alstria office REIT Annual Report 2012

← All annual reports

FY2012 Annual Report · alstria office REIT

Loading PDF…

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

Friedrichstrasse 19
40217 Düsseldorf, Germany
Phone: +49 (0)211 301216-600
Fax: +49 (0)211 301216-615
www.alstria.com

Points
of view

Annual Report 2012
Part II/II – Financial Report

alstria ofﬁ ce RE
alstria ofﬁ ce REIT-AG

53° 33' 13'' N; 9° 58' 54'' E

i
r
t
s
l

t
r
o
p
e
R

a
c
n
a
n
F

–

I
I
/
I
I

t
r
a
P

2
1
0
2

t
r
o
p
e
R

a
u
n
n
A

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

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

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

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

alstria ofﬁ ce REIT-AG ﬁ ve-year overview

according to IFRS

EUR k

Revenues and earnings

Revenues

Net rental income

Consolidated loss/proﬁ t
for the period

FFO

Earnings per share (EUR)

FFO per share (EUR)

EPRA1) earnings per share (EUR)

2012

2011

2010

2009

2008

101,286

90,110

39,911

43,571

0.51

0.55

90,798

80,868

27,448

34,685

0.40

0.48

0.50

89,094

81,759

102,510

91,964

102,055

93,222

206

–79,651

–56,000

27,541

0.00

0.45

0.44

32,690

–1.40

0.58

0.53

39,415

–1.02

0.70

0.68

Balance sheet

Investment property

Total assets

Equity

Liabilities

NAV per share (EUR)

Net LTV

G-REIT key ﬁ gures

G-REIT ratio

Revenues plus other income
from investment properties

EPRA1) key ﬁ gures

Diluted EPRA NAV per share (EUR)

EPRA NNNAV per share (EUR)

EPRA net initial yield

EPRA “topped-up” net initial yield

EPRA vacancy rate

EPRA cost ratio

Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2008

1,622,988

1,528,589

1,348,400

1,425,440

1,805,265

1,786,893

1,686,637

1,542,336

1,766,134

1,873,493

829,287

957,606

10.50

47.8%

768,195

918,442

10.71

50.1%

692,408

849,928

11.24

49.8%

634,185

729,667

1,131,949

1,143,826

11.32

57.9%

13.03

59.0%

50.0%

48.7%

49.8%

40.3%

100%

10.98

10.50

5.7%

8.0%

11.32

10.71

5.8%

6.5%

11.68

11.24

5.5%

5.7%

5.1%

12.18

11.32

5.4%

3.3%

13.87

13.03

5.2%

5.9%

21.4%

24.0%

20.2%

20.9%

20.1%

1) Please refer to EPRA Best Practices Recommendations, ›› www.epra.com.

Proﬁ le

alstria ofﬁ ce REIT-AG is the leading listed Real Estate Investment
Trust (REIT) and the largest listed ofﬁ ce property company by
market capitalisation in Germany. The Company is focused on
acquiring, owning and managing ofﬁ ce real estate in Germany.
alstria was founded in January 2006 and was converted into
the ﬁ rst German REIT in October 2007. Its headquarters are in
Hamburg. The Company owns a diversiﬁ ed portfolio of proper-
ties across attractive German ofﬁ ce real estate markets. Its port-
folio as at December 31, 2012 comprises 84 properties with an
aggregate lettable space of approx. 929,000 sqm and is valued
at approximately EUR 1.6 bn. The alstria ofﬁ ce REIT-AG strat-
egy is based on active asset and portfolio management as well
as on establishing and maintaining good relationships with key
customers and decision makers. alstria focuses on long-term
real estate value creation.

Contents

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

Consolidated ﬁ nancial 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

Independent auditors’ report

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

REIT disclosures
REIT declaration
REIT memorandum

Other information
Glossary
Events 2013
Contact/Imprint

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 disclosures

Additional Group disclosures
Employees
Remuneration report

Subsequent events and outlook
Subsequent events
Outlook

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

6
6
7
7
8

11
11
12

15
15
19

22
22
22

23
23
23

Group management report

Economics and strategy (business overview)

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

Economic conditions
In 2012, the European debt crisis affected the
real economy, which also impacted the German
economy. Germany’s GDP increased slightly by
0.7%, while the growth was 3.0% in 2011.* This
development also ended the positive trend in the
German labour market. The unemployment rate in-
creased by 0.1 percentage points to 6.7% in com-
parison to 2011.**

Despite the European recession the German real
estate market developed in a positive manner in
2012. Domestic and international investors seem to
prefer the stable German real estate market, which
appears to be very attractive in regards to its risk/
return proﬁ le. Some major transactions have driven
the volume on the commercial real estate market to
more than EUR 25 bn. The total investment volume
rose by 8% in comparison to the previous year.***

Overview of the German ofﬁ ce
property market
Development of ofﬁ ce rents
In 2012, ofﬁ ce
rents consistently developed in a positive way at the
most important commercial real estate sites Berlin,
Düsseldorf, Frankfurt/Main, Hamburg, Cologne,
Munich and Stuttgart (“Big 7”). On average, the
prime rents increased by around 3%. An above av-
erage growth was registered in Düsseldorf at 8.3%
(EUR 26.00 per sqm). The rents also increased in
Munich by 3.3% (EUR 31.00 per sqm), in Stuttgart
by 2.8% (EUR 18.50 per sqm), in Cologne and Ber-
lin by 2.3% (EUR 22.00 per sqm) and in Hamburg
by 2.1% (EUR 24.00 per sqm). The rents remained
at the same level (EUR 33.00 per sqm) as in the
previous year only in Frankfurt/Main.

Take-up in major German cities The vacancy
rate of ofﬁ ce properties in German cities decreased
from 9.4% in 2011 to 8.8% in 2012, which rep-
resents total vacancies of 7.78 million sqm (de-
crease of 0.58 million sqm). Comparing the “Big
7”, the highest vacancy rate was noted in Frankfurt
(11.9%), followed by Düsseldorf (11.0%), Berlin
(8.5%), Munich (8.4%), Hamburg (8.2%), Co-
logne (7.9%) and Stuttgart (5.6%).

* Federal Statistics Ofﬁ ce (Statistisches Bundesamt).

** Federal Employment Agency (Bundesagentur für Arbeit).

*** All numbers referred to in this Section are sourced from

Jones Lang Lasalle and BNP Paribas.

New lease-up
In 2012, new lease contracts for
over 3.04 million sqm of ofﬁ ce space have been
signed in the seven major German cities. This re-
ﬂ ects a decrease of 0.36 million sqm or 11% com-
pared to the previous year. Major decreases have
been registered in Stuttgart (–32.1%), Cologne
(–23.2%) and Munich (–15.0%). However, a
positive trend was recorded in Frankfurt at 20.7%.

supply

In 2012, at approx.
New ofﬁ ce
820,000 sqm, the delivery of new ofﬁ ce and com-
mercial space was on its lowest level in the past
ﬁ ve years, even though the number of completions
have increased in Düsseldorf, Cologne and Ham-
burg compared to 2011. For 2013, a slightly higher
completion volume of approx. 937,000 sqm is fore-
casted, of which the predominant part is already
pre-rented. Thus, in 2013, the supply of high-quality
new ofﬁ ce space will remain too low.

Investment markets The positive trend on the
investment market continued in the ﬁ scal year
2012. Total investment volume was approx. 8%
(around EUR 25.3 bn for commercial assets) above
the result of the previous year. In the “Big 7” sites,
a transaction volume of around EUR 15.7 bn was
recorded. The highest transaction volumes had Ber-
lin at EUR 3.95 bn, Munich with EUR 3.86 bn and
Frankfurt at EUR 3.25 bn.

The investment market has continued to focus on
high-quality core properties in premium locations.
The average prime yield for commercial ofﬁ ce real
estate was at 4.76%. However, in addition to the
core real estate, investors are seeking for opportu-
nities in the large volume area with the correspond-
ing increase in demand for “Value-Add” properties.
With regard to the deal structure, approximately
77% of the commercial investment turnover in the
ﬁ scal year 2012 related to single deals, whereas the
share of portfolio transactions amounted to 23%.

Outlook for 2013 Due to the expected down-
shift in the worldwide economy and the still ongo-
ing European debt crisis, the German government
is forecasting a slower growth rate for the German
economy of 0.4% in 2013. Still the dynamic of the
economic development might accelerate at the
end of the next year. Under these circumstances

alstria Financial Report 2012

the unemployment rate might remain stable at the
current level, the incomes may rise slightly and the
inﬂ ation will remain moderate.

In combination with more restrictive human re-
source policies of many companies, the ofﬁ ce rental
market may get under pressure in 2013. Decision
processes within the companies might decelerate
and the negotiations on conditions might get more
intense. On the investment market, the demand for
core assets will remain high and will highly exceed
the supply. Furthermore, the investors will demand
value-add properties. Under these circumstances
the transaction volume will remain stable at current
level and the prices for B locations will rise.

Strategy and structure
The alstria Group consists of the parent company
alstria ofﬁ ce REIT-AG, a real estate company listed
on the Frankfurt stock exchange, and 19 subsidiar-
ies, which include nine general partners, nine limit-
ed partnerships holding assets and one REIT service
company. Operations are made within the parent
company. Although the major part of the assets is
allocated in the alstria ofﬁ ce REIT-AG, 16 properties
are held by nine subsidiaries.

alstria is a long-term holder of its real estate port-
folio. alstria’s strategy is structured on the follow-
ing assumptions:
› The German real estate market will offer limited

rental or capital value growth in the future.

› The overall built environment is sufﬁ cient to host

all the existing demand for ofﬁ ce space.

› Rental markets are poised to suffer from an over-
crowded offer, while tenant space requirement is
going down.

› The market’s vacancy rates will remain relatively

stable.

On the back of these assumptions, our strategy
consists in owning and managing assets which:
› Fit to a speciﬁ c tenant demand in their immediate

micro-environment.

› Are rented at or below market, or if over-rented

are valued as such.

› Offer room for value enhancement as they require

to be upgraded to new real estate standards.

› Have the potential to offer the best value for

money to tenants in the micro-location.

alstria’s aim is to provide, through active day-to-
day management of its portfolio, superior real es-
tate returns.

alstria Financial Report 2012

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

› alstria has a long-term leased portfolio (around 7.1
years weighted average lease lengths). Some 72%
of rental income derives from a small number of
high-quality tenants. Around 40% of rental income
is generated from public or public-related entities,
which are less affected by economic developments.
› alstria pursues a non-trading strategy, and focuses
on long-term value creation through asset man-
agement. Thus alstria is conducting real estate
operations (i. e. asset and property management)
internally, which differentiate us from the compe-
tition in a positive way.

› 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 in-
creasing the returns of alstria. In fact, the current
environment could create opportunities for alstria
at a time when most German corporations are
looking to reduce costs.

Corporate management
alstria proactively focuses on the following indica-
tors: revenues, FFO or rather cash ﬂ ow, LTV and the
G-REIT equity ratio. Returns are realised through the
Company’s active asset management model.

By proactive management of its balance sheet, al-
stria was able to improve its LTV, reducing it from
56.4% on December 31, 2011, down to 55.0% as
at year-end 2012. The mid-term target is to reduce
the overall LTV down to below 50%.

The G-REIT equity ratio was at 50.0% at year-end
which compares to 48.7% in the prior year and a
legal covenant of 45%.

In 2012, alstria agreed terms and conditions for
the acquisition of six assets in Düsseldorf, Frank-
furt, Neu-Isenburg and Norderstedt (DIVE port-
folio). The transfer of beneﬁ ts and burden took
place in May 2012.

Additionally, four assets have been sold in 2012.
While two assets in Hamburg and Nuremberg were
transferred in 2012, one other asset in Dresden
was transferred on January 1, 2013. Furthermore,
one asset in Düsseldorf was transferred on Febru-
ary 1, 2013.

Further, in March 2012 beneﬁ ts and burden of the
asset “Alte Post” in Hamburg, which was sold at
the end of 2011, have been transferred.

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

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
further details.

In 2012, revenues were up from EUR 90.8 m to
EUR 101.3 m and funds from operations (FFO)*
were up 25.6%, from EUR 34,685 k in 2011 to
EUR 43,571 k. On a per share basis the FFO in-
creased from EUR 0.48 to EUR 0.55. The year-on-
year increase in revenues and funds from operations
was mainly driven by the new acquisitions executed
during the ﬁ nancial year 2012.

Portfolio overview
On December 31, 2012, alstria’s portfolio consisted
of 83 ofﬁ ce properties and one retail property with a
total of approx. 928,500 sqm of lettable area and a
contractual vacancy rate of 11.4%. The portfolio is
valued at a yield of 6.5% and the remaining weight-
ed average unexpired lease term is approx. 7.1 years.

The key metrics for the portfolio1)
as at December 31, 2012

Metric

Number of properties2)

Number of joint venture properties

Market value (EUR bn)

Contractual rent (EUR m/annum)

Valuation yield (contractual rent/OMV)

Lettable area (k sqm)

Vacancy (% of lettable area)3)

WAULT (years)

Average rent/sqm (EUR/month)

Value

1.6

105.5

6.5%

929

11.4%

7.1

10.7

1) Includes assets classiﬁ ed under property, plant and equipment.
2) As at reporting date, two assets are classiﬁ ed as “assets held for sale”.
3) Contractual vacancy includes vacancy in assets of the Company

development pipeline. EPRA vacancy rate is of 7.97%.

Transactions
In February 2012, alstria successfully executed a
capital increase and placed 7,170,362 new ordi-
nary bearer shares, increasing its nominal share
capital from EUR 71,703,625 to EUR 78,873,987.
The funds raised through the capital increase – af-
ter deduction of fees and expenses in connection
with the issuance – have been used to ﬁ nance the
equity portion of the acquisition of six assets. In
February 2012, alstria signed a binding notarised
agreement for the acquisition of these six assets,
located in Düsseldorf, Frankfurt, Neu-Isenburg and
Norderstedt (DIVE portfolio). The transfer of ben-
eﬁ ts and burden took place on May 1, 2012.

Acquisitions support alstria’s
buy-and-manage strategy

Acquisitions 2012

Asset

Portfolio transaction

1) Incl. acquisition related costs.

City

Frankfurt/
Düsseldorf/
Others

* For further details, please refer to ›› page 11.

Number of
assets

Purchase
price1) (EUR k)

Annual rent
(EUR k)

Yield
(%)

Avg. lease
length (years)

95,092

8,030

8.4

4.1

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 lo-
cation, size and quality. alstria’s strategy is to enter
new markets and build critical mass through long-
term secured assets. In light of this approach alstria
added six properties and approx. 71,800 sqm of let-
table space to the portfolio which helps to reinforce
its position in two of its core markets, namely Ham-
burg and Düsseldorf. To maintain an appropriate
asset and portfolio management, alstria established
an ofﬁ ce in Düsseldorf in July 2012.

alstria Financial Report 2012

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

Disposals 2012

Asset

Am Gräslein

Schopenstehl

Zwinglistrasse

City

Nuremberg

Hamburg

Dresden

Benrather Schlossallee

Düsseldorf

Number

Annual rent
(EUR k)

Avg. lease
length (years)

Sales price
(EUR k)

237

255

203

614

2.8

12.6

2.5

8.5

3,400

5,040

2,640

7,620

alstria signed binding and notarised agreements for
four properties during the ﬁ nancial year 2012:
› In February 2012, alstria signed a binding and
notarised agreement for the sale of one asset in
Nuremberg. The transfer of beneﬁ ts and burden
took place on April 1, 2012.

› In May 2012, alstria signed a binding and nota-
rised agreement for the sale of one asset in Ham-
burg. The transfer of beneﬁ ts and burden took
place on July 1, 2012.

› In October 2012, alstria signed a binding and
notarised agreement for the sale of one asset in
Dresden. The transfer of beneﬁ ts and burden took
place on January 1, 2013.

› In December 2012, alstria signed a binding and
notarised sale agreement for one asset in Düs-
seldorf. The transfer of beneﬁ ts and burden took
take place on February 1, 2013.

Additionally, in November 2011, alstria and its joint
venture partners in the joint venture “Alte Post”
signed a binding and notarised agreement for the
disposal of the “Alte Post” property. This asset was
transferred to the new owner in March 2012.

Refurbishment projects
Considerable progress was also made with alstria’s
refurbishment projects.
› Steinstrasse 5–7, Hamburg (Bartholomayhaus)
The Bartholomayhaus is part of the “Kontorhaus”
district in the heart of the city of Hamburg. The
new multi-storey car park garage in the inner
courtyard contains the original number of parking
spaces, but is reduced in its external dimension.
The reduction enables daylight and natural ventila-
tion to reach the ground and intermediate ﬂ oors
of the surrounding main building. In addition,
the new car park is equipped with a green roof
as well as a charging station for electric vehicles.
The retroﬁ tting of the garage started in the second
quarter of 2011 and was completed in April 2012.
For further information about sustainability at
alstria please refer to the sustainability report 2012
›› www.alstria.com/en/sustainability/sustainability-
reports/date/2012/.

alstria Financial Report 2012

› Hamburger Strasse 1–15, Hamburg
The retroﬁ tting of the landmark Mundsburg Of-
ﬁ 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 occu-
pancy 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 accord-
ance with the new “modernisation of ofﬁ ce and
administrative buildings” certiﬁ cation programme.
The DGNB silver pre-certiﬁ cate demonstrates the
project’s sustainability, particularly with regard to
space and energy efﬁ ciency, as well as tenant com-
fort. The refurbishment of the Mundsburg Ofﬁ ce
Tower was completed in 2012. The building was
handed over to its main tenant in January 2013.

refurbishment projects. Of

In 2012, alstria invested around EUR 12.8 m**
in ongoing
this
EUR 12.8 m, around EUR 8.0 m refers to develop-
ment projects. The main part of the 2012 capex
investment was linked to the refurbishment of the
two Hamburg buildings Bartholomayhaus (Stein-
strasse 5–7) and the Mundsburg Ofﬁ ce Tower
(Hamburger Strasse 1–15).

In the next two years, the Company plans to in-
vest between EUR 40 m and EUR 45 m in the
portfolio. These investments depend on ongoing
lease discussions with existing and potential ten-
ants. Major projects are related to the properties
Hamburger Strasse 1–15, Mundsburg Center, the
Kaiser-Wilhelm-Strasse and Schaartor in Hamburg,
as well as the Arndtstrasse in Hanover. This Capex
plan is part of alstria’s ongoing asset value en-
hancement programme.

** Excluding joint ventures.

Lease-ups
Leasing activity in 2012 was very successful. In
2012, alstria signed new leases* totalling approx.
44,800 sqm. The increase of the vacancy rate by
280 basis points (bps) to 11.4% or 105,890 sqm
is due to the recent acquisitions that incorpo-
rated a signiﬁ cant portion of vacancy. Of these
105,890 sqm, 37,400 sqm represents strategic va-
cancy (intended vacancy implemented by alstria as
part of its repositioning process for certain assets),
while the remainder is operational vacancy. From
the lease agreements which were due to expire in
2012, over 60% (of lettable area) could be retained
during the year.

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

A further key re-letting achievement was the
lease-up with one of our key tenants in Hanover,
Werner-von-Siemens-Platz. The tenant signed a
new contract for the next three years for around
19,400 sqm of ofﬁ ce and ancillary space.

In the newly acquired assets, the vacancy was sub-
stantially reduced with the lease-up of more than
4,700 sqm. The asset located in Norderstedt is tes-
timony of the Company's strong position, as the
occupancy rate increased from 62% at acquisition
up to 79% at year-end, boosting the rental income
by more than 39%.

Portfolio valuation
alstria’s portfolio was valued in accordance with the
RICS** Red Book guidance by Colliers Internation-
al at December 31, 2012.

The total valuation result on investment properties
was EUR 1,623 m.

For further information about the valuation of
alstria’s portfolio please refer to the valuation cer-
tiﬁ cate of Colliers International which is part of the
Annual Report ›› Part I/II – Company Report.

Tenants
Our key focus on a set number of major tenants is still
one of the main characteristics of the alstria portfolio.
Some 72% of total revenues are generated by alstria’s
top ten tenants. The 2012 portfolio also reﬂ ects the
clear focus on the ofﬁ ce asset class; 94%*** of the
total lettable area is dedicated to ofﬁ ces.

Total portfolio by utilisation

% of total lettable area

Ofﬁ ce

Retail

Residential

Others

alstria’s core tenants 2012
% of annual rent

City of Hamburg

Daimler AG

Bilﬁ nger Berger AG

Siemens AG

Barmer GEK

Deutsche Renten-

versicherung Bund

Rheinmetall

Württembergische
Lebensversicherung AG

HUK-COBURG

L`Oréal Deutschland GmbH 2

Third Party

Lease expiry proﬁ le
% of annual rent

2013

2014

5.7

8.1

8.5

2015

3.4

3.9

as at Dec. 31, 2011

as at Dec. 31, 2012

13.4

* New leases correspond to lease of vacant space. It does not

*** Ofﬁ ce and storage.

account for any lease renewal, prolongation or tenant exercise

of renewal option.

** Royal Institution of Chartered Surveyors.

alstria Financial Report 2012

Financial analysis

The year 2012 was a busy and successful year for
alstria, which was completed with the best op-
erational result (FFO) since the foundation. In the
ﬁ rst quarter of 2012, alstria successfully executed
a capital increase and placed 7,170,362 new or-
dinary bearer shares, increasing its nominal share
capital from EUR 71,703,625 to EUR 78,873,987.
The funds raised through the capital increase – after
deduction of fees and expenses in connection with
the issuance – have been used to ﬁ nance the eq-
uity portion of the acquisition of the DIVE portfolio,
which was acquired for EUR 95 m incl. acquisition-
related costs in spring 2012. Following the acquisi-
tion of the new assets, alstria successfully ﬁ nanced
the acquisition with a bullet loan of EUR 42.5 m in
the fourth quarter of 2012, which has a maturity of
seven years.

Earnings position
Following the transfer of the newly acquired as-
sets in the ﬁ rst half of 2012, revenues increased
by 11.6% in comparison to the previous year.
Total revenues in this reporting period amounted
to EUR 101,286 k (2011: EUR 90,798 k). Real
estate operating expenses slightly decreased by
0.2 percentage points to 10.3% of revenues or
EUR 10,398 k compared to 10.5% of revenues or
EUR 9,506 k in 2011. Net rental income for 2012
was EUR 90,110 k (2011: EUR 80,868 k).

The following table shows the key operating ﬁ g-
ures of the income statements for the ﬁ nancial
years 2012 and 2011:

Operational expenses (including administrative
and personnel expenses) were EUR 12,571 k for
the year, compared to EUR 13,138 k in 2011.
Accordingly, total operating expenses represent
12.4% of total revenues. Compared to 2011, the
rate could be lowered by 2.1 percentage points.

Net other income mainly comprises compensation
payments due to the early termination of lease con-
tracts (EUR 1,130 k), success fee paid by the joint
venture for the disposal of the “Alte Post” asset
in Hamburg (EUR 579 k) as well as other income
(EUR 1.451 k). On the other hand, it comprises
expenses of EUR 1,036 k, which mainly repre-
sent allocation to provision for rental guarantees
(EUR 895 k) and other expenses (EUR 141 k).

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

alstria closed the ﬁ nancial year 2012 with a net
operating result before ﬁ nance costs and taxes of
EUR 78,156 k. This compares to EUR 52,990 k for
the previous year, which was signiﬁ cantly inﬂ uenced
by the better net result on fair value adjustments of
investment properties and a higher revenue level.

Funds from operations (FFO)
per share up 15% (EUR 0.55)

EUR k

2012

2011

Pre-tax income (ETB)

39,957

27,448

Net proﬁ t/loss from fair value
adjustments on investment
property

Net proﬁ t/loss from fair value
adjustments on ﬁ nancial
derivatives

Proﬁ t/loss on disposal of
investment property

Other adjustments 1)

1,876

16,682

1,380

3,247

–369

–120

–1,126

673

–11,446

43,571

–3,795

34,685

–1,479

39,776

33,206

EUR k

Gross rental income

Net rental income

2012

101,286

90,110

2011

90,798

80,868

Fair value and other
adjustments in joint ventures

Funds from operations (FFO) 2)

Operational expenses

–12,571

–13,138

Maintenance capex

2,124

79,663

1,822

69,552

Adjusted funds from
operations (AFFO) 3)

–1,876

–16,682

369

78,156

120

52,990

1) Non-cash income or expenses and non-recurring effects.
2) (A)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 (A)FFO. Thus,

the (A)FFO or measures with similar names as presented by other

companies, may not necessarily be comparable to alstria’s (A)FFO.
3) The AFFO is equal to the FFO with adjustments made for capital

expenditures used to maintain the quality of the underlying

investment portfolio.

Net other income

Operating income

Net result from fair value
adjustments on investment
properties

Net result on disposals of
investment properties

Net operating result

alstria Financial Report 2012

Funds from operations amounted to EUR 43,571 k
in 2012 as against EUR 34,685 k in 2011. As a re-
sult, FFO per share* was EUR 0.55 in the ﬁ nancial
year 2011 (2011: EUR 0.48).

Financial result
The following table shows the ﬁ nancial result for
the period January 1 to December 31, 2012:

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

The increase in comparison with 2011 resulted
mainly from the growth of revenues after the ac-
quisition and transfer of six new assets in 2012.

Hedging instruments
The change in valuation of the ﬁ nancial derivatives
was driven by the development of the yield curve
in the year 2012. 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
qualifying part of the derivatives to be recognised
under the equity cash ﬂ ow hedge reserve with no
effect on income.

In line with the Group-wide ﬁ nancing strategy for
ﬂ oating interest hedging, new derivative ﬁ nancial
instruments were entered into in 2012.

