board and
Supervisory Board if such ownership directly or
indirectly exceeds 1 % of the shares issued by the
Company. If the total shares owned by all members
of the Management Board and Supervisory Board
together exceed 1 % of the total shares issued by
the Company, the total share ownership is to be
broken down by Management Board and Super-
visory Board.

No member of the Management Board or Super-
visory Board of alstria ofﬁ ce REIT-AG directly or
indirectly owns more than 1 % of the subscribed
capital of the Company. The total share ownership
of all members of the Management Board and the
Supervisory Board does not exceed 1 % of the total
shares issued by the Company.

Relationship to the shareholders
of the Company
alstria ofﬁ ce REIT-AG respects the rights of its
shareholders and makes best efforts to guarantee
the exercise of those rights to the extent stipulated
by law or the bylaws. In particular, these include the
right to freely purchase and sell shares, appropri-
ate access to information, an adequate number of
voting rights per share (one share – one vote) and
participation in our annual general meeting. Share-
holders have the possibility of exercising their vot-
ing rights personally or by authorised representative
at the general meeting, or sending voting instruc-
tions to their proxies. The invitation to the general
meeting includes voting instructions. The articles of
association currently do not stipulate an option to
vote by mail. Shareholders already have the option
of voting before the general meeting by authorising
a proxy in such that the additional option of vot-
ing by mail would not facilitate the exercise of the
shareholders’ rights.

After the shareholders in general meeting in 2008
approved the provision of information to share-
holders electronically, it is now possible to send
invitations and documents for general sharehold-
ers’ meetings to shareholders electronically upon
request. The invitation and the documents to be
made available for viewing prior to the upcoming
general meetings in accordance with the provisions
of law will be published together with additional
documents pursuant to Section 124a of the Ger-
man Stock Corporation Act and the agenda on the
Company website. The results of the votes will like-
wise be published on the website of the Company
following the general meeting.

alstria Financial Report 2010

Corporate governance

Communication with the public
In sharing information with people outside of the
Company, the Management Board follows the
principles of transparency, promptness, openness,
clarity and equal treatment of shareholders. In par-
ticular, alstria informs its shareholders and the inter-
ested public about the situation of the Company
and signiﬁ cant business events through ﬁ nancial
reports, analyst and press conferences, press and
ad-hoc announcements and the general meeting.
The website of alstria includes information on the
Company and its shares, especially the ﬁ nancial
reports, share price tracking and announcements
about the acquisition or disposal of Company
shares or related ﬁ nancing instruments pursuant
to Section 15a of the German Securities Trading
Act. Moreover, alstria’s ﬁ nancial reports and web-
site include a ﬁ nancial calendar which indicates all
dates of importance to shareholders. All announce-
ments and information is additionally published in
English. The Annual Document (pursuant to Sec-
tion 10 of the German Securities Prospectus Act)
includes a detailed list of all capital market-related
announcements issued in 2010; it can be found on
our website (www.alstria.com).

Financial reporting and auditing
During the ﬁ nancial year, alstria regularly informs
shareholders and third parties by publishing its
consolidated, half-year and quarterly financial
statements. The consolidated ﬁ nancial statements
are prepared in accordance with the International
Financial Reporting Standards (IFRS). For legal rea-
sons (calculating dividends, creditor protection),
ﬁ nancial statements for alstria ofﬁ ce REIT-AG are
also prepared in accordance with the German Com-
mercial Code (HGB).

The consolidated ﬁ nancial statements and the
ﬁ nancial statements of alstria ofﬁ ce REIT-AG are
audited by both the independent auditor selected
by the general meeting, and by the Supervisory
Board. 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.
PricewaterhouseCoopers Aktiengesellschaft Wirt-
schaftsprüfungsgesellschaft, Berlin, was appointed

to audit the annual and half-year ﬁ nancial state-
ments of alstria ofﬁ ce REIT-AG and of the Group
for the ﬁ nancial year 2010. The auditors partici-
pate 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.

Compliance
In accordance with Section 4.1.3 of the German
Corporate Governance Code, the Supervisory Board
is responsible for ensuring compliance with the legal
provisions and Company guidelines throughout all
of the consolidated companies. The good reputa-
tion of alstria and the trust of its shareholders, ten-
ants and employees depend entirely on the behav-
iour of each individual employee.

