Annual Report 2013
Ω Part II/II-Financial Report
Contact
Name
alstria office REIT-AG
Adress 1
Phone
Fax
Adress 2
Phone
Fax
Bäckerbreitergang 75
20355 Hamburg, Germany
+ 49 (0) 40 22 63 41-300
+ 49 (0) 40 22 63 41-310
Friedrichstrasse 19
40217 Düsseldorf, Germany
+ 49 (0)211 30 12 16-600
+ 49 (0)211 30 12 16-615
E-mail info@alstria.de
Website www.alstria.com
alstria Financial Report 2013
Key figures
five-year overview
according to IFRS
EUR k
Revenues and earnings
Revenues
Net rental income
Consolidated profit / loss
for the period
FFO
Earnings per share (EUR)
FFO per share (EUR)
Balance sheet
2013
2012
2011
2010
2009
104,224
101,286
93,249
90,110
38,945
45,328
0.49
0.57
39,911
43,571
0.51
0.55
90,798
80,868
27,448
34,685
0.40
0.48
89,094
81,759
102,510
91,964
206
–79,651
27,541
32,690
0.00
0.45
–1.40
0.58
Dec. 31,
2013
Dec. 31,
2012
Dec. 31,
2011
Dec. 31,
2010
Dec. 31,
2009
Investment properties
1,632,362
1,622,988
1,528,589
1,348,400
1,425,440
Total assets
Equity
Liabilities
NAV per share (EUR)
Net LTV (%)
1,785,679
1,786,893
1,686,637
1,542,336
1,766,134
844,114
829,287
768,195
692,408
634,185
941,565
957,606
918,442
849,928
1,131,949
10.69
50.7
10.51
47.8
10.71
50.1
11.24
49.8
11.32
57.9
G-REIT key figures
G-REIT ratio (%)
Revenues plus other income
from investment properties (%)
EPRA1) key figures
EPRA1) earnings per share (EUR)
Diluted EPRA NAV per share (EUR)
EPRA NNNAV per share (EUR)
EPRA net initial yield (%)
50.9
100
0.57
10.63
10.68
5.6
EPRA ‘topped-up’ net initial yield (%) 5.8
EPRA vacancy rate (%)
EPRA cost ratio (%)
6.8
18.4
50.0
100
0.55
10.98
10.50
5.7
5.7
8.0
18.5
48.7
100
0.50
11.32
10.71
5.8
5.8
6.5
n/a
49.8
100
0.44
11.68
11.24
5.5
5.7
5.1
n/a
40.3
100
0.53
12.18
11.32
5.4
5.4
3.3
n/a
1) Please refer to EPRA Best Practices Recommendations ›› www.epra.com.
alstria Financial Report 2013 Investment properties
1,632,362
1,622,988
1,528,589
1,348,400
1,425,440
EUR k
Revenues and earnings
Revenues
Net rental income
Consolidated profit / loss
for the period
FFO
Earnings per share (EUR)
FFO per share (EUR)
Balance sheet
Total assets
Equity
Liabilities
NAV per share (EUR)
Net LTV (%)
G-REIT key figures
G-REIT ratio (%)
Revenues plus other income
from investment properties (%)
EPRA1) key figures
EPRA1) earnings per share (EUR)
Diluted EPRA NAV per share (EUR)
EPRA NNNAV per share (EUR)
EPRA net initial yield (%)
2013
2012
2011
2010
2009
104,224
101,286
93,249
90,110
38,945
45,328
0.49
0.57
39,911
43,571
0.51
0.55
90,798
80,868
27,448
34,685
0.40
0.48
89,094
81,759
102,510
91,964
206
–79,651
27,541
32,690
0.00
0.45
–1.40
0.58
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
2013
2012
2011
2010
2009
1,785,679
1,786,893
1,686,637
1,542,336
1,766,134
844,114
829,287
768,195
692,408
634,185
941,565
957,606
918,442
849,928
1,131,949
10.69
50.7
10.51
47.8
10.71
50.1
11.24
49.8
11.32
57.9
50.9
100
0.57
10.63
10.68
5.6
6.8
18.4
50.0
100
0.55
10.98
10.50
5.7
5.7
8.0
18.5
48.7
100
0.50
11.32
10.71
5.8
5.8
6.5
n/a
49.8
100
0.44
11.68
11.24
5.5
5.7
5.1
n/a
40.3
100
0.53
12.18
11.32
5.4
5.4
3.3
n/a
EPRA ‘topped-up’ net initial yield (%) 5.8
EPRA vacancy rate (%)
EPRA cost ratio (%)
1) Please refer to EPRA Best Practices Recommendations ›› www.epra.com.
Contents
5
Group management report
Detail index
Group management report
6 Economics and strategy
(business overview)
12 Financial analysis
19 Report on risks and opportunities
28
28
31
32
Sustainability report
Mandatory disclosures
Additional Group disclosures
Reports on Post-Balance sheet date
events and expected developments
34
38
Consolidated financial statements
Detail index
Consolidated financial statements
36 Consolidated income statement
Consolidated statement of
37
comprehensive income
Consolidated statement of
financial position
Consolidated statement of cash flows
Consolidated statement of
changes in equity
Notes to the consolidated financial
statements
40
42
44
98
Responsibility statement
99
Independent auditors’ report
Coporate governance
Report of the Supervisory Board
Corporate governance statement
Remuneration report
REIT disclosures
REIT declaration
REIT memorandum
100
104
111
118
119
More information
120 Glossary
124 Events 2014
127 Contact / Imprint
alstria Financial Report 2013 Group management report
4
alstria Financial Report 2013 Group management report
Detail index
Group managment report
Economics and strategy
(business overview)
6 Economic conditions
7 Strategy and structure
8 Portfolio overview
Financial analysis
12 Earnings position
15
18
Financial and asset position
Coporate management
Report on risks and opportunities
Risk report
Report on opportunities
19
26
28
Sustainability report
28
Mandatory disclosures
Additional Group disclosures
31 Employees
31 Remuneration report
Reports on post-balance sheet
date events and expected
developments
Report on post-balance sheet events
Report on expected developments
32
32
5
alstria Financial Report 2013
Group management report
Group management report
ECONOMICS AND STRATEGY
(BUSINESS OVERVIEW)
burg (EUR 24.00 per sqm) and Stuttgart
(EUR 18.50 per sqm) rents remained at pre-
vious year level.
Take-up in major German cities
The vacancy rate of office properties in Ger-
man cities decreased from 8.8 % in 2012
to 8.3 % in 2013, which represents total
vacancies of 7.31 million sqm (decrease of
0.47 million sqm). Comparing the Big-7, the
highest vacancy rate was noted in Düsseldorf
(11.4 %), followed by Frankfurt (11.1 %), Ber-
lin (8.2 %), Hamburg (7.8 %), Munich (7.3 %),
Cologne (7.0 %) and Stuttgart (5.3 %).
New lease-up
In 2013, new lease contracts for over
2.93 million sqm of office space were signed
in the seven major German cities. This re-
flects a slight decrease by 0.11 million sqm
or 3.5 % compared to the previous year. The
greatest decreases were registered in Mu-
nich (– 17.1 %), Berlin (– 16.4 %) and Frank-
furt (– 14.0 %). These were partially offset
by some major increases e.g. in Stuttgart
(+34.7 %), Düsseldorf (+19.4 %) and Cologne
(+18.1 %).
New office supply
In 2013, the delivery of new office and
commercial space
increased by approx.
890,000 sqm. This is a slight increase (+8.2 %)
as compared to last year’s very low level, and
is mainly due to the completions in Frankfurt
(+143.3 %), Cologne (+59.0 %), and Stutt-
gart (+57.2 %). For 2014, a large increase in
completion volume (approx. 1,170,000 sqm)
is forecasted, of which the predominant part
(63.0 %) is already prelet. As a result the sup-
ply of high-quality new office space will re-
main at a low level in 2014.
Economic conditions
Despite the ongoing recessions in some Euro-
pean countries, the German economy proved
to be solid in 2013. Germany’s GDP increased
slightly by 0.4 % which is less than its growth
in 2012 (0.7 %) and its average of the last
10 years (+1.2 %).* This development was
also reflected in the German labour market,
resulting in a slight increase of the unemploy-
ment rate by 0.2 percentage points to 6.9 %
in comparison to 2012.**
The German real estate market developed
in a positive manner in 2013, resulting in the
highest transaction volume since the boom
of 2007. The total investment volume on
the commercial real estate market rose to
approx. EUR 31 bn and was therefore 21 %
higher than in the previous year. Domestic
and international investors seem to prefer the
stable German real estate market, which ap-
pears to be very attractive with regard to its
risk/return profile.***
Overview of the German office
property market
Development of office rents
In 2013, office rents developed positively
at the most important commercial real es-
tate sites, namely Berlin, Düsseldorf, Frank-
furt/Main, Hamburg, Cologne, Munich und
Stuttgart (‘Big-7’). On average, prime rents
increased by around 1.9 %. An above average
increase was registered in Frankfurt/Main at
6.1 % (EUR 35.00 per sqm) and Düsseldorf
at 5.8 % (EUR 27.50 per sqm). In Munich the
rents increased by 1.6 % (EUR 31.50 per sqm).
In Berlin (EUR 22.00 per sqm), Ham-
*
**
Federal Statistics Office (Statistisches Bundesamt).
Federal Employment Agency
(Bundesagentur für Arbeit).
*** All numbers referred to in this section are sourced
from Jones Lang Lasalle.
6
alstria Financial Report 2013 Group management report
Investment markets
The positive trend on the investment mar-
ket continued in fiscal year 2013. Total in-
vestment volume was approx. 21 % (around
EUR 30.7 bn for commercial assets) above
previous year results. Thus transaction vol-
mes in 2013 represent the highest vol-
ume since the boom of 2007. The Big-7
cities recorded a transaction volume of
around EUR 19.5 bn. The highest transac-
tion volumes were recorded in Munich at
EUR 4.7 bn, Frankfurt at EUR 4.2 bn and Ber-
lin at EUR 3.5 bn, respectively.
The investment market has continued to fo-
cus on high-quality core properties in pre-
mium locations. The average prime yield for
commercial office real estate was 4.67 %. In
regards to the deal structure, approx. 75 %
of the commercial investment turnover in fis-
cal year 2013 related to single deals, whereas
the share of portfolio transactions amounted
to 25 %.
Strategy and structure
The alstria Group consists of the parent
company alstria office REIT-AG, a real esta-
te company listed on the Frankfurter stock
exchange, and 19 subsidiaries, which inclu-
de nine general partners, nine limited part-
nerships holding assets and one REIT service
company. Operations are made at the parent
company. Although the major part of the as-
sets is allocated to the alstria office REIT-AG,
15 properties are held by nine subsidiaries as
at December 31, 2013.
alstria is a long term-holder of its real estate
portfolio. alstria’s strategy is structured ba-
sed on the following assumptions:
› The German real estate market will offer
limited rental or capital value growth in the
future.
› Overall built environment is sufficient to
host the entire demand for office space.
› The market’s vacancy rates will remain rel-
atively stable.
Based on these assumptions, our strategy
consists in owning and actively managing as-
sets which:
› Match a specific tenant’s 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 through
required refurbishments.
› Have the potential to offer the best value
for money to tenants in their micro-environ-
ment.
alstria’s aim is to provide superior real estate
returns through active day - to - day manage-
ment of its portfolio.
› alstria has a long-term leased portfolio
(around 6.8 years weighted average lease
lengths). Some 69 % of rental income derives
from a small number of high-quality tenants.
Around 42 % 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 management. alstria conducts real es-
tate operations (i.e. asset and property man-
agement) internally, which positively differ-
entiates us from our competitors.
› One of the key elements of alstria’s oper-
ating strategy involves helping alstria’s ten-
ants to optimise their real estate operating
costs. There is no contradiction in reducing
the overall real estate costs of alstria’s ten-
ants and increasing 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.
7
alstria Financial Report 2013 Group management report
Portfolio overview
As at December 31, 2013, alstria’s port-
folio consisted of 75 office properties and
one retail property with a total of ap-
prox. 894,300 sqm of lettable area and a
contractual vacancy rate of 9.1 %. The port-
folio is valued at a yield of 6.5 %. Its remain-
ing weighted average unexpired lease term is
approximately 6.8 years.
The key metrics for the portfolio1)
As at December 31, 2013
Metric
Number of properties
Number of joint venture properties
Market value (EUR bn)2)
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
76
1
1.6
106.7
6.5 %
894
9.1 %
6.8
10.9
1) Includes assets classified under property, plant and
equipment.
2) According to the year-end valuation by Colliers Inter-
national.
3) Contractual vacancy rate includes vacancies in assets
of the Company’s development pipeline. EPRA vacan-
cy rate is at 6.8%.
Transactions underline alstria´s
focus on core markets
Investment decisions at alstria are based on
the analysis of the local markets and on the
adequacy of a building within its local envi-
ronment in terms of location, size and quality.
alstria's strategy is to enter into new markets
and build a critical mass through long-term
secured assets. In light of this approach al-
stria added two properties and approx.
16,900 sqm of lettable space to the portfo-
lio in 2013, helping to reinforce its position in
two of its core markets, namely Stuttgart and
Düsseldorf.