In the ﬁ nancial year 2012, the effective devalua-
tion in the value of the swaps, which is recorded in
equity as “hedging reserve”, was EUR 5,363 k. This
change in fair value of effective cash ﬂ ow hedges is
therefore not recognised in the income statement.
The fair value changes of derivatives not catego-
rised as cash ﬂ ow hedges as well as the ineffective
part in fair value changes of cash ﬂ ow hedges are
recognised in the income statement under “Net re-
sult from fair value adjustments on ﬁ nancial deriva-
tives”. The interest expenses on swaps and caps are
stated in the ﬁ nancial result.

The fact that alstria’s main debt exposure is
hedged by ﬁ nancial derivatives, the current over-
all cost of debt for the existing portfolio amounts
to around 4%.

An overview of the composition and changes is de-
scribed in detail in ›› Section 10.7 of the notes.

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

period (December 31, 2012: 78,933,487; December 31, 2011:

71,703,625).

EUR k

Financial income

Interest expenses
syndicated loan

Interest expenses other loans

Interest result derivatives

Other interest expenses

2012

657

2011

959

–14,383

–17,869

–9,385

–12,589

–250

–8,625

–9,611

–7

Financial expenses

–36,607

–36,112

Other ﬁ nancial expenses

–135

–206

Net ﬁ nancing result

–36,085

–35,359

As at December 31, 2012 alstria was not in breach
of any of its ﬁ nancial covenants. Net ﬁ nancing costs
increased by EUR 726 k to EUR 36,085 k in com-
parison with the year 2011. The increase is attribut-
able to a higher average loan notional compared to
the previous reporting period. For details on the new
loans, we refer to the section entitled “ﬁ nancial and
asset position” ›› see below.

Consolidated net result at EUR 39,911 k
The pre-tax result is EUR 39,957 k for the ﬁ nancial
year 2012 (2011: EUR 27,448 k). The consolidated
net income amounted to EUR 39,911 k for the re-
porting period in comparison to EUR 27,448 k in
2011. The reasons for the improvement are mainly
driven by the positive developments in revenues
and in net result from fair value adjustments on in-
vestment properties.

REIT-AGs are fully exempt from German corporate
income tax and trade tax. Hence, alstria ofﬁ ce REIT-
AG has been exempt from income and trade tax
with retrospective effect since January 1, 2007. Tax
payment obligations of EUR 46 k arose in 2012 on
Group level for afﬁ liates serving as a general partner
of a partnership or for REIT service companies.

Earnings per share were EUR 0.51 for 2012 up by
28% (2011: EUR 0.40).

Financial and asset position
Financial management
alstria’s ﬁ nancial management is carried out at cor-
porate level, with individual loans being taken out
at property and portfolio level. The main goal of al-
stria’s ﬁ nancial policy is the establishment of secured,

alstria Financial Report 2012

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

long-term structures to support the development of
its business whilst providing the required degree of
ﬂ exibility. Corporate management of debt ﬁ nancing
forms the basis for optimised capital procurement,
proactive management of interest and liquidity risks
and efﬁ ciency improvements for the whole Group.

In conjunction with the disposal of three assets,
EUR 6,619 k of the syndicated loan has been
repaid in 2012. Following the acquisition of the
DIVE portfolio for EUR 95.1 m (including addi-
tional purchase costs) in early 2012, alstria suc-
cessfully closed the ﬁ nancing of this transaction
with the withdrawal on a new loan at the end
of 2012. The bullet loan has a total amount of
EUR 42.5 m and a term of seven years.

Existing loan agreements as at December 31, 2012

Loan

Syndicated loan

Non-recourse loan #1

Non-recourse loan #2

Non-recourse loan #3

Non-recourse loan #4

Non-recourse loan #5

Loan #6

Loan #7

Loan #8

Total as at Dec. 31, 2012

Maturity

Jul. 20, 2015

Oct. 20, 2015

Dec. 31, 2014

Jun. 30, 2014

Oct. 20, 2014

Jan. 31, 2017

Dec. 31, 2015

Dec. 17, 2018

Sept. 30, 2019

Principal amount
outstanding
(EUR k)

Current LTV
(%)

LTV covenant
(%)

564,721

47,902

42,670

29,568

30,747

71,376

11,500

56,000

42,500

896,984

54.1

70.2

64.9

56.0

55.0

60.2

58.7

48.8

45.6

55.0

70.0

80.0

60.0

65.0

75.0

60.0

65.0

alstria’s main ﬁ nancial goal is to establish a sus-
tainable long-term ﬁ nance structure. An integral
part of this structure is that long-term loans are
covered by corresponding hedging instruments,
such as swaps and caps. The aim of this strategy

Financial debt by maturities1)
EUR k

618,600

103,000

2013

5 2)

2014

2015

2016

2017

71,300

2018

56,000

2019

42,500

As at Dec. 31, 2012

1) Excluding regular amortisation.
2) Repayment due to disposal of one property in Düsseldorf.

alstria Financial Report 2012

is to largely eliminate short-term interest volatil-
ity from the income statement. The average debt
maturity was at 3.0 years as at December 31, 2012
compared to 3.8 years as at December 31, 2011,
whereas the average cost of debt of the Group
decreased slightly to around 3.9% (compared to
4.3% p.a. in the previous year).

Cash position is EUR 118,548 k
Cash ﬂ ows from operating activities for the ﬁ nancial
year 2012 amounted to EUR 45,735 k. The signiﬁ -
cant increase compared to the reporting period 2011
(EUR 38,457 k) resulted mainly from higher rental
revenues and lower payments for interest expenses.

The cash ﬂ ow from investing activities is impacted
by the cash outﬂ ows resulting from the acquisitions
of the DIVE portfolio and investments in existing
properties (cash outﬂ ow EUR 107,125 k). Cash in-
ﬂ ows of EUR 11,080 k relate to payments received
for the sale of investment properties. Proceeds from

the equity release of interests in joint ventures gen-
erated cash inﬂ ows in an amount of EUR 25,212 k.

The fair value of immovable assets is used for the
G-REIT equity ratio calculation.

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

The cash ﬂ ows from ﬁ nancing activities mainly re-
ﬂ ect the proceeds from shares issued in an amount
of EUR 59,756 k net and the dividend payment
(EUR 34,705 k). Furthermore, cash outﬂ ows were
made for the acquisition or termination of ﬁ nancial
derivatives (EUR 10,002 k) and in an amount of
EUR 10,317 k for the redemption of loans.

As a result, alstria ended the ﬁ nancial year 2012
with a cash position of EUR 118,548 k (2011:
EUR 96,009 k). The Group is adequately funded to
comply with its ﬁ nancial obligations.

Investment properties up by 6.2%
Total
investment property value amounted to
EUR 1,622,988 k in comparison with EUR 1,528,589 k
at the beginning of the year. The increase of invest-
ment property was particularly based on the acquisi-
tion of six assets in Düsseldorf, Frankfurt am Main,
Neu-Isenburg and Norderstedt (DIVE portfolio) as
well as the capitalisation of modernisation measures.
Reclassiﬁ cations of EUR 10,356 k refer to the assets
held for sale with EUR 9,750 k of latest appraised value
and the area of the property Friedrichstrasse in Düs-
seldorf, which has been partially occupied by alstria
for its own use since July 2012. The valuation result
amounted to EUR –1,876 k and therefore was slightly
negative in 2012. Extraordinary burdens of EUR 5 m
resulted from the depreciation of acquisition-related
costs (DIVE portfolio), EUR 2 m reﬂ ected the increase
of transfer tax in the state of Hesse. However, this
negative impact was partly compensated by valuation
gains resulting from successful asset-management ac-
tivities and yield compression.

EUR k

Investment properties at Dec. 31, 2011

1,528,589

Subsequent acquisition and production costs

Acquisitions

Disposals

Reclassiﬁ cation

Revaluations

12,867

101,844

–8,080

–10,356

–1,876

Investment properties at Dec. 31, 2012

1,622,988

Fair value of owner-occupied properties

Fair value of property held for sale1)

Interests in real estate partnerships

5,923

10,010

18,183

Fair value of immovable assets

1,657,104

1) Incl. valuation gains of EUR 260 k.

Equity ratio of 46.4% –
G-REIT equity ratio at 50.0%
The balance sheet reﬂ ects a total equity position
of EUR 829,287 k with an equity ratio of 46.4%
(December 31, 2011: EUR 768,195 k, 45.5%). The
G-REIT equity ratio, which is deﬁ ned as total equity
divided by immovable assets, was 50.0% (Decem-
ber 31, 2011: 48.7%). According to the G-REIT Act
(REITG), the minimum requirement for compliance is
a G-REIT equity ratio of 45% calculated at year-end.

NNNAV at EUR 10.50 per share
NNNAV (Triple Net Asset Value according to EPRA*)
is EUR 10.50 per share (2011: EUR 10.71 per share).

Following the capital increase at the end of the ﬁ rst
quarter 2012, equity increased compared to De-
cember 2011. Due to a decline in fair value of ﬁ -
nancial instruments, the hedging reserve decreased
by EUR 4,377 k from EUR –17,760 k as at De-
cember 31, 2011 to EUR –22,137 k as at Decem-
ber 31, 2012. The consolidated proﬁ t for the period
resulted in equity growth of EUR 39,911 k. This led
to a total increase in equity from EUR 768,195 k to
EUR 829,287 k.**

loans

New loan increased ﬁ nancial debt
Long-term
to
EUR 882,105 k in 2012. This is mainly related to
the ﬁ nancing of the acquisition of the DIVE portfo-
lio with a bullet loan expiring in 2019.

increased by 3.2%

Increase in current liabilities
Current liabilities amounted to EUR 28,101 k, of
which EUR 9,986 k were categorised as short-
term loans, representing ﬁ nancial liabilities that
will be repaid due to the disposal of the property
in Düsseldorf (EUR 5,460 k) or were part of sched-
uled amortisation in 2012. Other current liabilities
amounting to EUR 14,035 k mainly comprised
outstanding invoices (EUR 5,071 k), deferred in-
come (EUR 1,309 k) and other current liabilities
(EUR 7,337 k). Please refer also to the ›› Section
11.4 of the notes for ﬁ nancial year 2012.

* EPRA: European Public Real Estate Association, Best Practices

Committee, Brussels, Belgium.

** See also the consolidated statement of changes in equity

on ›› page 30.

alstria Financial Report 2012

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, evalu-
ated and monitored on at least a quarterly basis. The
goal of alstria Group’s risk management strategy is
to minimise or, where possible, completely avoid the
risks associated with entrepreneurial 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 detection 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 meas-
ures 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 man-
agement 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 department. A risk report is prepared by
the risk manager on a quarterly basis and provided
to the Management Board. The bases for the prep-
aration 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.

alstria Financial Report 2012

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 process is
to make sure that the reporting is consistent and
in line with the legal requirements, the generally
accepted accounting principles and the Interna-
tional Financial Reporting Standards (IFRS), as
well as internal 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 manage-
ment system that combines all relevant principles,
processes and measures.

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

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

The monitoring measures consist of elements incor-
porated in the process and external, independent
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 check-
ing mechanisms. In addition, qualiﬁ ed employees
with the appropriate expertise 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 inter-
locutor. If required, external experts (auditors, quali-
ﬁ ed accounting specialists, etc.) will be consulted.

In addition, the accounting-related monitoring
is executed by the controlling department of the
Company. All items and main accounts of the in-
come statement and the balance sheet are reviewed
regularly 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.

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

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 docu-
mented by the risk management committee. Ap-
propriate action is taken in order to monitor and
optimise accounting-related risks throughout the
alstria Group.

indicators to monitor these risks. Rent projections,
vacancy analyses, the control of the lease terms
and termination clauses, and ongoing insurance
checks are designed to help identifying 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 highly rated, the risk
of shortfall in payments is currently limited.

Risk areas
Within the context of its business activities, the
alstria Group faces various risks, which are ex-
plained 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
Group’s position and performance are described in
this chapter in accordance with alstria’s risk man-
agement system. The individual risks described re-
late to the planning horizon of 2013 to 2015.

Strategic risks
Strategic risk management consists mainly of the
implementation of guidelines contained in the in-
vestment 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 catego-
rised as strategic risks. In view of the impact of
the so-called sovereign debt crisis on the ﬁ nancial
markets, consequences on the general strategic risk
situation due to the future macroeconomic envi-
ronment as compared to the previous year are not
evident. As long as there is no material change in
the economic environment, alstria’s strategic 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
creditworthiness 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 Group uses various early warning

Refurbishment projects alstria realises refur-
bishment projects to a material extent. All risks
related to these projects, e. g. risk of not-in-time
completion, risk of budget overrun as well as the
risk of deﬁ ciencies in the construction, is managed
through with the implementation of an extensive
project controlling and a budget management pro-
cess. Compared to the end of the previous reporting
period the risk resulting from refurbishment projects
is categorised unchanged at a moderate level.

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 uctuations as well as from not recruiting suf-
ﬁ 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,
which could inﬂ uence the competitive advantages
on the markets as well as the further growth oppor-
tunities 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, improved com-
pared to the previous year.

IT security The majority of our business processes
are supported by efﬁ cient IT systems. Any fault af-
fecting 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 exter-
nal data depository. Detailed rules on access rights
ensure that employees can only access the systems

alstria Financial Report 2012

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

they need for their work. Overall, therefore IT risks
are assessed to be unlikely and their possible con-
sequences are assessed to be moderate, basically
unchanged compared to last year’s assessment.

Property transactions alstria is exposed to risks
related to the acquisition and disposal of real estate
properties, such as a lack of revealing all, or the
full extent, of the risks and liabilities associated with
properties in the due diligence examination carried
out or the risk associated with/inherent in the valu-
ation method used to appraise the property. In the
case of the disposal of real estate assets, alstria will
usually give certain warranties to a potential pur-
chaser as regards factual and legal matters of the
sold property. It cannot be fully excluded that al-
stria’s management is not aware of a risk that is
covered by certain representation and warranty in
the sales agreement. As a result, there will generally
be a risk that alstria as seller may be charged by a
prospective purchaser for breach of warranty. From
a purchasing perspective, alstria is exposed to the
risks that hidden deﬁ ciencies on land and/or prop-
erty are not observed or unfavourable contractual
agreements are transferred to the Company, result-
ing into additional future cost.

alstria responds to these risks – both in acquisition
and selling proceedings – by thorough technical,
legal and tax analysis with respect to all relevant
property and contractual issues by employing in-
ternal and external lawyers, tax advisors, architects,
construction engineers and other experts required.
Risks relating to transactions of properties are as-
sessed to be of a low to moderate level.

Environmental risks alstria is exposed to risks
arising from environmental liabilities or possible
damages resulting from natural events such as ﬁ re
or ﬂ ooding. alstria’s buildings may contain unde-
tected hazardous materials (such as asbestos) to
an unanticipated extent or alstria’s real estate may
be contaminated or otherwise affected by envi-
ronmental risks or liabilities, such as pre-existing
pollution and soil contamination. Risk mitigation is
implemented by a due-diligence examination that
alstria customarily undertakes when acquiring new
properties as well as the warranty issued by the
seller.

Furthermore, insurances covering the impacts of
natural catastrophes are in place.

Compliance risks
G-REIT legislation alstria is registered in the
commercial register as a German REIT-AG (G-RE-
IT). The German REIT segment allows alstria to of-
fer 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 ad-
mission on the Regulated Market (Prime Standard).

Certain requirements have to be met by the Com-
pany in order to qualify for and retain its designa-
tion as a G-REIT. The most relevant of these re-
quirements 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 and investment
management activities are designed to maintain
the Company’s G-REIT status in order to support its
business activities and maximise shareholder value.

The alstria Group manages its capital structure
and makes adjustments in response to changes
in economic conditions. In order to maintain or
adjust the capital structure, the Group can issue
new shares or make a capital repayment to its
shareholders. No changes were made to the aims,
guidelines and processes as at December 31, 2012
and December 31, 2011.

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 immovable

alstria Financial Report 2012

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

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 satisﬁ ed for three
consecutive ﬁ nancial years.

The G-REIT equity ratio at the balance sheet date
is 50.0%. Accordingly, alstria complied with the
minimum G-REIT equity ratio requirement accord-
ing to Section 15 G-REIT Act (REITG) calculated at
year-end of 45%. Generally, the risk remains that
alstria may fail to meet the minimum G-REIT eq-
uity 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
forecasting period until December 31, 2015, it is
excluded that alstria will lose its G-REIT status by
reason of shortfall of the 45% barrier.

Compliance risks alstria is dependent on the ob-
servance of compliance standards by all employees
and management. On the basis of documented poli-
cies and procedures as well as applicable law, alstria's
business depends on its employees and the mem-
bers of the management being in compliance with
such laws, policies and procedures. If alstria's senior
management fails to document and reinforce the
Company's policies and procedures, or employees
commit criminal, unlawful or unethical acts (includ-
ing corruption), this could have a material adverse
effect on alstria's business, ﬁ nancial condition and
results of operations, also by harming alstria's repu-
tation in the real estate market and thereby nega-
tively affecting future business opportunities. alstria
has implemented a compliance organisation com-
prising adequate and documented compliance rules
and regulations as well the training of compliances
related topics to all employees. The materialisation
of compliance risks is assessed to be unlikely.

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

Financial risks
With respect to alstria’s reﬁ nancing strategy, the ﬁ -
nancial risk situation proved to be stable as compared
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 ﬁ nancial in-
struments 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 risks, interest rate
risks and liquidity risks. alstria’s current debt ratio is
approx. 54%. This is a reasonable rate compared to
the average leveraging rate of German real estate
companies. alstria’s syndicated loan facility agree-
ment 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 54.1% at
the relevant test date. The risk of covenant breach
was encountered effectively.

The next reﬁ nancing requirement for the main part
of alstria’s loans will be effected according to plan
in mid-2015, enabling alstria a two and a half year
cushion for performing the reﬁ nancing. Thus the
risk of reﬁ nancing on unfavourable terms is limited
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 uctuations 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 uctua-
tions, 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 different 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 borrow-
ings. 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 notional principal amount. Interest caps
were also acquired in order to cap the interest at a

alstria Financial Report 2012

set maximum. If the maximum interest rate is ex-
ceeded, 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 prevent 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 ma-
jor liquidity risk resulting from the balloon repayment
on the main syndicated loan facility was successfully
averted. Since the new syndicated loan facility will
not be due until mid-2015, the liquidity risk resulting
from repayment obligations is currently mitigated.

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 vari-
ety of factors, some of which are exogenous and
may not be under alstria’s control, such as declin-
ing 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, discre-
tionary and may differ from the opinion of another
appraiser. Should the factors considered or assump-
tions made in valuing a property change, in order to
reﬂ ect new developments or for other reasons, sub-
sequent valuations of the respective property may
result in a decrease in the market value ascribed to
such property. If such valuations reveal signiﬁ cant
decreases in market value compared to prior valua-
tions, the Company would incur signiﬁ cant revalua-
tion losses with respect to such properties.

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

alstria Financial Report 2012

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

Counterparty risk alstria hedges a portion of its
risk by using third-party instruments (interest rate
derivatives, property insurances and others). alstria’s
counterparties in these contracts are internationally
recognised institutions, which are rated by the lead-
ing 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’ assess-
ments. As a reaction to this objection, alstria started
to perform a review of the main counterparties in
order to reinforce the rating agencies’ assessments.

Overall assessment
Compared to the previous year, the overall risk
situation of alstria stays unchanged stable. On the
one hand, the economic situation in Germany is
remaining relatively stable compared to other Eu-
ropean economies affected by the sovereign debt
crisis. On the other hand, the stable reﬁ nancing po-
sition and a solid G-REIT equity ratio allow a solid
development of the Company. 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 position of the Group safeguards a
stable ﬁ nancial position until at least mid-2015 at fa-
vourable interest rates. On the revenue side, alstria
beneﬁ ts from long-term rent agreements of approx.
7.1 years’ average lease length and potential rent
increases due to consumer price indexation.

In addition, the Group possesses a range of proper-
ties available for attractive and value-add refurbish-
ment opportunities.

The alstria portfolio is well balanced and contains
many ﬁ rst-class anchor buildings with high-quality
tenants.

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

alstria’s core competence is asset management.
The asset repositioning and refurbishment alstria is
continuously undertaking, both as part of joint ven-
tures and on its own, will strengthen the basis for
organic value increase across the portfolio.

Sustainability report

Mandatory disclosures

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

In 2012, alstria published its third sustainability re-
port. In this report alstria’s sustainability approach
and the stakeholder approach are described. Fur-
thermore, it provides information about alstria’s
key achievements within the framework and gives
the reader a deeper insight into the operational
impacts. The key values within the framework ex-
pressed for each and every stakeholder group are
alstria’s main drivers for the integration of sustain-
ability issues into the Company’s daily business de-
cisions. The associated operational impacts specify
the overall values.

For further information on our sustainability en-
gagement and targets, please refer to the annual
sustainability report 2012, which is available on
alstria’s website ›› www.alstria.com/sustainability/
sustainability reports/2012 and/or to ›› Part I/II –
Company Report of the annual report 2012.

Disclosure requirements in accordance with
Section 315 para. 4 of the German Commercial
Code (HGB) for the ﬁ nancial year 2012 and the
explanatory report of the Management Board

Composition of subscribed capital
As per the balance sheet date at December 31,
2012, the share capital of alstria amounted to
EUR 78,933,487.00, divided into 78,933,487 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. 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 voting rights or the
transfer of shares
The exercise of voting rights and the transfer of
shares are based on the general statutory require-
ments and alstria’s articles of association, which
does not restrict either of these activities. Under
Section 136 of the German Stock Corporation Act
(AktG) the voting right of the affected shares is ex-
cluded by law. There are no other restrictions as to
voting rights or the transfer of shares, or, as far as
they arise from agreements between shareholders,
are not known to the Management Board.

Shareholdings which exceed 10%
of the voting rights
As per the balance sheet date at December 31, 2012,
alstria was not aware of any shareholders holding di-
rectly or indirectly 10% of the voting rights.

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
The employees, who hold alstria shares, exercise
their control rights as other shareholders in ac-
cordance with applicable law and the articles of
association.

alstria Financial Report 2012

Appointment and dismissal of
Management Board and amendments
to the articles of association
alstria’s Management Board consists of one or more
members who may be appointed or dismissed by
the Supervisory Board in accordance with Sections
84 and 85 of the German Stock Corporation Act
(AktG). The articles of association do not contain
any special provisions in this respect. Pursuant 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. Reap-
pointment or extension of the term of ofﬁ ce is per-
mitted, 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 Ger-
man Stock Corporation Act (AktG). The Supervi-
sory 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 in general meeting, Section 12
para. 2 of the articles of association. Pursuant to
Section 15 para. 5 of the articles of association in
conjunction with Sections 179 para. 2 and 133 of
the German Stock Corporation Act, sharehold-
ers may make resolutions regarding such amend-
ments 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 by
resolution of the Supervisory Board on Septem-
ber 19, 2012: Section 5 para. 1, 2 and 7 of the
articles of association were formally adapted to a
capital increase executed under the employee par-
ticipation programme of the Company.

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 Su-
pervisory Board, to increase the share capital
until October 23, 2013 by issuing new bearer
shares against contribution in cash and/or kind
once or repeatedly up to a total amount of
EUR 39,436,993.00. Further details are gov-
erned by Section 5 para. 3 to 4b of the articles
of association.

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

2. Conditional Capital

alstria has four conditional capital (pursuant to
Sections 192 et seq. of the German Stock Cor-
poration Act, AktG), which are regulated in Sec-
tions 5 para. 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 is-
suance 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 exercise of options or
conversion rights or the fulﬁ lment of a conver-
sion obligation at variance from Section 60 para.
2 of the German Stock Corporation Act (AktG).
The conditional capital increase is only carried out
insofar as the holders of option rights or conver-
sion rights, or those holders with conversion obli-
gations 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 shareholders in
general meeting on June 16, 2010, utilise their
option rights or conversion rights or, insofar as
such holders have conversion obligations, such
holders fulﬁ l their conversion obligations, unless
a cash settlement is granted or treasury shares
or shares of another listed company are used to
fulﬁ l the option rights or conversion rights.

b) Conditional Capital II

The share capital is conditionally increased by
an amount of up to EUR 515,625.00 by the is-
suance of up to 515,625 no par value bearer
shares. The sole purpose of the conditional capi-
tal increase is to grant shares to the holders of
subscription rights (stock options) which were
issued by alstria in accordance with the authori-
sation of the Annual General Meeting held on
March 15, 2007. The conditional capital increase
is only carried out insofar as the holders exercise
their stock options and no treasury shares are
used to fulﬁ l the stock options. The new shares
shall participate in the Company’s proﬁ ts from
the beginning of the ﬁ nancial year in which they
come into existence to satisfy the exercise of the
stock options.

alstria Financial Report 2012

t
r
o
p
e
r

t
n
e
m
e
g
a
n
a
m
p
u
o
r
G

c) Conditional Capital III

The share capital is conditionally increased by an
amount of up to EUR 336,874.00 by the issuance
of up to 336,874 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 were issued by
the Company until March 14, 2012 in accord-
ance with the authorisation of the general meet-
ing held on March 15, 2007. The conditional
capital increase is only carried out insofar as is-
sued convertible proﬁ t participation certiﬁ cates
are converted into shares of the Company and
no treasury shares are used to satisfy the cer-
tiﬁ 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.

d) Conditional Capital III 2012

Furthermore, the share capital is conditionally in-
creased by an amount of up to EUR 500,000.00
by the issuance 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
were issued by the Company until April 23, 2017
in accordance with the authorisation of the gen-
eral meeting held on April 24, 2012. The condi-
tional capital increase is only 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 in general meeting on June 8,
2011 authorised the Management Board to ac-
quire shares up to a total of 10% of the Com-
pany’s share capital at the time of the issuance
of the authorisation until June 7, 2016. The ac-
quired 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).

Signiﬁ cant agreements which take effect
upon a change of control of the Company
A signiﬁ cant syndicate loan agreement of alstria
entitles the creditor to declare the loan due for pay-
ment after alstria’s shares are no longer admitted
for trading on an organised market within the EU
and the current majority shareholder at the time of
the conclusion of the loan agreement is not in a
position to control alstria, or a person other than
the then current majority shareholder holds a larger
shareholding in alstria than the then current major-
ity shareholder.