For this reason, alstria drew up a code of conduct,
listing guidelines for behaviour and orientation
for resolving conﬂ icts (e.g. conﬂ icts of interest),
thereby serving as a model of correct behaviour for
all employees of the Group. The guidelines are pub-
lished on our website (www.alstria.com).

alstria set up a compliance organisation to commu-
nicate the values inherent in the code of conduct
and Company guidelines, and to monitor com-
pliance with these values. The compliance ofﬁ cer
is responsible for communicating these values by
answering questions on the implementation of the
code and through in-house training for all employ-
ees. Compliance is monitored through colleagues,
supervisors and the compliance ofﬁ cer, as well as
via regular investigation by auditors. alstria has
also set up a hotline through which employees can
anonymously report any violations of the code of
conduct or the Company-internal guidelines. Fur-
thermore, the Management Board regularly dis-
cusses Company compliance with the Supervisory
Board’s audit committee.

Violations of the code of conduct will not be toler-
ated; they will be fully investigated and the viola-
tors punished. This can be anything from discipli-
nary measures to dismissal, a claim for damages or
even prosecution.

Corporate governance

alstria Financial Report 2010

REMUNERATION REPORT *

Management Board remuneration
The remuneration system for the members of the
Management Board is determined by the Supervi-
sory Board and is reviewed regularly. In its meet-
ing in March 2010, the Supervisory Board resolved,
as recommended by the remuneration expert, to
amend the remuneration system and the serv-
ice contracts of the members of the Management
Board in accordance with the new legal require-
ments of the German Act on Appropriateness of the
Management Board Compensation (VorstAG). The
Supervisory Board is of the opinion that this remu-
neration system provides adequate remuneration
for the members of the Management Board, which
is based on customary market terms and conditions
and, in particular, also takes account of the last-
ing success of the company. The remuneration sys-
tem for the members of the Management Board
described below was approved by the shareholders
in general meeting for the ﬁ nancial year 2009 by a
large majority.

In the new remuneration system, the criteria for
determining the appropriateness of the remunera-
tion of the members of the Management Board are
the duties of each individual Management Board
member, his or her personal performance, the ﬁ nan-
cial situation, the success and future prospects of the
company, as well as the customary practice regard-
ing remuneration relative to its peer companies and
the remuneration structure of the Company.

The remuneration structure, furthermore, consists
of a ﬁ xed basic salary, a short term and a long term
variable component and ancillary beneﬁ ts (beneﬁ ts
in kind) for each Management Board member. The
majority of the remuneration is made up of the vari-
able components which each are partially or pri-
marily based on several years of assessment. Limits
were introduced for extraordinary developments.

The ﬁ xed remuneration is a basic salary independ-
ent of performance which is paid as salary on a
prorated basis each month. The ﬁ xed remuneration
amounts to approx. 40 % of the designated total
remuneration without ancillary beneﬁ ts.

The short term variable remuneration (Short Term
Incentive or STI) is determined for each year on the
basis of a performance target, the Budgeted Funds
from Operations (FFO). The amount of the Short
Term Incentive depends on the degree to which the
target is reached, whereby the target value must be
met by at least 50 % for the incentive to be paid
out and by no more than a maximum of 150 %
(cap). The individual performance of each Manage-
ment Board member will be taken into account in a
multiplier (0.8 to 1.2). The maximum amount to be
paid is limited by a cap. Only 75 % of the perform-
ance incentive will be paid to a Management Board
member in cash. A total of 25 % of the perform-
ance incentive will be converted to virtual shares,
which are subject to a minimum vesting period of
two years. The number of virtual shares granted is
calculated from the amount corresponding to 25 %
of the Short Term Incentive divided by the share
price of one alstria share at the time, which is cal-
culated on the basis of one reference period. The
virtual shares will be converted into a cash amount
after the expiry of the vesting period. This cash
amount is calculated based on the number of virtual
shares multiplied by the share price of one alstria
share at the time, and is calculated on the basis of
a reference period. This component of the remu-
neration amounts to approx. 20 % of the prescribed
total remuneration without ancillary beneﬁ ts.