In 2013, alstria signed binding and notarised
agreements for the acquisition of a piece of
land in Düsseldorf and two office properties
in Stuttgart and Düsseldorf. The acquisition
of the land was finalised in April 2013, while
the transfer of benefits and burden of the as-
sets in Stuttgart and Düsseldorf took place
on July 1, 2013 and September 1, 2013, re-
spectively.
Acquisitions 2013
Asset
Freehold
City
Georg-Glock-Str. Düsseldorf
Hauptstätter Str.
Stuttgart
Immermannstr.
Düsseldorf
Total
Purchase
Annual
Avg. lease
price
rent
(EUR k)1)
(EUR k)
length
(years) 2)
Signing
SPA
Transfer of
benefits
and burden
7,564
19,625
16,835
44,024
–
1,701
1,140
2,841
–
Feb.13, 2013 Apr.23, 2013
3.5 May 22, 2013
Jul. 01, 2013
3.4
Jul. 11, 2013 Sep.01, 2013
1) Including transaction costs.
2) At the time of transfer of benefits and burden.
Disposals and transfers of benefits and burdens 2013
Asset
Zwinglistr.
Benrather
Schlossallee
City
Dresden
Düsseldorf
Lothar-Streit-Str.
Zwickau
Kanalstr.
Hamburg
15,000
Schweinfurter Str. Würzburg
Helene-Lange Str.
Potsdam
Am Roten Berg
Johannesstr.
Erfurt
Erfurt
Joliot-Curie-Platz
Halle
Sales
price
2,640
7,620
350
4,530
5,700
1,060
5,850
610
203
614
0
914
397
422
142
577
81
947
Bornbarch
Norderstedt
10,320
Total
53,680
4,297
1) Excluding transaction costs.
2) At the time of transfer of benefits and burden.
Annual
Avg. lease
rent
(EUR k)
length
(years)2)
Signing
SPA
Transfer of
benefits
and burden
2.5 Oct. 25, 2012
Jan. 1, 2013
8.4 Nov.14, 2012
Feb. 1, 2013
- Mrz. 28, 2013 May 24, 2013
4.3 Mrz. 5, 2013 May 31, 2013
3.0
Apr. 2, 2013
Jun. 30, 2013
4.7 May 6, 2013
Jun. 30, 2013
1.5 Apr. 23, 2013
Jul. 31, 2013
3.9
Jul 18, 2013 Oct. 31, 2013
0.9 Oct. 24, 2013 Dec. 31, 2013
4.0 Oct. 31, 2013 Dec. 31, 2013
8
alstria Financial Report 2013
Group management report
Transactions
Acquisitions 2013
Asset
City
Freehold
Georg-Glock-Str. Düsseldorf
Hauptstätter Str.
Stuttgart
Immermannstr.
Düsseldorf
Total
Purchase
price
(EUR k)1)
Annual
rent
(EUR k)
Avg. lease
length
(years) 2)
Signing
SPA
Transfer of
benefits
and burden
7,564
19,625
16,835
44,024
–
1,701
1,140
2,841
–
Feb.13, 2013 Apr.23, 2013
3.5 May 22, 2013
Jul. 01, 2013
3.4
Jul. 11, 2013 Sep.01, 2013
1) Including transaction costs.
2) At the time of transfer of benefits and burden.
Disposals and transfers of benefits and burdens 2013
Asset
Zwinglistr.
Benrather
Schlossallee
City
Dresden
Düsseldorf
Lothar-Streit-Str.
Zwickau
Sales
price
2,640
7,620
350
Kanalstr.
Hamburg
15,000
Schweinfurter Str. Würzburg
Helene-Lange Str.
Potsdam
Am Roten Berg
Johannesstr.
Erfurt
Erfurt
Joliot-Curie-Platz
Halle
4,530
5,700
1,060
5,850
610
Bornbarch
Norderstedt
10,320
Annual
rent
(EUR k)
Avg. lease
length
(years)2)
Signing
SPA
Transfer of
benefits
and burden
203
614
0
914
397
422
142
577
81
947
2.5 Oct. 25, 2012
Jan. 1, 2013
8.4 Nov.14, 2012
Feb. 1, 2013
- Mrz. 28, 2013 May 24, 2013
4.3 Mrz. 5, 2013 May 31, 2013
3.0
Apr. 2, 2013
Jun. 30, 2013
4.7 May 6, 2013
Jun. 30, 2013
1.5 Apr. 23, 2013
Jul. 31, 2013
3.9
Jul 18, 2013 Oct. 31, 2013
0.9 Oct. 24, 2013 Dec. 31, 2013
4.0 Oct. 31, 2013 Dec. 31, 2013
Total
53,680
4,297
1) Excluding transaction costs.
2) At the time of transfer of benefits and burden.
alstria signed binding and notarised agree-
ments for the disposal of eight properties
during financial year 2013:
› In the first quarter, alstria signed binding and
notarised agreements for the sale of two
assets. The transfer of benefits and burden
of the assets in Zwickau and Hamburg took
place in May 2013.
› In the second quarter, alstria signed bind-
ing and notarised agreements for the sale of
three assets. While the assets in Würzburg
and Potsdam were legally transferred on
June 30, 2013, the transfer of benefits and
burden of one asset in Erfurt took place on
July 31, 2013.
› In the third quarter, alstria signed a binding
and notarised agreement for the sale of an-
other asset in Erfurt. The transfer of bene-
fits and burden took place on October 31,
2013.
› In the fourth quarter, alstria signed binding
and notarised agreements for the sale of one
asset in Halle and one asset in Norderstedt.
The transfer of benefits and burden took
place on December 31, 2013.
Additionally, in the last quarter of 2012, al-
stria agreed on the disposal of two proper-
ties, which were classified as ‘assets held for
sale’ as at December 31, 2012.
These assets were transferred to the new
9
alstria Financial Report 2013
Group management report
owners in the first quarter of 2013.
Refurbishment projects
alstria also achieved considerable progress
with its refurbishment projects.
› Kaiser-Wilhelm-Straße 79 – 87, Hamburg
(Holstenhof)
The historic Kontorhaus Holstenhof in Ham-
burg, Kaiser-Wilhelm-Strasse was acquired by
alstria in 2006. At the time of acquisition, the
listed Art Nouveau building, which was erected
in 1900/01, was in need of renovation. alstria
decided to completely revitalise the building.
Redevelopment measures started at the
end of 2012. The modernisation includes,
among others, the rebuilding of the entire
roof construction and the ceiling above the
4th floor. After completion of all modifica-
tions the building will offer efficient office
space with high-quality equipment and mod-
ern retail space on the ground floor. Further-
more, the building will be certified as a ’ma-
jor refurbishment`- building by the BREEAM
International Green Building Standard.
alstria succeeded to sign a 5-year lease con-
tract for around 2,000 sqm six months before
the area will be ready for occupancy.
› Schaartor 1, Hamburg
The building at Schaartor was acquired
by alstria in 2011. The property is direct-
ly located between the city centre and
the new HafenCity, which is one of Ham-
burg’s most important urban axis. The
revitalisation of the building started in
April 2013. It includes the complete in-
stallation of the building’s technical facil-
ities, a new construction of the 6th floor
and further tenant specific developments.
Although the completion of the moderni-
sation is planned for 2014, alstria signed a
lease agreement for 85 % of the lettable
area already in September 2013.
› Arndtstraße 1, Hanover
The office building was erected in 1970.
The technical
installations dating back
from 1970 mostly no longer fulfil today’s
requirements. The planned revitalisation
adapts the building to today's state of the
art technology and tenant’s expectations.
Besides the modernisation of the façade
the refurbishment measures include the
10
complete refurbishment from the ground
floor to the 9th floor, the replacement of
central technical installations and an im-
provement in the floor plan flexibility.
The completion of the refurbishment is
scheduled for the end of 2014. Nonetheless,
at the end of 2013, alstria already succeed-
ed in pre-letting a substantial part of the
building to the City of Hanover on a long-
term basis.
› Grosse Bleichen 23 – 27, Hamburg
(Kaisergalerie)
In January 2010, alstria agreed on terms
of a second joint venture with the Ham-
burg-based Quantum Immobilien AG to
refurbish the Kaisergalerie in Hamburg.
The Kaisergalerie was erected from 1907-
1909 and is listed in the ‘List of recognized
monuments’ (Liste erkannter Denkmäler) in
Hamburg.
The property is located at Grosse Bleichen
23–27 directly in the centre of Hamburg. The
refurbishment of this joint venture property
started after the old tenant ‘Ohnsorg-Thea-
tre’ moved to its new location Bieberhaus in
2011, which was also renovated by alstria.
After completion of the modernisation, the
building will offer attractive retail space.
Part of this redevelopment project is to add
a new pedestrian bridge at the waterside of
the Kaisergalerie and a passage through the
building to connect the Grosse Bleichen and
the Bleichenfleet. The refurbishment is pro-
gressing according to plan and is scheduled
to be completed in spring 2014.
In 2013, alstria invested around EUR 14.5 m*
in ongoing refurbishment projects. Of this
EUR 14.5 m, around EUR 6.5 m refers to
development projects. The main part of the
2013 capex investment was connected to
the refurbishment of the Hamburg build-
ings Holstenhof (Kaiser-Wilhelm-Strasse 79-
87) and Schaartor (Schaartor 1) as well as
the property at Arndtstrasse 1 in Hanover.
In the next two years, the Company plans
to invest around EUR 48 m in the portfolio.
These investments depend on ongoing lease
negotiations with existing and potential ten-
ants. Major projects are related to the prop-
* Excluding joint ventures.
alstria Financial Report 2013
Group management report
alstria continued its lease progress in the de-
velopment segment with a new lease in the
Holstenhof. The new tenant signed a five-
year lease for approximately one third of the
lettable space (2,000 sqm). The lease will
start on July 1, 2014.
Furthermore a long-term lease for around
5,400 sqm has been signed with the City of
Hanover and a lease for around 1,200 sqm
with the ‘Niedersächsisches Landesmuseum
Hanover’ in the property at Arndtstrasse in
Hanover.
Portfolio valuation
alstria’s portfolio was valued by Colliers Inter-
national as at December 31, 2013 pursuant to
IAS 40 and in accordance with the RICS* Red
Book guidance.
The valuation resulted in a total value of in-
vestment properties of EUR 1,632 m.
For further information about the valuation
of alstria’s portfolio please refer to the val-
uation certificate of Colliers International,
which is part of the Annual Report » Part I/II
– Company Report.
Tenants
One of the main characteristics of the alstria
portfolio is its focus on a set number of ma-
jor tenants. 69 % of total revenues are gen-
erated by alstria’s top ten tenants. The 2013
portfolio also reflects the clear focus on the
office asset class. 94 %** of the total lettable
area is office space.
erties Hamburger Strasse 1–15 (Mundsburg
Center) in Hamburg, Kaiser-Wilhelm-Strasse
(Holstenhof) in Hamburg and Arndtsrasse 1
in Hanover. This capex plan is part of al-
stria’s ongoing asset value enhancement pro-
gramme.
Lease-ups
Leasing activities in 2013 were very success-
ful. In 2013, alstria signed new leases* total-
ling approx. 35,600 sqm and prolonged lease
agreements of around 49,000 sqm. This
resulted in a decrease of the vacancy rate
by 230 basis points (bps) to 9.1 % or 81,300
sqm. Of these 81,300 sqm, 24,120 sqm rep-
resent strategic vacancy (intended vacancy
initiated by alstria as part of its repositioning
process for certain assets), while the remain-
der of this space is operational vacancy. Over
60 % (of lettable area) of the lease agree-
ments, which were due to expire in 2013,
could be retained during the year.
With the successful lease-up of 7,700 sqm
of office and ancillary space at Hans-Böck-
ler-Strasse 36, alstria signed one of the larg-
est new leasing contracts in Düsseldorf in
the reporting year. The Company agreed
a long-term lease with the State of North
Rhine-Westphalia for the whole building for
the accommodation of a regional tax office
(Finanzamt Düsseldorf-Nord). The lease will
start in the first half of 2014.
Another climax in terms of letting achieve-
ments was the signing of an agreement with
a new tenant for the property Ernsthalden-
strasse 17, Stuttgart, for which a five-year
contract comprising around 2,500 sqm of
office and ancillary space has been signed.
The lease commenced in the fourth quarter
of financial year 2013.
In 2013, alstria also successfully leased areas
of those assets, which are undergoing refur-
bishment measures.
In the third quarter of 2013 alstria signed a
long-term lease for 4,000 sqm of office and
ancillary space at Schaartor 1, Hamburg with
a leading advertising agency in Germany. The
lease will start after the completion of the de-
velopment on August 1, 2014.
* New leases correspond to lease of vacant space.
It does not account for any lease renewals,
prolongations or tenant exercise of renewal option.
* Royal Institution of Chartered Surveyors.
** Office and storage.
11
alstria Financial Report 2013 Group management report
Total portfolio by utilisation
Lease expiry profile
% of total lettable area
% of annual rent
as at 31.12.2012
as at 31.12.2013
13.4
13.3
16.5
16.9
3.9
3.5
2014
2015
2016
FINANCIAL ANALYSIS
alstria developed according to plan
in
the reporting period. Both revenues (ap-
prox. EUR 104 m) and funds from operations
(FFO) (approx. EUR 45 m) were in line with
the forecast for the financial year 2013.