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

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 at December 31, 2012, alstria had 59 employ-
ees (December 31, 2011: 50). The annual average
number of employees was 55 (2011: 48). These ﬁ g-
ures 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 ›› appendix to the Group
management report pages 90 to 93, containing de-
tails of the principles for the deﬁ nition of the Man-
agement Board and Supervisory Board remunera-
tion, forms an integral part of the audited Group
management report.

alstria Financial Report 2012

G
r
o
u
p
m
a
n
a
g
e
m
e
n
t

r
e
p
o
r
t

Subsequent events
and outlook

Subsequent events
As at October 2012, a binding and notarised agree-
ment for the sale of one property located in Dresden
was signed. The transfer of beneﬁ ts and burden took
place on January 1, 2013.

As at December 2012, a binding and notarised
agreement for the sale of one property located
in Düsseldorf was signed. The transfer of beneﬁ ts
and burden took place on February 1, 2013.

In February 2013, alstria received from a former ma-
jority shareholder EUR 1,800 k as a compensation
for expenses relating to certain capital market trans-
actions and associated liabilities, which have been
recognised at the end of the reporting period 2012
an amount of EUR 1,229 k.

Outlook
Based on the latest transactions and the contracted
rent for 2013, alstria expects revenues of around
EUR 103 m and funds from operations of EUR 45 m.

This projection could be impacted by changes in in-
terest rates and further property acquisitions or dis-
posals or other changes of the assumptions in 2013.
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 portfo-
lio growth is highly dependent on the development
of the global equity markets and is 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 2014.
Again, these results may be impacted by further ac-
quisitions and disposals or interest rate changes.

The management report contains statements re-
lating to anticipated future developments. These
statements are based on current assessments and
are, by their very nature, exposed to risks and un-
certainty. Actual developments may differ from
those predicted in these statements.

Hamburg, February 14, 2013

alstria Financial Report 2012

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

Corporate information
Basis of preparation
Changes in accounting policy and disclosures
Basis of consolidation
Key judgements and estimates
Seasonal or economic effects on business
Summary of signiﬁ cant accounting policies
Segment reporting
Notes to the consolidated income statement

1
2
3
4
5
6
7
8
9
9.1 Revenues
9.2

Income and expenses from passed-on
operating expenses

9.3 Real estate operating expenses
9.4 Administrative expenses
9.5 Personnel expenses
9.6 Other operating income
9.7 Other operating expenses
9.8 Financial and valuation result
9.9
9.10 Income taxes
10

Notes to the consolidated statement
of ﬁ nancial position – assets

Gain or loss on disposal of investment property

10.1 Investment property
10.2 Equity-accounted investment
10.3 Property, plant and equipment
10.4 Intangible assets
10.5 Assets held for sale
10.6 Receivables and other assets
10.7 Derivative ﬁ nancial instruments
10.8 Cash and cash equivalents

26
27
28
30
32
34

34
34
34
38
39
40
40
46
47
47

47
47
47
47
48
48
48
49
49

49
49
50
50
51
51
51
52
54

alstria Financial Report 2012

Consolidated ﬁ nancial statements

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

11.1 Equity
11.2 Financial liabilities
11.3 Other provisions
11.4 Trade payables and other liabilities
11.5 Trust assets and liabilities
11.6 Deferred taxes
12 Other notes
12.1 Compensation of Management Board

and Supervisory Board

12.2 Commitments and contingencies
12.3 Consolidated cash ﬂ ow statement
13
Related party relationships
13.1 Preliminary remarks
13.2 Remuneration of key management personnel
13.3 Related party transactions
14
Earnings per share
15 Dividends paid
Employees
16
Stock option programme
17
Share-based remuneration
18
Convertible proﬁ t participation rights
19
programme
Financial risk management
Signiﬁ cant events after the end of the
reporting period

20
21

22 U tilisation of exempting provisions
23

Disclosures pursuant to Wertpapierhandels -
gesetz [German Securities Trading Act]

23.1 Ad-hoc announcement
23.2 Directors’ dealings
23.3 Voting rights notiﬁ cations
24

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

25 Auditor’s fees
26 Management Board
27

Supervisory Board

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

54
54
56
57
58
58
59
59

59
59
60
60
60
60
60
60
61
61
61
62

63
65

71
71

72
72
72
74

76
76
76
76

alstria Financial Report 2012

Consolidated ﬁ nancial statements

Consolidated income statement
for the period from January 1 to December 31, 2012

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 on disposals 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

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Pre-tax result (EBT)

Income tax expense

Consolidated proﬁ t

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

2012

101,286

–778

–10,398

90,110

–5,722

–6,849

3,160

–1,036

–1,876

369

78,156

2011

90,798

–424

–9,506

80,868

–6,799

–6,339

3,380

–1,558

–16,682

120

52,990

–36,085

–35,359

–734

–1,380

39,957

–46

39,911

13,064

–3,247

27,448

39,911

27,448

0.51

0.40

alstria Financial Report 2012

Consolidated statement of comprehensive income
for the period from January 1 to December 31, 2012

EUR k

Consolidated proﬁ t for the period

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

10.7

2012

39,911

–5,363

986

–4,377

35,534

2011

27,448

–14,171

1,333

–12,838

14,610

35,534

14,610

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

alstria Financial Report 2012

Consolidated statement of ﬁ nancial position
as at December 31, 2012

Assets

EUR k

Non-current assets

Investment property

Equity-accounted investments

Property, plant and equipment

Intangible assets

Derivatives

Total non-current assets

Current assets

Assets held for sale

Trade receivables

Accounts receivable from joint ventures

Derivatives

Other receivables

Cash and cash equivalents

thereof restricted

Total current assets

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Notes

2012

2011

10.1

10.2

10.3

10.4

10.7

10.5

10.6

10.7

10.6

10.8

1,622,988

18,183

5,334

467

403

1,528,589

44,128

4,576

450

1,471

1,647,375

1,579,214

10,010

3,656

403

6,812

118,548

252

139,518

2,449

2,095

6,870

96,009

270

107,423

Total assets

1,786,893

1,686,637

alstria Financial Report 2012

Equity and liabilities

EUR k

Equity

Share capital

Capital surplus

Hedging reserve

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

Short-term loans

Trade payables

Proﬁ t participation rights

Derivatives

Other current liabilities

Total current liabilities

Total liabilities

Notes

11.1

2012

2011

78,933

769,412

–22,137

3,079

829,287

882,105

35,080

5,191

7,129

929,505

9,986

3,735

345

14,035

28,101

957,606

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

71,704

751,084

–17,760

–36,833

768,195

854,814

37,553

3,767

989

897,123

4,505

3,201

291

2,479

10,843

21,319

918,442

11.2

10.7

11.3

11.4

11.2

11.4

10.7

11.4

Total equity and liabilities

1,786,893

1,686,637

alstria Financial Report 2012

Consolidated statement of changes in equity
for the period from January 1 to December 31, 2012

Notes

Share
capital

Capital
surplus

Hedging
reserve

Treasury
shares

Retained
earnings

Total
equity

71,704

751,084

–17,760

–36,833

768,195

EUR k

As at Jan. 1, 2012

Changes in the
ﬁ nancial year 2012

Consolidated proﬁ t

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Other comprehensive income

Total comprehensive income

Payments of dividends

Share-based remuneration

–4,377

–34,705

506

Proceeds from shares issued

11.1

7,170

53,778

Transaction costs of issue
of shares

Conversion of convertible
participation rights

11.1

–1,310

As at Dec. 31, 2012

11.1

78,933

769,412

–22,137

39,911

–4,377

35,534

–34,705

506

60,948

–1,310

118

3,079

829,287

alstria Financial Report 2012

for the period from January 1 to December 31, 2011

Notes

Share
capital

Capital
surplus

Hedging
reserve

Treasury
shares

Retained
earnings

Total
equity

61,600

700,036

–4,922

–26

–64,280

692,408

27,448

–12,838

27,448

14,610

–31,503

407

95,000

–2,938

208

–36,833

768,195

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

EUR k

As at Jan. 1, 2011

Changes in the
ﬁ nancial year 2011

Consolidated proﬁ t

Other comprehensive income

Total comprehensive income

Payments of dividends

Share-based remuneration

–12,838

–31,503

407

Proceeds from shares issued

11.1

10,000

85,000

Transaction costs of issue
of shares

Conversion of convertible
participation rights

Conversion of treasury shares

11.1

–2,938

104

–22

As at Dec. 31, 2011

11.1

71,704

751,084

–17,760

alstria Financial Report 2012

Consolidated statement of cash ﬂ ows
for the year ended December 31, 2012

EUR k

1. Cash ﬂ ows from operating activities

Consolidated proﬁ t for the period

Unrealised valuation movements

Interest income

Interest expense

Result from income taxes

Other non-cash expenses (+)

Notes

9.8

9.10

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

Depreciation and impairment of ﬁ xed assets (+)

9.9

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

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Interest received

Interest paid

Income taxes 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

Payment of transaction cost in relation to the sale
of investment properties

Acquisition of other property, plant and equipment

Proceeds from the equity release of interests in joint ventures

Proceeds from the repayment of loans granted to joint ventures

Net cash used in investing activities

12.3

2012

39,911

3,990

–656

36,741

2,530

–369

402

–914

–787

80,894

656

–35,769

–46

45,735

–107,125

11,080

–251

–571

25,212

1,771

–69,884

2011

27,448

6,982

–959

36,318

1,590

–138

500

–376

5,135

76,500

959

–39,002

38,457

–192,442

2,738

–843

1,321

–189,226

alstria Financial Report 2012

Notes

2012

2011

95,208

–2,939

72,887

–31,503

–2,467

–5,051

–149

125,990

–24,779

120,788

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

61,066

–1,310

42,500

–34,705

–10,002

–10,317

–543

46,689

22,539

96,009

118,548

96,009

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

Payments of dividends

Payments for the acquisition and termination
of ﬁ nancial derivatives

Payments of the redemption of bonds and borrowings

Payments of transaction costs

Net cash generated from ﬁ nancing activities

12.3

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

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

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

thereof restricted: EUR 252 k; previous year: EUR 270 k

alstria Financial Report 2012

Notes to the consolidated
ﬁ nancial statements

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

1 Corporate information
alstria ofﬁ ce REIT-AG is a listed real estate property
corporation within the meaning of the G-REIT Act.
Pursuant to Section 2 of its Articles of Association,
the Company’s objective is the acquisition, man-
agement, operation and sale of owned real estate
property, as well as the holding of participations in
enterprises, which acquire, manage, operate and
sell owned property. All of the aforementioned ob-
jectives are subject to the conditions of the G-REIT
Act legislation.

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 ef-
fect since January 1, 2007.

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 consolidated ﬁ nancial statements of alstria of-
ﬁ ce REIT-AG (hereinafter also referred to as the
“Company” or “alstria ofﬁ ce REIT-AG”) as at De-
cember 31, 2012 were prepared and authorised for
issue by resolution of the Company’s Management
Board on February 14, 2013.

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

2 Basis of preparation
The consolidated ﬁ nancial statements of alstria of-
ﬁ 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 re-
porting 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 conform-
ity with IFRS requires the use of certain critical ac-
counting estimates. It also requires management to
exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas
where assumptions and estimates are signiﬁ cant to
the consolidated ﬁ nancial statements, are disclosed
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, 2012.

Items are summarised in the consolidated statement
of ﬁ nancial position and income statement and com-
mented 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.

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, 2012:

EU endorsement until
Dec. 31, 2012

Nov. 22, 2011

Standards

Content

Amendments
to IFRS 7

Disclosures:
transfer of ﬁ nancial assets

Applicable for
ﬁ nancial years
beginning
on/after

Effects

Jul. 1, 2011

Notes disclosure

alstria Financial Report 2012

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

› Amendments to IFRS 7 “Financial instruments:
Disclosures”,
issued October 7, 2010. The
amendments are applicable to ﬁ nancial years
starting on or after July 1, 2011. The amend-
ments require enhanced derecognition disclosures
in case of transfer transactions of certain ﬁ nancial
assets. As transfer transactions of ﬁ nancial assets
are not a normal part of alstria’s business, these
amendments have no signiﬁ cant inﬂ uence on al-
stria’s ﬁ nancial reporting.

The initial application of the newly applied IFRS does
not have any material effect on the presentation of
the consolidated interim ﬁ nancial statements.

New and amended IFRS to existing stand-
ards which are not yet effective and have
not been early adopted by the Group
In its 2012 consolidated ﬁ nancial statements, al-
stria ofﬁ ce REIT-AG did not apply the following ac-
counting standards or interpretations which have
already been adopted by the IASB but were not
required to be applied for the ﬁ nancial year 2012:

EU endorsement
until
Dec. 31, 2012

Standards/
interpretations Content

Applicable for
ﬁ nancial years
beginning
on/after

Effects

Not yet endorsed IFRS 9

Financial instruments: Classiﬁ cation and
measurement

Jan. 1, 2015

No material effects

Dec. 11, 2012

IFRS 10

Consolidated ﬁ nancial statements

Jan. 1, 2013

Still to be assessed

Dec. 11, 2012

IFRS 11

Joint arrangements

Jan. 1, 2013

No material effects

Dec. 11, 2012

IFRS 12

Disclosure of interests in other entities

Jan. 1, 2013

Still to be assessed

Dec. 11, 2012

IAS 27

IAS 28

Separate ﬁ nancial statements

Jan. 1, 2013

Investments in associates and joint ventures

Jan. 1, 2013

None

Dec. 11, 2012

IFRS 13

Fair value measurement

Jan. 1, 2013

Still to be assessed

Dec. 11, 2012

Amendments
to IFRS 1

Severe hyperinﬂ ation and removal of ﬁ xed
dates for ﬁ rst-time adopters

Jul. 1, 2011

None

Not yet endorsed Amendments

to IFRS 1

Government loans

Jan. 1, 2013

None

Dec. 13, 2012

Amendments
to IFRS 7

Disclosures-offsetting ﬁ nancial assets and
ﬁ nancial liabilities

Jan. 1, 2013

Notes disclosure

Not yet endorsed Amendments
to IFRS 7 and
IFRS 9

Mandatory effective date and transition
disclosure

Jan. 1, 2015

None

Jun. 5, 2012

Dec. 11, 2012

Jun. 5, 2012

Dec. 13, 2012

Amendments
to IAS 1

Presentation of items of other comprehensive
income

Jul. 1, 2012

No material effects

Amendments
to IAS 12

Amendments
to IAS 19

Amendments
to IAS 32

Deferred tax: recovery of underlying assets

Jan. 1, 2012

None

Amendments to IAS 19, “Employee beneﬁ ts”

Jan. 1, 2013

None

Offsetting ﬁ nancial assets and ﬁ nancial liabilities

Jan. 1, 2014

Notes disclosure

Dec. 11, 2012

IFRIC 20

Stripping costs in the production phase of a
surface mine

Jan. 1, 2013

None

Not yet endorsed Improvements

to IFRSs

Improvements to IFRSs 2009–2011

Jan. 1, 2013

None

Not yet endorsed Transition
Guidance

Not yet endorsed Investment

Amendments to IFRS 10, IFRS 11 and IFRS 12

Jan. 1, 2013

No material effects

Entities

Amendments to IFRS 10, IFRS 12 and IAS 27

Jan. 1, 2013

No material effects

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

› IFRS 9 “Financial instruments”; new standard
originally issued on November 12, 2009. In No-
vember 2012 the IASB submitted a further draft
concerning the limited amendment of IFRS 9. The
standard addresses the classiﬁ cation and meas-
urement of ﬁ nancial assets and is likely to affect
the Group’s accounting of ﬁ nancial assets. Ap-
plication of the standard is not mandatory until
January 1, 2015, but subject to EU endorsement,
the standard is available for early adoption. The
Group has not yet assessed the full impact of
IFRS 9.

› IFRS 10 “Consolidated ﬁ nancial statements”; new
standard issued on May 12, 2011. The objective
of IFRS 10 is to establish principles for the pres-
entation and preparation of consolidated ﬁ nancial
statements when an entity controls one or more
other entities. The standard supersedes the guide-
lines on consolidation as outlined in the present
IAS 27 “Consolidated and Separate Financial
Statements’’ and SIC-12 “Consolidation – Special
Purpose Entities”. IFRS 10 is applicable to annual
reporting periods beginning on or after Janu-
ary 1, 2013.* It is not expected that the applica-
tion of the new standard will lead to a change in
the basis of consolidation of the Group.

› IFRS 11 “Joint arrangements”; new standard issued
on May 12, 2011. The core principle of IFRS 11 is
that a party to a joint arrangement determines the
type of joint arrangement in which it is involved by
assessing its rights and obligations, and accounts
for those rights and obligations, in accordance with
that type of joint arrangement. The standard su-
persedes IAS 31 “Interests in Joint Ventures” and
SIC-13 “Jointly Controlled Entities – Non-Mon-
etary Contributions by Venturers”. IFRS 11 is ap-
plicable to annual reporting periods beginning on
or after January 1, 2013*. It is not expected that
the application of the new standard will lead to a
change in the accounting for joint ventures.

› IFRS 12 “Disclosures of interests in other entities”;
new standard issued on May 12, 2011. The objec-
tive of IFRS 12 is to require the disclosure of infor-
mation that enables users of ﬁ nancial statements
to evaluate the nature of, and risks associated
with, the interests in other entities and the ef-
fects of those interests on their ﬁ nancial position,
ﬁ nancial performance and cash ﬂ ows. IFRS 12 is
applicable to annual reporting periods beginning
on or after January 1, 2013*. The Group has not
yet assessed the full impact of IFRS 12.

› IAS 27 “Separate ﬁ nancial statements”; new re-
vised standard issued on May 12, 2011. IAS 27
(revised 2011) has the objective of setting stand-
ards to be applied in accounting for investments
in subsidiaries, joint ventures and associates when
an entity elects, or is required by local regulations,
to present separate (non-consolidated) ﬁ nancial
statements. IAS 27 (2011) together with IFRS 10
“Consolidated Financial Statements” supersedes
the previous version of IAS 27 (2008) “Consoli-
dated and Separate Financial Statements” includ-
ing the related interpretation SIC-12 “Consolida-
tion – Special Purpose Entities”. IAS 27 (revised
2011) is applicable to annual reporting periods
beginning on or after January 1, 2013*. Since
none of alstria’s Group companies prepares sin-
gle-entity ﬁ nancial statements in accordance with
IFRS, no impact on accounting is expected as a
result of the revised standard.

› IAS 28 “Investments in associates and joint ven-
tures”; new standard issued May 12, 2011. The
objective of IAS 28 (revised 2011) is to prescribe
the accounting for investments in associates, and
to set out the requirements for the application of
the equity method when accounting for invest-
ments in associates and joint ventures. IAS 28
(2011), together with IFRS 12 “Disclosures of in-
terests in other entities”, supersedes the previous
version of IAS 28 (2008) “Investments in Associ-
ates”. IAS 28 (revised 2011) is applicable to ﬁ nan-
cial years beginning on or after January 1, 2013*.
It is not expected that the application of the new
standard will lead to a change in the accounting
for joint ventures.

› An entity may apply the aforementioned stand-
ards IFRS 10 “Consolidated Financial Statements”,
IFRS 11 “Joint Arrangements”, IFRS 12 “Disclosure
of Interests in Other Entities”, IAS 27 (2011) “Sep-
arate Financial Statements” and IAS 28 (2011) “In-
vestments in Associates and Joint Ventures” to an
earlier accounting period, but if it elects to do this
prematurely, it must adopt all standards together.
› IFRS 13 “Fair value measurement”; new stand-
ard issued on May 12, 2011. IFRS 13 establishes a
single source of guidance for fair value measure-
ments and disclosures about fair value measure-
ments. The Standard deﬁ nes fair value, establishes
a framework for measuring and requires disclo-
sures about fair value measurements. The scope
of IFRS 13 is broad; it applies to both ﬁ nancial
instrument items and non-ﬁ nancial instrument

* Estimated shift of the mandatory application date for EU

companies to January 1, 2014.

alstria Financial Report 2012

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

items for which other IFRSs require or permit
fair value measurements or disclosures about
fair value measurements, except for share-based
payment transactions within the scope of IFRS 2
“Share-based Payment”,
leasing transactions
within the scope of IAS 17 “Leases”, measure-
ments that have some similarities to fair value
but are not fair value, such as net realisable value
in IAS 2 “Inventories”, or value in use in IAS 36
“Impairment of Assets”. IFRS 13 is applicable to
annual reporting periods beginning on or after
January 1, 2013. The management does not rule
out that the application of the new standard may
affect certain amounts reported in the ﬁ nancial
statements and anticipates a more extensive dis-
closure in the ﬁ nancial statements.

› Amendments to IFRS 1 “Severe hyperinﬂ ation
and removal of ﬁ xed dates for ﬁ rst-time adopt-
ers”, issued on December 20, 2010. The amend-
ment will be applicable for ﬁ nancial years starting
on July 1, 2011 or later. Since alstria has no expo-
sure to hyperinﬂ ation markets, the amendments
will have no effect on alstria’s ﬁ nancial reporting.
› Amendment to IFRS 1 with regard to govern-
ment grants with interest rates not in line with
market level. The Amendment was published on
March 13, 2012 and will give ﬁ rst-time adopters
the same relief to recognition and measurement
of government grants as existing preparers. The
amendment applies to annual periods beginning
on or after January 1, 2013 and will have no effect
on the Group’s ﬁ nancial reporting.

› The IASB has revised the requirements for offset-
ting ﬁ nancial assets and ﬁ nancial liabilities and as a
result, published on December 16, 2011 amend-
ments to IAS 32 “Financial instruments: presenta-
tion” and IFRS 7 “Financial instruments: disclo-
sure”. The current offsetting model in IAS 32 has
been basically maintained and was solely substan-
tiated by additional application guidance, which
applies to annual periods beginning on or after
January 1, 2014. A new feature is the IFRS 7 dis-
closure requirements inserted in connection with
certain settlement agreements. The amendments
to IFRS 7 are to apply retrospectively for annual
periods beginning on or after January 1, 2013.
Impact from these changes may result in terms
of reporting in the event that there is a netting
agreement.

› Amendments to IFRS 10 “Consolidated ﬁ nancial
statements”, IFRS 11 “Joint arrangements” and
IFRS 12 “Disclosures of interests in other enti-
ties” – Transition Guidance. The amendments

will clarify the transition guidance in IFRS 10 and
grants additional relief in all three standards. The
amendments are applicable – similar to IFRS 10,
IFRS 11 and IFRS 12 – to annual periods begin-
ning on or after January 1, 2013*.

› Amendments to IAS 1 “Presentation of ﬁ nancial
statements”. On June 16, 2011, the International
Accounting Standards Board (IASB) published
amendments to IAS 1. The amendments to IAS 1
retain the “one or two statement” approach at
the option of the entity and only revise the way
other comprehensive income is presented, requir-
ing separate subtotals for those elements which
may be “recycled”, and those elements that will
not. The amendments are applicable to annual
periods beginning on or after July 1, 2012, with
early adoption permitted. The amendments are
not expected to affect presentation of the Group’s
ﬁ nancial statements.

› Amendment to IAS 12 “Deferred tax: Recovery of
underlying assets”, issued on December 20, 2010.
This amendment, which will have no impact on
the ﬁ nancial reporting of alstria is generally to
apply from January 1, 2012, but to date the en-
dorsement by the EU is still pending.

› Amendments to IAS 19 “Employee beneﬁ ts”. On
June 16, 2011, the IASB published amendments
to IAS 19, implementing new reporting proce-
dures on employee beneﬁ ts. The amendments are
applicable to annual periods beginning on or after
January 1, 2013, with early adoption permitted.
The amendments are not expected to affect pres-
entation of the Group’s ﬁ nancial reporting.

› IFRIC 20 “Stripping costs in the production phase
of a surface mine”: IFRIC 20 considers when
and how to account separately for beneﬁ ts aris-
ing from the stripping activities in surface mining
operations. IFRIC 20 applies to annual periods
beginning on or after January 1, 2013. The inter-
pretation has no relevance for the Group.

› The International Accounting Standards Board
(IASB) issued “Annual Improvements 2009–2011”,
a collection of amendments to IFRSs, in response
to issues addressed during the 2009–2011 cycle.
Five standards (IFRS 1, IAS 1, IAS 16, IAS 32 and
IAS 34) are primarily affected by the amendments,
with consequential amendments to numerous oth-
ers. The improvements apply to annual periods be-
ginning on or after January 1, 2013 and will be of
only minor, if any, relevance for the Group

The Group did not early adopt any new or amend-
ed standards in 2012.

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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, 2012. The ﬁ nancial
statements of the subsidiaries are prepared for the
same reporting year as for the parent company, us-
ing 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 in-
tra-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 rec-
ognised as goodwill. After reassessment, any re-
maining credit difference is recognised immediately
as proﬁ t. In the periods following the business com-
bination, the disclosed hidden reserves and charges
are carried forward, amortised or released, depend-
ing 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 uence
ﬁ nancial and operating policy decisions (associates),
or directly or indirectly shares control (joint ven-
tures), are accounted for using the equity method.

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

Group entity (subsidiaries of
alstria ofﬁ ce REIT-AG)

alstria Bamlerstrasse GP GmbH, Hamburg

alstria Portfolio 1 GP GmbH, Hamburg

alstria Gänsemarkt Drehbahn GP GmbH,
Hamburg

alstria Halberstädter Strasse GP GmbH, Hamburg

alstria Hamburger Strasse 43 GP GmbH, Hamburg

alstria Englische Planke 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 Englische Planke GmbH & Co. KG,
Hamburg

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

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

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

alstria ofﬁ ce Insterburger Strasse 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

Two entities – a limited partnership (Kommanditge-
sellschaft), alstria ofﬁ ce Portfolio 2 GmbH & Co. KG,
Hamburg, and its general partner (Komplementärin),
alstria Portfolio 2 GP GmbH, Hamburg – were estab-
lished in the ﬁ rst quarter of 2012. As fully owned
afﬁ liates of alstria ofﬁ ce REIT-AG, these companies
have been consolidated as part of the alstria Group.
During the second quarter, a merger agreement be-
tween alstria ofﬁ ce REIT-AG and alstria Portfolio 2
GP GmbH was closed, leading to the accretion of the
alstria Portfolio 2 GP GmbH on alstria ofﬁ ce REIT-AG
by way of an up-stream merger with an effective
date of May 1, 2012.