A new performance share plan (Long Term Incentive
Plan, LTI Plan) replaces the previous stock option
program for the Management Board as a long term
variable remuneration component. Virtual shares
with a four-year term are issued to the members
of the Management Board each year. The number
of virtual shares to be granted results, in principle,
from a target value divided by the share price of
one alstria share upon the issue of the virtual share
(calculated on the basis of a reference period). The
amount of virtual shares issued from the LTI plan
will be adjusted at the end of each performance
period depending on the degree to which the target
is met. A total of 50 % of the performance targets
determined by the Supervisory Board is the absolute
total shareholder return derived from the Weighted
Average Cost of Capital (WACC) and 50 % is the
relative total shareholder return calculated on the

* This remuneration report forms an integral part of the audited Group management report or notes

to the annual ﬁ nancial statements and also forms part of the corporate governance report.

alstria Financial Report 2010

Corporate governance

basis of the reference index EPRA NAREIT Europe
Ex UK. The virtual shares will be converted into a
one-time cash payment after the expiry of the term.
The amount will be calculated by the number of vir-
tual shares after adjustment multiplied by the share
price of one alstria share at the time (calculated on
the basis of a reference period) and a multiplier (0.8
to 1.2) which takes into consideration the individ-
ual performance of the Management Board mem-
ber. Just as with the Short Term Incentive, a certain
degree of the target must be reached in order for
a payment to be made. Furthermore, the amount
of the payment is also limited by a cap in the LTI
plan. This component of the remuneration amounts
to approx. 40 % of the planned total remuneration
without ancillary beneﬁ ts.

The members of the Management Board, further-
more, receive ancillary beneﬁ ts in the form of ben-
eﬁ ts in kind which essentially consist of insurance
premiums, pension beneﬁ ts and the private use of
a company car. As a component of remuneration,
each individual member of the Management Board
is to pay taxes on such ancillary beneﬁ ts. Each
member of the Management Board is, in principle,
equally entitled to such ancillary beneﬁ ts though
the amount varies in accordance with each personal
situation. For the purpose of pension, the Company
grants the members of its Management Board an
annual amount, i. e. EUR 75,000 for Olivier Elamine
and EUR 50,000 for Alexander Dexne, each pay-
able in prorated monthly instalments.

The total remuneration for the active members of
the Management Board in the last ﬁ nancial year
amounted to EUR 2,453 k. The members of the
Management Board did not receive any advance
salary payments, loans or pension beneﬁ ts. A
total of approximately 25 % of the incentive pay-
ment was paid out as shares in the company for
the ﬁ nancial year 2009. The members of the Man-
agement Board were promised short term variable
remuneration at the terms and conditions of the
new Short Term Incentive Plan for the ﬁ rst time for
the ﬁ nancial year 2010. The target of the commit-
ment amounts to EUR 220 k for Olivier Elamine
and EUR 180 k for Alexander Dexne. The members
of the Management Board, furthermore, received
a ﬁ rst tranche of the new long term remunera-
tion component in the ﬁ nancial year 2010. Mr Ela-
mine was issued 54,455 virtual shares with a tar-
get cash value of EUR 440 k and Mr Dexne was
issued 44,554 virtual shares with a target cash value
of EUR 360 k. Former members of the Manage-
ment Board received payments in the ﬁ nancial year
2010 totalling EUR 5 k. No provisions needed to be
set aside for former members of the Management
Board. The legal speciﬁ cations for the self-deducti-
ble of the members of the Management Board for
D&O insurance were implemented with effect as
of July 1, 2010.

Corporate governance

alstria Financial Report 2010

INDIVIDUAL MANAGEMENT BOARD
REMUNERATION 2010

EUR k

Management Board member

Olivier Elamine,
Chief Executive Ofﬁ cer

Alexander Dexne,
Chief Financial Ofﬁ cer

Former members
of the Management Board

Total

Long-term
variable
remun -
e ration

Ancillary
beneﬁ ts 3

Total
remune-
ration

Fixed
amount

Short-term variable
remuneration 1

Cash
component

Share
component

440

360

800

300

240

540

162

440 2

360 2

800

156

1,363

1,090

2,458

1 For performance in 2009, granted according to old remuneration

system for the last time.