Earnings position
Compared to the previous year, revenues in-
creased in 2013 by 2.9 % following the trans-
fer of the newly acquired assets in the first
half of 2012. Total revenues in this reporting
period amounted to EUR 104,224 k (2012:
EUR 101,286 k). The share of real estate op-
erating expenses at revenues decreased by
0.3 percentage points to 10.0 % of total rev-
enues (EUR 10,462 k) compared to 10.3 %
of total revenues (EUR 10,398 k) in 2012.
Net rental income for 2013 amounted to
EUR 93,249 k (2012: EUR 90,110 k).
The following table shows the main figures
of the income statements for financial years
2013 and 2012:
office
retail
residental
others
94
2
1
3
alstria´s core tenants 2013
% of annual rent
City of Hamburg
Daimler AG
Bilfinger SE
Siemens AG
Barmer GEK
Deutsche Renten-
versicherung Bund
Württembergische
Lebensversicherungs AG
Rheinmetall
L´Oréal Deutschland GmbH
State of Baden-Württemberg
Others
30
15
5
4
3
3
3
2
2
2
31
12
Funds from operations (FFO) per share up by 4 % (EUR 0.57)
EUR k
Pre-tax income (EBT)
Net profit/loss from fair value adjustments on investment property
Net profit/loss from fair value adjustments on financial derivatives
Profit/loss on disposal of investment property
Other adjustments1)
Fair value and other adjustments in joint ventures
Funds from operations (FFO)²)
Maintenance capex
Adjusted funds from operations (AFFO)³)
2013
38,983
– 27
7,554
– 1,398
545
– 329
45,328
– 7,963
37,365
2012
39,957
1,876
1,380
– 369
54
673
43,571
– 3,795
39,776
alstria Financial Report 2013 Group management report
EUR k
2013
2012
Gross rental income
104,224
101,286
Net rental income
93,249
90,110
Operational expenses
– 13,115
– 12,571
Net other income
Operating income
3,821
2,124
83,955
79,663
Net result from fair value
adjustments on investment
property
Net result on disposals of
investment property
27
– 1,876
1,398
369
Net operating result
85,380
78,156
Operational expenses
(including admin-
istrative and personnel expenses) were
EUR 13,115 k for the year, compared to
EUR 12,571 k in 2012, which represents
12.6 % of total revenues. Compared to 2012,
the rate increased slightly by 0.2 percentage
points.
Net other income mainly comprised the re-
versal of accruals for rental guarantees
(EUR 946 k), payments for the reimburse-
ment of expenses from former sharehold-
ers related to a capital increase (EUR 571 k),
compensation payments for not executed
maintenance measures due to the early ter-
mination of lease contracts (EUR 410 k) as
well as other income (EUR 2,005 k). Further-
more, it comprised expenses of EUR 111 k.
alstria closed the financial year 2013 with a
net operating result before financing costs
and taxes of EUR 85,380 k which compares
to EUR 78,156 k for the previous year. The
increase mainly results from higher revenues,
a better net result on fair value adjustments
of investment properties as well as higher re-
alised disposal gains compared to 2012.
Funds from operations (FFO) per share up by 4 % (EUR 0.57)
EUR k
2013
Pre-tax income (EBT)
Net profit/loss from fair value adjustments on investment property
Net profit/loss from fair value adjustments on financial derivatives
Profit/loss on disposal of investment property
Other adjustments1)
Fair value and other adjustments in joint ventures
Funds from operations (FFO)²)
Maintenance capex
Adjusted funds from operations (AFFO)³)
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-flow meas-
ures as determined in accordance with IFRS.
Furthermore, no standard definition exists for (A)FFO.
38,983
– 27
7,554
– 1,398
545
– 329
45,328
– 7,963
37,365
2012
39,957
1,876
1,380
– 369
54
673
43,571
– 3,795
39,776
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.
from operations amounted
in 2013 compared
to
Funds
to
EUR 45,328 k
EUR 43,571 k in 2012. As a result, FFO per
share* was EUR 0.57 in financial year 2013
(2012: EUR 0.55). The increase in comparison
with 2012 resulted mainly from the growth
of revenues following the acquisition and
transfer of new assets.
* Divided by the number of shares at the end of the
reporting period (December 31, 2013: 78,933,487;
December 31, 2012: 78,933,487).
13
alstria Financial Report 2013 Group management report
Hedging instruments
The change in valuation of the financial de-
rivatives was driven by the development of
the yield curve in the year 2013. alstria ap-
plies hedge accounting to all qualifying hedg-
es in order to limit the impact of the volatility
of the interest rate markets on profit and loss.
This allows alstria to recognise the losses or
gains on the qualifying part of the derivatives
as an equity cash flow hedge reserve, having
no effect on income.
New derivative financial instruments were
entered into in line with the Group-wide fi-
nancing strategy for floating interest hedging
in 2013.
In financial year 2013, the effective re-
valuation in the value of the swaps was
EUR 11,820 k. The amount was recorded in
equity as ‘hedging reserve’, and is therefore
not recognised in the income statement. The
fair value changes of derivatives not catego-
rised as cash flow hedges are recognised in
the income statement under ‘Net result from
fair value adjustments on financial deriva-
tives’ along with the ineffective part in fair
value changes of cash flow hedges. Interest
expenses on swaps and caps are recorded in
the financial result.
alstria’s main debt exposure is hedged by fi-
nancial derivatives. The current overall cost of
debt due to these hedging activities amounts
to around 3.6 % for the existing portfolio.
An overview of the composition and changes
is described in detail in section » 10.7 of the
notes.
14
Financial result
The following table shows the development
of the financial result for the period from Jan-
uary 1 to December 31, 2013:
EUR k
Financial income
Interest expenses
syndicated loan
2013
317
2012
657
– 13,471 – 14,383
Interest expenses other loans
– 9,036
– 9,385
Interest result derivatives
– 13,406 – 12,589
Interest expenses
convertible bond
– 2,697
0
Other interest expenses
– 119
– 250
Financial expenses
– 38,729 – 36,607
Other financial expenses
– 704
– 135
Net financial result
– 39,116 – 36,085
As at December 31, 2013 alstria was not in
breach of any of its financial covenants.
Net financing costs increased by EUR 3,031 k
to EUR 39,116 k in comparison to 2012.
The increase is mainly attributable to one-
off expenses in relation to the refinanc-
ing of the syndicated loan of an amount of
EUR 2,593 k.
For details on the new loans, we refer to the
section entitled ‘financial and asset position’
on » page 15.
result
Consolidated net result
at EUR 38,945 k
for financial year
The pre-tax
2013 amounted to EUR 38,983 k (2012:
EUR 39,957 k). Consolidated net income
amounted to EUR 38,945 k for the reporting
period compared to EUR 39,911 k in 2012.
The reasons for the decline are mainly driven
by higher financing costs as well as a lower
net result from fair value adjustments on fi-
nancial derivatives. These could only partly be
compensated by the positive developments in
revenues, in net result from fair value adjust-
ments on investment property and the gain
on disposal of investment property.
REIT-AGs are fully exempt from German cor-
porate income tax and trade tax. Hence, al-
stria office REIT-AG has been exempt from
income and trade tax with retrospective ef-
fect since January 1, 2007. Tax payment ob-
alstria Financial Report 2013 Group management report
ligations of EUR 38 k arose on group level in
2013 (2012: EUR 46 k) for affiliates serving
as a general partner of a partnership or REIT
Service Companies.
Earnings per share were down by 4 % at
EUR 0.49 for 2013 (2012: EUR 0.51).
Financial and asset position
Financial management
alstria’s financial management is carried out
at corporate level, with individual loans be-
ing taken out at property and portfolio lev-
el. The main goal of alstria’s financial policy
is the establishment of secured, long-term
structures to support the development of its
business whilst providing the required degree
of flexibility. Corporate management of debt
financing forms the basis for optimised cap-
ital procurement, proactive management of
interest and liquidity risks and efficiency im-
provements for the whole Group.
In 2013, alstria signed a credit agreement
amounting to EUR 544 m, replacing the exist-
ing syndicated loan facility, which was due to
mature on July 20, 2015. The new syndicated
loan facility was initially drawn on Septem-
ber 30, 2013, amortising the old syndicated
loan with an amount of EUR 544 m at the
same time. The new syndicated loan has a
maturity of seven years and has been signed
by four German banks. The early refinancing
allows alstria to benefit from the attractive
financing environment and significantly im-
proves the overall debt maturity profile of the
Company to around 5.3 years. With the new
syndicated loan in place, alstria has no major
refinancing needs before mid-2018.
Furthermore, alstria issued its first convertible
bond in June 2013. The bonds have a maturi-
ty of five years, and are issued and will be re-
deemed at 100 % of their principal amount.
The coupon is set at 2.75 % p.a., payable
quarterly in arrears. The initial conversion
price was set at EUR 10.0710, representing a
conversion premium of 15 % above the refer-
ence share price of EUR 8.7574. The convert-
ible bond has also improved the Company’s
maturity profile and is considered to be an
important step in diversifying the Company’s
sources of financing.
As one of the first refinancing measures re-
sulting from the corporate bond issue, alstria
terminated one non-recourse facility and re-
paid it on July 22, 2013 (EUR 30,240 k).
In connection with the disposal of five assets,
an amount of EUR 20,619 of the old syndicat-
ed loan was repaid until September 30, 2013.
In connection with the disposal of two fur-
ther assets, an amount of EUR 5,137 k of the
new syndicated loan was repaid until Decem-
ber 31, 2013.
15
alstria Financial Report 2013 Group management report
Existing loan agreements as at December 31, 2013
Maturity
Principal amount
outstanding (EUR k)
Current
LTV (%)
LTV covenant ( %)
Financing
Syndicated loan
Non-recourse loan #1
Non-recourse loan #2
Non-recourse loan #3¹)
Non-recourse loan #4
Loan #5
Loan #6
Loan #7
Total loans
Sep. 30, 2020
Oct. 20, 2015
Dec. 31, 2014
Jun. 30, 2014
Jan. 31, 2017
Dec. 31, 2015
Dec. 17, 2018
Sep. 30, 2019
Convertible bond
Jun. 14, 2018
Total as at Dec. 31, 2013
538,963
47,902
42,670
28,503
69,626
11,328
56,000
39,500
834,492
79,400
913,892
53.4
70.2
64.0
54.8
61.5
51.5
46.1
40.6
50.9
55.8
70.0
80.0
80.0
62.5
75.0
80.0
60.0
65.0
1) Refinancing of EUR 28 m has already been signed with a maturity date of Sep. 30, 2019.
Cash position amounting to
EUR 82,782 k
Cash flows from operating activities amount-
ed to EUR 50,114 k in financial year 2013.
The increase compared to the reporting peri-
od 2012 (EUR 45,735 k) resulted mainly from
higher rental revenues and lower interest ex-
penses.
The cash flow from investing activities is im-
pacted by the cash outflows resulting from
the acquisitions of two investment properties
and a piece of land and investments in exist-
ing properties (cash outflow EUR 58,506 k).
Cash inflows of EUR 51,040 k relate to pay-
ments received from the disposal of invest-
ment properties. Payments for capital con-
tribution in joint ventures generated cash
outflows of an amount of EUR 3,370 k.
Cash flows from financing activities mainly
reflect refinancing activities, i.e. payments
for the redemption of borrowings of an
amount of EUR 606,592 k and cash proceeds
from the issue of loans (EUR 544,100 k) and
a convertible bond (EUR 79,400 k). Divi-
dend payments resulted in cash outflows of
EUR 39,467 k. Furthermore cash payments
were made for the acquisition and termina-
tion of financial derivatives (EUR 46,512 k).
alstria’s main financial goal is to establish a
sustainable long-term finance structure. An
integral part of this structure is to hedge
long-term loans with corresponding hedging
instruments, such as swaps and caps. The aim
of this strategy is to largely eliminate short-
term interest volatility from the income state-
ment. As at December 31, 2013 the average
debt maturity was at 5.3 years compared to
3.0 years as at December 31, 2012. The av-
erage cost of debt of the Group decreased to
around 3.6 % (compared to 3.9 % p.a. in the
previous year).
Financial debt by maturities1)
EUR m as at Dec. 31, 2013
539.0
135.4
39.5
71.22)
59.2
69.6
0
2016
2014
2015
2017 2018 2019 2020
1) Excluding regular amortisation.
2) Refinancing of EUR 28 m has already been signed with
a maturity date of Sep. 30, 2019.
16
alstria Financial Report 2013
Group management report
As a result, alstria held a cash position of
EUR 82,782 k (2012: EUR 118,548 k) at the
end of financial year 2013. The Group is ad-
equately funded to comply with its financial
obligations.
NNNAV at EUR 10.68 per share
NNNAV (Triple Net Asset Value according
to EPRA*) increased to EUR 10.68 per share
(2012: EUR 10.50 per share).
Investment properties
remain stable
Total investment property value amounted to
EUR 1,632,362 k at year-end, in comparison
to EUR 1,622,988 k at the beginning of the
year. The slight increase in investment prop-
erty results from the acquisition of two prop-
erties and a piece of land as well as the cap-
italisation of modernisation measures on one
hand and the disposal of eight assets on the
other hand. The valuation result amounted to
EUR 27 k compared to EUR – 1,876 in 2012.