The Group of consolidated companies includes 20
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, 2011.

alstria Financial Report 2012

Interests in joint ventures
The Group holds interests in two joint ventures re-
sulting in a carrying amount at the end of the re-
porting period of EUR 18,183 k. alstria ofﬁ ce REIT-
AG holds a share of 49% in each of the two joint
ventures. The joint ventures are Alstria IV. Hambur-
gische Grundbesitz GmbH & Co. KG, Hamburg,
and Alstria VII. Hamburgische Grundbesitz GmbH
& Co. KG, Oststeinbek.

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

EUR k

Non-current assets

Current assets

Non-current liabilities

Current liabilities

Proﬁ t or loss for
the period

2012

30,896

7,417

17,685

4,187

2011

85,159

3,918

45,913

589

–734

13,064

5 Key judgements and estimates
The preparation of the consolidated ﬁ nancial state-
ments in accordance with IFRS requires assumptions
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 following
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 port-
folio. The Group has determined, based on an
evaluation of the terms and conditions of the ar-
rangements, that it retains all the signiﬁ cant risks
and rewards of ownership in these properties and
so accounts for the contracts as operating leases.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

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 derivative ﬁ nancial

instruments;

› determine the fair value of virtual shares granted

to management;

› determine the fair value of convertible proﬁ t

participation certiﬁ cates; and

› determine the fair value of other provisions.

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.

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.

Value of the properties (EUR m)

Capitalisation rates

–0.25%

0.00%

0.25%

2012

1,697

1,622

1,553

2011

1,686

1,529

1,458

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 mod-
els. Thus, the usual estimation uncertainties exist
regarding possible deviations from the market data
used. We consider the models used to be adequate
and believe that they do not engender any uncer-
tainty as to their applicability.

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

The fair value of share-based virtual shares granted
to the Management Board is measured at each bal-
ance 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 be-
tween two reporting dates and the dividend equiva-
lent paid during the period. This valuation requires
the Company to make estimates about certain pa-
rameters, and hence they are subject to uncertainty.
The fair value of the virtual shares granted is allo-
cated to the vesting period according to the deter-
minations in the underlying share-based incentive
plan. The resulting personnel expenses caused an
addition to provisions of EUR 563 k (December 31,
2011: EUR 558 k) and a provision in an amount of
EUR 1,472 k in the consolidated ﬁ nancial statements
as at December 31, 2012. Furthermore, the provi-
sions are made up of provisions for rental guarantees
in an amount of EUR 3,829 k. The determination of
the amount of the provision for rental guarantees is
based on the assessment of the possible exercise of
the probability of use, which refers to information
about the situation of tenants in relation to the pos-
sible exercise of the break option.

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-Sc-
holes 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.

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 the reporting period:

EUR k

Dec. 31, 2012 Dec. 31, 2011

Investment property

1,622,988

1,528,589

Properties held for sale

10,010

Positive fair values
of derivatives

Negative fair values
of derivatives

Other provisions

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

806

1,471

35,080

5,191

40,032

3,767

–1,174

–1,016

6 Seasonal or economic effects

on business

The activities of alstria ofﬁ ce REIT-AG (primarily the
generation of revenues from investment properties)
are not generally affected by seasonal factors. How-
ever, the sale of one or more large properties 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 modiﬁ ed 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
recognised at acquisition costs at the time of addi-
tion. 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.

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.

alstria Financial Report 2012

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 re-
porting period.

› non-allocable operating costs in the amount of

5% of rental income p. a.; and

› the net selling price.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

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 (compa-
rable 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 val-
ues of investment property are disclosed in the item
“Net gain/loss from fair value adjustments on in-
vestment property” in the income statement in the
year in which they arise.

Investment properties are derecognised when ei-
ther they have been disposed of or when the in-
vestment property is permanently withdrawn from
use and no future economic beneﬁ t is expected
from its disposal. Any gains or losses on the retire-
ment or disposal of an investment property are rec-
ognised 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 mini-
mum lease payments at the inception of the lease.
The corresponding leasing liability against the les-
sor is disclosed as lease commitment under other
non-current liabilities. The resulting lease payments
are separated into an interest and an amortising
part. In the reporting period, the Group acquired a
property lease for which the terms of IAS 17 apply.
The property lease is categorised as ﬁ nancial lease
and the leasehold rent as lease payments.

All market values were determined by Colliers In-
ternational UK plc, London, a renowned appraiser
and brokerage ﬁ rm, as at December 31, 2012.

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

alstria Financial Report 2012

Operating leases
Lease agreements that alstria ofﬁ ce REIT-AG has
entered into with commercial tenants are classi-
ﬁ ed as operating leases under IFRS. Accordingly,
alstria ofﬁ ce REIT-AG is lessor in numerous differ-
ent types of operating lease agreements for invest-
ment properties. These leases generate the majority
of proceeds and income for alstria ofﬁ ce REIT-AG.
Moreover, alstria ofﬁ ce REIT-AG is, to a limited ex-
tent, lessee within the scope of operating leases.

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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.

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

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 oc-
cupied 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 as-
set) is included in proﬁ t or loss in the year the asset
is derecognised.

The assets’ residual values, useful lives and meth-
ods of depreciation are reviewed, and adjusted if
appropriate, 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
recognition, intangible assets are carried at cost less
any accumulated amortisation and any accumulated
impairment losses. Internally generated intangible
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.

Intangible assets with ﬁ nite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with
a ﬁ nite useful life are reviewed at least at each ﬁ nan-
cial 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 function 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).

alstria Financial Report 2012

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 be-
tween the net disposal proceeds and the carrying
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 ex-
pected to be recovered from or paid to the taxa-
tion authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or
substantively enacted by the end of the reporting
period.

There are no deferred taxes because, according to
the REIT status, alstria ofﬁ ce REIT-AG is tax trans-
parent and exempt from income taxation.

Financial instruments
Pursuant to IAS 39, a ﬁ nancial instrument is any con-
tract that gives rise to both a ﬁ nancial asset to one
entity and a ﬁ nancial liability or equity instrument
to another entity. Financial assets comprise in par-
ticular cash and cash equivalents, trade receivables,
as well as other loans and receivables originated by
the enterprise, held-to-maturity investments and
original and derivative ﬁ nancial assets held for trad-
ing. 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 li-
abilities. Financial assets and liabilities are generally
not offset.

Financial assets
The recognition and measurement of ﬁ nancial as-
sets are subject to the provisions of IAS 39. De-
pending on the classiﬁ cation 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 as-
set is not active (and for unlisted securities), the

alstria Financial Report 2012

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

Group determines fair value by using valuation
techniques. These include the use of recent arm’s
length transactions, reference to other instruments
that are substantially 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 recogni-
tion and reviews the classiﬁ cation at the end of
each reporting period. A ﬁ nancial asset is derecog-
nised when the entity loses control of the contrac-
tual rights that comprise the ﬁ nancial instrument.

All regular way purchases and sales of ﬁ nancial as-
sets 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 nan-
cial 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.

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 re-
porting period, or unless the maturity at the end
of reporting period is less than twelve months. The
available-for-sale ﬁ nancial assets are initially rec-
ognised at fair value and subsequently carried at
fair value. Changes in the fair value of ﬁ nancial as-
sets classiﬁ ed as available for sale are recognised in
equity; when they are sold or impaired their accu-
mulated 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.

exceed its amortised cost at the reversal date. Any
subsequent reversal of an impairment loss is recog-
nised in proﬁ t or loss.

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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

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 neces-
sary 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 dis-
count 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 re-
ceivables, a solvency check was performed on the
tenants (risk associated with the legal validity of re-
ceivables) 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.

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.

If there is objective evidence that an impairment
loss has been incurred, the amount of the loss is
measured as the difference between the asset’s car-
rying amount and the present value of estimated
future cash ﬂ ows discounted at the ﬁ nancial asset’s
original effective interest rate (i. e. the effective in-
terest rate computed at initial recognition). The car-
rying 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 im-
pairment loss decreases and the decrease can be
related objectively to an event occurring after the
impairment was recognised, the previously rec-
ognised impairment loss is reversed to the extent
that the carrying value of the receivable does not

Provision for impairment is made when there is
objective evidence (such as the probability of in-
solvency 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.

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 liabili-
ties when the fair value is negative.

The instruments were measured as at Decem-
ber 31, 2012 by an independent third party. The
fair value of derivative ﬁ nancial instruments is de-
termined 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.

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.

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 re-
lationship between the hedging instrument and the
hedged item and the aim of the risk management
measure and underlying strategy when concluding
the hedge transaction.

alstria Financial Report 2012

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 expo-
sure 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
relationship to which the Group wishes to apply
hedge accounting and the risk management objec-
tive and strategy for undertaking the hedge. The
documentation includes identiﬁ cation of the hedg-
ing instrument, the hedged item, the nature of the
risk being hedged and how the entity will assess
the hedging instrument’s effectiveness in offsetting
the exposure to changes in the hedged item’s cash
ﬂ ows attributable to the hedged risk. Such hedges
are expected to be highly effective in achieving off-
setting changes in fair value or cash ﬂ ows, and are
assessed on an ongoing basis to determine their ef-
fectiveness throughout the ﬁ nancial reporting peri-
ods 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 eq-
uity, 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 qualify
for the hedging of the fair value of recognised as-
sets 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.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

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 original
maturities of three months or less, and bank over-
drafts.

Current bank balances are recognised in the nomi-
nal 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
purchase, 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 interest
rates from the term structure of interest rates to the
end of the reporting period.

The recognition and measurement of ﬁ nancial liabili-
ties is subject to the provisions of IAS 39. Depending
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 recognition,
interest-bearing loans and borrowings are subse-
quently measured at amortised cost using the effec-
tive interest method. Gains and losses are recognised
in proﬁ t or loss when the liabilities are derecognised
as well as through the amortisation process.

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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

A ﬁ nancial liability is derecognised when the obliga-
tion underlying the liability is discharged or cancelled
or expires. When an existing ﬁ nancial liability is re-
placed with another liability from the same lender
under substantially different terms, or the terms of
an existing liability are substantially modiﬁ ed, such
an exchange or modiﬁ cation is treated as a derec-
ognition of the original liability and the recognition
of a new liability, and the difference in the respective
carrying amounts is recognised in proﬁ t or loss.

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.

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

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 oper-
ating 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 pur-
poses.

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 eq-
uity (paid-in capital).

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.

Liability awards are measured at fair value at each
balance sheet date until settlement and are clas-
siﬁ 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 reporting segment is reported in a manner
consistent with the internal reporting provided to
the chief operating decision-maker. The chief oper-
ating decision-maker is the person or group that al-
locates resources to, and assesses the performance
of, the operating segments of an entity. The chief
operating decision-maker has been identiﬁ ed as the
Management Board.

alstria Financial Report 2012

Revenues are generated by a larger number of
tenants. Of total revenues of EUR 101,286 k
(previous year: EUR 90,798 k) EUR 31,127 k and
EUR 15,671 k relate to leases with the two largest
customers of the Group. No other single customer
has, neither in the ﬁ nancial year 2011 nor in the
ﬁ nancial year 2012, contributed with 10% or more
to the consolidated revenues.

9 Notes to the consolidated

income statement

9.1 Revenues

9.3 Real estate operating expenses

EUR k

Maintenance and refurbishment

Vacancy

Running repairs

Property management

Tax on land and building

Brokerage fees

Other

2012

4,900

3,166

1,203

427

652

2011

3,932

2,297

1,293

566

190

598

630

10,398

9,506

EUR k

2012

2011

9.4 Administrative expenses

Revenues from investment property 101,286

90,798

Revenues from investment property chieﬂ y include
rental income from investment property.

9.2 Income and expenses from

passed-on operating expenses

EUR k

2012

2011

EUR k

Legal and consulting fees

Communication and marketing

Depreciation

IT maintenance

Audit fee (audit and audit-related
services)

Travel expenses

Supervisory Board compensation

Income from passed-on operating
expenses

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

15,967

13,257

Insurances

Leasing costs

434

1,333

Recruitment

16,401

14,590

Sustainability expenses

Expenses from passed-on operating
expenses

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

–15,967

–13,257

–1,212

–1,757

Other

Income less expenses from
passed-on operating expenses

–778

–424

EUR k

–17,179

–15,014

9.5 Personnel expenses

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

2012

1,754

2011

3,193

607

471

377

330

318

302

179

158

110

1,062

5,722

548

401

259

362

376

290

122

162

114

906

6,799

2012

3,625

524

2011

3,225

457

1,228

1,204

1,174

1,016

Salaries and wages

Social insurance contribution

Bonuses

Expenses for share-based
compensation

thereof relating to virtual shares

564

558

thereof relating to the convertible
proﬁ t participation certiﬁ cates

610

458

Amounts for retirement provisions
and disability Management Board

Other

186

112

183

254

6,849

6,339

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

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Convertible proﬁ t participation rights granted to em-
ployees entitle not only a conversion when the con-
ditions apply, but also an annual payment equivalent
to the dividend per share. Therefore, expenses for
share-based compensation resulting from the con-
vertible proﬁ t participation rights are to be recog-
nised in equity (for the conversion right) as well as
against liabilities (for the dividend entitlement). Out
of the EUR 610 k expense in relation to the proﬁ t
participation rights, EUR 506 k was recognised in
equity (2011: EUR 407 k), while EUR 104 k was re-
ﬂ ected in the liabilities (2011: EUR 51 k).

9.7 Other operating expenses

EUR k

Allocation to provision for rental
guarantees

Impairment on trade receivables

Other

2012

2011

895

870

117

571

1,036

1,558

Explanation of the allocation to provision for rental
guarantees can be found in ›› Note 11.3.

Within the course of 2012 the Group had 55 em-
ployees on average (2011: 48).

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

9.6 Other operating income

EUR k

Financial income

2012

657

2011

959

EUR k

2012

2011

Interest expenses syndicated loan

–14,383

–17,869

Compensation payment for the early
termination of leases

Success fee

Income from the reversal of accrued
liabilities

Income in relation to development
projects

Property management services

Payments on provisions on doubtful
debts

Car use

Other

1,130

579

600

387

431

326

110

156

161

302

496

3,160

1,690

3,380

The success fee relates to the procurement of a
property transaction.

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

Among last year’s other operating income of
EUR 1,690 k an amount of EUR 1,229 k is included
for charges passed on to a former majority share-
holder. These are expenses that have been incurred
in connection with the placement of shares of that
shareholder in the capital market.

Interest expenses other loans

–9,385

–8,625

Interest result derivatives

–12,589

–9,611

Other interest expenses

Financial expenses

–250

–7

–36,607

–36,112

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

Commitment fees

Other

–76

–18

–41

–159

–23

–24

Other ﬁ nancial expenses

–135

–206

Net ﬁ nancing result

–36,085

–35,359

Total interest income and expenses for ﬁ nancial
assets and liabilities which are not ﬁ nancial de-
rivatives were EUR 657 k (interest income; 2011:
EUR 959 k) and EUR 24,018 k (interest expenses;
2011: EUR 26,494 k), respectively.

Total interest expenses calculated using the ef-
fective interest method for ﬁ nancial liabilities that
are not recognised at fair value through proﬁ t or
loss were EUR 1,700 k (interest expenses; 2011:
EUR 1,555 k).

Within the two former ﬁ nancial years, the Group
did not hold ﬁ nancial assets available for sale.
Therefore, the net result from the disposal of ﬁ -
nancial assets available for sale amounted, as in the
previous year, to EUR 0.

alstria Financial Report 2012

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

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

Minor tax payment obligations may arise on a
Group level for afﬁ liates serving as a general partner
of a partnership or REIT service companies.

EUR k

2012

2011

Transfer of cumulated loss from
cash ﬂ ow hedge reserve to income
statement

Ineffective change of the fair value
of cash ﬂ ow hedges

Change in fair value of ﬁ nancial
derivatives not qualifying as a cash
ﬂ ow hedge

Net loss from fair value adjustments
on ﬁ nancial derivatives

–1,380

–3,247

675

857

Deferred income tax Due to the REIT tax ex-
emption, there were no impacts on proﬁ t and loss,
the ﬁ nancial statements, or equity or proﬁ t and loss
in 2011 and 2012.

–986

–1,333

–1,069

–2,770

10 Notes to the consolidated

statement of ﬁ nancial position –
assets

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

In 2012, EUR 986 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 transac-
tion is no longer expected to occur.

Further details and explanation on derivatives are
shown under ›› Note 10.7.

EUR k

Fair values

As at Jan. 1

Property acquisition

Capital expenditure

Disposals

2012

2011

1,528,589 1,348,400

101,844

169,200

12,867

26,309

–8,080

–2,100

9.9 Gain or loss on disposal of

investment property

EUR k

2012

2011

Investment property disposal
proceeds

Carrying value of investment
property disposals

Valuation result of held-for-sale
properties

8,189

2,820

–8,080

–2,700

260

369

120

The loss from objects and portfolios sold below
their carrying value amounts to EUR 146 k in 2012
and EUR 18 k in 2011.

9.10 Income taxes
Because of obtaining the G-REIT status, alstria ofﬁ ce
REIT-AG was subject to ﬁ nal taxation on the effec-
tive 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.

alstria Financial Report 2012

Reclassiﬁ cation to investment
property

Reclassiﬁ cation from investment
property

Transfers to held for sale

Net result from the adjustment of
the fair value of investment property

As at Dec. 31

3,462

–606

–9,750

–1,876

–16,682

1,622,988 1,528,589

alstria ofﬁ ce REIT-AG uses the fair value model pursu-
ant to IAS 40.33 et seq. for subsequent measurement
of investment property. External appraisals were ob-
tained for measurement. For a detailed description of
the valuation of assets, please see ›› Note 7.

In February 2012, alstria concluded a binding and
notarised sales agreement for the acquisition of a
property portfolio with six ofﬁ ce properties. The
transfer of beneﬁ ts and burden of the properties
took place in the second quarter of 2012. The invest-
ment for the portfolio amounted to EUR 95,092 k.
One land asset of the portfolio is owned through a
leasehold which was taken over by alstria. The fair
value of the leasehold liability at the transfer date
was EUR 6,752 k. The fair value of the leasehold as
at December 31, 2012 amounted to EUR 7,130 k.

Capital expenditure (EUR 12,867 k) is made up of
subsequent acquisition and production costs in re-
lation to property acquisitions and refurbishment
projects.

In the ﬁ nancial year 2012, alstria ofﬁ ce REIT-AG
sold two ofﬁ ce properties with a transaction price
of EUR 8,440 k.

In the ﬁ nancial year 2012, alstria ofﬁ ce REIT-AG
concluded two further binding and notarised sale
agreements for the disposal of two investment prop-
erties. The assets have been reclassiﬁ ed to “held for
sale” at the end of the reporting period. The proper-
ties were transferred to the buyer in the ﬁ rst quarter
of 2013.

Borrowing costs that would have to be capitalised as
construction cost of an asset were not incurred dur-
ing the reporting period (2011: EUR 0 k).

Expenses/income disclosed in the income statement
pursuant to IAS 40.75 (f):
› EUR 101,286 k (2011: EUR 90,798 k) rental income

from investment property;

› EUR 7,232 k (2011: EUR 7,209 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 3,166 k (2011: EUR 2,297 k) operating ex-
penses (including repairs and maintenance) arising
from investment property which did not generate
rental income during the period under review.

Investment properties (including held-for-sale in-
vestment properties) have been used as security for
bank loans in the amount of EUR 1,632,998 k (2011:
EUR 1,528,589 k).

10.2 Equity-accounted investment
At the end of the reporting period, two companies
in which alstria ofﬁ ce REIT-AG holds a share of 49%
were treated as joint ventures and accounted for us-
ing the equity method. The carrying amount of the
joint ventures at the end of the reporting period was
EUR 18,183 k (December 31, 2011: EUR 44,128 k).
For further information please refer to ›› Note 4.

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

10.3 Property, plant and equipment

EUR k

Acquisition and production cost

As at Jan. 1, 2012

Additions

Transfer out of investment property

Disposals

As at Dec. 31, 2012

Accumulated amortisation, depreciation and write-downs

As at Jan. 1, 2012

Additions

As at Dec. 31, 2012

Net book values as at Dec. 31, 2012

Furniture and
ﬁ xtures

Own occupied
property

Plant

Total 2012

1,150

1,169

1,117

1,134

625

259

–1

883

223

318

565

4,343

6,118

606

348

606

–1

5,019

7,071

202

285

4,734

1,542

195

1,737

5,334

alstria Financial Report 2012

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

EUR k

Acquisition and production cost

As at Jan. 1, 2011

Additions

Transfer to investment property

As at Dec. 31, 2011

Accumulated amortisation, depreciation and write-downs

As at Jan. 1, 2011

Additions

Disposals

As at Dec. 31, 2011

Net book values as at Dec. 31, 2011

Furniture and
ﬁ xtures

Own occupied
property

Plant

Total 2011

1,101

1,150

1,010

107

1,117

562

625

142

223

402

7,513

388

–3,558

4,343

199

–96

202

4,141

9,176

500

–3,558

6,118

1,351

287

–96

1,542

4,576

The useful life of the assets is estimated to be be-
tween three to 15 years for plant, furniture and ﬁ x-
tures and 33.33 to 50 years for the own occupied
properties used 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 areas in two of its
ofﬁ ce buildings in Hamburg and Düsseldorf for its
own use. Therefore, the owner-occupied part of
the properties are categorised as “property, plant
and equipment” according to IAS 16.

In order to secure Group liabilities, the properties
are pledged with land charges as security.

10.4 Intangible assets

Licences

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 266 k and EUR 201 k, respectively.

10.5 Assets held for sale
Assets held for sale as presented in the consolidated
statement of ﬁ nancial position refer exclusively to
investment properties which have been transferred
to the buyer until the issue date of these consoli-
dated ﬁ nancial statements. The disposal of the two
properties resulted in a disposal gain in an amount
of EUR 260 k ›› Note 9.9.

10.6 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

2012

2011

Acquisition and production cost

EUR k

Dec. 31, 2012 Dec. 31, 2011

As at Jan. 1

Additions

As at Dec. 31

Accumulated amortisation,
depreciation and write-downs

As at Jan. 1

Additions

As at Dec. 31

Net book values as at Dec. 31

1,192

288

1,480

742

271

1,013

467

849

343

1,192

530

212

742

450

Trade receivables

Rent receivables

Accounts receivable
from afﬁ liates

Other receivables

“ Rent-free period”

receivables

Deposit account

Prepayments

Receivables and other
assets

Other receivables

3,656

2,449

2,095

2,998

1,624

142

2,048

6,812

3,461

1,586

154

1,669

6,870

alstria Financial Report 2012

All receivables except EUR 1,624 k receivables (De-
cember 31, 2011: EUR 1,586 k) against an escrow
holder 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.

To secure the loans of the Group, all receiv ables
from rental and property sale agreements, as
well as insurance receivables and derivative ﬁ -
nancial instruments, were assigned to the lenders
›› Note 11.2.

Trade receivables were written down by EUR 64 k
(2011: EUR 117 k) due to rent payments in arrears.
Other receivables, other than trade receivables, were
not impaired.

A total of EUR 2,998 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).

As at December 31, 2012, trade receivables of
EUR 1,343 k (2011: EUR 818 k) were past due but
not impaired. These relate to a number of independ-
ent customers for whom there is no recent history
of default. The ageing analysis of these trade receiv-
ables is as follows:

Among the receivables and other assets of
EUR 2,048 k an amount of EUR 1,229 k of receiv-
ables is included for charges passed on to a former
majority shareholder. These are expenses that have
been incurred in connection with the placement of
shares of that shareholder in the capital market.

EUR k

Dec. 31, 2012 Dec. 31, 2011

Trade receivables

Up to 3 months

3 to 6 months

Over 6 months

Total

820

103

420

1,343

508

219

818

10.7 Derivative ﬁ nancial instruments
The following derivative ﬁ nancial instruments existed
as at the end of reporting period or have been ter-
minated during the reporting period:

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Product

Cap

Cap1)

Cap

Swap

Interest rate derivatives – held for trading 2)

Cap

Swap1)

Swap

Strike

p.a. (%) Maturity date

3.0000 Sept. 30, 2019

4.6000 Oct. 20, 2015

4.9000 Dec. 20, 2012

4.1160

Jul. 10, 20134)

3.0000 Dec. 17, 2018

3.2500 Dec. 31, 2015

3.3000 Oct. 20, 2014

4.6000 Oct. 20, 2015

Dec. 31, 2012

Dec. 31, 2011

Notional
(EUR k)

Fair value
(EUR k)

Notional
(EUR k)

Fair value
(EUR k)

42,500

47,902

42,500

56,000

11,500

22,876

7,871

395

403

395

75,000

47,902

122,902

56,000

11,500

23,630

8,130

95,000

37,283

–2,479

1,421

–6,921

–1,234

2.1940 Dec. 31, 2014

37,283

–1,632

2.9900

Jul. 20, 2015

472,500

–33,448

472,500

–29,398

Interest rate derivatives – cash ﬂ ow
hedges3)

Total2)

608,030

–34,677

609,043

–36,082

650,530

–34,274

731,945

–38,561

1) Not effective before July 10, 2013.
2) Notional excluding the EUR 47,902 k not effective before July 10, 2013.
3) Notional excluding the EUR 95,000 k not effective before July 10, 2013.
4) Terminated as at December 28, 2012.

alstria Financial Report 2012

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, 2011 by category:

Changes in ﬁ nancial derivatives

Financial derivatives

Financial assets

Financial liabilities

EUR k

Hedging instruments
as at Dec. 31, 2011

Effective change in fair values cash
ﬂ ow hedges

Ineffective change in fair values
cash ﬂ ow hedges

Net result from fair value changes
in ﬁ nancial derivatives not
qualifying for cash ﬂ ow hedging

Reclassiﬁ cation of cumulated loss
from equity to income statement

Changes in accrued interests
concerning ﬁ nancial derivatives

Acquisitions

Disposals

Hedging instruments
as at Dec. 31, 2012

Cash ﬂ ow
hedge
reserve Non-current

–17,760

1,471

–5,363

986

–1,068

Current Non-current

Current

Total

–193

596

–37,553

–2,479

–38,561

–5,363

–1

–204

8,041

–5,363

–1,069

868

675

246

596

1,365

9,406

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

–22,137

403

–35,080

–34,274

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 650,530 k
(December 31, 2011: EUR 731,945 k). One cap
with a notional amount of EUR 47,902 will not
become effective before July 10, 2013. Derivatives
with a notional amount of EUR 47,902 k (Decem-
ber 31, 2011: EUR 122,902 k) are not designated
as a cash ﬂ ow hedge.