2 Virtual shares with speciﬁ ed cash value and four-year term.
3 Includes beneﬁ ts for company car, insurance and pension.

Due to the change in the remuneration system in
the ﬁ nancial year 2010, in accordance with the
new legal requirements of the German Manage-
ment Board Remuneration Appropriateness Act
( VorstAG), the numbers in the table are hardly com-
parable and include variable remuneration elements
for performance in the ﬁ nancial year 2009 (short
term variable remuneration) and the new long term
variable remuneration element (virtual shares with
a four year term) granted for the ﬁ rst time in the

ﬁ nancial year 2010. Therefore, the total remunera-
tion for the ﬁ nancial year 2010 is hardly compara-
ble to the total remuneration for the previous ﬁ nan-
cial year. Due to the expiring short term incentive
plan, the generally intended allocation of the remu-
neration elements without ancillary beneﬁ ts under
the new remuneration system (40 % ﬁ xed, 20 %
short term variable, 40 % long term variable) is not
yet existent in the ﬁ nancial year 2010.

INDIVIDUAL MANAGEMENT BOARD
REMUNERATION 2009

EUR k

Management Board member

Olivier Elamine,
Chief Executive Ofﬁ cer

Alexander Dexne,
Chief Financial Ofﬁ cer

Former members
of the Management Board

Total

Long-term
variable
remun-
eration

Ancillary
beneﬁ ts 2

Total
remune-
ration

Fixed
amount

Short-term variable
remuneration 1

Cash
component

Share
component

438

360

798

262.5

87.5

150

412.5

137.5

181

882

634

1,529

1 For performance in 2008.
2 Includes beneﬁ ts for company cars, insurance and pensions.

If membership of the Management Board is ter-
minated, members have agreed to a post-con-
tractual non-compete agreement of up to twelve
months, which may be waived by alstria with a six
months’ notice period. As long as alstria exercises

alstria Financial Report 2010

Corporate governance

options may only be exercised if the current share
price of the Company exceeds the exercise price
by 20 % or more on at least seven non-consecu-
tive trading days of the Frankfurt Stock Exchange
before the start of the respective exercise period.
The performance target for the 2007 stock options
amounts to EUR 19.20. The stock options may only
be exercised after expiry of a vesting period of two
years and during one of the four exercise periods of
each year. The exercise period amounts to 30 days
beginning on the date of publication of the Com-
pany’s results for the ﬁ rst, second and third quar-
ters and the date of the Company’s annual general
meeting. There are no cash settlement alternatives.

Remuneration of the Supervisory Board
The total remuneration for the Supervisory Board
in 2010 amounted to EUR 305 k. The members of
the Supervisory Board each receive an annual ﬁ xed
remuneration in the amount of EUR 40 k. The chair-
man of the Supervisory Board also receives an addi-
tional annual amount of EUR 20 k and the deputy
chairman receives an additional EUR 10 k. Members
who only sit on the Supervisory Board for part of a
year receive pro rata remuneration. Membership of
the audit committee entails separate remuneration
of EUR 10 k and the chair of the audit commit-
tee receive EUR 15 k. Membership in other com-
mittees does not give entitlement to any additional
remuneration. No advance remuneration payments
were made to members of the Supervisory Board,
nor were any loans made. No remuneration was
paid out for individual services.

this post-contractual non-compete obligation, the
members of the Management Board shall receive
a compensation payment for this period equivalent
to their last ﬁ xed salary. Beneﬁ ts to be paid by the
company if the appointment is terminated by the
death of the board member amount to the ﬁ xed
salary for the month in which the member died and
for the following three months. The incentive pay-
ment for this period shall be paid pro rata up to and
including the month of death.

Stock option scheme 2007
On March 27, 2007, the Supervisory Board estab-
lished a stock option program for members of the
Management Board (hereinafter, the “stock option
scheme 2007”), stipulated the details of this stock
option scheme based on the authorisation by the
annual general meeting of March 15, 2007, and
issued the ﬁ rst tranche of stock options to members
of the Management Board. No stock options were
granted in 2008, 2009 or 2010. The stock option
scheme 2007 has, meanwhile, been replaced by a
new long term remuneration component but will
continue in the scope of the tranche granted in
2007. No expenses arose in the ﬁ nancial year 2010
from the stock options granted in the ﬁ nancial year
2007.