The fair value of immovable assets is used for
the calculation of the G-REIT equity ratio.
EUR k
Investment properties
at Dec. 31, 2012
Subsequent acquisition
and production costs
Acquisitions
Disposals
Reclassifications
Revaluations
Investment properties
at Dec. 31, 2013
Fair value of owner-occupied
properties
Fair value of property held for sale
Interests in real estate partnerships
1,622,988
14,483
36,865
– 42,000
0
27
1,632,362
6,078
0
21,001
Fair value of immovable assets
1,659,441
Equity ratio of 47.3 % –
G-REIT equity ratio of 50.9 %
The balance sheet shows a total equity posi-
tion of EUR 844,114 k with an equity ratio of
47.3 % (December 31, 2012: EUR 829,287 k,
46.4 %). The G-REIT equity ratio, which is
defined as total equity divided by immov-
able assets, amounted to 50.9 % (Decem-
ber 31, 2012: 50.0 %). According to the
G-REIT Act (REITG), the minimum require-
ment for compliance with the G-REIT criteria
is a G-REIT equity ratio of 45 % calculated at
year-end.
Compared to fiscal year 2012, total equity in-
creased in 2013 by EUR 14,827 k. Due to an
increase in fair value of financial instruments,
the hedging reserve increased by an amount
of EUR 14,808 k from EUR -22,137 k as at
December 31, 2012 to EUR -7,329 k as at
December 31, 2013. The consolidated profit
for the period resulted in equity growth of
EUR 38,945 k. On the other hand the capital
surplus decreased by EUR 38,926 k, main-
ly due to the payments of dividends. All in
all this led to a total increase in equity from
EUR 829,287 k to EUR 844,114 k**.
Decrease in long-term loans
Long-term loans decreased by 6.8 % to a total
of EUR 822,486 k in 2013. This is mainly relat-
ed to the re-classification of two loans which
are due to expire within the next 12 months
from non-current to current liabilities.
Increase in current liabilities
Current liabilities amounted to EUR 88,820 k,
of which EUR 73,886 k were categorised as
short-term loans, mainly representing two
loans which are due to expire within the next
12 months. Other current liabilities amount-
ing to EUR 8,977 k mainly comprised out-
standing invoices (EUR 3,435 k), deferred
income (EUR 1,544 k) and other current lia-
bilities (EUR 3,998 k).
Please refer also to » section 11.4 of the Notes
for the financial year 2013 for further details.
* EPRA: European Public Real Estate Association,
Best Practices Committee, Brussels, Belgium.
** See also the consolidated statement of changes
in equity.
17
alstria Financial Report 2013 Group management report
Corporate management
alstria proactively focuses on the following fi-
nancial key performance indicators: revenues
and funds from operations (FFO).
Revenues mainly comprise rental income,
which derives from the leasing activities of
the Company.
The FFO is the operating result from real es-
tate management, excluding valuation effects
and other adjustments such as non-cash ex-
penses/income and non-recurring effects.*
For the financial year 2013 the Company
forecasted revenues of around EUR 103 m.
Due to a good leasing result, this projection
was exceeded by around EUR 1 m, resulting
in revenues of EUR 104 m in 2013.
Funds from operations (FFO) amounted to
around EUR 45 m in 2013, in line with the
FFO forecast for this year.
Furthermore, the Company keeps track on
the cash flow, the LTV, and the G-REIT eq-
uity ratio.
By proactively managing its balance sheet,
alstria was able to improve its LTV from
bank financing, reducing it from 55.0 % as at
December 31, 2012 to 50.9 % as at year-end
2013.
The G-REIT equity ratio was 50.9 % at year-
end, exceeding a rate of 50.0 % in the prior
year and the legal covenant of 45 %.
* For further details, please refer to page 13.
18
alstria Financial Report 2013 Group management report
REPORT ON RISKS
AND OPPORTUNITIES
Risk report
Risk management
alstria has implemented a Group-wide struc-
tured risk management and an early warning
system in accordance with Section 91 (2) of
the German Stock Corporation Act (AktG).
All risks are recorded, evaluated and moni-
tored on an at least quarterly basis. The aim
of alstria Group’s risk management strategy
is to minimise or, where possible, completely
avoid the risks associated with entrepreneur-
ial activity in order to safeguard the Group
against potential losses, and against risks to
the Company going concern. The system of
the early detection of risks is in active use.
The Company’s risk identification process al-
lows the early identification of sources of any
potential new risks on an ongoing basis. Risk
mitigation measures are defined in order to
undertake any necessary steps to circumvent
the identified risks, i.e., to insure, diversify,
manage or avoid risks.
For alstria, risk management is the targeted
securing of existing and future potential for
success, along with improving the quality of
the Company’s planning processes.
The risk management system of alstria office
REIT-AG is an integral part of the manage-
ment and control system of the alstria Group.
The risk management system is integrated
into the regular reporting to the Manage-
ment Board and Supervisory Board in order
to ensure that risks are dealt with proactive-
ly and efficiently. The risk management sys-
tem thereby focuses on a full coverage of the
risks. The identification and assessment of
opportunities is not part of the risk manage-
ment system of alstria office REIT-AG.
Structure of risk management system
Risk management is organised as a central
unit independent of the individual business
divisions. The risk manager prepares a risk re-
port on a quarterly basis and provides it to the
Management Board. The bases for the prepa-
ration of the risk report are the reports from
the risk owner, who is responsible for a par-
ticular area of risk.
alstria Group faces various areas of risk within
the context of its business activities, which are
divided into the following four categories:
› strategic risks
› operational risks
› compliance risks
› financial risks
Each risk category is assigned to a so-called
risk owner. Inherent to his position in the
Company the risk owner represents the area
in which the identified risks could possibly
materialise and is at the same time respon-
sible for the assigned risk category:
Risk category
Strategic risks
Operational risks
Compliance risks
Financial risks
Risk owner
» Finance & Controlling
» Real Estate Operations
» Legal
» Finance & Controlling
The risk report presents the findings that are
observed during risk identification, assess-
ment, evaluation and monitoring. At the
same time, the comprehensive documenta-
tion of this report ensures an orderly assess-
ment, which is conducted by the responsible
departments and by the Supervisory Board.
In addition, the divisions report their respec-
tive risks and opportunities to the Manage-
ment Board in weekly meetings. The Man-
agement Board must be notified of any risks
immediately via ad-hoc announcements,
which represent a potential economic loss of
more than EUR 1.0 million.
By monitoring the risk management system,
alstria is able to continually improve and
adapt its structures and processes.
19
alstria Financial Report 2013 Group management report
Risk valuation
Risks are assessed according to their likeli-
hood of occurrence and their magnitude of
impact. Accordingly, they are categorised as
‘high’, ‘medium’ or ‘low’. The potential dam-
age is any potential negative deviation from
the forecasts and objectives of the Group.
Classification according
to likelihood
Probability/likelihood
of occurrence (in %)
Description
1 to 15
16 to 35
36 to 55
56 to 75
76 to 99
Remote
Unlikely
Likely
Highly likely
Close to certain
Under this framework, a remote risk is de-
fined as one that will occur only under ex-
ceptional circumstances and a close-to-cer-
tain risk as one that can be expected to occur
within a specified period of time.
Classification according
to degree of impact
Expected impact
in EUR million
Degree of impact
> 0.0 to 0.3
> 0.3 to 0.75
> 0.75 to 3.0
> 3.0 to 7.5
> 7.5
Insignificant
Minor
Moderate
Major
Critical
Based on the likelihood that risks will occur and
the impact they would have on the business,
financial position, profit, and cash flow of the
Group risks are classified as ‘high’, ‘medium’
or ‘low’ according to the following matrix:
Key characteristics of the account-
ing-related internal control and risk
management system
The objective of the control and risk manage-
ment system regarding the (Group) reporting
process is to make sure that the reporting
is consistent and in line with legal require-
ments, the generally accepted accounting
principles and the International Financial Re-
porting Standards (IFRS), and internal Group
guidelines. Only then it can provide true and
reliable information to the recipients of the
annual financial statements. To this end al-
stria has implemented an internal control and
risk management system that combines all
relevant principles, processes and measures.
The internal control system consists of two
areas: control and monitoring. In organi-
sational terms, the divisions’ treasury, con-
trolling and accounting divisions are respon-
sible for control.
The monitoring measures consist of elements
incorporated in the process as well as exter-
nal, independent elements. Among others,
the integrated measures include process-
related system-based technical controls such
as the ‘dual control principle’, which is ap-
plied universally, and software-based check-
ing mechanisms. In addition, qualified em-
ployees, who have the appropriate expertise,
and specialised Group departments such as
controlling, legal and treasury perform mon-
itoring and control functions as part of the
various processes.
Probability
Close to certain
Highly likely
Likely
Unlikely
Remote
L
L
L
L
L
M
M
L
L
L
H
M
M
L
L
H
H
M
M
L
H
H
H
M
M
Degree of impact
Insignificant Minor
Moderate Major
Critical
H = High risk
M = Medium risk
L = Low risk
The risk management system of alstria office
REIT-AG was not exposed to any significant
changes compared to the previous year.
20
alstria Financial Report 2013
Group management report
The Management Board and the Supervisory
Board (in particular the Audit Committee) as
well as an auditing company are involved in
the monitoring system. They perform various
checks that are independent of the Compa-
ny’s processes.
Group accounting acts as the central inter-
locutor for special technical questions and
complex reporting issues. If required, exter-
nal experts (auditors, qualified accounting
specialists, etc.) are consulted.
In addition, monitoring related to accounting
is executed by the controlling department of
the Company. All items and main accounts of
the income statement and the balance sheet
are reviewed regularly for accuracy and plau-
sibility. This is conducted both for the con-
solidated financial statements and for the in-
dividual financial statements of the Group’s
companies. Accounting-related data is mon-
itored monthly or on a quarterly basis, de-
pending on the frequency of its preparation.
The accounting-related risk management
system forms part of the Group’s risk man-
agement system. The risk owner responsible
for the area of risk ‘finance’ monitors risks
that are relevant for the accuracy of account-
ing-related data. Risks are identified on a
quarterly basis and are assessed and docu-
mented by the risk management committee.
Appropriate action is taken to monitor and
optimise accounting-related risks throughout
the alstria Group.
Description and assessment of risks
In accordance with alstria’s risk management
system all material risks inherent to the fu-
ture development of the Group’s position
and performance are described in this chap-
ter. The individual risks described relate to the
planning period from 2014 to 2016.
Strategic risks
Strategic risk management is concerned with
factors influencing the Company’s market
environment, its regulatory environment and
its strategic corporate organisation.
Market environment risks to the Group are
derived from macro-economic developments
and their impact on real estate markets. Unfor-
tunately, the impact on the situation of the
financial markets and on the future macroe-
conomic environment in Germany that may
result from the ongoing sovereign debt crisis in
Europe and the U.S. remains unclear. Compa-
red to last year, no direct impact on the overall
strategic risk situation that can be linked to
the future macroeconomic environment can
currently be identified.
As long as there is no substantial change in
the economic environment, the market envi-
ronment risk level will remain stable at low (L)
to medium (M).
Risks related to the Company’s legal en-
vironment result from changes to regula-
tions and laws. These may, in turn, have an
impact on the key regulatory requirements
as well as the corporate constitution of the
alstria companies. These are e.g. alstria of-
fice REIT-AG’s classification as a REIT, and a
currently planned stronger regulation of the
European investment industry by the EU Di-
rective on Alternative Investment Fund Man-
agers (AIFM Directive). The directive was
transposed into national law in mid-2013. It
is not yet clear whether alstria will fall under
the scope of the directive. If so, the new law
could result in new regulatory requirements,
resulting in higher expenses.
Overall, risks regarding the legal environment
are, like in the previous year, classified as low
(L).
Further risks exist as part of the strategic di-
rection of the business organization, due to
inefficient organisational structures and the
Company’s dependence on IT systems and
structures. Both the organisational structure
and the IT infrastructure support strategic
and operational objectives. The risk of strate-
gic corporate organization therefore remains
classified as low (L).
21
alstria Financial Report 2013 Group management report
Operational risks
alstria’s operational risk management deals
with property-specific risks and general busi-
ness risks. This includes, among others, va-
cancy risk, the credit worthiness of tenants
and the risk of falling market rents. Person-
nel-related risks such as loss of know-how
and competences due to fluctuation of staff
are also monitored in this risk area. The
Group applies various early warning indica-
tors to monitor these risks. Ongoing insur-
ance checks such as rent projections, vacancy
analyses, the control of the lease terms and
termination clauses are designed to help iden-
tify potential dangers and risks. An operation-
al risk, which could materialise as a result of
the sovereign debt crisis, is, as before, mainly
due to a potential shortfall of rental payments
from one or more major tenants. Due to the
fact that all of alstria’s main tenants are public
institutions or highly rated, the risk of shortfall
in payments is currently, and as in the previ-
ous year, limited (L).
Refurbishment projects
alstria realises a significant number of refur-
bishment projects. All risks related to these
projects are managed by extensive project
controlling and a related budget management
process. Potential risks are e.g. the risk of not-
in-time completion, risk of budget overrun, as
well as the risk of deficiencies in the construc-
tion. Unchanged to the end of the previous
reporting period the risk resulting from refur-
bishment projects is categorised at a moder-
ate level (M).