A decrease of EUR 5,363 k in fair values of de-
rivatives effective in a cash ﬂ ow hedge has been
recognised in the hedging reserve in 2012 (2011:
decrease of EUR 14,171 k).

The ineffective portion recognised in proﬁ t or
loss that arises from cash ﬂ ow hedges amounted
to a fair value loss of EUR 1,069 k (2011: gain of
EUR 2,770 k).

Further gains totalling EUR 675 k (2011: gain of
EUR 857 k) due to the market valuation of deriva-
tives not included in hedge accounting were re-
corded in the income statement 2012.

A loss of EUR 986 k (2011: EUR 1,333 k) relates to
cumulative losses from cash ﬂ ow hedges for which
the forecast transaction is no longer expected to
occur due to premature repayment of the loans.

Together, this results in a loss of EUR 1,380 k
(2011: loss of EUR 3,247), which is shown as “net
result from fair value adjustments on ﬁ nancial de-
rivatives”.

In line with alstria’s hedging strategy, the Group
entered into a new interest rate forward cap with
a notional amount of EUR 47,902 k and a strike
of 4.6000%. The cap will become effective on
July 10, 2013 and expires on October 20, 2015. This
transaction became effective as at June 12, 2012.

alstria Financial Report 2012

The interest rate forward cap agreement partially
replaced a so far existing interest rate forward swap
with a notional amount of EUR 95,000 k, a swap
rate of 4.6000% and an initial maturity between
July 10, 2013 and October 20, 2015. The forward
interest rate swap agreement was terminated in the
total notional amount of EUR 95,000 k with effect
from June 14, 2012.

A second ﬁ nancial derivative in the form of an inter-
est rate cap was entered into on December 13, 2012.
The interest rate cap with a notional amount of
EUR 42,500 k and a strike of 3.0000%, became ef-
fective on December 28, 2012 and is scheduled to
expire on September 30, 2019. The cap is not desig-
nated into a cash ﬂ ow hedge relationship.

Additionally an existing interest rate swap with
a notional amount of EUR 47,902 k, a swap
rate of 4.1160% and an initial maturity date of
July 10, 2013 was terminated with an effective
date of December 28, 2012.

10.8 Cash and cash equivalents

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

EUR k

Bank balances

Dec. 31, 2012 Dec. 31, 2011

118,548

96,009

Bank balances earn interest at ﬂ oating rates based
on daily bank deposit rates. As at the end of the
reporting period, EUR 252 k (December 31, 2011:
EUR 270 k) of the cash and cash equivalents was
restricted. The amount corresponds to accrued in-
terest obligations and amounts on other bank ac-
counts 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, 2012 Dec. 31, 2011

Ordinary share of
EUR 1 each

78,933

71,704

The issue of 7,170,362 new shares for cash in-
creased the share capital of alstria ofﬁ ce REIT-AG
by EUR 7,170,362. The share capital increased
from EUR 71,703,625 to EUR 78,873,987. This
capital increase was registered in the commercial
register (Handelsregister) on February 23, 2012.

The conversion of proﬁ t participation rights
›› Note 12 in the second quarter of 2012 resulted in
the issue of 59,500 new shares by using the con-
ditionally increased capital provided for such pur-
poses (Conditional Capital III).

On December 31, 2012 alstria ofﬁ ce REIT-AG’s
share capital amounted to EUR 78,933,487, repre-
sented by 78,933,487 non-par value bearer shares.

The majority of the shares in the Company are in
free ﬂ oat.

The following table shows the reconciliation of the
number in shares outstanding:

Number of shares

2012

2011

alstria’s shares at Jan. 1

71,703,625

61,599,999

Treasury shares at Jan. 1

–2,374

Shares outstanding
at Jan. 1

71,703,625

61,597,625

Issue of new shares

7,170,362

10,000,000

Conversion of convertible
participation rights

59,500

103,626

Disposal of treasury shares

2,374

As at Dec. 31

78,933,487

71,703,625

alstria Financial Report 2012

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

An increase of EUR 506 k (2011: EUR 407 k) re-
sulted from the vesting of the convertible proﬁ t
participation certiﬁ cates granted to employees of
the Group.

EUR k

As at Jan. 1

2012

2011

751,084

700,036

Contributions to capital surplus

53,778

85,000

Transaction costs of issue of shares

–1,310

–2,938

Payment of dividends

–34,705

–31,503

Share-based payments

Conversion of convertible
participation rights

Conversion of treasury shares

506

407

104

–22

In the course of dividend payments, in 2012
totalling
the Company distributed dividends
EUR 34,705 k (EUR 0.44 per outstanding share)
out of the capital reserve to its shareholders.

Hedging reserve

EUR k

Dec. 31, 2012 Dec. 31, 2011

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

As at Dec. 31

769,412

751,084

Hedging reserve

– 22,137

–17,760

The new shares generated from the capital increase
were offered and sold at a price of EUR 8.50 per
share. The issue proceeds by which the nominal
share capital increase was exceeded amounted to
EUR 53,778 k and were recognised as capital re-
serve. The share placement resulted in an overall
increase in the capital reserve of EUR 52,468 k,
based on contributions of EUR 53,778 k and ex-
penses of EUR 1,310 k.

For further details on the change in hedging reserve
please refer to ›› Note 10.7.

Treasury shares
As at December 31, 2012, the Company held no
treasury shares.

By resolution of the Annual General Meeting held
on June 8, 2011, the Company’s authorisation to
acquire treasury shares was renewed. According
to the resolution, alstria ofﬁ ce REIT-AG is author-
ised to acquire up to 10% of the capital stock until
June 8, 2016. There is no intention to make use of
this authorisation at present.

Retained earnings
Retained earnings as at December 31, 2012
showed an amount of EUR 3,079 k. Since the pay-
ment of the dividend could not be generated from
positive retained earnings at the time the dividend
was paid, the amount of the dividend pay-outs in
2012 was paid from the capital reserve.

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

11.2 Financial liabilities

EUR k

Loans

Syndicated loan

Other loans

Total

EUR k

Loans

Syndicated loan

Other loans

Total

Non-current

555,610

326,495

882,105

Non-current

566,507

288,307

854,814

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

As at December 31, 2012, the notional amount
of the loans used by alstria ofﬁ ce REIT-AG
(December 31, 2011:
is EUR 896,984 k
EUR 864,801 k). The lower carrying amount of
EUR 892,091 k (EUR 882,105 k non-current and
EUR 9,986 k current) takes into account interest
liabilities and transaction costs to be allocated un-
der 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 successfully reﬁ nanced its main credit facility
on July 20, 2010. A syndicate consisting of ﬁ ve banks
has provided a credit facility totalling EUR 630 m
(“syndicated loan”). Out of this nominal amount,
EUR 564,721 k had been drawn as of December 31,
2012 (December 31, 2011: EUR 571,339 k). The
carrying amount was EUR 561,070 k as of Decem-
ber 31, 2012 (December 31, 2011: EUR 566,507 k).
The difference between the notional amount and
the carrying amount is due to the allocated transac-
tion costs accounted under the effective interest rate
method.

Current

Accrued
interest

Total

current Dec. 31, 2012

379

405

5,486

4,500

9,986

561,096

330,995

892,091

Current

Accrued
interest

Total

current Dec. 31, 2011

715

807

4,413

4,505

566,599

292,720

859,319

Loan

5,460

4,121

9,581

Loan

3,698

The loan agreement has a maturity of ﬁ ve years until
July 20, 2015. The syndicated loan was arranged by
UniCredit Bank AG and underwritten by Berlin-Han-
noversche Hypothekenbank AG, Hypothekenbank
Frankfurt AG (formerly: Eurohypo Aktiengesell-
schaft), HSH Nordbank AG and Natixis S. A. In rela-
tion to the disposal of three ofﬁ ce buildings, alstria
repaid EUR 6,619 k on its syndicated loan in the re-
porting period 2012.

To secure the liabilities of the syndicated loan,
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
›› Note 10.6.

alstria ofﬁ ce REIT-AG entered into a new ﬂ oating
rate loan in March 2011 in relation to the acquisi-
tion of two ofﬁ ce buildings. The interest rate on this
loan is based on the three-months EURIBOR rate
plus a spread of 180 basis points. The loan facility,
of which EUR 11,500 k has been drawn, amounts
to EUR 14,000 k and matures at the end of 2015.

alstria Financial Report 2012

Two other new ﬂ oating rate loans were closed in
November 2011, both with an interest rate based
on the three-months EURIBOR rate plus a spread
of 135 basis points and a maturity until December
17, 2018. The loans serve to reﬁ nance a newly
acquired portfolio of six investment properties
and were drawn in an amount of EUR 56,000 k
as at December 31, 2012. In the third quarter
of 2012 a loan agreement for a credit facility of
EUR 42,500 k was closed. The ﬂ oating rate loan,
based on the three-months EURIBOR rate plus a
spread of 180 basis points has a maturity until Sep-
tember 30, 2019 and was paid out to the Group on
December 28, 2012.

The current portion of the loan concerns scheduled
repayments and accrued interest on the loans.

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 sig-
niﬁ cant differences between the carrying amounts
and fair value with the exception of transaction
costs.

A total of EUR 100,945 k (December 31, 2011:
EUR 103,629 k) in ﬁ nancial liabilities from non-re-
course loans relates to two ﬁ xed interest rate loans.
As at the end of the reporting period, these loans
had a fair value of EUR 102,906 (December 31,
2011: EUR 104,587 k).

As at December 31, 2012, loans were reduced by
transaction costs of EUR 5,418 k (December 31,
2011: EUR 6,289 k).

The average debt maturity as at the end of the re-
porting period decreased to 3.0 years compared to
3.8 years as at December 31, 2011.

The average interest rate of the Group's loans
amounted to a rate of 3.9% at the end of the re-
porting period.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

The carrying amounts of the loans are all denomi-
nated in euros; the fair value of all ﬁ nancial liabili-
ties, 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, 2012 Dec. 31, 2011

6,646

789,393

796,039

1,014

720,336

721,350

The following loans are secured by land charges:

EUR k

Dec. 31, 2012 Dec. 31, 2011

Financial liabilities secured
by land charges

thereof on investment
property

892,091

859,319

887,357

855,178

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 3,829 k was calculated as the net present
value of possible cash outﬂ ow due to this rental
guarantee for which a realisation is expected more
likely than not. The commitment relates to a six-
year rental period starting in 2014. The same cir-
cumstances led to contingent liabilities ›› Note 12.2.
At December 31, 2011, the provision for the rental
guarantees amounted to EUR 2,858 k. The increase
in this provision in an amount of EUR 76 k results
from the change in the net present value due to the
time shift and discount rate changes. The remaining
EUR 895 k increase in the provision for rental guar-
antee is based on the modiﬁ cation in the expectation
of realisation, which takes into account new infor-
mation of the tenants’ situation with regard to its
claiming on using the possible break option.

In addition EUR 1,472 k (December 31, 2011:
EUR 909 k) is recognised as provision for awarding
the Long- and Short-Term Incentive Plan ›› Note 18.

alstria Financial Report 2012

11.4 Trade payables and other liabilities

EUR k

Trade payables

Other current liabilities

Property lease liability

Outstanding invoices

Advance disposal price payments
received

Advance rent payments received

Accrued bonuses

Customers with credit balances

Received deposits

Value added tax liabilities

Supervisory Board compensation

Auditing costs

Consultancy costs

Miscellaneous other liabilities

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Due

Up to
1 year

In more
than
1 year

Total

Due

Dec. 31,
2012

Up to
1 year

In more
than
1 year

Total

Dec. 31,
2011

3,735

361

5,071

2,640

1,309

1,210

1,103

758

561

302

286

416

6,387

742

3,735

6,748

5,071

2,640

1,309

1,210

1,103

1,500

561

302

286

416

3,201

5,566

2,292

1,140

640

268

167

722

3,201

5,566

2,292

1,140

989

1,629

268

167

722

14,035

7,129

21,164

10,843

989

11,832

The disclosed carrying amounts approximate their
fair values.

The following table presents the future minimum
lease payments as per end of the reporting period
and their discounted values for future periods:

Trade payables relate to operating costs not yet
invoiced of EUR 2,492 k (December 31, 2011:
EUR 1,669 k), liabilities from project development,
rental activities and third-party real estate manage-
ment services of EUR 1,243 k (December 31, 2011:
EUR 1,119 k).

The property lease liability resulted from property
leasehold acquired within the ﬁ nancial year. The
property lease matures in December 2088. The an-
nual lease payment rate is EUR 381 k and its de-
velopment is attached to the development of the
annual average consumer price index in Germany.

The fair value of the property lease as at Decem-
ber 31, 2012 amounted to EUR 7,130 k.

Minimum lease
payments

Discounted
value of
minimum lease
payments

381

1,523

27,035

28,939

361

1,263

5,124

6,748

EUR k

Maturity property
lease

<1 year

1–5 years

>5 years

Total

Less:

Future ﬁ nancing costs

22,191

Discounted value
of minimum lease
payments

6,748

11.5 Trust assets and liabilities
As at the end of the reporting period, alstria of-
ﬁ ce REIT-AG had trust assets worth an amount of
EUR 1,624 k (December 31, 2011: EUR 1,586 k)
and liabilities of EUR 758 k (December 31, 2011:
EUR 640 k), in particular from rent deposits.

alstria Financial Report 2012

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.

12 Other notes
12.1 Compensation of Management

Board and Supervisory Board

In 2012, the overall com-
Management Board
pensation of the members of the Management
Board totalled EUR 2,221 k (2011: EUR 2,260 k).
As at the reporting date, liabilities for the compen-
sation of the members of the Management Board
amounted to EUR 360 k (2011: EUR 360 k). Un-
der the stock option programme of alstria ofﬁ ce
REIT-AG, members of the Management Board held
non-transferable stock options for 375,000 shares
of alstria ofﬁ ce REIT-AG as at December 31, 2012
and 2011, respectively. The stock options had been
granted under the regime of the meanwhile ter-
minated stock option programme implemented in
2007. Details of the stock option programme are
also included in these notes ›› Note 17. Out of the
subsequent cash-settled share-based incentive plan
implemented in 2010, 292,294 virtual shares were
granted to the members of the Management Board
as at December 31, 2012 ›› Note 18.

Supervisory Board Pursuant to the articles of
association, Supervisory Board members’ ﬁ xed
annual payment amounted to EUR 302 k (2011:
EUR 290 k).

Further information on disclosures according to
Section 314 para. 1 no. 6a HGB (German Com-
mercial Code) and IAS 24.16 is provided in the
remuneration report see ›› appendix to the Group
management report pages 90 to 93.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

12.2 Commitments and contingencies
Other ﬁ nancial obligations from refurbishment
projects and ongoing maintenance amounted to
EUR 6,481 k (2011: EUR 9,377 k).

In respect of the sale of properties, at the dis-
posal date the Group accepted the commitment
to compensate the buyer for possible rent income
shortfalls in case rental agreements existing with
certain tenants are not extended. Contingencies
out of this commitment amounted to EUR 670 k
(December 31, 2011: EUR 5,094 k). The commit-
ment relates to a six-year rental period starting in
2014. According to the details of the rental guar-
antees and the lettability of the objects, the Com-
pany does not expect a claim to come out of the
rental guarantees. The same circumstances led to
provisions for rental guarantees ›› Note 11.3. The
decrease in this commitment from EUR 5,094 k to
EUR 670 k is based on the renewal of the lease
length of a part of the rental areas in question, re-
sulting in the termination of the rental guarantee
originally granted for these areas.

As at December 31, 2012, there was no rental agree-
ment for the administrative premises with a mini-
mum lease length. Out of other leasing agreements,
future ﬁ nancial obligations arose in an amount of
EUR 248 k. EUR 128 k of which has a residual matu-
rity up to one year and the remainder, EUR 120 k, a
remaining maturity of one to ﬁ ve years.

Annual lease payments in an amount of currently
EUR 381 k are to be paid for an existing property
lease. The development of the lease payment rate
is attached to the development of the annual aver-
age consumer price index in Germany.

Operating lease commitments – Group as
lessor The Group has entered into commercial
property leases on its investment property port-
folio, consisting of the Group’s surplus ofﬁ ce and
manufacturing buildings. These non-cancellable
leases have remaining terms of between one
and 23 years. Most leases include an indexation
clause, i. e. the rental charges may be raised an-
nually according to prevailing market conditions.

alstria Financial Report 2012

Future minimum rental charges receivable under
non-cancellable operating leases are as follows:

The cash and cash equivalents in the cash ﬂ ow
statement relate to all cash disclosed in the bal-
ance sheet, i. e. cash on hand and bank balances.

EUR k

Within 1 year

Dec. 31, 2012 Dec. 31, 2011

98,079

89,826

After 1 year but not longer
than 5 years

More than 5 years

296,037

314,741

708,857

286,454

379,458

755,738

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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 re-
ceived and paid. In accordance with IAS 7, a dis-
tinction is made between cash ﬂ ows from operat-
ing activities and cash ﬂ ows from investing and
ﬁ nancing activities.

The cash ﬂ ows from investing and ﬁ nancing ac-
tivities 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 the ﬁ nan-
cial year 2012 amounted to EUR 45,735 k. The
signiﬁ cant increase compared to the reporting pe-
riod 2011 (EUR 38,457 k) resulted mainly from
higher rental revenues and lower payments for
interest expenses.

The cash ﬂ ow from investing activities is impacted
by the cash outﬂ ows resulting from the acquisi-
tions of the DIVE portfolio and investments in
existing properties (cash outﬂ ow EUR 107,125 k).
Cash inﬂ ows of EUR 11,080 k relate to payments
received for the sale of investment properties. Pro-
ceeds from the equity release of interests in joint
ventures generated cash inﬂ ows in an amount of
EUR 25,212 k.

The cash ﬂ ows from ﬁ nancing activities mainly re-
ﬂ ect the proceeds from shares issued in an amount
of EUR 59,756 k net and the dividend payment
(EUR 34,705 k). Furthermore, cash outﬂ ows were
made for the acquisition or termination of ﬁ nan-
cial derivatives (EUR 10,002 k) and in an amount
of EUR 10,317 k for the redemption of loans.

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 entities
with controlling inﬂ uence over the Group and enti-
ties with joint control over, or signiﬁ cant inﬂ uence
on, alstria ofﬁ ce REIT-AG.

The majority of alstria ofﬁ ce REIT-AGs shares are
in free ﬂ oat. No person or entity has a controlling
inﬂ uence over the Company. alstria ofﬁ ce REIT-AG
is the ultimate parent company of the Group.

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

In the view of alstria ofﬁ ce REIT-AG’s management,
all transactions with related parties, entered into in
the ﬁ nancial year 2012, were effected on arm’s
length terms or under conditions 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 appendix to the
Group management report.

13.3 Related party transactions
At the end of the reporting period, the Group had
receivables of EUR 89 k (December 31, 2011:
EUR 2,095 k) against the joint ventures. Further-
more, alstria ofﬁ ce REIT-AG received EUR 701 k
(2011: EUR 317 k) from the joint venture as com-
pensation for services connected to real estate.

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

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.

alstria Financial Report 2012

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.

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

Proﬁ t attributable to the
shareholders (EUR k)

Average number of shares
outstanding (thousands)

Basic earnings per share
(EUR per share)

2012

2011

39,911

27,448

77,848

69,245

0.51

0.40

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 be-
tween the reporting date and the date of comple-
tion of these ﬁ nancial statements.

alstria ofﬁ ce REIT-AG is authorised to issue up to
EUR 27,912 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.

15 Dividends paid

EUR k

2012

2011

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

Dividend per share
(without treasury shares)

34,705

31,503

0.44

1) Refers to all shares except treasury shares at the

dividend payment date.

The annual general meeting of alstria ofﬁ ce REIT-
AG held on April 24, 2012, resolved to distribute
dividends totalling EUR 34,705 k (EUR 0.44 per
outstanding share). The dividend was distributed
on April 25, 2012. The dividends paid out in 2011
totalled EUR 31,503 k (EUR 0.44 per share out-
standing).

16 Employees
During the period from January 1 to Decem-
ber 31, 2012, the Company had an average of 55
employees (January 1 to December 31, 2011: on
average 48 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, 2012, 59 people (December 31, 2011: 50
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.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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

Expected volatility is based on the historical vola-
tility of comparative listed companies and was cal-
culated as an average of these comparables.

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 Company with a total
nominal value of EUR 2,000 k may be granted to
members of the Management Board. The stock op-
tions will be granted in annual tranches. The ﬁ rst
tranche was granted by the Supervisory Board in
2007, subject to the conditions below. The exer-
cise price for the stock options granted in 2007 is
EUR 16. In 2010, the stock option programme was
replaced by a new long-term incentive plan that is
described in detail in ›› Note 18. The stock options
granted in 2007 under the terminated stock option
program stay unaffected.

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 val-
ues of the stock options at the granting date over
the vesting period amounted to EUR 0 k in 2012
and 2011.

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

Fair value of stock options
granted on

Dividend yield (%)

Risk-free interest rate (%)

Expected volatility (%)

Expected life of option (years)

Exercise share price (EUR)

Labour turnover rate (%)

Stock price as at valuation
date (EUR)

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

Mar. 27, 2007 Sept. 5, 2007

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

The term of each stock option is seven years be-
ginning with the respective issue date. The stock
options may only be exercised if the current stock
exchange price of the Company’s shares exceeds
the stock exchange price of the Company’s shares
on the issue date by 20% or more for at least
seven non-subsequent trading days of the Frank-
furt Stock Exchange prior to the commencement
of the respective exercise period. The stock op-
tions 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
period lasts 30 days, commencing with the day of
announcement of the results for the ﬁ rst, second
and third quarters, 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 established a new share-based remunera-
tion system as part of the success-based remunera-
tion for members of the Management Board. The
share-based remuneration is made up of a long-
term component, the Long-Term Incentive Plan
(LTIP), and a short-term component, the Short-
Term Incentive Plan (STIP). The remuneration type
is a cash-settled and share-based payment transac-
tion, respectively.

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 be-
tween the grant date and the maturity date, but in
no event higher than 250% of the average stock
market 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
discretionary factor.

alstria Financial Report 2012

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

The determination of virtual shares will depend in
equal amounts on the absolute return of the alstria
share price (absolute total shareholder return) and
on the relative performance of alstria's share in re-
lation to the EPRA Index Continental Europe (rela-
tive total shareholder return).

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

Virtual shares under the short-term variable remu-
neration (STIP) were granted for the ﬁ rst time on
March 3, 2011. The virtual shares resulting from
the STI are subject to a minimum vesting period of
two years. The virtual STI shares will be converted
into a cash amount after the expiry of the vesting
period. This cash amount is calculated on the basis
of the number of virtual shares, multiplied by the
share price of one alstria share at that time, and is
calculated on the basis of a reference period.

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 employ-
ees 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 convert-
ible proﬁ t participation rights programme. With its
resolution, the Supervisory Board ﬁ xed the details of
the convertible proﬁ t participation rights programme
in accordance with an authorisation granted by the
general meeting of shareholders of March 15, 2007.
The convertible proﬁ t participation rights pro-
gramme was renewed by the Supervisory Board
with minor modiﬁ cations in 2012 in accordance with
an authorisation granted by the general meeting of
shareholders of April 24, 2012.

The main terms of the programme can be summa-
rised as follows:

The nominal amount of each certiﬁ cate is EUR 1.00
and is payable upon issuance. Under the cur-
rent programme, starting in 2012, a maximum
of 500,000 certiﬁ cates in an aggregate nominal
amount of up to EUR 500 k may be issued.

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

The development of the virtual shares until Decem-
ber 31, 2012 is shown in the following table:

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

Number of
virtual shares

Dec. 31, 2012

Dec. 31, 2011

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

LTIP

STI

LTIP

STI

Jan. 1

175,711

11,718

99,009

Granted in the
reporting period

91,954

12,911

76,702

11,718

Dec. 31

267,665

24,629 175,711

11,718

In 2012, the LTI and the STI generated remunera-
tion expenses amounting to EUR 563 k (2011: re-
muneration expenses of EUR 558 k) and provisions
amounting to EUR 1,472 k (December 31, 2011:
EUR 909 k). The Group recognises the liabilities
arising from the vested virtual shares under other
provisions.

During its term, each certiﬁ cate entitles the holder to
a preferred disbursement from the Company’s an-
nual 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 ben-
eﬁ ciary for less than a full business year of the Com-
pany, 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 86,000 certiﬁ cates issued on June 18, 2012,
this market condition was fulﬁ lled until the end of
the ﬁ nancial year 2012.

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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 con-
version 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 share-based payment agreements
under the employee proﬁ t participation programme
were in existence during the year:

Granting date of tranche

Jan. 1, 2012

Expired due to time lapse

Expired due to termination
of employment

Converted

Granted

Dec. 31, 2012

Sept. 6,
2007

2,200

–2,200

Jun. 6,
2008

36,000

–500

35,500

Jun. 17,
2010

59,500

–59,500

Jun. 9,
2011

80,000

–7,000

73,000

Jun. 18,
2012

86,000

Total

177,700

–2,200

–7,500

–59,500

86,000

194,500

Total expenses relating to convertible proﬁ t partici-
pation rights were EUR 610 k in 2012 ›› Note 9.5.