The details of the stock option program 2007 are
as follows:

The exercise price for the stock options granted in
2007 is EUR 16. The term of the stock options is
seven years from the time they are granted. The

INDIVIDUAL SUPERVISORY BOARD MEMBER
REMUNERATION

EUR k

Supervisory Board member

Supervisory Board
membership

Audit committee
membership

Remuneration
for 2009
(EUR k)

Remuneration
for 2010
(EUR k)

Alexander Stuhlmann

Chairman

John van Oost

Deputy Chairman

Dr Johannes Conradi

Roger Lee

Richard Mully

Daniel Quai

Total

Member

n.a.

Chairman

Member

n.a.

Member

57.5

36.6

299.1

305

REIT disclosures

alstria Financial Report 2010

REIT DISCLOSURES

REIT DECLARATION

Statement of the Management Board
Regarding the compliance with the requirements
of Section 11 to 15 REIT Act (Real Estate Invest-
ment Trust Law) as per December 31, 2010, we
declare the following in relation with our ﬁ nancial
statement according to Section 264 HGB (German
Commercial Code) and our consolidated ﬁ nancial
statement according to Section 315a HGB as per
balance sheet date:

1. As per balance sheet date, 40.86 % of alstria’s
shares were free ﬂ oat according to Section 11
paragraph 1 REIT Act. This was stated to the
German Federal Financial Supervisory Author-
ity (BaFin).

2. In accordance with Section 11 paragraph 4
REIT Act, as per balance sheet date, no share-
holder owned directly 10 % or more of 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 distri bution
obligation and the reserves pursuant to Sec-
tion 12 paragraph 2 REIT Act
a) as per the balance sheet date the immovable
assets amounted to EUR 1,389,885 k which
equals to 90.12 % of the assets, therefore at
least 75 % of the assets belong to the immov-
able assets;

b) the assets belonging to the property of REIT
service companies which were included in the
consolidated statements amount to a maxi-
mum of 20 %, namely EUR 277 k and there-
fore 0.02 %.

4. In relation to the sum of the sales revenue plus
the other earnings from immovable assets pur-
suant to Section 12 paragraph 3 and 4 REIT Act
a) for the ﬁ nancial year 2010, the entire sales
revenues of the Group plus other earnings
from immovable assets amounted to EUR 98.4
m. This equals 100 % of total revenues plus
other earnings from immovable assets;

b) the sum of the sales revenue plus the other
earnings from immovable assets of REIT serv-
ice companies amounted to EUR 163 k in
the ﬁ nancial year 2010. This equals 0.17 %
of total revenue plus other earnings from
immovable assets.

5. In 2010 a dividend payment of EUR 28.0 m for
the prior ﬁ nancial year was distributed to the
shareholders. The ﬁ nancial year 2009 did not
result in a net income according to commer-
cial law pursuant to Section 275 of the German
Commercial Code.

6. alstria ofﬁ ce REIT-AG’s dividend does not derive

from already taxed parts of the proﬁ t.

7. Since 2007 the Group has realised 20.34 % of
the average portfolio of its immovable assets and
therefore did not trade with real estate according
to Section 14 REIT Act.

8. On balance sheet date the Group’s equity as
shown in the consolidated statements accord-
ing to Section 12 paragraph 1 REIT Act was EUR
692.4 m. This equals to 49.8 % of the value of
the immovable assets which are shown in the
consolidated statements in conformance with
Section 12 paragraph 1 REIT Act.