Employees
The skills and motivation of alstria’s employ-
ees are decisive factors in the Group’s success.
A risk of losing knowledge results from the
fluctuation of staff as well as from not recruit-
ing sufficiently qualified experts to fill vacan-
cies in the Group in good time. Both cases
could result in a shortfall of suitable experts
and key personnel, which could endanger the
Group’s competitive advantages in its mar-
kets as well as its further growth opportuni-
ties. alstria mitigates these risks through the
following measures: selective, needs-orient-
ed skills-development of the existing staff,
strengthening its image as an attractive em-
ployer, university marketing, promoting em-
22
ployee motivation through strong leadership
and corporate culture and profit-oriented var-
iable remuneration schemes. Overall, alstria
estimates the described risks to be at a low
level (L), which corresponds to the situation
at the end of the previous year.
IT security
The majority of our business processes are
supported by efficient IT systems. Any fault
affecting the reliability or security of the IT
system could lead to delays or interruptions
of operating activities. alstria protects itself
against IT risks by constant examination and
enhancement of the information technology
deployed. In addition, modern hardware and
software solutions and safeguards against at-
tacks are installed. Structural security meas-
ures are in place to protect the computer
centre. All data is backed up daily in an inter-
nal data depository, and in an external data
depository once a week. Workstations have
access restrictions so that employees are only
able to access the systems they need for their
work. Overall, therefore IT risks are assessed
to be unlikely to materialise. Equal to last
year’s assessment, their possible consequenc-
es are considered to be moderate (M).
Property transactions
alstria is exposed to risks related to the acqui-
sition and disposal of real estate properties.
Related risks are not revealing all or the full
extent of the risks and liabilities associated
with properties in the due diligence exami-
nation carried out or the risks associated with
or inherent to the valuation method used to
value the property. In case of the disposal of
real estate assets alstria usually gives certain
warranties to the potential purchaser regard-
ing factual and legal matters of the proper-
ty in question. It cannot be fully ruled out
that alstria’s management is not aware of a
risk covered by certain elements and warran-
ties given in the sales agreement. As a result,
there is generally a risk that alstria (as the sell-
er) may be charged for breach of warranty by
a prospective purchaser. From a purchasing
perspective, alstria is exposed to the risks that
hidden deficiencies on land and/or property
are not observed or unfavourable contractual
agreements are transferred to the Company,
resulting in additional future costs.
alstria Financial Report 2013 Group management report
Both in acquisition and selling proceedings
alstria responds to these risks by thorough
technical, legal and tax analysis with respect
to all relevant property and contractual is-
sues. It does so by employing internal and
external lawyers, tax advisors, architects,
construction engineers and other required
experts. As before, risks relating to transac-
tions of properties are assessed to be of a low
(L) to moderate (M) level.
Environmental risks
alstria is exposed to risks arising from en-
vironmental liabilities or possible damag-
es resulting from natural events like fire or
flooding. alstria’s buildings may contain un-
detected hazardous materials (such as asbes-
tos) to an unanticipated extent. It may fur-
ther be contaminated or otherwise affected
by environmental risks or liabilities, such as
pre-existing pollution and soil contamination.
Risk mitigation is implemented by a due-dil-
igence examination that alstria customarily
undertakes when acquiring new properties
in addition to a warranty issued by the seller.
Furthermore insurances covering the impacts
of natural catastrophes are in place. The en-
vironmental risks described are considered to
be at a low (L) level, same as in the previous
year.
Compliance risks
G-REIT legislation
alstria is registered as a German REIT-AG
(G-REIT) in the commercial register. The Ger-
man REIT segment allows alstria to offer a
high profile to investors and distinguish it-
self on the capital market as a REIT. The REIT
shares are traded at the Frankfurt Stock Ex-
change. The G-REIT status does not have any
influence on the admission to the Regulated
Market (Prime Standard).
Certain requirements have to be met by the
Company in order to qualify for and retain
its designation as a G-REIT. The most sig-
nificant requirements are as follows: The
G-REIT must be a stock corporation listed on
an organised market and its registered office
and management must be in Germany. Its
registered share capital must amount to at
least EUR 15 m. All shares must be voting
shares of the same class. Free float 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 profits as
resulting under German GAAP accounting
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 re-
corded under IFRS.
Due to the consistent monitoring of the com-
pliance with all described REIT criteria, the
risk of non-compliance is considered to be
low (L), as in the previous year REIT corpo-
rations are fully exempt from German cor-
porate income tax (KSt) and German trade
tax (GewSt). This tax exemption has been
applied with retrospective effect starting on
January 1, 2007.
Capital management
Capital and investment management activi-
ties are designed to maintain the Company’s
G-REIT status in order to support its business
activities and maximise shareholder value.
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 is-
sue new shares or make a capital repayment
to its shareholders. No changes were made to
the aims, guidelines and processes as at De-
cember 31, 2013 and December 31, 2012.
The capital structure is monitored by the
Company using key performance indicators
(KPIs) relevant for classification as a G-REIT.
The G-REIT equity ratio (the ratio of equi-
ty to the fair value of immovable assets) is
the most important KPI. Under the Group’s
strategy, the G-REIT equity ratio must be be-
tween 45 % and 55 %.
According to § 5 of the REIT Act, altria’s eq-
uity (as reported in its consolidated financial
statements) must not fall short of 45 % of
its immovable assets. If the minimum equity
ratio is, however, not satisfied for three con-
23
alstria Financial Report 2013 Group management report
secutive financial years, the exemption from
corporate income tax (KSt) and trade tax
(GewSt) ceases at the end of the third finan-
cial year.
The G-REIT equity ratio is 50.9 % on the
balance sheet date. Accordingly, alstria com-
plies with the minimum G-REIT equity ratio
requirement according to section 15 G-RE-
IT-Act (REITG). Nonetheless, the risk that al-
stria may fail to meet the minimum G-REIT
equity ratio of 45 % in the following three
consecutive years remains. As stated above
it would then face the prospect of losing its
status as G-REIT and its tax exemption. The
three-year forecast until December 31, 2016,
excludes the possibility that alstria will lose its
G-REIT status by falling shortfall of the 45 %
barrier.
respecting
Compliance risks
alstria is dependent on all employees and
management
the compliance
standards in place. alstria's business de-
pends on employees and the members of
the management complying with laws, pol-
icies and procedures as prescribed by docu-
mented policies, procedures and laws. If al-
stria's senior management fails to document
and reinforce the Company's policies and
procedures or employees commit criminal,
unlawful or unethical acts (including corrup-
tion), this could have a material adverse ef-
fect on alstria's business, financial condition
and results of operations. It would also harm
alstria's reputation in the real estate market
and thereby negatively affect future busi-
ness opportunities. alstria has implemented
a compliance organisation, which deals with
adequate and documented compliance rules
and regulations and provides training to all
employees concerning compliance-related
topics. The materialization of compliance
risks is assessed to be unlikely (L).
Legal risks
The Company is not involved in any major
lawsuits from any individual or other kind of
legal dispute outside of its day-to-day busi-
ness. Thus equal to the previous year, the risk
of legal disputes is classified as low (L).
24
Financial risks
Due to alstria’s refinancing strategy, the fi-
nancial risk situation is stable as compared to
the previous year’s reporting period.
The Group’s main financial instruments are
bank loans and derivative financial instru-
ments. The main purpose of the bank loans
is to finance alstria’s business activities. De-
rivative financial instruments include interest
swaps and caps. The purpose of these deriv-
ative financial instruments is to hedge against
interest risks arising from the Company’s
business activities and its sources of finance.
The main risks arising from the Group’s finan-
cial instruments are cash flow risks, interest
rate risks and liquidity risks. alstria’s current
debt ratio is approx. 52.7 %. This is a reason-
able rate compared to the average leverage
of German real estate companies. alstria’s
syndicated loan facility agreement allows for
a loan-to-value ratio (LTV) of up to 70 %.
After refinancing the main loan in financial
year 2013, alstria managed to fix the LTV at
53.4 % on the relevant test date. The risk of
a covenant breach was encountered effec-
tively.
According to plan the next refinancing of the
main part of alstria’s loans will be necessary in
2018. Thus, the risk of refinancing on unfa-
vourable terms is limited for the time being (L).
Interest rate risk
Interest rate risks result from fluctuations
in market interest rates. These affect the
amount of interest expenses in the financial
year and the market value of derivative finan-
cial instruments used by the Company.
alstria’s hedging policy allows the use of a
combination of plain vanilla swaps and caps
in order to limit the Company’s exposure
to interest rate fluctuations. It still provides
enough flexibility to allow for the disposal of
real estate assets, avoiding any cost linked to
an over-hedged situation. The interest base
for the financial liability (loan) is the three-
month EURIBOR, which is adjusted every
three months. A number of different deriv-
ative financial instruments were acquired to
manage the interest expense. The maturi-
ty of the derivative financial instruments is
linked to the term of maturity of the loans.
alstria Financial Report 2013 Group management report
Derivative financial instruments mainly re-
late to interest swaps, in which the Company
agrees to exchange the difference between
fixed and variable interest rate amounts with
its contract partners at specified intervals, as
calculated by reference to an agreed notional
principal amount. Interest caps were further
acquired in order to cap the interest at a set
maximum. If the maximum interest rate is
exceeded, the difference between the actual
interest rate and the cap rate is paid out. As
in the previous year the interest rate risk as
based on the described hedging strategy is at
present, classified as moderate (M).
Liquidity risk
One of alstria’s core processes is cash man-
agement. The Company manages its future
cash position and monitors its progress on a
daily basis. A cash-forecasting tool is used to
prevent liquidity risks. As a basis for analysis
this liquidity-planning tool makes use of the
expected cash flows from business activities
and the maturity of the financial investments.
Having implemented refinancing in 2013, the
major liquidity risk resulting from the balloon
repayment on the main syndicated loan fa-
cility was successfully averted. Since the new
syndicated loan facility will not be due un-
til mid-2020, the liquidity risk resulting from
repayment obligations is currently, as in the
previous year, mitigated (L).
Valuation risks
The fair value of the real estate properties
owned by the Group reflects the market val-
ue as determined by an independent apprais-
er. It can be subject to change in the future.
Generally, the market value of real estate
properties depends on a variety of factors,
some of which are exogenous and may not
be under alstria’s control. These are declining
rent levels, a decreasing demand or increas-
ing vacancy rates. Many qualitative factors
are also decisive in the valuation of a prop-
erty, including a property’s expected mar-
ket rents, its condition and its location. The
final assessment of the mandated appraiser
is, to a certain extent, discretionary and may
differ from the opinion of another appraiser.
Should the factors considered or assumptions
made in valuing a property change in order
to reflect new developments or for other rea-
sons, subsequent valuations of the respec-
tive property may result in a decrease in the
market value ascribed to such a property. If
such valuations reveal significant decreases in
market value compared to prior valuations,
the Company can incur significant revalua-
tion losses with respect to such properties.
Factors such as economic changes, interest
rate fluctuations and inflation may adversely
affect the value of the properties. To mini-
mise these risks, a regional diversification of
investment portfolios, a consistent focus on
the individual needs of tenants and a detailed
market research and analysis (broker reports)
is applied. In addition, the market value of all
of alstria’s assets is determined annually at
year-end by independent, internationally rec-
ognised experts. In summary, the risk of un-
expected devaluations is, as in the previous
year, classified as moderate (M).
Counterparty risk
alstria hedges a portion of its risk by apply-
ing third party instruments (interest rate de-
rivatives, property insurances and others).
alstria’s counterparties in these contracts are
internationally recognised institutions, which
are rated by the leading rating agencies. al-
stria reviews the ratings of its counterparties
on a regular basis in order to mitigate any
risk of default. The financial crisis has raised
doubts as to the reliability of rating agencies’
assessments. As a reaction to this objection,
alstria makes use of other sources of infor-
mation to challenge the rating agencies’ as-
sessments.
The Group is otherwise not exposed to any
significant credit risks. Hence same as last
year, they can be classified, as low (L).
Overall risk assessment by the
Management Board
alstria office REIT-AG consolidates and ag-
gregates all risks reported by the different
business units and functions following its risk
management policy. Compared to the previ-
ous year, the overall risk situation of alstria
remained stable. In financial year 2013 only
minor or immaterial changes were noted for
risks categorised as high (H) or medium (M)
25
alstria Financial Report 2013 Group management report
in alstria’s risk level matrix. At the end of the
year, risks categorised as ‘high’ accounted for
1.1 % (2012: 1.1 %) of all identified risks while
risks categorised as ‘medium’ accounted for
46.3 % (2012: 37.6 %) of all identified risks.
On the one hand this is due to the econom-
ic environment in Germany, which so far has
proven to be relatively stable despite the sov-
ereign debt crisis in some European countries
and the USA. On the other hand, the Com-
pany’s stable funding position, conservative
level of debt and the solid-REIT equity ratio
support this assessment.
Sufficient precautions have been taken
against identifiable risks. In our view, the risks
described in our aggregated risk report do
neither individually nor cumulatively threat-
en our ability to continue as a going concern,
considering their likelihood of occurrence and
impact level. This applies both to the single
Group companies and the Group.
Report on opportunities
Management of opportunities
alstria Group’s opportunities management
aims to identify and assess opportunities as
early as possible and to initiate appropriate
measures in order to take advantage of op-
portunities and transform them into business
success.