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

Sept. 6, 2007

Jun. 6, 2008 Jun. 17, 2010

Jun. 9, 2011 Jun. 18, 2012

Dividend yield (%)

Risk-free interest rate (%)

Expected volatility (%)

Expected life of option (years)

Exercise share price (EUR)

Labour turnover rate (%)

Stock price as at valuation date (EUR)

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

3.70

4.20

30.00

2.00

10.00

13.18

4.70

4.65

35.00

2.00

10.00

11.03

6.06

0.47

58.00

2.00

10.00

8.25

4.23

1.67

47.00

2.00

10.00

10.40

5.76

0.04

38.00

2.00

10.00

7.64

10.77

8.76

6.19

8.25

5.45

alstria Financial Report 2012

Expected volatility is based on the historical volatil-
ity of alstria and comparative listed companies and
was calculated as an average of these comparable
ﬁ gures.

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.

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 in-
struments are cash ﬂ ow interest rate risks and liquid-
ity risks. The Group is not exposed to any signiﬁ cant
credit risks. The amount that best presents the maxi-
mum credit risk is the carrying amount of ﬁ nancial
assets. The Management Board decides on strate-
gies and processes for managing speciﬁ c risk types.
These are presented on the following pages.

Risks that could arise as a result of the ﬁ nancial
crisis are seen mainly in a potential default of pay-
ment 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%. The Company managed to keep the
LTV ratio for the syndicated loan on the relevant
test date at 54.1%. The risk of a breach of cov-
enant is effectively countered.

The following table presents the single LTV ratios
and covenants for the Group loans as at the end of
the reporting period:

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

Existing loan agreements
as at December 31, 2012

Loan

Syndicated loan

Non-recourse loan #1

Non-recourse loan #2

Non-recourse loan #3

Non-recourse loan #4

Non-recourse loan #5

Loan #6

Loan #7

Loan #8

Total as at Dec. 31, 2012

Maturity

Jul. 20, 2015

Oct. 20, 2015

Dec. 31, 2014

Jun. 30, 2014

Oct. 20, 2014

Jan. 31, 2017

Dec. 31, 2015

Dec. 17, 2018

Sept. 30, 2019

Principal amount
outstanding
(EUR k)

Current LTV (%)

LTV covenant
( %)

564,721

47,902

42,670

29,568

30,747

71,376

11,500

56,000

42,500

896,984

54.1

70.2

64.9

56.0

55.0

60.2

58.7

48.8

45.6

55.0

70.0

80.0

60.0

65.0

75.0

60.0

65.0

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

alstria Financial Report 2012

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, 2012

Variable interest

Syndicated loan

Other loans

Total

5,460

1,186

6,646

559,261

72,576

59,057

618,318

564,721

98,500

231,319

796,040

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

EUR k

< 1 year

1–2 years

2–3 years

3– 4 years

> 4 years

Total

Financial year as at Dec. 31, 2011

Variable interest

Syndicated loan

Other loans

Total

1,014

1,186

571,339

72,576

59,057

630,396

56,000

189,833

761,172

Due to the extensive portfolio of non-current ﬁ nan-
cial liabilities with a variable interest risk, alstria of-
ﬁ ce REIT-AG is exposed to risks from ﬂ uctuations in
market interest rates. The interest base for the ﬁ nan-
cial liability (loan) is the three-month EURIBOR rate,
which is adjusted every three months. A number of
different derivative ﬁ nancial instruments were ac-
quired to manage the interest expense. The deriva-
tive ﬁ nancial instruments relate to interest swaps in
which the Company agrees to exchange with con-

tracting 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 prede-
termined maximum. If the maximum interest rate is
exceeded, the difference between the actual interest
rate and the cap rate is paid out.

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

Product

Cap

Cap1)

Cap

Swap

Interest rate derivatives – held for trading 2)

Cap

Swap1)

Swap

Strike

p.a. (%) Maturity date

3.0000

Sept. 30, 2019

4.6000

Oct. 20, 2015

4.9000

Dec. 20, 2012

4.1160

Jul. 10, 2013 4)

3.0000

Dec. 17, 2018

3.2500

Dec. 31, 2015

3.3000

Oct. 20, 2014

3.3000

Oct. 20, 2014

4.6000

Oct. 20, 2015

Dec. 31, 2012

Dec. 31, 2011

Notional
(EUR k)

Fair value
(EUR k)

Notional
(EUR k)

Fair value
(EUR k)

42,500

47,902

42,500

56,000

11,500

22,876

7,871

395

403

395

75,000

47,902

122,902

56,000

11,500

23,630

8,130

95,000

37,283

–2,479

1,421

–6,921

–1,234

2.1940

Dec. 31, 2014

37,283

–1,632

2.9900

Jul. 20, 2015

472,500

–33,448

472,500

–29,398

Interest rate derivatives – cash ﬂ ow
hedges3)

Total2)

608,030

–34,677

609,043

–36,082

650,530

–34,274

731,945

–38,561

alstria Financial Report 2012

Liquidity Risk The Company continually moni-
tors the Group-wide risk of potential liquidity bot-
tlenecks using a liquidity planning tool, which uses
the expected cash ﬂ ows from business activities and
the maturity of the ﬁ nancial liabilities as a basis for
analysis. The long-term reﬁ nancing strategy of the
Group ensures the medium and long-term liquidity
requirements. Such forecasting takes into consid-
eration the Group’s debt ﬁ nancing plans, covenant
compliance, compliance with internal balance sheet
targets and, if applicable, external regulatory or legal
requirements – 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, 2012
plus the weighted average margin of 152 basis
points for the Group’s loans).

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

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

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.

Interest expenses p. a.

EUR k

+ 100 bps

– 50 bps

2012

7,116

2011

7,719

–3,558

–3,860

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:

a) Impact on equity

Financial derivatives qualifying
for cash ﬂ ow hedge accounting

EUR k

+ 100 bps

– 50 bps

2012

13,205

–3,397

2011

18,025

–9,383

b) Impact on income statement

Financial derivatives not qualifying
for cash ﬂ ow hedge accounting

EUR k

+ 100 bps

– 50 bps

2012

1,254

–263

2011

2,985

–1,391

alstria Financial Report 2012

The following chart shows the related future undis-
counted cash ﬂ ows of ﬁ nancial liabilities:

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, 2012

Interests

Loans

18,346

18,502

12,814

9,461

102,911

620,236

Financial derivatives

14,220

13,464

6,555

Trade payables

Other current liabilities

3,735

9,180

5,887

2,009

3,581

5,026

64,156

63,867

98,500

896,984

34,239

3,735

6,713

15,922

54,942

134,884

639,612

7,903

67,456

110,239

1,015,036

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, 2011

Interests

Loans

Financial derivatives

Trade payables

Other current liabilities

26,795

26,690

25,680

15,386

3,698

9,421

3,201

7,858

4,001

102,911

632,315

10,335

11,432

6,669

4,875

2,009

3,911

103,337

119,867

864,801

37,857

3,201

7,858

50,973

41,026

140,023

654,370

6,884

123,778

1,017,054

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

The most signiﬁ cant liability consists of a syn-
dicated loan provided by ﬁ ve banks with an
amount of EUR 564,721 k (December 31, 2011:
EUR 571,339 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
an amount of EUR 332,264 k (December 31, 2011:
EUR 289,764 k). 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 1,638,921 k were furnished as
security.

Capital management Capital management ac-
tivities 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 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, 2012, and at Decem-
ber 31, 2011.

The capital structure is monitored by the Company
using the key performance indicators (KPIs) rel-
evant 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 busi-
ness year is not below 45% for three consecutive
business years.

alstria Financial Report 2012

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

Total Fair value

3,656

806

3,814

The following KPIs are also used to manage capital:

KPIs according to G-REIT law

2012

2011

G-REIT
covenant

Equity ratio acc.
to G-REIT law

Immovable assets

Revenues gained
from immovable
assets

Income gained
from disposal of
immovable assets

50.04

92.74

48.68

93.56

> 45

> 75

100.00

> 75

20.99

20.62

< 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
assets

Financial assets

Assets as per
balance sheet
(EUR k) as at
Dec. 31, 2012

Trade receivables

3,656

Accounts receivable
from joint ventures

Derivatives

Receivables and
other assets

Cash and cash
equivalents

Total

806

118,548

129,911

Assets at
fair value
through
proﬁ t and
loss

Loans and
receivables

3,656

Derivative
hedge
accounting

Available
for sale

403

6,812

2,998

3,814

118,548

0 118,548

118,548

2,998

126,107

403

0 126,913

126,913

Carrying
amount

Non-ﬁ nancial
liabilities

Financial liabilities

Liabilities as
per balance sheet
(EUR k) as at
Dec. 31, 2012

Long-term loans

Derivatives

Short-term loans

Trade payables

Other liabilities

Total

Liabilities
at fair value
through
proﬁ t
and loss

882,105

35,080

9,986

3,735

21,164

952,070

3,949

Other
liabilities

882,105

Derivative
hedge
accounting

Total

Fair value

882,105

889,484

35,080

9,986

3,735

17,215

9,986

3,735

9,986

3,735

17,215

913,041

35,080

948,122

955,501

alstria Financial Report 2012

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Carrying
amount

Non-ﬁ nancial
assets

Assets as per
balance sheet
(EUR k) as at
Dec. 31, 2011

Trade receivables

2,449

2,095

3,566

Accounts receivable
from joint ventures

Derivatives

Receivables and
other assets

Cash and cash
equivalents

Total

Loans and
receivables

2,449

2,095

Financial assets

Assets at
fair value
through
proﬁ t and
loss

Derivative
hedge
accounting

Available
for sale

3,566

Total Fair value

2,449

2,095

3,566

2,095

3,566

3,461

96,009

3,566

0 107,580

107,580

6,870

3,409

3,461

96,009

110,989

96,009

3,409

104,014

Carrying
amount

Non-ﬁ nancial
liabilities

Financial liabilities

Liabilities as
per balance sheet
(EUR k) as at
Dec. 31, 2011

Long-term loans

Derivatives

Short-term loans

Trade payables

Other liabilities

Total

Liabilities
at fair value
through
proﬁ t
and loss

Other
liabilities

Derivative
hedge
accounting

Total

Fair value

854,814

40,032

4,505

3,201

11,832

914,384

9,817

793,603

2,479

37,553

40,032

4,505

3,201

2,015

4,505

3,201

2,015

4,505

3,201

2,015

2,479

803,324

37,553

843,356

The fair value of the derivative ﬁ nancial instru-
ments and the loans was determined by an inde-
pendent expert by discounting the expected future
cash ﬂ ows at prevailing market interest rates.

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

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

EUR k

2012

2011

Financial instruments at fair
value through proﬁ t or loss

Loans and receivables

Total

–1,380

–3,247

–64

–117

–1,444

–3,364

Fair value estimation Financial instruments
which are measured in the balance sheet at fair
value require the disclosure of fair value measure-
ments by level of the following fair value measure-
ment 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, unobservable
inputs) (level 3)

alstria Financial Report 2012

All of the Group’s ﬁ nancial instruments which are
measured in the balance sheet at fair value are val-
ued using the level 2 valuation measurement ap-
proach. 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.

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,

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 valua-
tion 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 ob-
servable, the instrument is included in level 2.

Hamburg

› alstria ofﬁ ce Englische Planke GmbH & Co. KG,

Hamburg

› alstria ofﬁ ce Gänsemarkt Drehbahn 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 Insterburger Strasse GmbH & Co.

KG, Hamburg

21 Signiﬁ cant events after the end

› alstria ofﬁ ce Ludwig-Erhard-Strasse GmbH & Co.

of the reporting period

KG, Hamburg

The two properties classiﬁ ed as held for sale at the
end of the reporting period were transferred to the
buyer in the ﬁ rst quarter of the year 2013.

› alstria ofﬁ ce Mannheim/Wiesbaden GmbH & Co.

KG, Hamburg

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

Hamburg

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

In February 2013, alstria received from a former
majority shareholder EUR 1,800 k as a compensa-
tion for expenses relating to certain capital market
transactions and associated liabilities, which have
been recognised at the end of the reporting period
2012 an amount of EUR 1,229 k.

alstria Financial Report 2012

23 Disclosures pursuant to Wert-

papierhandelsgesetz [German
Securities Trading Act]

23.1 Ad-hoc announcement

The following table summarises the announcements
pursuant to Section 15 para. 1 German Securities
Trading Act (WpHG) as published by the Company
in the reporting year:

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Date

Topic

Feb. 21, 2012

Acquisition of a real estate portfolio and capital increase of up to 7,170,362 new shares

Feb. 22, 2012

alstria ofﬁ ce REIT-AG successfully executed capital increase

23.2 Directors’ dealings
The following table summarises the transactions
reported to the Company pursuant to Section 15a
para. 1 WpHG during the reporting period:

Name of person subject to the
disclosure requirement

Function

Classiﬁ cation of the
ﬁ nancial instrument

ISIN

Alexander Stuhlmann

Member of the Supervisory Board

Olivier Elamine

Member of the Management Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

Alexander Stuhlmann

Member of the Supervisory Board

DE000A0LD2U1

alstria Financial Report 2012

Trans action

Place

Trans action date

(EUR) Number of shares

Price per share

Buy

Sell

XETRA

Feb. 27, 2012

May 18, 2012

May 21, 2012

Aug. 15, 2012

Sept. 14, 2012

Sept. 27, 2012

8.440

7.84

7.73

9.044

9.033

9.031

9.025

9.020

9.380

9.373

9.370

9.365

9.360

9.226

9.224

9.223

9.222

9.210

1,000

2,500

500

1,750

681

1,048

1,228

293

1,900

650

1,200

1,100

750

1,169

1,500

1,400

249

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

Deal volume
(EUR)

8,440.00

19,600.00

3,867.00

15,827.00

6,151.47

9,464.49

11,082.70

2,642.86

17,822.00

6,092.45

11,244.00

10,301.50

7,020.00

10,785.19

13,836.00

12,912.20

756.20

2,293.29

alstria Financial Report 2012

23.3 Voting rights notiﬁ cations
Information according to Section 160 para.
1 No. 8 German Stock Corporation Act
(AktG): As per balance sheet date 2012, the

following share holdings in the Company existed
that were communicated to us pursuant to Section
21 para. 1 WpHG and published pursuant to Sec-
tion 26 para. 1 WpHG:

No.

Shareholders, registered ofﬁ ce

Voting rights
(new) (%)

Strike threshold
(%)

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

Stichting Pensioenfonds ABP, Heerlen, Netherlands

APG Groep N.V., Heerlen, Netherlands

APG Algemene Pensioen Groep N.V., Heerlen, Netherlands

Morgan Stanley International Limited, London, United Kingdom

Morgan Stanley Group (Europe), London, United Kingdom

Morgan Stanley Investments (UK), London, United Kingdom

Morgan Stanley Investment Management Limited,
London, United Kingdom

Grove International Partners LLP, New York, USA

CGI Partners L.P., New York, USA

Cypress Grove International Associates LLC, New York, USA

Cypress Grove International D L.P., New York, USA

Shamrock Cedobar Limited, Dublin, Ireland

Cohen & Steers Inc., New York, USA

Morgan Stanley Bank AG, Frankfurt, Germany

Morgan Stanley International Holdings Inc, Delaware, USA

CG Delaware Malta Limited, Valetta, Malta

CG Delaware Apellas Limited, Valetta, Malta

Morgan Stanley, Delaware, USA

BPCE S.A., Paris, France

Natixis S.A., Paris, France

Natixis Alternative Assets S.A., Luxembourg, Luxembourg

RECM S.à r.l., Luxembourg, Luxembourg

Captiva Capital (Luxembourg) S.à r.l., Luxembourg, Luxembourg

Captiva Capital (Luxembourg) Partners II S.C.A., Luxembourg,
Luxembourg

FTW II S.à r.l., Luxembourg, Luxembourg

CNP Assurances, Paris, France

PGGM Coöperatie U.A., Zeist, Netherlands

PGGM N.V., Zeist, Netherlands

PGGM Fondsenbeheer B.V., Zeist, Netherlands

Stichting PGGM Depositary, Zeist, Netherlands

1) Attribution pursuant to Section 22 para. 1 sentence 1 No. 1 WpHG.
2) Attribution pursuant to Section 22 para. 1 sentence 1 No. 5 WpHG.
3) Attribution pursuant to Section 22 para. 1 sentence 1 No. 6 WpHG.
4) Attribution in connection with Section 22 para. 1 sentence 2 WpHG.
5) Attribution in connection with Section 22 para. 1 sentence 3 WpHG.

3.45

4.95

7.87

2.85

0.00

4.28

0.00

7.15

4.94

4.80

4.55

0.00

5.14

2.85

5, 3

10, 5

5, 3

alstria Financial Report 2012

Date of change

Attribution of
voting rights

Apr. 1, 2011

Yes 1)

Apr. 1, 2011

Yes 1)

Apr. 1, 2011

Jun. 24, 2011

Yes 3), 4)

Jun. 24, 2011

Yes 3), 4)

Jun. 24, 2011

Yes 3), 4)

Jun. 24, 2011

Yes 3)

Jun. 30, 2011

Yes 1)

Jun. 30, 2011

Yes 1)

Jun. 30, 2011

Yes 1)

Jun. 30, 2011

Yes 1)

Jun. 30, 2011

Jan. 19, 2012

Yes 3), 4), 5)

Feb. 27, 2012

Yes 3), 4)

Aug. 3, 2012

Yes 1)

Contains 3% or more of voting rights from

APG Groep N.V.,
APG Algemene Pensioen Groep N.V.

APG Algemene Pensioen Groep N.V.

–

CGI Partners L.P., Cypress Grove International Associates LLC,
Cypress Grove International D L.P., CG Delaware Malta Limited,
Shamrock Cedobar Limited

Cypress Grove International Associates LLC, Cypress Grove
International D L.P., CG Delaware Malta Limited, Shamrock
Cedobar Limited

Cypress Grove International D L.P., CG Delaware Malta Limited,
Shamrock Cedobar Limited

CG Delaware Malta Limited, Shamrock Cedobar Limited

–

Shamrock Cedobar Limited

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

Aug. 31, 2012

Yes 2), 3), 4)

–

Dec. 7, 2012

Yes 1)

Dec. 7, 2012

Yes 1)

Natixis S.A.,
Natixis Alternative Assets S.A.,
RECM S.à r.l.

Natixis Alternative Assets S.A.,
RECM S.à r.l.

Dec. 7, 2012

Yes 1)

RECM S.à r.l.

Dec. 7, 2012

Dec. 07, 2012

Dec. 21, 2012

Yes 3), 4)

Dec. 21, 2012

Yes 3), 4)

Dec. 21, 2012

Yes 3)

Dec. 21, 2012

–

alstria Financial Report 2012

24 Declaration of compliance

pursuant to Section 161 AktG
[Aktiengesetz: German Stock
Corporation Act]

The declaration of compliance required by Sec-
tion 161 AktG regarding the recommendations
of the German Corporate Governance Code de-
veloped by the government commission has been
submitted by the Management Board and the Su-
pervisory Board and is made permanently available
to the public on alstria ofﬁ ce REIT-AG’s website
›› www.alstria.com. It is included in the declara-
tion of corporate management according to Sec-
tion 289a HGB.

25 Auditor’s fees
On April 24, 2012, the general meeting elected
Deloitte & Touche GmbH Wirtschaftsprüfungsge-
sellschaft, Dammtorstraße 12, Hamburg, to audit
the separate and consolidated ﬁ nancial statements
for the ﬁ nancial year 2012. The fee expenses for
audit services in 2012 amounted to EUR 255 k.
Other consulting services accounted for expenses
of EUR 75 k.

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

s
t
n
e
m
e
t
a
t
s

c
n
a
n
ﬁ

d
e
t
a
d

i
l

o
s
n
o
C

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

Chief Financial Ofﬁ cer (CFO)

The attached remuneration report contains details of
the principles for the deﬁ nition of the Management
Board’s and Supervisory Board’s remuneration.

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 2015.

During the ﬁ nancial year 2012, the members of the
Supervisory Board were:

Alexander Stuhlmann (Chairman)
Hamburg, Germany
Management consultant;
Manager of Alexander Stuhlmann GmbH
› Capital Stage AG,

Vice-Chairman of the Supervisory Board

› Euro-Aviation Versicherungs AG,

Chairman of the Supervisory Board
› Frank Beteiligungsgesellschaft mbH,

Chairman of the Advisory Board

› HASPA Finanzholding,

Member of the Board of Trustees

› HCI Capital AG,

Member of the Supervisory Board

› LBS Bausparkasse Schleswig-Holstein-

Hamburg AG, Member of the Supervisory Board

› Ludwig Görtz GmbH,

Member of the Administrative Board
› until September 30, 2012: 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

Dr Johannes Conradi (Vice-Chairman)
Hamburg, Germany
Lawyer and Partner at Freshﬁ elds
Bruckhaus Deringer LLP
› Freshﬁ elds Bruckhaus Deringer LLP,

Global Head of Real Estate,
Member of the German Management Group,
› EBS Universität für Wirtschaft und Recht – Real

Estate Management Institute,
Member of the Board of Trustees

› Elbphilharmonie Hamburg Bau GmbH & Co. KG,

Member of the Supervisory Board

Benoît Hérault
from April 24, 2012
Uzès, France,
Managing Director at Chambres
de l'Artémise S.á r.l.

alstria Financial Report 2012

Mr Daniel Quai resigned from his ofﬁ ce as member
of the Company’s Supervisory Board as at March
31, 2012. Ms Marianne Voigt was appointed as
member of the Supervisory Board by court in Oc-
tober 2011.

By resolution of the Annual General Meeting held
on April 24, 2012, Mr Benoît Hérault and Ms Mari-
anne Voigt were elected as members of the Super-
visory Board of alstria ofﬁ ce REIT-AG.

Hamburg, February 14, 2013

The Management Board

Olivier Elamine
CEO

Alexander Dexne
CFO

C
o
n
s
o

l
i

d
a
t
e
d

ﬁ
n
a
n
c

s
t
a
t
e
m
e
n
t
s

Roger Lee
Paris, France
Director and Real Estate Investment
Manager at Captiva Capital
Management Ltd.
› Captiva Capital Management Ltd.,

Director

› Caposition SARL,

Director

› Captiva Capital Management GmbH,

Director

› Captiva International Partners LLP,

Partner

Richard Mully
Cobham (Surrey), United Kingdom
Director, Investment Advisor and
Manager at Starr Street Limited
› Starr Street Limited,

Director

› from April 23, 2012:

Aberdeen Asset Management PLC,
Director

› Hansteen Holdings PLC,

Director

› from August 8, 2012:

ISG plc,
Director

Marianne Voigt
Berlin, Germany
Businessman, Managing Director at
bettermarks GmbH

Daniel Quai
until March 31, 2012
Crans, Switzerland,
Partner at Captiva International
Partners LLP
› Captiva International Partners LLP,

Partner

› CDS Costruzioni SpA,

Director

› CDS Holdings SpA,

Director

› Mercurio Asset Management SGR SpA,

Director

› Natixis Capital Partners Ltd,

Director

alstria Financial Report 2012

Management compliance statement

“We confirm that, to the best of our knowledge, the
consolidated financial statements give a true and fair
view of the net assets, financial position and results
of operations of the Group, and the Group manage-
ment 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 14, 2013

The Management Board

Olivier Elamine
CEO

Alexander Dexne
CFO

t
n
e
m
e
t
a
t
s

e
c
n
a

i
l

p
m
o
c

t
n
e
m
e
g
a
n
a
M

alstria Financial Report 2012

Independent auditors' report

We have audited the consolidated ﬁ nancial state-
ments prepared by alstria ofﬁ ce REIT-AG, Ham-
burg/Germany, – comprising the income statement
and statement of comprehensive income, state-
ment of consolidated ﬁ nancial statements, cash
ﬂ ow statement, statement of changes in equity and
the notes to the consolidated ﬁ nancial statements
– and the group management report for the busi-
ness year from January 1 until December 31, 2012.
The preparation of the consolidated ﬁ nancial state-
ments and the group management report in ac-
cordance with IFRS, as adopted by the European
Union (EU), and the additional requirements of
German commercial law pursuant to § 315a (1)
HGB (“German Commercial Code”) are the re-
sponsibility of the Parent Company’s Management
Board. 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 Insti-
tut der Wirtschaftsprüfer. Those standards require
that we plan and perform the audit such that mis-
statements materially affecting the presentation of
the net assets, ﬁ nancial position and results of op-
erations 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 entities to be
included in consolidation, the accounting and con-
solidation principles used and signiﬁ cant estimates
made by the Management Board, as well as evalu-
ating the overall presentation of the consolidated
ﬁ nancial statements and the group management
report. We believe that our audit provides a rea-
sonable 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 of alstria ofﬁ ce
REIT-AG, Hamburg/Germany, comply with IFRS, as
adopted by the EU, the additional requirements of
German commercial law pursuant to § 315a (1) HGB
and give a true and fair view of the net assets, ﬁ nan-
cial 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 fu-
ture development.

Hamburg/Germany, February 15, 2013

Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft

n
d
e
p
e
n
d
e
n
t

a
u
d
i
t
o
r
s
'

r
e
p
o
r
t

sgd. Gerald Reiher
Wirtschaftsprüfer
(German Public Auditor)

sgd. p.p. Annika Deutsch
Wirtschaftsprüferin
(German Public Auditor)

alstria Financial Report 2012

Corporate governance

Report of the Supervisory Board

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

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 the statutory pro-
visions and the Company’s articles of association.
The Supervisory Board was 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, on planning, important business events
and on current risks, risk management and on the
Company’s compliance. The Management Board
and Supervisory Board cooperated to set the stra-
tegic direction of the Company. Between meetings,
the Management Board further informed the Su-
pervisory Board orally and in writing of important
events. The Chairman of the Supervisory Board
regularly met with the Management Board to ex-
change information and advice on matters of the
strategy, the planning, the business development,
the current risks, the risk management and the
compliance of the Company.