Hamburg, February 18, 2011

Olivier Elamine
CEO
alstria ofﬁ ce REIT-AG

Alexander Dexne
CFO
alstria ofﬁ ce REIT-AG

alstria Financial Report 2010

REIT disclosures

REIT MEMORANDUM

Auditor’s Memorandum according to
Section 1 (4) of the Act on German Real
Estate Stock Corporations with Listed Shares
(REIT Act)

To alstria ofﬁ ce REIT-AG, Hamburg

As auditor of the ﬁ nancial statement and the
consolidated ﬁ nancial statement of alstria ofﬁ ce
REIT-AG, Hamburg, for the ﬁ scal year from Jan-
uary 1, to December 31, 2010, we have audited
the information given in the attached declaration
of the Management Board members for the com-
pliance with the requirements of Section 11 to 15
of the REIT Act and the composition of the pro-
ceeds concerning the pre-taxation of proceeds
according to Section 19 (3) and 19a REIT Act as
of December 31, 2010 (hereinafter referred to as
”REIT declaration“). The information given in the
REIT declaration is in the responsibility of the Man-
agement Board of the company. Our responsibility
is to express an opinion on the information given,
based on our audit.

We conducted our audit considering the audit guid-
ance promulgated by the Institut der Wirtschaft-
sprüfer (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 Sec-
tion 2 Clause 3 REIT Act and 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 make a judgement with reasonable assur-
ance if the free ﬂ oat ratio and the maximum stock
ownership per shareholder according to Section 11
(1) and (4) REIT Act agrees with the announce-
ments due to Section 11 (5) REIT Act as of Decem-
ber 31, 2010 and if the provided information con-
cerning the requirements of Section 12 to 15 REIT
Act and the composition of the proceeds concern-
ing the pre-taxation of proceeds according to Sec-
tion 19 a REIT Act is appropriate. It was not part
of our engagement to fully assess the companies
tax assessments or position. Within our audit pro-
cedures we compared the information concerning
the free ﬂ oat ratio and the maximum stock own-
ership per shareholder according to Section 11 (1)
and (4) REIT Act provided within the REIT-declara-
tion with the announcements due to Section 11 (5)
REIT Act as of December 31, 2010 and agreed the

provided information concerning the requirements
of Section 12 to 15 REIT Act with the information
disclosed in the ﬁ nancial statement and the consoli-
dated ﬁ nancial statements of the company. Further-
more we tested the adjustments made to the valu-
ation of immovable assets held as investment for
their compliance with Section 12 (1) REIT Act. We
believe that our audit provides a reasonable basis
for our opinion.

In our opinion based on the ﬁ ndings of our audit,
the information given in the REIT declaration con-
cerning the free ﬂ oat ratio and the maximum stock
ownership per shareholder due to Section 11 (1)
and (4) REIT Act agrees with the announcements
made according to Section 11 (5) REIT Act as of
December 31, 2010 and the information provided
concerning the compliance with Section 12 to 15
REIT Act and the composition of the proceeds con-
cerning the pre-taxation of proceeds according to
Section 19a REIT Act are appropriate.

This memorandum is solely provided for submission
to the tax authorities of the city of Hamburg within
the tax declaration according to Section 21 (2)
REIT Act.

Berlin, February 23, 2011

PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

sgd. Gregory Hartman
Wirtschaftsprüfer
(German Public Auditor)

sgd. i. V. Dr. Kay Lubitzsch
Wirtschaftsprüfe
(German Public Auditor)

Other information

alstria Financial Report 2010

OTHER INFORMATION

GLOSSARY

Annual ﬁ nancial accounts
The annual ﬁ nancial accounts include the balance
sheet and the proﬁ t and loss account of a com-
pany. In respect of a joint stock company, these are
prepared by the Management Board, audited by a
chartered accountant for compliance and checked
by the Supervisory Board.

Annual General Meeting
At least once a year the shareholders of a joint stock
company convene for the Annual General Meet-
ing. This meeting elects the Supervisory Board and
the balance sheet auditor. It passes resolutions on
the appropriation of the annual proﬁ t shown, on
measures for raising capital, on changes to the Arti-
cles of Association and other fundamental issues; it
is the only body which can approve the decisions
made by the Supervisory Board and the Manage-
ment Board.

Asset management
Value-driven running and/or optimisation of
real estate investments through letting manage-
ment, refurbishment, repositioning and tenant
management.

Bearer share
A share whereby the rights of the holder can be
exercised. In this instance, the company does not
know who its shareholders are.

Cash ﬂ ow
Indicator that shows the net inﬂ ow of cash from
sales activities and other current activities during a
given period.

CMBS (commercial mortgage-backed securities)
Securities or loans that are backed by commercial
real estate mortgages.