Growth and earnings opportunities of alstria
Group result both from the existing real estate
portfolio and the acquisition of properties,
which have a certain earnings potential. De-
pending on the level of a property’s life cycle,
opportunities may be found in the reposition-
ing and development, the strengthening of
tenant relationships or in selling the property.
The funding that is necessary for the imple-
mentation of these activities is safeguarded
by the financing activities of the Group. Here,
opportunities lie in ensuring sustainable fi-
nancing on favourable terms.
The evaluation of opportunities is partial-
ly carried out in the context of the annual
budget planning or on an ongoing or oc-
casional basis during the year. The process
starts with the careful analysis of the market
environment and the market opportunities of
the properties held in the portfolio. These in-
clude the assessment of different criteria like
tenant needs, the category of properties, as
well as the regulatory changes. Regular re-
porting supports the monitoring of growth
initiatives within the respective budget and
planning approval processes. alstria office
REIT-AG’s Management Board is regularly
(usually at least via a monthly report) updat-
ed on the status and progress of the initiatives
being implemented. In addition, the real es-
tate operations department receives monthly
reports in which the planned costs and rev-
enues are compared to the actual budget
consumption and actual revenues. Coordi-
nated by the central controlling department
the Management Board is provided with an
indicator-based report, in which the planned
performance indicators are compared to the
actual figures. In addition, the financial and
liquidity planning as well as forecasts are up-
dated and changes to the project scope are
made transparent.
26
alstria Financial Report 2013
Group management report
Opportunities relating to
real estate acquisitions
The location of a property is essential for its
attractiveness. Opportunities arise when the
regional market is characterised by favour-
able demographics and positive real estate
dynamics. Together with an optimal proper-
ty management this results in opportunities
for long-term capital appreciation. alstria’s
acquisition strategy aims to identify prop-
erties with the described opportunity struc-
ture. The acquisition will therefore only be
performed if the investment volume offers
prospects of achieving a sustainable increase
in value.
Opportunities relating to
tenant relationships
A structured and active property and as-
set management ensures the quality of our
leasing service and is the basis for a sustain-
able tenant relationship. Opportunities arise
through a flexible response to the needs and
requirements of existing or potential ten-
ants. alstria has the knowledge and resourc-
es to provide solutions and to implement the
requirements for the tenants of the rental
property. This gives rise to opportunities for
the generation of sustainable and long-term
leases.
Opportunities arising from
real estate development
As a long-term oriented owner of real estate
alstria’s property portfolio also entails aging
buildings that require refurbishment or repo-
sitioning. The modernisation of a property
opens up the opportunity for value creation
by reshaping the asset for the next 20 to 30
years and strengthens its future attractive-
ness in the market and for tenants.
Opportunities from financing
The Group's financing strategy is focused on
optimal provision of funds to invest in new
properties and development projects. Op-
portunities arise from optimisation of the
financing terms. This requires the imple-
mentation of long-term and flexible fund-
ing at favourable conditions as well as the
safeguarding of the financial covenants at
all times. A significant opportunity from fi-
nancing also arises out of the low debt ratio
(LTV from bank financing), which is currently
at 50.9 %, representing a comfortable base
for future funding and growth.
Overall Summary of the
Opportunities Report
The current refinancing position of the Group
safeguards a stable financial position at fa-
vourable interest rates until mid- 2018. Con-
cerning revenues, alstria benefits from long-
term rental agreements of an average lease
length of approx. 6.8 years and potential in-
creases in rents due to decreases in vacan-
cy rates and adjustments to the consumer
price index. In addition, the Group possesses
a range of properties available for attractive
and value adding refurbishment opportuni-
ties. alstria’s portfolio is well balanced and
contains many first-class anchor buildings
with high-quality tenants.
Therefore, alstria is well positioned to contin-
ue its buy-and-manage strategy and to iden-
tify and implement relevant future market
opportunities.
alstria’s core competence is the management
of assets. The asset repositioning and the re-
furbishment alstria is continuously undertak-
ing, both as a part of joint ventures and on its
own, will strengthen the basis for an increase
in organic value across the portfolio.
27
alstria Financial Report 2013 Group management report
SUSTAINABILITY REPORT
MANDATORY DISCLOSURES
In 2013, alstria published its fourth sustaina-
bility report. This report shows a continuous
improvement of alstria’s reporting frame-
work, and the scope of coverage since the
first sustainability report. It provides informa-
tion about alstria’s key achievements within
its sustainability framework and gives the
reader a deeper insight into the respective
operational impacts. The key values within
the framework expressed for each and every
stakeholder group are alstria’s main drivers to
consider a sustainable approach in every de-
cision made at every level of the organisation.
For further information on our sustainabili-
ty engagement and targets, please refer to
our annual sustainability report 2013, which
is available on our website » http://www.al-
stria.com/en/sustainability/sustainability-re-
ports/date/2013/ and/or to » Part I/II – Com-
pany Report of the Annual Report 2013.
Disclosures in accordance with
Section 315 para. 4 of the
German Commercial Code (HGB)
for financial year 2013 and
the explanatory report of the
Management Board
Composition of
subscribed capital
As at December 31, 2013, alstria’s share capi-
tal 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 deci-
sive for the shareholder’s share in the Com-
pany’s profit. The individual rights and duties
of the shareholders result from the provisions
of the German Stock Corporation Act (Ak-
tiengesetz, 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
requirements and alstria’s articles of associa-
tion, which does not restrict either of these
activities. For cases falling under Section 136
AktG, the voting rights of the affected shares
are excluded by law. No other restrictions
concerning voting rights or the transfer of
shares apply on the reporting date or, if aris-
ing from agreements between shareholders,
are not known to the Management Board.
Shareholdings that exceed
10 % of the voting rights
alstria was not aware of any shareholders di-
rectly or indirectly holding an excess of 10 %
of the voting rights as at December 31, 2013.
Shares with special rights
alstria has not issued any shares with special
rights granting control rights.
28
alstria Financial Report 2013 Group management report
Nature of voting rights control if
employees have a share in capital
and do not directly exercise their
right of control
Equal to other shareholders, employees,
holding alstria shares, exercise their control
rights in accordance with applicable law and
the articles of association.
Appointment and dismissal of Man-
agement Board and amendments to
the articles of association
alstria’s Management Board consists of one
or more members who are appointed or dis-
missed by the Supervisory Board in accord-
ance with Sections 84 and 85 AktG. The arti-
cles of association do not contain any special
provisions in this respect. Pursuant to Sec-
tion 84 AktG, members of the Management
Board are appointed for a maximum term of
five years. Reappointment or extension of
the term of office is permitted for a maxi-
mum of five years, in each case.
Amendments to the articles of association are
made pursuant to Sections 179 and 133 AktG.
The Supervisory Board is furthermore author-
ised to make changes in, and amendments
to, the articles of association that merely
affect its wording without the shareholders
passing a resolution in general meeting (Sec-
tion 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 AktG, shareholders may
pass resolutions regarding such amendments
at a general meeting with a simple majority
of the votes cast and a simple majority of
the share capital represented. Insofar as law
prescribes a larger majority, such majority
shall be decisive. The articles of association
were last amended by resolution of the An-
nual General Meeting on May 29, 2013: The
provisions regarding Authorized Capital 2012
were replaced by the provisions regarding
Authorized Capital 2013 and the provisions
regarding Conditional Capital 2010 were
replaced by the provisions regarding Condi-
tional Capital 2013.
Authority of Management Board
regarding the issue and buyback
of shares
1. Authorised Capital
Subject to the approval of the Superviso-
ry Board the articles of association author-
ise the Management Board to increase the
share capital by issuing new bearer shares
against contribution in cash and/or kind
once or repeatedly up to a total amount of
EUR 39,466,743.00 until November 28,
2014. Further details are governed by Section
5 para. 3 and 4 of the articles of association.
2. Conditional Capital
alstria controls four conditional capitals (pur-
suant to Sections 192 et seq. AktG, which are
regulated in Sections 5 para. 5 to 8 of the
Company’s articles of association.
a) Conditional Capital 2013
The share capital is conditionally increased by
an amount of up to EUR 38,000,000.00 by
the issuance of up to 38,000,000 no par val-
ue bearer shares. The Management Board is
authorised to stipulate the profit entitlement
for the new shares issued on the basis of the
exercise of options or conversion rights or
the fulfilment of a conversion obligation at
variance from Section 60 para. 2 AktG. The
conditional capital increase is only carried out
insofar as the holders of option rights or con-
version rights or those holders with conver-
sion obligations from bonds with warrants or
convertible bonds, profit participation rights
or participating bonds, which are issued on
the basis of the authorisation resolved by the
shareholders in the general meeting on May
29, 2013 utilise their option rights or conver-
sion rights or, insofar as such holders have
conversion obligations, such holders fulfil
their conversion obligations, unless a cash set-
tlement is granted or treasury shares are used
to fulfil 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
issuing of up to 515,625 no par value bear-
er shares. The sole purpose of the condition-
al capital increase is to grant shares to the
holders of subscription rights (stock options),
which alstria issued in accordance with the
29
alstria Financial Report 2013 Group management report
3. Purchase of treasury shares
The shareholders in general meeting on
June 8, 2011 authorised the Management
Board to acquire shares until June 7, 2016 up
to a total of 10 % of the Company’s share
capital at the time of issuing of the authorisa-
tion. The acquired shares and other treasury
shares that are in the possession of or are at-
tributed to alstria pursuant to Sections 71a et
seq. AktG may never amount to more than
10 % of the share capital. Shares may be pur-
chased through a stock exchange, by means
of a public offer to all shareholders or by us-
ing derivatives (put or call options or a com-
bination of both).
Significant agreements, which take
effect upon a change of control
of the Company
A significant syndicate loan agreement of al-
stria entitles the creditor to declare the loan
due for payment should any person or com-
pany acquire – directly or indirectly – 50 %
of the voting rights or a controlling influence
in alstria.
Compensation agreements with
Management Board members and
employees in case of a takeover bid
No compensation agreements were entered
into with Management Board members or
employees in case of a takeover bid.
These provisions comply with statutory re-
quirements or are reasonable and common
practice for comparable publicly listed com-
panies. They are not intended to hinder po-
tential takeover bids.
authorisation of the annual general meet-
ing held on March 15, 2007. The conditional
capital increase is only carried out insofar as
the holders exercise their stock options and if
no treasury shares are used to fulfil the stock
options. The new shares shall participate in
the Company’s profits from the beginning of
the financial year in which they come into ex-
istence through exercise of the option.
c) Conditional Capital III
The share capital is conditionally increased
by an amount of up to EUR 336,874.00 by
issuing of up to 336,874 no par value bear-
er shares. The conditional capital increase is
used solely to grant shares to the holders of
convertible profit participation certificates,
which were issued by the Company until
March 14, 2012 in accordance with the au-
thorisation of the general meeting held on
March 15, 2007. The conditional capital in-
crease is only carried out insofar as issued
convertible profit participation certificates
are converted into shares of the Company
and no treasury shares are used to satisfy the
certificates. The new shares shall participate
in the Company’s profits from the beginning
of the financial year in which they come into
existence through conversion of the certifi-
cates.
d) Conditional Capital III 2012
Furthermore share capital
is condition-
ally increased by an amount of up to
EUR 500,000.00 by issuing up to 500,000 no
par value bearer shares. The conditional capi-
tal increase shall be used solely to grant shares
to the holders of convertible profit participa-
tion certificates, which were issued by the
Company until April 23, 2017 in accordance
with the authorisation of the general meet-
ing held on April 24, 2012. The conditional
capital increase is only carried out insofar as
issued convertible profit participation certifi-
cates are converted into Company shares and
no treasury shares are used to satisfy the cer-
tificates. The new shares shall participate in
the Company’s profits from the beginning of
the financial year in which they come into ex-
istence through conversion of the certificates.
30
alstria Financial Report 2013 Group management report
ADDITIONAL GROUP
DISCLOSURES
Employees
As at December 31, 2013, alstria had 63 em-
ployees (December 31, 2012: 59). The annual
average number of employees was 61 (previ-
ous year: 55). These figures exclude Manage-
ment Board members.
Remuneration report
Management Board members’ compensation
comprises a fixed and a variable component
linked to the Company’s operating perfor-
mance. 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 a
fixed remuneration.
The remuneration report (appendix to the
Group management report 2013), contain-
ing details of the principles for the definition
of the Management Board and Supervisory
Board remuneration, forms an integral part of
the audited Group management report.
31
alstria Financial Report 2013 Group management report
REPORTS ON POST-BALANCE SHEET DATE EVEN TS
AND EXPECTED DEVELOPMEN TS
Outlook for the alstria-Group
Based on the expected stability of the Ger-
man economy and the real estate market, the
Company does not expect significant chang-
es in alstria’s direct environment. However,
changes other than the expected concerning
interest rates, further property acquisitions or
disposals or other changes in the assumptions
for 2014 could have an impact on the pro-
jections.
Due to the disposal of eight properties
in financial year 2013 and taking into ac-
count the already contracted rent for 2014,
alstria is expecting revenues to decrease by
around EUR 2 m to EUR 102 m compared to
EUR 104 m revenues in 2013.