The Management Board consulted the Supervisory
Board intensively on all transactions requiring its
approval. After careful examination and consulta-
tion, 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 2012, the Supervisory Board
had six ordinary and two extraordinary meetings.
All members of the Supervisory Board were present
at almost every meeting of the Supervisory Board
or participated in the meetings by telephone con-
ference. Only in two meetings of the Supervisory
Board respectively one member was absent and
each was excused for a good cause. In one case the
excused member of the Supervisory Board handed
in a written vote. In 2013 one additional meeting
of the entire Supervisory Board took place prior to
the ﬁ nalisation of this report.

The situation and development of the Company, the
business performance, the market, the development
of risks were discussed with the Management Board
during all ordinary meetings of the Supervi sory
Board. With exception of the meetings in March
and April 2012 the ﬁ nancial results of the Company
(quarterly and half-year ﬁ nancial reports, ﬁ nancial
statements of alstria ofﬁ ce REIT-AG and the consoli-
dated ﬁ nancial statements) were discussed in every
ordinary meeting of the Supervisory Board.

Focal points of discussion
In addition to the regularly recurring topics, the Su-
pervisory Board and its committees focused in the
ﬁ nancial year 2012 in particular on the reappoint-
ment of both members of the Management Board,
the successfully executed capital increase in spring
2012 and the acquisition of a real estate portfolio
as well as the conclusion of a bank loan.

In the extraordinary meeting in January 2012, the
Supervisory Board and Management Board con-
sulted on matters of strategy and approved the
conclusion of a loan agreement for ﬁ nancing an
acquisition. Based on the respective recommenda-
tion of the nomination and remuneration commit-
tee, the Supervisory Board resolved upon the re-
appointment of the members of the Management
Board as well as on the (remuneration-related)
basic points of the new service contracts for the
members of the Management Board and author-
ised the nomination and remuneration committee
to negotiate and conclude respective contracts.
Furthermore, the Supervisory Board resolved upon
the appointment of the members of the Manage-
ment Board as Managing Directors of a subsidiary.

In February 2012, the Supervisory Board and the
Management Board consulted in an extraordinary
meeting on the ﬁ nancing of an acquisition and the
Supervisory Board approved the conclusion of all
necessary advisory and service contracts in con-
nection with a possible capital increase against
cash contribution of up to 10% of the share capi-
tal using the Company’s authorised capital under
the exclusion of subscription rights. In this context
the Supervisory Board formed a special committee,
which was authorised to issue all necessary approv-
als and all declarations within the framework of the
execution of the capital increase.

alstria Financial Report 2012

During its balance sheet meeting in February 2012,
the Supervisory Board dealt with the consolidated
ﬁ nancial statements and the ﬁ nancial statements as
at December 31, 2011, the management reports
and the report on relationships with afﬁ liated com-
panies for the period running from January 1 until
March 30, 2011, and discussed them with the audi-
tors. The Supervisory Board approved the ﬁ nancial
statements of alstria ofﬁ ce REIT-AG as well as the
consolidated ﬁ nancial statements as at Decem-
ber 31, 2011, and after careful examination and
due consideration joined the proposal of the Man-
agement Board regarding the proﬁ t appropriation.

During its meeting on March 1, 2012, the Superviso-
ry Board and Management Board discussed the uti-
lisation of the placement proceeds from the capital
increase. The Supervisory Board decided on its reso-
lution proposals and its report to the Annual General
Meeting for the ﬁ nancial year 2011 and on the cor-
porate governance statement including the declara-
tion of compliance with the recommendations of the
German Corporate Governance Code. On the basis
of the nomination and remuneration committee’s
recommendation, the Supervisory Board discussed
and resolved upon the amount of the short-term
variable remuneration of the members of the Man-
agement Board for the ﬁ nancial year 2011 consid-
ering their individual performance. It also discussed
the variable remuneration of the members of the
Management Board for the ﬁ nancial year 2012.

During its meeting subsequent to the Annual Gen-
eral Meeting in April 2012, the Supervisory Board
approved the conclusion of a loan agreement as well
as the conditions of the new Employee Participation
Program as resolved by the Annual General Meet-
ing. It resolved on the personnel composition of the
audit committee, substantiated the conditions of
the long-term variable remuneration element of the
members of the Management Board (long-term in-
centive plan) and made editorial amendments to the
Company’s articles of association.

In its meeting in June 2012, the Supervisory Board
amended the rules of procedure for the nomina-
tion and remuneration committee and the invest-
ment committee and approved the Company’s
budget for the ﬁ nancial year 2012, which has been
adapted during the year with regard to acquisitions
and disposals. Furthermore, employees of the ﬁ rst
management level below the Management Board
and the departments they manage have been in-
troduced to the Supervisory Board.

alstria Financial Report 2012

During the Supervisory Board’s meeting in Sep-
tember 2012, the Supervisory Board approved the
cancellation of a loan agreement, which had been
concluded to ﬁ nance an acquisition and that had
not been drawn down due to the successful execu-
tion of the capital increase. The Supervisory Board
dealt with the current amendments of the German
Corporate Governance Code and adapted the rules
of procedure for the audit committee accordingly.
Moreover, the formal adaption of the Company’s
articles of association to the execution of a capi-
tal increase by EUR 59,500.00 in the course of the
Company’s Employee Participation Program has
been resolved on by the Supervisory Board.

After intensive discussion with the Management
Board, the Supervisory Board resolved on the busi-
ness and budget planning for the ﬁ nancial year
2013 in its meeting in November 2012. The Su-
pervisory Board dealt with the composition of the
permanent Supervisory Board committees and re-
solved on the amendment of the personnel com-
position of the audit committee and investment
committee as at January 1, 2013. The Supervisory
Board reviewed the objectives for its composition
as they were determined last in November 2011
(Diversity Statement) and adapted these to the
current amendments of the German Corporate
Governance Code. The current diversity statement
and the status of its implementation are published
in the Company’s corporate governance report. Fi-
nally, 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 Su-
pervisory Board on the basis of a questionnaire.

In its balance sheet meeting in February 2013, the
Supervisory Board dealt with the consolidated ﬁ -
nancial statements and the ﬁ nancial statements
for the year ending December 31, 2012, as well
as with the Management Board’s recommendation
for the proﬁ t appropriation, and resolved upon its
report for the ﬁ nancial year 2012 to the Annual
General Meeting and the corporate governance re-
port. The Supervisory Board dealt with the variable
remuneration for the members of the Management
Board.

Committees of the Supervisory Board
To increase the efﬁ ciency of its work, the six-person
Supervisory Board formed three permanent 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

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

in some cases they prepare the resolutions of the
Supervisory Board by making proposals. During
the Supervisory Board’s meetings, the committee’s
chairmen reported on the result of their commit-
tees’ work.

In the ﬁ nancial year 2012, the audit committee
had four meetings, which were always attended
by the Chief Financial Ofﬁ cer. In the course of
auditing the accounts of the Company, the audit
committee dealt with the consolidated ﬁ nancial
statements and the ﬁ nancial statements as at De-
cember 31, 2011 and the management reports. It
discussed these with the independent auditors and
carried out a respective preliminary examination of
these documents and the Management Board’s rec-
ommendation for the proﬁ t appropriation. Further
topics were the recommendation to the Supervi-
sory Board regarding the proposed resolution to the
Annual General Meeting for the choice of the audi-
tors, the review of the independency of the audi-
tors, as well as the additional services performed by
the auditors, granting the audit contract to Deloitte
& Touche GmbH Wirtschaftsprüfungsgesellschaft,
Hamburg branch, and the engagement agreement,
setting the key audit areas and the discussion of the
accounting process, 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
revealed consistently good efﬁ ciency.

Management Board on the new service contracts
for the members of the Management Board and it
dealt with the appropriateness of the remuneration
for the members of the Supervisory Board. Before
the authority for these resolutions was transferred
to the investment committee, the nomination and
remuneration committee in addition dealt in two
cases with its approval of advisory services by the
law ﬁ rm Freshﬁ elds Bruckhaus Deringer LLP, of
which the member of the Supervisory Board, Dr
Johannes Conradi, is a partner.

In the ﬁ nancial year 2012, the investment commit-
tee had two meetings and made one decision in
writing after circulation of detailed documents to
the members. It gave its approval for the acquisi-
tion of a real estate portfolio and advisory services
by the law ﬁ rm Freshﬁ elds Bruckhaus Deringer LLP.

In addition, in the ﬁ nancial year 2012 the Super-
visory Board established a special committee that
was authorised to issue all necessary approvals and
declarations in the course of the execution of a
capital increase against cash contribution of up to
10% of the share capital using the Company’s au-
thorised capital under the exclusion of subscription
rights. The special committee met in February 2012
twice, discussed matters of the execution of the
capital increase under the exclusion of subscription
rights with the Management Board and approved
the capital increase against cash contribution and
all related actions and resolutions.

The nomination and remuneration committee,
which also carries out the tasks of a nomination
committee, met three times during the ﬁ nancial
year 2012 and made one decision in writing after
circulation of detailed documents to the members.
The nomination and remuneration committee dis-
cussed the amount of the variable remuneration
of the members of the Management Board for the
ﬁ nancial year 2011, considering their individual
performance, the parameters for the variable remu-
neration of the Management Board members for
the ﬁ nancial year 2012, the proposed resolution of
the Supervisory Board to the Annual General Meet-
ing on the election of Supervisory Board members
and the objectives for the composition of the Su-
pervisory Board. The nomination and remuneration
committee provided the Supervisory Board with
corresponding resolution proposals. The nomina-
tion and remuneration committee resolved on the
basis of the authorisation given by the Supervisory
Board in the course of the reappointment of the

No member of the committees participated in less
than half of the respective committee’s meetings.

Audit of the annual ﬁ nancial
statements and consolidated
ﬁ nancial statements
Deloitte & Touche GmbH Wirtschaftsprüfungs-
gesellschaft, Hamburg branch, audited the ﬁ nancial
statements and the management report of alstria
ofﬁ ce REIT-AG, as well as the consolidated ﬁ nan-
cial statements, including the management report
of the Group for the ﬁ nancial year running from
January 1 until December 31, 2012, all prepared by
the Management Board, and issued its unqualiﬁ ed
opinion on these documents.

The ﬁ nancial statements and the 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 recommendation for the appropriation of

alstria Financial Report 2012

Changes in the Supervisory Board
Mr Daniel Quai resigned from the Supervisory Board
as at March 31, 2012. He has been a member of
the Company’s Supervisory Board since 2006. The
Supervisory Board would like to thank Mr Quai for
many years of valuable contribution to the Company.

During the Annual General Meeting 2012, Mr
Benoît Hérault and Ms Marianne Voigt, who had al-
ready been appointed as member of the Supervisory
Board by court since October 2011, were elected as
members of the Supervisory Board.

The Supervisory Board would like to thank the
Management Board and all employees for their
dedication and their successful work in the ﬁ nancial
year 2012.

Hamburg, February 2013

Alexander Stuhlmann
Chairman of the Supervisory Board

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

the annual net proﬁ t were immediately presented
to the members of the Supervisory Board after be-
ing prepared, as was the auditors’ report. The Su-
pervisory Board examined the documents provided
by the Management Board in detail, both in its audit
committee and at a plenary meeting. In the meet-
ing of the audit committee, the auditors reported
on the material ﬁ ndings of their audit (including the
audit of the internal control and risk management
system) and were available for questions. The audit
committee prepared the examination of the Super-
visory Board and, in the presence of the auditors
of the ﬁ nancial statements of alstria ofﬁ ce REIT-AG
and the consolidated ﬁ nancial statements, reported
to the plenary session. The attendees of the ple-
nary meeting examined and discussed both the
annual ﬁ nancial statements of the Company and
consolidated ﬁ nancial statements prepared by the
Management Board and the ﬁ ndings of the audi-
tors. There were no objections to the ﬁ nal results
of the review by the Supervisory Board. The Super-
visory Board approved the ﬁ nancial statements of
alstria ofﬁ ce REIT-AG and the consolidated ﬁ nan-
cial statements. Thus the ﬁ nancial statements are
conﬁ rmed. The Supervisory Board also shared the
Management Board’s recommendation for the ap-
propriation of the balance sheet proﬁ t.

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 February 2013, in accord-
ance with Section 161 AktG; it was subsequently
made permanently available to shareholders on the
Company’s website. In their declaration, the Man-
agement Board and Supervisory Board explained
that most of the recommendations of the German
Corporate Governance Code have been, or will be,
implemented, as well as which recommendations
were, or will not be, followed, and the reasons why
they will not be followed.

In the ﬁ nancial year 2012, conﬂ icts of interest for
Dr Johannes Conradi arose in two approvals per-
taining to the commissioning of the law ﬁ rm Fresh-
ﬁ elds Bruckhaus Deringer LLP, of which Dr Johan-
nes Conradi is a partner. In June 2012, for practical
reasons the respective authority for approval was
transferred to the investment committee, of which
Dr Johannes Conradi is not a member. Since then
no conﬂ icts of interest occurred.

alstria Financial Report 2012

Corporate governance

statement

The Management Board and Supervisory Board of
alstria ofﬁ ce REIT-AG (“alstria”) are conscious of
their responsibility for the corporate governance of
the Company, which is undertaken with due regard
to the Company’s shareholders, employees and
tenants. This sense of responsibility is expressed,
among other ways, in transparent corporate gov-
ernance 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’s cor-
porate governance according to Section 3.10 of the
German Corporate Governance Code (“Code”) and
Section 289a para. 1 of the German Commercial
Code (HGB). This statement includes the declaration
of compliance according to Section 161 of the Ger-
man Stock Corporation Act, the relevant information
on corporate governance practices, a description of
the operating principles and the composition of the
Management Board and Supervisory Board as well
as corporate governance structures.

German Corporate Governance Code
and declaration of compliance
Many of the principles of the most recent ver-
sion of the German Corporate Governance Code
(dated May 15, 2012) have already become part
of alstria's value-oriented corporate management,
which are therefore stricter than the legal require-
ments. The principles and recommendations of
the Government Commission appointed by the
German Federal Ministry of Justice contain inter-
nationally 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 website
›› www.alstria.com. After careful consideration, al-
stria 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 Feb-
ruary 28, 2013:

Declaration of compliance dated
February 28, 2013
“The recommendations of the ‘Government Com-
mission German Corporate Governance Code’ as
amended on May 15, 2012 were complied with
since the prior declaration of compliance dated
March 1, 2012 with the following exceptions. The
Company intends to continue to comply with the
recommendations of the Code as amended on
May 15, 2012 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 deductible.
The Management Board and Supervisory Board be-
lieve that the members of the Supervisory Board
carry out their duties responsibly without any such
deductible.

Change of performance targets
for variable remuneration elements,
Section 4.2.3
The short-term incentive of the Management Board
is mainly based on the achievement of a funds from
operations (“FFO”) target. In the event the FFO
achieved in a ﬁ nancial year was positively and mate-
rially impacted by new acquisitions, the Supervisory
Board adjusts the FFO target accordingly. In doing
so, the Supervisory Board is making sure that the
Management Board is not incentivised to do acquisi-
tions for short-term personal beneﬁ t. The impact of
any acquisition on the management remuneration
is solely linked to the multi-year remuneration ele-
ments, therefore aligning the interest of the Man-
agement Board with those of the Company and its
shareholders. Vice versa, the Supervisory Board in-
tends to also adapt the FFO target to disposals.

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 quarter-
ly ﬁ nancial reports will be made available to the Su-
pervisory Board. Furthermore, the ﬁ nancial reports
will be discussed with the Supervisory Board in de-
tail soon after their publication. In the event that
there are considerable differences to the budget or
business plan authorised by the Supervisory Board,

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

alstria Financial Report 2012

the Supervisory Board will have the opportunity to
discuss the ﬁ gures with the Management Board be-
fore they are published. The Management Board
and Supervisory Board consider this approach ap-
propriate and adequate.”

All other recommendations of the German Corpo-
rate Governance Code dated May 15, 2012 have
been, or will be, fully implemented. alstria has ap-
pointed a corporate governance ofﬁ cer within the
Company, who will report any changes of the Code
to the Management Board and the Supervisory
Board at least once per year and whenever nec-
essary. In this way, alstria ensures consistent com-
pliance with these principles. Analysis, supervision
and transparency are the tools with which alstria
lays the foundation for fair and efﬁ cient corporate
management. They will also remain the key criteria
in future.

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 Chairman 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 Alexan-
der Dexne as the Chief Financial Ofﬁ cer. The Man-
agement Board is responsible for running alstria in
the interest of the Company with the aim of sus-
tainably increasing the Company’s value. It sets the
business goals and – in conjunction with the Super-
visory Board – the strategic direction of the Com-
pany. 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 Manage-
ment 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 member-
ship in the Supervisory Boards of companies 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 Man-
agement Board serve on no Supervisory Boards of
listed companies outside of the Group or in Super-
visory Boards of companies with comparable re-
quirements. Major business transactions between
the Company and members of the Management

alstria Financial Report 2012

Board, or with any persons or companies in close
association with them, require the approval of the
Supervisory Board. All such business transactions
must be concluded at standard commercial con-
ditions. There were no such contracts during the
reporting period. The Management Board pays at-
tention to diversity in ﬁ lling its management posi-
tions and aims to adequately consider women for
these positions. As at December 31, 2012, 44.44%
of the management positions at alstria were held
by female employees.

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
Supervisory Board stipulate that certain, signiﬁ cant
business transactions by the Company are subject
to the approval of the Supervisory Board, for exam-
ple acquiring or disposing 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 as-
sets (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 2012 in
its report to the general meeting on ›› pages 80 to
83 of the annual report.

Composition of the Supervisory Board
In accordance with the articles of association, the
Supervisory Board is composed of six members.
The Supervisory Board currently consists of Alex-
ander Stuhlmann (Chairman), Dr Johannes Conradi
(Vice-Chairman), Benoît Hérault, Roger Lee, Rich-
ard Mully and Marianne Voigt. The periods of ofﬁ ce
of all supervisory members expire at the end of the
Annual General Meeting in which the shareholders
resolve to discharge them in respect to their activi-
ties for ﬁ nancial year 2015. The following changes
took place in the composition of the Supervisory
Board in 2012: Daniel Quai resigned from ofﬁ ce as
at March 31, 2012. Benoît Hérault and Marianne
Voigt have been appointed as members of the Su-
pervisory Board by the shareholders in the Annual
General Meeting for ﬁ nancial year 2012. Marianne
Voigt had already been judically appointed as Su-
pervisory Board member in October 2011.

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

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. The Super-
visory Board of alstria ofﬁ ce REIT-AG ﬁ rst speciﬁ ed
the goals for its composition in November 2010. In
November 2012, the Supervisory Board recently
reviewed and revised its goals for its composition,
in particular with regard to the new recommenda-
tion of the German Corporate Governance Code
that the Supervisory Board shall now stipulate the
number of independent Supervisory Board mem-
bers according to No. 5.4.2 of the Code, when
naming the objectives for its composition. Further-
more, the term of independency has been speci-
ﬁ ed effective as of May 15, 2012. The Supervisory
Board agreed on a complete adaption of the deﬁ ni-
tion of independency of Supervisory Board mem-
bers in the objectives for the composition of the
Supervisory Board to the term of independency ac-
cording to No. 5.4.2 of the Code.

With due consideration of the speciﬁ c situation of
the Company, the Supervisory Board of alstria thus
speciﬁ ed the following goals for the composition of
the Supervisory Board in November 2012, which
are to be considered in its nominations to the share-
holders in general meeting:

› Diversity
The members of the Supervisory Board shall have
the knowledge, skills and expert experience re-
quired to successfully complete their tasks, espe-
cially in the capital market and the German real
estate market.

› Women
At least one member of the Supervisory Board

shall be female.

› Experience abroad
At least two members of the Supervisory Board
shall have acquired reasonable international ex-
perience.

› Independence
At least three members of the Supervisory Board
shall have no business or personal relations, which
could cause a substantial and not temporary con-
ﬂ ict of interest, with the Company, its executive
bodies, a controlling shareholder or an enterprise
associated with the latter.

› Independent ﬁ nancial expert
At least one independent member of the Super-
visory Board shall have expertise in accounting or
audit of annual statements.

› Other conﬂ icts of interest
At least three members of the Supervisory Board
shall not have any consulting or representation
duties with main tenants, lenders or other busi-
ness partners of the Company.

› Age limit
Members of the Supervisory Board shall not be
older than 70 years of age.

All of these goals are currently 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 independent
auditors to prepare audit reports, determines the
key audit areas and the independent auditors’ com-
pensation, and is responsible for issues surrounding
risk management, internal control, internal audit
and compliance. Until March 31, 2012, the audit
committee consisted of Dr Johannes Conradi, as
Chairman, as well as Roger Lee and Daniel Quai.
Marianne Voigt replaced the resigning member
Daniel Quai on the committee on April 24, 2012.
Effective as of January 1, 2013, Marianne Voigt
took over the chairmanship of the audit commit-
tee, from this day on Dr Johannes Conradi sits on
the audit committee as ordinary member.

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 100 m. Trans-
actions of a value greater than this amount are
to be presented to the entire Supervisory Board
for approval. The investment committee further-
more decides on the approval of the Supervisory
Board regarding the conclusion, renewal or early
termination of lease agreements with third par-
ties with a total annual consideration of more
than EUR 2 m, as well as regarding contracts
with Supervisory Board members according to
Section 114 German Stock Corporation Act (Ak-

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

alstria Financial Report 2012

tiengesetz, AktG). Up until December 31, 2012,
the investment committee consisted of Richard
Mully, as chair, as well as Roger Lee and Alexander
Stuhlmann. Benoît Hérault was elected as member
of the investment committee replacing Roger Lee
effective as of January 1, 2013.

The nomination and remuneration committee,
which also carries out the function of a nomina-
tion committee, prepares resolutions of the entire
Supervisory Board for the appointment and dis-
missal of members of the Management Board, for
the Management Board’s compensation system
and for the total remuneration of individual mem-
bers of the Management Board, the resolution of,
or amendments to, the rules of procedure for the
Management Board, as well as the approval of
certain other activities and primary contracts of
members of the Management Board. The nomina-
tion and remuneration committee decides on the
conclusion, amendment, extension and termination
of contracts with Management Board members, as
well as on the content of such contracts except for
compensation. Finally, the nomination and remu-
neration 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 Chairman, as well as Dr Johannes
Conradi and Richard Mully.

In February 2012, the Supervisory Board addition-
ally formed a special committee in the course of
the execution of a capital increase consisting of Dr
Johannes Conradi as Chairman and Roger Lee and
Richard Mully as additional members.

The Supervisory Board reports on the activities of the
committees of the Supervisory Board during the ﬁ -
nancial year 2012 in its report to the Annual General
Meeting on ›› pages 80 to 83 of the annual 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 2012.
The remuneration of each member of the Manage-
ment Board and the Supervisory Board is also bro-
ken down there for the ﬁ nancial years 2011 and
2012. By way of resolution of the shareholders in
general meeting on June 16, 2010, the shareholders

approved the 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. The
term of the stock options granted ends in ﬁ nancial
year 2014. 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 in 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 of the annual report.

Employee participation program
Pursuant to the authorisation granted by the share-
holders in general meeting on March 15, 2007, the
Management Board was authorised up until March
15, 2012 to issue up to a total of 500,000 con-
vertible proﬁ t participation certiﬁ cates with a total
nominal value of EUR 500,000 to alstria employees
and employees of companies directly or indirectly
controlled by alstria within the framework of an
employee proﬁ t participation program. Members
of the Management Board are not considered em-
ployees for the purposes of this plan.

After expiration of the aforementioned authorisa-
tion, the annual general meeting on April 24, 2012
again authorised the Management Board up until
April 23, 2017 to issue up to a total of 500,000
convertible proﬁ t participation certiﬁ cates to alstria
employees and employees of companies directly or
indirectly controlled by alstria within the framework
of an employee proﬁ t participation program.

Each convertible proﬁ t participation certiﬁ cate is-
sued under the employee participation programs
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

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

alstria Financial Report 2012

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.

A total of 300,100 certiﬁ cates was issued in the
course of this now expired employee proﬁ t par-
ticipation program 2007 of which, so far, a total
of 165,500 convertible proﬁ t participation rights
were converted into shares of the Company. In the
course of the new employee proﬁ t participation
program 2012, 86,000 proﬁ t participation certiﬁ -
cates were issued.

Directors' Dealings – Securities
transactions subject to reporting
requirement
The Management Board and Supervisory Board
of alstria ofﬁ ce REIT-AG, as well as related par-
ties (family members), are required, pursuant to
Section 15a of the German Securities Trading Act
(Wertpapierhandelsgesetz, WpHG), to notify the
Company of their own transactions involving Com-
pany shares. In addition to the acquisition and sale
of alstria 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
must be informed of such transactions 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. All
transactions reported to alstria have been duly pub-
lished in the relevant media throughout Europe and
can be found on our website ›› www.alstria.com.

Relationship to the shareholders
of the Company
alstria ofﬁ ce REIT-AG respects the rights of its share-
holders and makes best efforts to guarantee the ex-
ercise of those rights to the extent stipulated by law
or the bylaws. In particular, these include the right to
freely purchase and sell shares, appropriate access to
information, an adequate number of voting rights
per share (one share – one vote) and participation in
our Annual General Meeting. Shareholders have the
option of exercising their voting rights personally or
by an authorised representative at the general meet-
ing, or sending voting instructions to their proxies.
The invitation to the general meeting includes an ex-
planation of how voting instructions can be issued.
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 that the additional option of vot-
ing by mail would not facilitate the exercise of the
shareholders’ rights.

Since the shareholders in general meeting in 2008
approved the provision of transmitting information
to shareholders electronically, it is now possible to
send invitations and documents for shareholders’
general 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 German
Stock Corporation Act (Aktiengesetz, AktG) and the
agenda on the Company website. The results of the
votes will likewise be published on the website of the
Company following the general meeting.