CO2
Carbon dioxide, a gas produced primarily through
the combustion of fossil fuels. It is believed to be
the main cause of climate change.

Consolidated statement of ﬁ nancial position
Balancing assets against liabilities, that is, “debits”
and “credits”, at the end of the ﬁ nancial year. As a
result one can see the net asset position of the joint
stock company. A component part of the annual
ﬁ nancial statements.

Corporate Governance
An instrument which is required by professional
ﬁ nancial analysts and investors when performing
modern company analyses. It can also redress cur-
rent deﬁ cits in the traditional valuation processes
particularly in respect of growth values. Compe-
tences, communications and control by the deci-
sion-making committees for companies quoted
on the stock exchange are viewed and inspected.
These supposed soft facts are of crucial importance
when evaluating a company with increasingly non-
material production processes.

DAX
The German Share Index (DAX) reﬂ ects the value
trend of the 30 most important German shares. In
addition to the market prices, the dividend pay-
ments are also included here. DAX began at the
end of 1987 with a value of 1,000.

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).

DGNB (Deutsche Gesellschaft für
Nachhaltiges Bauen)
The German Sustainable Building Council estab-
lishes a system for the assessment and the certiﬁ ca-
tion of sustainable buildings.

Dividend
Each shareholder is entitled to a share in the annual
proﬁ t of their company which is paid out. This will
correspond to the amount of their shareholding.
This part of the proﬁ t is called a dividend.

alstria Financial Report 2010

Other information

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 Associa-
tion (EPRA) is an organisation that represents the
interests of the major European property manage-
ment 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 will-
ing buyer and a willing seller in an arm’s length
transaction after proper marketing, wherein the
parties had each acted knowledgeably, prudently
and without compulsion. The fair value for alstria’s
investment properties is reviewed regularly by
external appraisers.

FFO (funds from operations)
alstria calculates FFO as EBT (Earnings before
Taxes), increased/decreased by the net loss/gain
from fair value adjustment on investment property,
increased/decreased by the net loss/gain from fair
value adjustment on ﬁ nancial derivatives, reduced/
increased by the proﬁ t/loss on disposal of invest-
ment property, increased/decreased by the net loss/
gain from fair value adjustments on joint ventures,
increased/decreased by non-recurring items, plus
non-cash-expenses and less cash taxes paid.

G-REIT
Real Estate Investment Trusts are public listed com-
panies, fully tax transparent, which solely invest in
properties.

ICR (interest coverage ratio)
The interest coverage ratio/interest service cover-
age ratio is a commonly used ratio which belongs in
a loan agreement to the debtor’s contractual assur-
ances (covenants) for the duration of the loan and
which is also used to assess the ability to service
interest payments. It indicates to which propor-
tion the interest payments have to be/are covered
by the earnings of the Company or the respective
portfolio (sometimes after allowance for operating
and/or maintanance expenses) by the earnings of
the investment property.

IFRS
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 report-
ing. IFRSs have applied to listed companies since
January 1, 2005.

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.

Other information

alstria Financial Report 2010

Joint venture
Legally independent entity formed between two
or more parties to undertake economic activ-
ity 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.

NNNAV (triple net asset value)
NNNAV reﬂ ects the economic equity of the Com-
pany. The Company computes NNNAV as total
equity as reported in the IFRS balance sheet, which
accounts for the carrying amount and the fair value
of ﬁ nancial instruments and ﬁ nancial liabilities,
adjusted for hidden reserves and hidden losses in
immovable assets and ﬁ nancial liabilities.

LTV (loan to value)
alstria calculates loan to value (LTV) by dividing
the total loans outstanding to ﬁ nance investment
properties by the value of all mortgaged investment
properties. The calculation of alstria’s net LTV also
deducts the available non-restricted cash on the
respective balance sheet date, which is deducted
from the gross debt amount.

Management Board
The Supervisory Board and the Management Board
head the management of a joint stock company.
The Management Board manages the company’s
day-to-day business and dealings.