For fiscal year 2014, the Company is expect-
ing an FFO of around EUR 47 m. The increase
in FFO compared to the FFO of EUR 45 m
achieved in 2013 is mainly due to the Com-
pany’s new finance structure, resulting in
lower financing costs.
Since the Company pays out a significant part
of its funds from operations as dividends, fu-
ture external growth largely depends on the
Company’s ability to raise additional equity.
Consequently, further portfolio growth is
highly dependent on the development of the
global equity markets and is therefore diffi-
cult to predict for a longer period of time.
Hamburg, February 14, 2014
Report on post-balance sheet
date events
No events occurred after the balance sheet
date, which had a significant impact on the
earnings, financial and assets position of the
alstria-Group.
Report on expected
developments
The report on expected developments con-
tains statements relating to anticipated fu-
ture developments. The development of the
Company depends on various factors. Some
of these factors are beyond the Company’s
sphere of influence. Statements about ex-
pected developments are based on current
assessments and are hence, by their very na-
ture, exposed to risks and uncertainty. The
actual development of the alstria Group may
differ positively or negatively from the pre-
dicted development in the statements of this
report.
Expected economic development
Based on a strong German economy and
the expected recovery in the Euro-zone, the
German government is forecasting a 1.8 %
growth rate of its economy in 2014. This de-
velopment is expected to positively impact
the labour market, resulting in an increase in
the rate of employment, especially due to im-
migrations, and a further growth of income
levels.
Development of the real estate
market: Outlook for 2014
The relevance of real estate as investment
class will persist at a high level in 2014, due to
the continuing very low interest rate level. On
the investment market, the demand for core
assets is expected to remain high and will
highly exceed the supply. Therefore investor
demand for value-add properties could accel-
erate, although the biggest transactions still
should take place in the core market. Con-
sidering the continuing request for first-class
office space in central locations, top rents are
likely to increase slightly in 2014.
32
alstria Financial Report 2013 Consolidated financial statements
Detail index
Consolidated
financial statements
36 Consolidated income statement
37
Consolidated statement
of comprehensive income
Consolidated statement
of financial position
Consolidated statement
of cash flows
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
1 Coporate Information
38
40
42
44
44
44
2 Basis of preparation
45
3 Changes in accounting policies
and mandatory disclosures
51
4 Basis of consolidation
52
5 Key judgements and estimates
54
6 Seasonal or economic effects
on business
54
7 Summary of significant
accounting policies
62
8 Segment reporting
9 Notes to the consolidated
income statement
62 9.1 Revenues
62 9.2 Income and expenses from
passed-on operating expenses
62 9.3 Real estate operating expenses
63 9.4 Administrative expenses
9.5 Personnel expenses
63
9.6 Other operating income
63
9.7 Other operating expenses
64
9.8 Financial and valuation result
64
9.9 Net result on the disposal of
65
investment property
65
9.10 Income taxes
33
alstria Financial Report 2013
Consolidated financial statements
Detail index
Consolidated
financial statements
10 Notes to the consolidated
statement of financial position –
assets
65
67
68
69
69
69
70
72
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 financial instruments
10.8 Cash and cash equivalents
11 Notes to the consolidated
statement of financial position –
equity and liabilities
72 11.1 Equity
73 11.2 Financial liabilities
76 11.3 Provisions
77 11.4 Trade payables and other liabilities
78
78
11.5 Trust assets and liabilities
11.6 Deferred taxes
78
12 Other notes
12.1 Compensation of Management
Board and Supervisory Board
79
12.2 Other financial commitments
and contingencies
80
12.3 Consolidated cash flow statement
13 Related party relationships
13.1 Preliminary remarks
13.2 Remuneration of key
80
80
management personnel
80
13.3 Related party transactions
34
alstria Financial Report 2013 Consolidated financial statements
81 14 Earnings per share
81 15 Dividends paid
81 16 Employees
82 17 Stock option programme
82
18 Share-based remuneration
83
19 Convertible profit participation
rigths programme
20 Financial risk management
20.1 Managing financial risk factors
20.2 Capital management
20.3 Determination of fair value
85
89
92
92 21 Significant events after the end
of the reporting period
92 22 Utilisation of exempting
provisions
23 Disclosures pursuant to
Wertpapierhandelsgetz
(German Securities Trading Act)
93
93
94
23.1 Ad - hoc - announcement
23.2 Directors´ dealings
23.3 Voting right notifications
96
24 Declaration of compliance
pursuant to Section 161 AktG
(Aktiengesetz: German Stock
Corporation Act)
96
25 Auditor´s fees
96
26 Management Board
96
27 Supervisory Board
35
alstria Financial Report 2013 EUR k
Consolidated profit for the period
Items which might be classified to the income
statement in a future period:
Cash flow hedges
Reclassification from cash flow hedging reserve
Other comprehensive income for the period:
Total comprehensive income for the period:
Total comprehensive income attributable to:
Shareholders
10.7
10.7
2013
38,945
11,820
2,988
14,808
53,753
2012
39,911
– 5,363
986
– 4,377
35,534
53,753
35,534
Consolidated financial statements
Consolidated
financial statements
CONSOLIDATED INCOME STATEMEN T
for the period from January 1 to December 31, 2013
for the period from January 1 to December 31, 2013
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 result from fair value adjustments on invest-
ment property
Gain on disposal of investment property
Net operating result
Net financial result
Share of the result of joint venture
companies accounted for at equity
Net loss from fair value adjustments
on financial derivatives
Pre-tax income (EBT)
Income tax expenses
Consolidated profit
Attributable to:
Shareholders
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
4
9.8
9.10
2013
104,224
– 513
– 10,462
93,249
– 5,325
– 7,790
3,932
– 111
27
1,398
85,380
2012
101,286
– 778
– 10,398
90,110
– 5,722
– 6,849
3,160
– 1,036
– 1,876
369
78,156
– 39,116
– 36,085
273
– 7,554
38,983
– 38
38,945
– 734
– 1,380
39,957
– 46
39,911
38,945
39,911
14
14
0.49
0.46
0.51
0.51
36
alstria Financial Report 2013 for the period from January 1 to December 31, 2013
for the period from January 1 to December 31, 2013
Consolidated financial statements
CONSOLIDATED STATEMEN T OF COMPREHENSIVE INCOME
EUR k
Consolidated profit for the period
Items which might be classified to the income
statement in a future period:
Cash flow hedges
Reclassification from cash flow hedging reserve
Other comprehensive income for the period:
Total comprehensive income for the period:
Total comprehensive income attributable to:
Shareholders
10.7
10.7
2013
38,945
11,820
2,988
14,808
53,753
2012
39,911
– 5,363
986
– 4,377
35,534
53,753
35,534
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 result from fair value adjustments on invest-
ment property
Gain on disposal of investment property
Net operating result
Net financial result
Share of the result of joint venture
companies accounted for at equity
Net loss from fair value adjustments
on financial derivatives
Pre-tax income (EBT)
Income tax expenses
Consolidated profit
Attributable to:
Shareholders
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
4
9.8
9.10
2013
104,224
– 513
– 10,462
93,249
– 5,325
– 7,790
3,932
– 111
27
1,398
85,380
273
– 7,554
38,983
– 38
38,945
2012
101,286
– 778
– 10,398
90,110
– 5,722
– 6,849
3,160
– 1,036
– 1,876
369
78,156
– 734
– 1,380
39,957
– 46
39,911
– 39,116
– 36,085
38,945
39,911
14
14
0.49
0.46
0.51
0.51
37
alstria Financial Report 2013 Consolidated financial statements
CONSOLIDATED STATEMEN T OF FINANCIAL POSITION
as at December 31, 2013
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
Notes
2013
2012
10.1
10.2
10.3
10.4
10.7
10.5
10.6
10.6
10.7
10.6
10.8
1,632,362
1,622,988
21,001
5,156
472
32,474
18,183
5,334
467
403
1,691,465
1,647,375
0
3,708
89
644
6,991
82,782
252
94,214
10,010
3,656
89
403
6,812
118,548
252
139,518
Total assets
1,785,679
1,786,893
38
alstria Financial Report 2013
as at December 31, 2013
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
Derivatives
Other receivables
Cash and cash equivalents
thereof restricted
Total current assets
Accounts receivable from joint ventures
Notes
2013
2012
1,632,362
1,622,988
10.1
10.2
10.3
10.4
10.7
10.5
10.6
10.6
10.7
10.6
10.8
1,691,465
1,647,375
21,001
5,156
472
32,474
0
3,708
89
644
6,991
82,782
252
94,214
18,183
5,334
467
403
10,010
3,656
89
403
6,812
118,548
252
139,518
Consolidated financial statements
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
Provisions
Other liabilities
Total non-current liabilities
Current liabilities
Short-term loans
Trade payables
Profit participation rights
Provisions
Other current liabilities
Total current liabilities
Total liabilities
Notes
11.1
2013
2012
78,933
730,486
– 7,329
42,024
844,114
822,486
25,963
3,244
1,052
78,933
769,412
– 22,137
3,079
829,287
882,105
35,080
5,191
7,129
852,745
929,505
73,886
3,474
468
2,015
8,977
88,820
941,565
9,986
3,735
345
0
14,035
28,101
957,606
11.2
10.7
11.3
11.4
11.2
11.4
19
11.3
11.4
Total assets
1,785,679
1,786,893
Total equity and liabilities
1,785,679
1,786,893
39
alstria Financial Report 2013
Consolidated financial statements
CONSOLIDATED STATEMEN T OF CASH FLOWS
for the year ended December 31, 2013
EUR k
1. Cash flows from operating activities
Consolidated profit for the period
Unrealised valuation movements
Interest income
Interest expense
Result from income taxes
Other non-cash expenses (+)
Notes
2013
2012
9.8
9.8
9.10
38,945
39,911
7,254
– 317
3,990
– 656
39,432
36,741
38
708
46
2,530
– 369
402
Gain (–)/loss (+) on disposal of investment properties
9.9
– 1,398
Depreciation and impairment of fixed assets (+)
10.3 10.4
549
Increase (–)/decrease (+) in trade receivables and other assets
that are not attributed to investing or financing activities
Increase (+)/decrease (–) in trade payables and other liabilities
that are not attributed to investing or financing activities
Cash generated from operations
Interest received
Interest paid
Income taxes paid
Net cash generated from operating activities
2. Cash flows from investing activities
Acquisition of investment properties
Proceeds from the sale of financial 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
Payments for capital contribution in joint ventures
– 270
– 914
– 1,652
83,289
– 787
80,894
317
656
– 33,454
– 35,769
– 38
– 46
50,114
45,735
– 58,506
– 107,125
51,040
11,080
– 272
– 376
826
– 3,370
– 251
– 571
25,212
0
Proceeds from the repayment of loans granted to joint ventures
0
1,771
Net cash used in investing activities
12.3
– 10,658
– 69,884
40
alstria Financial Report 2013 Consolidated financial statements
Notes
2013
2012
EUR k
Notes
2013
2012
9.8
9.8
9.10
7,254
– 317
38
708
549
3,990
– 656
46
2,530
– 369
402
38,945
39,911
Cash received from equity contributions
3. Cash flows from financing activities
39,432
36,741
Proceeds from the issue of a convertible bond
Payment of transaction costs due to the issue of shares
Proceeds from issuing of bonds and taking on loans
Payments of dividends
Payments for the acquisition and termination of
financial derivatives
0
0
544,100
11.2
79,400
61,066
– 1,310
42,500
0
15
– 39,467
– 34,705
– 46,512
– 10,002
– 270
– 914
Net cash generated from financing activities
12.3
– 75,222
46,689
Payments due to the redemption of bonds and borrowings
Payments of transaction costs
– 606,592
– 10,317
– 6,151
– 543
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 252 k
– 35,766
118,548
22,539
96,009
10.8
82,782
118,548
for the year ended December 31, 2013
EUR k
1. Cash flows from operating activities
Consolidated profit for the period
Unrealised valuation movements
Interest income
Interest expense
Result from income taxes
Other non-cash expenses (+)
Gain (–)/loss (+) on disposal of investment properties
9.9
– 1,398
Depreciation and impairment of fixed assets (+)
10.3 10.4
Increase (–)/decrease (+) in trade receivables and other assets
that are not attributed to investing or financing activities
Increase (+)/decrease (–) in trade payables and other liabilities
that are not attributed to investing or financing activities
Cash generated from operations
Interest received
Interest paid
Income taxes paid
Net cash generated from operating activities
2. Cash flows from investing activities
Acquisition of investment properties
Proceeds from the sale of financial 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
Payments for capital contribution in joint ventures
– 1,652
83,289
– 787
80,894
317
656
– 33,454
– 35,769
– 38
– 46
50,114
45,735
– 58,506
– 107,125
51,040
11,080
– 272
– 376
826
– 3,370
– 251
– 571
25,212
0
Proceeds from the repayment of loans granted to joint ventures
0
1,771
Net cash used in investing activities
12.3
– 10,658
– 69,884
41
alstria Financial Report 2013 Consolidated financial statements
CONSOLIDATED STATEMEN T OF CHANGES IN EQUITY
for the period from January 1 to December 31, 2013
Notes
Share
capital
Capital
surplus
Hedging
reserve
Retained
earnings
Total
equity
78,933
769,412
– 22,137
3,079
829,287
EUR k
As at Jan. 1, 2013
Changes in the
financial year 2013
Consolidated profit
Other comprehensive income
Total comprehensive income
Payments of dividends
Share-based remuneration
15
19
0
0
0
0
0
0
0
0
– 39,467
541
0
38,945
14,808
14,808
0
38,945
38,945
14,808
53,753
0
0
0
0
– 39,467
541
As of Dec. 31, 2013
11.1
78,933
730,486
– 7,329
42,024
844,114
42
alstria Financial Report 2013
Consolidated financial statements
for the period from January 1 to December 31, 2012
Notes
Share
capital
Capital
surplus
Hedging
reserve
Retained
earnings
Total
equity
71,704
751,084
– 17,760
– 36,833
768,195
EUR k
As at Jan. 1, 2012
Changes in the
financial year 2012
Consolidated profit
Other comprehensive income
Total comprehensive income
Payments of dividends
Share-based remuneration
15
19
0
0
0
0
39,911
– 4,377
– 4,377
0
39,911
0
0
0
0
0
– 34,705
506
39,911
– 4,377
35,534
– 34,705
506
60,948
–1,310
118
0
0
0
0
0
0
0
0
0
0
Proceeds from shares issued
11.1
7,170
53,778
Transaction costs due to issue
of shares
11.1
Conversion of convertible
participation rights
0
– 1,310
59
59
As of Dec. 31, 2012
11.1
78,933
769,412
– 22,137
3,079
829,287
43
alstria Financial Report 2013
Consolidated financial statements
Notes to the consolidated
financial statements
1 Corporate information
alstria office 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 ob-
jective is the acquisition, management, oper-
ation and sale of owned real estate proper-
ty, as well as the holding of participations in
enterprises, which acquire, manage, operate
and sell owned property. All of the afore-
mentioned objectives are subject to the con-
ditions of the G-REIT Act legislation.