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 in-
terested 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 WpHG. Moreover, alstria’s ﬁ nancial
reports and website include a ﬁ nancial calendar
which indicates all dates of importance to share-
holders. All announcements and information are
additionally published in English.

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

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

alstria Financial Report 2012

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 discip-
linary measures to dismissal, a claim for damages
or even prosecution.

Hamburg, February 2013

The Management Board
The Supervisory Board

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

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 shareholders in 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 nancial statements and negotiates the audit-
ing fees. Deloitte & Touche GmbH Wirtschaftsprü-
fungsgesellschaft, Hamburg branch, 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 2012. 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 Management
Board is responsible for ensuring compliance with
the legal provisions and Company guidelines
throughout all of the Group companies. The good
reputation of alstria and the trust of its sharehold-
ers, tenants and employees depend crucially on the
behaviour 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), there-
by serving as a model of correct behaviour for all
employees of the Group. The code of conduct is
published 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 compli-
ance with these values. The compliance ofﬁ cer is
responsible for communicating these values by
answering questions on the implementation of the
code and by in-house training for all employees.
Compliance is monitored through colleagues, su-
pervisors and the compliance ofﬁ cer, as well as via
regular investigation by auditors. alstria has also set
up a hotline through which employees can anony-
mously report any violations of the code of conduct
or the Company-internal guidelines. Furthermore,
the Management Board regularly discusses Com-
pany compliance with the Supervisory Board’s audit
committee.

alstria Financial Report 2012

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

Remuneration report*

Remuneration of the Management
Board members
The remuneration system for the members of the
Management Board is determined by the Supervi-
sory Board and is reviewed regularly. In the ﬁ nancial
year 2010, the Supervisory Board adapted the re-
muneration system to the new legal requirements of
the German Act on Appropriateness of the Manage-
ment Board Compensation (VorstAG) in accordance
with the recommendations of an independent ex-
ternal remuneration expert. The Supervisory Board
is of the opinion that this remuneration system still
provides adequate remuneration for the members of
the Management Board, which is based on custom-
ary market terms and conditions and, in particular,
also takes account of the lasting success of the Com-
pany. The remuneration system for the members of
the Management Board described below was ap-
proved by the shareholders in general meeting for
the ﬁ nancial year 2009 by a large majority (98.11%
of votes in favour) and has been incorporated into
the new Management Board service contracts,
which apply to the new appointment of the Man-
agement Board members since January 1, 2013.

In the remuneration system, the criteria for deter-
mining the appropriateness of the remuneration of
the members of the Management Board are the du-
ties of each individual Management Board member,
his or her personal performance, the ﬁ nancial situa-
tion, the success and future prospects of the Com-
pany, as well as the customary practice regarding
remuneration relative to its peer companies and the
remuneration structure of the Company.

1. Structure of the Management

Board remuneration

The remuneration 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 variable compo-
nents which are primarily based on several years of
assessment. Limits were introduced for extraordi-
nary 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.

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

management report or notes to the annual ﬁ nancial statements.

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 Man-
agement Board member is 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 performance
incentive will be converted to virtual shares, which
are subject to a 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 calculated 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. The
Short-Term Incentive amounts to approx. 20% of
the planned total remuneration without ancillary
beneﬁ ts.

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
within the framework of a performance share plan
(Long-Term Incentive Plan or LTI Plan). 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 shares
(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 pe-
riod depending on the degree to which the target is
met. A total of 50% of the performance targets de-
termined 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
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 virtual shares after adjustment multiplied by the
share price of one alstria share at the time (calcu-
lated on the basis of a reference period) and a mul-
tiplier (0.8 to 1.2) which takes into consideration

alstria Financial Report 2012

the individual performance of the Management
Board member. Just as with the Short-Term Incen-
tive, 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. The Long-Term Incentive amounts
to approximately 40% of the prescribed total re-
muneration 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 per-
sonal situation.

2. Remuneration of the Management
Board in the ﬁ nancial year 2012
The total remuneration for the members of the Man-
agement Board in the last ﬁ nancial year amounted
to EUR 2,221 k. The individual remuneration of the
members of the Management Board for the ﬁ nancial
years 2012 and 2011 is composed as follows:

Individual Management Board remuneration 2012

EUR k

Member of the
Management Board

Fixed
amount

Short-term variable

remuneration 1)

Long-term variable
remuneration

Ancillary
beneﬁ ts 4)

Total
remuneration

Paid-out
component

Deferred
component 2)

Paid-out
component

Deferred
component 3)

Olivier Elamine,
Chief Executive Ofﬁ cer

Alexander Dexne,
Chief Financial Ofﬁ cer

Total

440

360

800

185

151

336

112

440

360

800

173

1,223

998

2,221

1) For performance in 2011.
2) Allotment of virtual shares with speciﬁ ed fair value with deferred cash payment after two years' vesting period.
3) Allotment of virtual shares with speciﬁ ed target value with deferred cash payment after four years' vesting period.
4) Includes beneﬁ ts for company car, insurance and pension.

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

Individual Management Board remuneration 2011

EUR k

Member of the
Management Board

Fixed
amount

Short-term variable

remuneration 1)

Long-term variable
remuneration

Ancillary
beneﬁ ts 4)

Total
remuneration

Cash
component

Deferred
component 2)

Cash
component

Deferred
component 3)

Olivier Elamine,
Chief Executive Ofﬁ cer

Alexander Dexne,
Chief Financial Ofﬁ cer

Total

440

360

800

200

164

364

122

440

360

800

174

1,242

1,018

2,260

1) For performance in 2010.
2) Allotment of virtual shares with speciﬁ ed fair value with deferred cash payment after two years' vesting period.
3) Allotment of virtual shares with speciﬁ ed target value with deferred cash payment after four years' vesting period.
4) Includes beneﬁ ts for company car, insurance and pension.

alstria Financial Report 2012

The individual Management Board remuneration for
the ﬁ nancial year 2012 presented in the table above
shows a short-term variable remuneration compo-
nent for performances in the ﬁ nancial year 2011.
The structure of this short-term variable remunera-
tion component (STI) is described above in more
detail. The target value for the ﬁ nancial year 2011
amounted to EUR 220 k for Mr Olivier Elamine and
to EUR 180 k for Mr Alexander Dexne. The actual
amount of the STI for the Management Board as de-
scribed above is mainly based on the achievement of
a funds from operations target.

As the FFO achieved in ﬁ nancial year 2011 was posi-
tively and materially impacted by new acquisitions,
the Supervisory Board has changed the FFO target
by increasing it with regard to acquisitions that be-
came effective during 2011. In doing so, the Super-
visory Board made sure that the Management Board
is not incentivised to do acquisitions for short-term
personal beneﬁ t. As a result of the adjustment, the
short-term incentive awarded to the Management
Board for ﬁ nancial year 2011 was lower than what
it would have been if the FFO target had not been
adjusted.

The impact of any real estate transaction on the
management remuneration is solely linked to the
multi-year remuneration elements, therefore align-
ing the interest of the Management Board with
those of the Company and its shareholders. The
Supervisory Board intends to also adapt the FFO
target in future ﬁ nancial years accordingly in order
to limit the performance measure to operational
result, excluding any real estate transaction impact.
25% of the short-term incentive for the ﬁ nancial
year 2011 was paid out in virtual shares of the Com-
pany, whereby Mr Elamine was allotted 7,101 vir-
tual shares with the fair value speciﬁ ed above and
Mr Dexne received 5,810 virtual shares with the fair
value speciﬁ ed above.

The individual Management Board remuneration
for the ﬁ nancial year 2012 presented in the table
above shows a long-term variable remuneration
component. The structure of this long-term vari-
able remuneration component is described above
in more detail. In the ﬁ nancial year 2012, virtual
shares with a target value in total of EUR 800 k
and a four years vesting period were granted in
the course of the long-term variable remuneration

component. The target value for the long-term var-
iable remuneration component in the ﬁ nancial year
2012 amounted for Mr Elamine to EUR 440 k and
for Mr Dexne to EUR 360 k. Thus, Mr Elamine was
granted 50,575 virtual shares valued at EUR 8.70
each and Mr Dexne was granted 41,379 virtual
shares valued at EUR 8.70 each. Both will vest after
four years subject to certain relative and absolute
share price performance.

The ancillary beneﬁ ts shown in the table above for
2012 and 2011 include payments for private pen-
sion plans for Mr Olivier Elamine in the amount
of EUR 75 k and for Mr Alexander Dexne in the
amount of EUR 50 k.

No advance remuneration payments were made to
members of the Management Board in the ﬁ nancial
year 2012, nor were any loans granted or conﬁ rma-
tions of pension entitlements issued. No salary was
paid to former members of the Management Board
in the ﬁ nancial year 2012. No provisions needed to
be set aside for former members of the Manage-
ment Board.

3. Other mandatory disclosures
Beneﬁ ts upon premature termination
of Management Board duties
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
this post-contractual non-compete obligation, the
members of the Management Board shall receive
a compensation payment for this period equiva-
lent to their last ﬁ xed salary. In the event of an
early termination of a Management Board service
contract by mutual agreement, the members of
the Management Board are still entitled to their
remuneration claims during the remaining term of
the service contract, however, no more than the
value of two years’ remuneration. Beneﬁ ts to be
paid by the Company if the appointment is termi-
nated 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 payment for this period shall be paid
pro rata up to and including the month of death.
The Management Board contracts do not include
any change of control clauses.

e
c
n
a
n
r
e
v
o
g

e
t
a
r
o
p
r
o
C

alstria Financial Report 2012

Additional information on share-based
remuneration components
The long-term variable remuneration component
was implemented in 2010 and thereby replaced the
Company’s stock option program 2007. The mem-
bers of the Management Board were granted a
single tranche of stock options in the course of the
stock option program 2007 in ﬁ nancial year 2007.
The term for these stock options ends in ﬁ nancial
year 2014. No expenses arose in the ﬁ nancial year
2012 from the stock options granted in the ﬁ nan-
cial year 2007.

The details of the stock option program 2007 are
as follows: The term of the stock options is seven
years from the time they are granted. The 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-consecutive trad-
ing days of the Frankfurt Stock Exchange before
the start of the respective exercise period. 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. Each exer-
cise period amounts to 30 days beginning on the
date of publication of the Company’s results for the
ﬁ rst, second and third quarters and the date of the
Company’s Annual General Meeting. There are no
cash settlement alternatives. The exercise price for

the stock options granted in 2007 is EUR 16.00.
The performance target for the 2007 stock options
amounts to EUR 19.20 and their term ends in ﬁ -
nancial year 2014.

Remuneration of the Supervisory
Board members
1. Structure of the Supervisory Board

remuneration

The members of the Supervisory Board each re-
ceive an annual ﬁ xed remuneration in the amount
of EUR 40 k. The Chairman of the Supervisory
Board also receives an additional annual amount of
EUR 20 k and the Vice-Chairman receives an ad-
ditional amount of EUR 10 k. Members who only
sit on the Supervisory Board for part of a year re-
ceive pro rata remuneration. Membership of the
audit committee entails separate remuneration of
EUR 10 k and the chair of the audit committee re-
ceives EUR 15 k. Membership in other committees
does not give entitlement to any additional remu-
neration.

2. Remuneration of the Supervisory
Board in the ﬁ nancial year 2012

The total remuneration for the Supervisory Board
in 2012 amounted to EUR 301.86 k. The individual
remuneration of the members of the Supervisory
Board for the ﬁ nancial year 2012 and 2011 is com-
posed as follows:

EUR k

Supervisory Board
member

Supervisory Board
membership

Audit committee
membership

Remuneration
for 2011

Remuneration
for 2012

C
o
r
p
o
r
a
t
e

g
o
v
e
r
n
a
n
c
e

Alexander Stuhlmann Chairman

Dr Johannes Conradi Vice-Chairman

Roger Lee

Richard Mully

Daniel Quai

Member

Member until
March 31, 2012

Marianne Voigt

Member

n/a

Chairman

Member

n/a

Member until
March 31, 2012

Member since
April 24, 2012

Benoît Hérault

John van Oost

Total

Member since
April 24, 2012

Vice-Chairman
until June 8, 2011

n/a

60.00

60.67

50.00

40.00

50.00

7.56

n/a

21.78

290.01

60.00

65.00

50.00

40.00

12.43

46.89

27.54

n/a

301.86

No advance remuneration payments were made to
members of the Supervisory Board in the ﬁ nancial
year 2012, nor were any loans granted. No remu-
neration was paid out for individual services.

alstria Financial Report 2012

REIT disclosures

REIT declaration

Statement of the Management Board
In relation with our ﬁ nancial statements according to
Section 264 of the German Commercial Code (Han-
delsgesetzbuch, HGB) and our consolidated ﬁ nan-
cial statements according to Section 315a HGB as at
December 31, 2012, the Management Board issues
the following declaration regarding compliance with
the requirements of Sections 11 to 15 of the Ger-
man Real Estate Investment Trust Act (REIT-Gesetz,
REITG) and regarding the calculation of the compo-
sition of income subject to and not subject to income
tax for the purpose of Section 19 para. 3 REITG in
conjunction with Section 19a REITG:

1. As per the balance sheet date, 73.80% of alstria’s
shares were free ﬂ oat according to Section 11
para. 1 REITG. This was disclosed to the German
Federal Financial Supervisory Authority (BaFin).

2. In accordance with Section 11 para. 4 REITG, as
per the balance sheet date, no shareholder 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 distribution
obligation and the reserves pursuant to Sec-
tion 12 para. 2 REITG

a) as per the balance sheet date the immovable
assets amounted to EUR 1,657,104 k which
equals to 92.74% 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 as per balance sheet date
which were included in the consolidated
statements amount to a maximum of 20%,
namely EUR 390 k and therefore 0.02%.

4. In relation to the sum of the entire sales revenue
plus the other earnings from immovable assets
pursuant to the consolidated statements accord-
ing to Section 12 para. 3 and 4 REITG

a) for the ﬁ nancial year 2012, the entire sales rev-
enues of the Group plus other earnings from
immovable assets amounted to EUR 99.0 m.
This equals 100% of total revenues plus other
earnings from immovable assets;

s
e
r
u
s
o
c
s
i
d

E
R

b) the sum of the sales revenue plus the other
earnings from immovable assets of REIT serv-
ice companies amounted to EUR 204 k in the
ﬁ nancial year 2012. This equals 0.21% of to-
tal revenue plus other earnings from immov-
able assets.

5. In the ﬁ nancial year 2012, a dividend payment
of EUR 34,705 k for the prior ﬁ nancial year was
distributed to the shareholders. The ﬁ nancial year
2011 did not result in a net income according to
commercial law pursuant to Section 275 HGB.

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

from already taxed parts of the proﬁ t.

7. Since 2008, the Group has realised 20.99% of
the average portfolio of its immovable assets and
therefore did not trade with real estate according
to Section 14 REITG.

8. On the balance sheet date the Group’s eq-
uity as shown in the consolidated statements
according to Section 12 para. 1 REITG was
EUR 829.3 m. This equals to 50% of the value
of the immovable assets which are shown in the
consolidated statements in conformance with
Section 12 para. 1 REITG.

alstria ofﬁ ce REIT-AG
Hamburg, February 14, 2013

Olivier Elamine
CEO

Alexander Dexne
CFO

alstria Financial Report 2012

REIT memorandum

We summarised the result of our audit in an au-
ditor’s memorandum according to Section 1 (4)
Clause 5 of the Act on German Real Estate Stock
Corporations with listed Shares:

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 annual ﬁ nancial statements and
the consolidated ﬁ nancial statements of alstria of-
ﬁ ce REIT-AG, Hamburg, for the ﬁ nancial year from
January 1 to December 31, 2012, we have audited
the information given in the attached declaration of
the Management Board members for the compli-
ance with the requirements of Section 11 to 15 of
the REIT Act and the composition of the proceeds
concerning the pre-taxation of proceeds accord-
ing to Section 19 (3) and Section 19a REIT Act as
of December 31, 2012 (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
guidance promulgated by the Institut der Wirt-
schaftsprüfer (Institute of Public Auditors in Ger-
many) (IDW): Particularities concerning the audit
of a REIT stock corporation according to Section 1
(4) REIT Act, a pre-REIT stock corporation accord-
ing to Section 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 per-
formed our audit to make a judgement with rea-
sonable assurance if the free ﬂ oat ratio and the
maximum stock ownership per shareholder accord-
ing to Section 11 (1) and (4) REIT Act agrees with
the announcements due to Section 11 (5) REIT
Act as of December 31, 2012, and if the provided
information concerning the requirements of Sec-
tion 12 to 15 REIT Act and the composition of the
proceeds concerning the pre-taxation of proceeds
according to Section 19a REIT Act is appropriate.

alstria Financial Report 2012

It was not part of our engagement to fully assess
the companie's tax assessments or position. Within
our audit procedures we compared the information
concerning the free ﬂ oat ratio and the maximum
stock ownership per shareholder according to Sec-
tion 11 (1) and (4) REIT Act provided within the
REIT declaration with the announcements due to
Section 11 (5) REIT Act as of December 31, 2012
and agreed the provided information concerning
the requirements of Section 12 to 15 REIT Act with
the information disclosed in the annual ﬁ nancial
statements and the consolidated ﬁ nancial state-
ments of the Company. Furthermore, we tested the
adjustments made to the valuation 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, 2012 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 submis-
sion to the tax authorities of the city of Hamburg
within the tax declaration according to Section 21
(2) REIT Act.

Hamburg/Germany, February 15, 2013

Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft

R
E

d
i
s
c
o
s
u
r
e
s

sgd. Gerald Reiher
Wirtschaftsprüfer
(German Public Auditor)

sgd. p.p. Annika Deutsch
Wirtschaftsprüferin
(German Public Auditor)

Other information

Glossary

AFFO (adjusted funds from operations)
The AFFO is equal to the FFO (funds from opera-
tions) with adjustments made for capital expendi-
tures used to maintain the quality of the underlying
investment portfolio.

Annual ﬁ nancial statements
The annual ﬁ nancial statements include the balance
sheet and the proﬁ t and loss account of a company.
In respect of a joint stock company, these are pre-
pared by the Management Board, audited by a char-
tered 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 Meeting.
This meeting elects the Supervisory Board and the
balance sheet auditor. It passes resolutions on the
appropriation of the annual proﬁ t shown, on mea-
sures for raising capital, on changes to the articles of
association and other fundamental issues; it is the
only body which can approve the decisions made by
the Supervisory Board and the Management Board.

Asset management
Value-driven management and/or optimisation of real
estate investments through letting management, re-
furbishment, repositioning and tenant management.

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

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.

n
o
i
t
a
m
r
o
f

r
e
h
t
O

Contractual rent
At a given date, the contractual rent reﬂ ects the total
annualised rent taking into consideration all signed
rental contracts.

Contractual vacancy rate
Contractual vacancy rate is the amount of space as
a per cent of the total area of the portfolio on which
there is no current or future signed lease contract.

CRESS (Construction and Real Estate
Sector Supplement)
Supplement to the GRI guidelines for the special
disclosure requirements of companies from the real
estate and construction sector.

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 payments
are also included here. DAX began at the end of
1987 with a value of 1,000.

DGNB (Deutsche Gesellschaft für
Nachhaltiges Bauen)
The German Sustainable Building Council establishes
a system for the assessment and the certiﬁ cation of
sustainable buildings.

EPRA (European Public Real Estate
Association)
The EPRA index is the well-known international index
which tracks the performance of the largest Euro-
pean and North American listed property companies.
The European Public Real Estate Association (EPRA)
is an organisation that represents the interests of the
major European property management companies
and supports the development and market presence
of European public property companies. Its members
include companies such as alstria ofﬁ ce REIT-AG,
ﬁ nancial analysts, investors, advisors and auditors.

Fair value (or open market value [OMV])
The estimated amount for which a property should
exchange on the date of valuation between a willing
buyer and a willing seller in an arm’s-length transac-
tion 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.

alstria Financial Report 2012

FFO (funds from operations)
alstria calculates FFO as EBT, decreased/increased
by the net gain/loss from fair value adjustment on
investment property, decreased/increased by the
net gain/loss from fair value adjustment on ﬁ nan-
cial derivatives, increased/reduced by the proﬁ t/
loss on disposal of investment property, decreased/
increased by the net gain/loss from fair value ad-
justments on investment property of joint ventures,
decreased/increased 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.

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 ﬁ nancial reporting.
IFRS have applied to listed companies since Janu-
ary 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 ac-
cording to IAS 40.

Joint venture
Legally independent entity formed between two
or more parties to undertake economic activity to-
gether. It is jointly controlled by the parties under
a contractual arrangement whereby decisions on
ﬁ nancial and operating policies essential to the
operation, performance and ﬁ nancial position of the
venture require each party’s consent.

LTV (loan to value)
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.

NAV (net asset value)
Reﬂ ects the economic equity of the Company. It is
calculated from the value of assets less debt.

NNNAV (triple net asset value)
The Company computes NNNAV as total equity as
reported in the IFRS consolidated statement of ﬁ nan-
cial position, which accounts for the carrying amount
and the fair value of ﬁ nancial instruments and ﬁ nan-
cial liabilities, adjusted for hidden reserves and hidden
losses in immovable assets and ﬁ nancial liabilities.

Ofﬁ ce building
Property where at least 75% of the lettable area is
destined to 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.

Property management
Property management is the management of real es-
tate assets including the processes, systems and man -
power required to manage the life cycle of a building.

O
t
h
e
r

f
o
r
m
a
t
i
o
n

Road shows
Corporate presentations to institutional investors.

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.

alstria Financial Report 2012

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, subscrip-
tion right proceeds are also included when calculat-
ing the index.

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 buy back
A process whereby a joint stock company buys its
own shares and thus allows capital to ﬂ ow back
to the shareholders. No rights are conceded to the
company from these shares (voting right, dividend
entitlement, subscription right, etc.).

n
o
i
t
a
m
r
o
f

r
e
h
t
O

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.

Stakeholder
An individual, community or organisation that af-
fects or is affected by some aspect of an organisa-
tion’s products, operations, markets, industries and
outcomes.

Stock exchange
The stock exchange is the market (meeting place
for supplies and demands) for securities. Stock ex-
change 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 ad-
mitted to any of the market segments may not be
accepted or negotiated in the dealing room during
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 Manage-
ment Board and provides supervision and advice
regarding management of the company’s business.

Sustainability
Alignment of an organisation’s products and services
with stakeholder expectations, thereby adding eco-
nomic, environmental and social value.

Transparency
A principle that allows those affected by adminis-
trative decisions, business transactions or charitable
work to know not only the basic facts and ﬁ gures
but also the mechanisms and processes. It is the duty
of civil servants, managers and trustees to act visibly,
predictably and understandably.

Vacant space
Vacant space refers to the sum of all lettable space
that at the end of a calendar year is unoccupied or
offered for lease.

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.

alstria Financial Report 2012

Events 2013

Special dates you should note ...

March 27

Publication of the annual report 2012
Financial report (Hamburg)

May 7

Publication of Q1 report
Interim report (Hamburg)

May 29

Annual General Meeting
Hamburg

August 6

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

November 5

Publication of Q3 report
Interim report (Hamburg)
Publication of the sustainability report 2013

alstria Financial Report 2012

O
t
h
e
r

f
o
r
m
a
t
i
o
n

Contact

Imprint

Concept, design
and realisation
Kirchhoff Consult AG
Herrengraben 1
20459 Hamburg, Germany

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

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

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

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

alstria ofﬁ ce REIT-AG ﬁ ve-year overview

according to IFRS

EUR k

Revenues and earnings

Revenues

Net rental income

Consolidated loss/proﬁ t
for the period

FFO

Earnings per share (EUR)

FFO per share (EUR)

EPRA1) earnings per share (EUR)

2012

2011

2010

2009

2008

101,286

90,110

39,911

43,571

0.51

0.55

90,798

80,868

27,448

34,685

0.40

0.48

0.50

89,094

81,759

102,510

91,964

102,055

93,222

206

–79,651

–56,000

27,541

0.00

0.45

0.44

32,690

–1.40

0.58

0.53

39,415

–1.02

0.70

0.68

Balance sheet

Investment property

Total assets

Equity

Liabilities

NAV per share (EUR)

Net LTV

G-REIT key ﬁ gures

G-REIT ratio

Revenues plus other income
from investment properties

EPRA1) key ﬁ gures

Diluted EPRA NAV per share (EUR)

EPRA NNNAV per share (EUR)

EPRA net initial yield

EPRA “topped-up” net initial yield

EPRA vacancy rate

EPRA cost ratio

Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2008

1,622,988

1,528,589

1,348,400

1,425,440

1,805,265

1,786,893

1,686,637

1,542,336

1,766,134

1,873,493

829,287

957,606

10.50

47.8%

768,195

918,442

10.71

50.1%

692,408

849,928

11.24

49.8%

634,185

729,667

1,131,949

1,143,826

11.32

57.9%

13.03

59.0%

50.0%

48.7%

49.8%

40.3%

100%

10.98

10.50

5.7%

8.0%

11.32

10.71

5.8%

6.5%

11.68

11.24

5.5%

5.7%

5.1%

12.18

11.32

5.4%

3.3%

13.87

13.03

5.2%

5.9%

21.4%

24.0%

20.2%

20.9%

20.1%

1) Please refer to EPRA Best Practices Recommendations, ›› www.epra.com.

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

Friedrichstrasse 19
40217 Düsseldorf, Germany
Phone: +49 (0)211 301216-600
Fax: +49 (0)211 301216-615
www.alstria.com

Points
of view

Annual Report 2012
Part II/II – Financial Report

alstria ofﬁ ce RE
alstria ofﬁ ce REIT-AG

53° 33' 13'' N; 9° 58' 54'' E

i
r
t
s
l

t
r
o
p
e
R

a
c
n
a
n
F

–

I
I
/
I
I

t
r
a
P

2
1
0
2

t
r
o
p
e
R

a
u
n
n
A