Market value or MV
Market value is the estimated amount for which
a property should exchange on the date of valu-
ation between a willing buyer and a willing seller in
an arm’s length transaction after proper marketing
wherein the parties had each acted knowledgeably,
prudently and without compulsion (PS 3.2 of the
Appraisal and Valuation Standards issued by The
Royal Institution of Chartered Surveyors).

NAV (net asset value)
Reﬂ ects the economic equity of a company. It is cal-
culated from the value of assets less debt.

Ofﬁ ce building
Property where at least 75 % of the lettable area
is destined for ofﬁ ce use (disregarding potential
ground ﬂ oor retail).

Passing rent
Annual gross rental income as per a certain date,
excluding the net effects of straight-lining for lease
incentives.

Prime Standard
Market segment of the Frankfurt Stock Exchange
with the greatest relevance and degree of regula-
tion. Being quoted on the Prime Standard is a pre-
requisite for admission to DAX, MDAX, SDAX and
TecDAX.

Property management
Property management is the management of real
estate assets including the processes, systems and
manpower required to manage the life cycle of a
building.

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.

SDAX
Small Cap Index; it contains, with variable weight-
ing, the prices of the 50 most important, in terms
of market capitalisation and turnover, German joint
stock companies which are not included in DAX
or MDAX. In addition to dividend payments, sub-
scription right proceeds are also included when cal-
culating the index.

alstria Financial Report 2010

Other information

Vacancy rate
Determines the vacancy within the portfolio and is
calculated by comparing the vacancy area and the
total lettable area.

Vacant space
Vacant space refers to the sum of all ofﬁ ce space
that at the end of a calendar year is unoccupied or
offered for lease or sale, and that is available for
occupation within the next three months. Vacant
space consequently does not include space that is
unlettable because it is undergoing major refurbish-
ments during the relevant three-month period.

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.

Share
The term share describes both the membership
rights (holding in the joint stock company) and the
security which embodies these rights. The holder of
a share (shareholder) is a “sharer” in the assets of
the joint stock company. Their rights are protected
by the regulations contained in the Companies Act.

Share capital
The capital stipulated in a corporation’s articles of
association. The articles also specify the number of
shares into which the share capital is divided. The
company issues shares in the amount of its share
capital.

Stock exchange
The stock exchange is the market (meeting place for
supplies and demands) for securities. Stock exchange
dealing takes place in the Federal Republic of
Germany in certain places and at certain times.
The German stock exchanges are subject to state
control. The Stock Exchange Commission decides
which persons are authorised to deal on the stock
exchanges. A listing committee supervised by the
federal state decides on the admission of securities
for stock exchange dealing. There are various sub-
markets on the German stock exchanges which are
also called trading or market segments. Purchase
and sales contracts for securities which are not
admitted to any of the market segments may not
be accepted or negotiated in the dealing room dur-
ing trading hours.

Supervisory Board
The Supervisory Board is one of the three execu-
tive bodies of a joint stock company: Annual Gen-
eral Meeting, Management Board and Supervisory
Board. The Supervisory Board appoints the Man-
agement Board and provides supervision and advice
regarding management of the company’s business.

100

Other information

alstria Financial Report 2010

FINANCIAL CALENDAR

Date

Event

May 06, 2011

Jun. 08, 2011

Aug. 08, 2011

Nov. 07, 2011

Publication of Q1 Report
Interim Report (Hamburg)

Annual General Meeting
Hamburg

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

Publication of Q3 Report
Interim Report (Hamburg)

Other information

alstria Financial Report 2010

FINANCIAL CALENDAR

Date

Event

May 06, 2011

Jun. 08, 2011

Aug. 08, 2011

Nov. 07, 2011

Publication of Q1 Report
Interim Report (Hamburg)

Annual General Meeting
Hamburg

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

Publication of Q3 Report
Interim Report (Hamburg)

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 assess-
ments 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).

CONTACT

alstria ofﬁ ce REIT-AG
Bäckerbreitergang 75
20355 Hamburg, Germany
Phone: +49 (0)40 226341-300
www.alstria.com
www.alstria.blogspot.com
www.twitter.com/alstria_REIT

Investor Relations
Ralf Dibbern
Phone: +49 (0)40 226341-329
Fax: +49 (0)40 226341-310
E-mail: rdibbern@alstria.de

IMPRINT

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

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