alstria office REIT-AG was transformed into a
German Real Estate Investment Trust (G-RE-
IT) in the financial year 2007 and was regis-
tered 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 cor-
porate income tax and trade tax. Hence, al-
stria office REIT-AG has been exempt from
tax with retrospective effect since January 1,
2007.
The Company’s registered office and address
is Bäckerbreitergang 75, 20355 Hamburg,
Germany. Registration was made in the com-
mercial register at the local court of Hamburg
under HRB No. 99204.
The Company’s Management Board pre-
pared the consolidated financial statements
of alstria office REIT-AG (hereinafter also re-
ferred to as the ‘Company’ or ‘alstria office
REIT-AG’) as at December 31, 2013. It passed
resolution on their publication and submis-
sion to the Supervisory Board on February
14, 2014.
The financial year ends on December 31 of
each calendar year.
44
2 Basis of preparation
The consolidated financial statements of al-
stria office REIT-AG and its subsidiaries (to-
gether ‘the Group’) have been prepared in
accordance with the International Financial
Reporting Standards (IFRS) of the Interna-
tional Accounting Standards Board (IASB),
including the interpretations of the standards
(IFRIC). All IFRS and IFRIC were observed as
adopted and prescribed by the EU as of the
reporting date.
The consolidated financial statements have
been prepared under the historical cost con-
vention method except for investment prop-
erty (land and buildings) and financial instru-
ments that have been measured at fair value
through profit or loss.
The preparation of financial statements in
conformity with IFRS requires the use of
certain critical accounting estimates. It also
requires management to exercise its judge-
ment in the process of applying the Group’s
accounting policies. Areas involving a higher
degree of judgement or complexity, or items
where assumptions and estimates have a sig-
nificant impact on the consolidated financial
statements, are disclosed in » Note 5.
The consolidated financial statements are
presented in euros. All values are rounded to
the nearest thousand (EUR k) except when
otherwise indicated.
The consolidated financial statements pre-
sented in this report were prepared for the pe-
riod from January 1 to December 31, 2013.
All items are summarised in the consolidat-
ed statement of financial position and the in-
come statement. They are commented on in
the notes to the financial statements.
Assets and liabilities are classified as non-cur-
rent and current, respectively. Current items
are defined as items that are due in less than
one year and vice versa.
alstria Financial Report 2013 Consolidated financial statements
3 Changes in accounting
policies and mandatory
disclosures
Effects resulting from new and
amended IFRS
alstria office REIT-AG prepares its consol-
idated financial statements, in accordance
with Section 315a of the German Commer-
cial Code (HGB), under those IFRS endorsed
by the European Commission for use in the
European Union. The following paragraphs
describe the IFRS published by the IASB and
endorsed for application in the EU that were
applied for the first time during the reporting
period. Thereafter new Standards and Inter-
pretations issued by the IASB at the reporting
date are described which have not been ap-
plied early, as their application is either not
mandatory or endorsement by the European
Commission is still pending or which are not
relevant for the consolidated financial state-
ments of alstria office REIT-AG.
The following new standards and amend-
ments to standards are mandatory for the
first time for the financial year beginning on
January 1, 2013:
EU endorsement
until
Dec. 31, 2013
Standards/
Interpretationen Content
Applicable for
financial years
beginning
on/after
Dec. 11, 2012
IFRS 13
Fair value measurement
Jan. 1, 2013
Effects
Notes
disclosure
Dec. 11, 2012
Mar. 4, 2013
Dec. 13, 2012
Jun. 5, 2012
Dec. 11, 2012
Jun. 5, 2012
Amendments
to IFRS 1
Amendments
to IFRS 1
Amendments
to IFRS 7
Amendments
to IAS 1
Amendments
to IAS 12
Amendments
to IAS 19
Severe hyperinflation and removal
of fixed dates for first-time adopters Jan. 1, 2013
None
Government loans
Jan. 1, 2013
None
Disclosures – offsetting financial
assets and financial liabilities
Jan. 1, 2013
Presentation of financial statements
Jul. 1, 2012
Notes
disclosure
OCI
disclosure
Deferred tax: Recovery of
underlying assets
Amendments to IAS 19,
‘Employee benefits’
Jan. 1, 2013
None
Jan. 1, 2013
None
Dec. 11, 2012
IFRIC 20
Stripping costs in the production
phase of a surface mine
Jan. 1, 2013
None
Mar. 27, 2013
Improvements
to IFRSs
Improvements to IFRSs
2009 – 2011
Jan. 1, 2013
None
45
alstria Financial Report 2013
Consolidated financial statements
Standards, interpretations and
amendments to standards and
interpretations initially applied
in the reporting period with an
impact on the amounts and
disclosures reported
› IFRS 13 Fair Value Measurement
The Group firstly applied IFRS 13 in the cur-
rent year. IFRS 13 establishes a single source
of guidance for fair value measurements and
disclosures about fair value measurements.
The scope of IFRS 13 is broad; it applies
to both items classified as financial instru-
ments as well as non-financial instruments.
It applies to the latter if other IFRSs require
or permit fair value measurements and dis-
closures about fair value measurements of
these items with some limited exceptions.
Exceptions are share-based payment trans-
actions that are within the scope of IFRS 2
‘Share-based Payment’, leasing transactions
that are within the scope of IAS 17 ‘Leases’
and similar measurement bases, such as net
realisable value in IAS 2 ‘Inventories’ or val-
ue in use in IAS 36 ‘Impairment of Assets’.
IFRS 13 defines fair value as the price that
would be received upon disposal of an asset
or the price paid to transfer a liability in an
orderly transaction in the principal (or most
advantageous) market on the measurement
date and under current market conditions.
Fair value under IFRS 13 is an exit price,
regardless of whether that price is directly
observable or estimated using another val-
ua-tion technique. Furthermore, IFRS 13 re-
quires extensive disclosures.
IFRS 13 is effective for annual periods be-
ginning on or after January 1, 2013 and will
be prospectively applied. In addition tran-
sitional provisions have been given to en-
tities affected in that they need not apply
the disclosure requirements set out in the
standard for reporting periods prior to the
initial application of the standard. In ac-
cordance with this, the Group has not made
any disclosures as required by IFRS 13 for
the comparative period 2012 (please see
» notes 7, 10.1 and 20.3 for the 2013 disclo-
sures). The standard requires the inclusion
of the company’s own credit risk (debt valu-
46
ation adjustment or DVA) in the valuation of
derivative financial instruments for the first
time. This has an immaterial impact on the
total value of the Group’s financial deriva-
tives. Other than the additional disclosures,
the application of IFRS 13 has not had any
material impact on the amounts recognised
in the consolidated financial statements.
› Amendment to IFRS 7 ‘financial
instruments: Disclosures’ –
Offsetting financial assets and
financial liabilities
The IASB has revised the requirements for
offsetting financial assets and financial li-
abilities and as a result, published amend-
ments to IFRS 7 ‘financial instruments:
disclosure’. 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 retro-
spectively 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 IAS 1 ‘Presentation
of financial statements’
On June 16, 2011, the International Ac-
counting Standards Board (IASB) published
amendments to IAS 1. The amendments in-
troduce new obligations concerning the re-
porting of other comprehensive results. The
amendments to IAS 1 retain the ‘one or two
statement’ approach at the entity’s discretion
and only revise the way other comprehen-
sive income is presented. The changes re-
quire separate subtotals for those elements,
which may be reclassified into profit and
loss, and those elements that will not. The
amendments are applicable to annual peri-
ods beginning on or after July 1, 2012. The
amendments resulted in selective effects
concerning the presentation of the consoli-
dated statement of comprehensive income.
Apart from the effects and additional dis-
closure requirements of the fore mentioned
standards, alstria office REIT-AG did not ap-
ply any standards or interpretations for the
first time in the financial year 2013, which
had an impact on the amounts and disclosure
reported in the reporting period.
alstria Financial Report 2013 Consolidated financial statements
Standards, interpretations and
amendments to standards and
interpretations initially applied
in the reporting period without
impact on the amounts and dis-
closures reported
›Amendments to IFRS 1 ‘Severe hyper-
inflation and removal of fixed dates
for first - time adopters’
The amendment is generally applicable for
financial years starting on July 1, 2011 or lat-
er but was allowed to be applied not before
January 1, 2013 on as a result of the Europe-
an Union endorsement process. Since alstria
has no exposure to hyperinflation markets,
the amendments have no effect on alstria’s
financial reporting.
›Amendment to IFRS 1 with regard
to government grants with interest
rates not in line with market level
The amendment was published on
March 13, 2012. It gives first-time adop-
ters the same relief concerning recognition
and measurement of government grants as
it does existing preparers. The amendment
applies to annual periods beginning on or
after January 1, 2013. It has no effect on the
Group’s financial reporting.
›Amendment to IAS 12 ‘Deferred
tax: Recovery of underlying assets’
The Amendment was issued on December
20, 2010. It has no impact on altria’s finan-
cial reporting and was generally to be ap-
plied from January 1, 2012 onwards. As a
result of the European Union endorsement
process its adoptions was, however, also
permitted for annual periods beginning on
January 1, 2013.
›Amendments to IAS 19 ‘Employee
benefits’
On June 16, 2011, the IASB published the
final version of IAS 19. The amendments
issue rules concerning the recognition of
employee benefits in the financial state-
ments. The amendments are applicable
to annual periods beginning on or after
January 1, 2013, permitting early adoption.
The amendments do not affect the Group’s
financial reporting.
›IFRIC 20 ‘Stripping costs in the
production phase of a surface mine’
IFRIC 20 considers when and how to ac-
count separately for benefits arising from
the stripping activities in surface mining
operations. IFRIC 20 applies to annual pe-
riods beginning on or after January 1, 2013.
Its interpretation has no relevance for the
Group.
›Annual improvement process IFRS
2009 – 2011
The International Accounting Standards
Board (IASB) issued a document called ‘An-
nual Improvements 2009 – 2011’. It is a col-
lection 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 affect-
ed by the amendments, with consequen-
tial amendments to numerous others. The
mandatory, retroactive adoption applies to
annual periods beginning on or after Janu-
ary 1, 2013. Their effect will be of only mi-
nor, if any, relevance for the Group.
47
alstria Financial Report 2013 Consolidated financial statements
New and amended IFRS and
interpretations to existing
standards which are not yet
effective and have not been
early adopted by the Group
In its 2013 consolidated financial statements,
alstria office REIT-AG did not apply the fol-
lowing accounting standards or interpreta-
tions which have already been adopted by
the IASB but were not required to be applied
for the financial year 2013.
EU Endorsement
Standards/
Interpre-
tationen
Content
Applicable for
financial years
beginning
on/after
not yet endorsed
IFRS 9
New Standard ‘Financial instruments:
classification and measurement’
Jan. 1, 2017
Effects
No material
effects
Dec. 11, 2012
IFRS 10
Consolidated financial statements
Jan. 1, 2014
None
Dec. 11, 2012
IFRS 11
Joint arrangements
Jan. 1, 2014
Dec. 11, 2012
IFRS 12
Disclosure of interests in other
entities
Jan. 1, 2014
No material
effects
Notes
disclosure
Dec. 11, 2012
IAS 27
Separate financial statements
Jan. 1, 2014
None
Dec. 11, 2012
IAS 28
Investments in associates and
joint ventures
Jan. 1, 2014
None
not yet endorsed
not yet endorsed
Amendments
to IFRS 7
and IFRS 9
Mandatory effective date
and transition disclosure
Amendments
to IAS 19
Defined benefit plans: employee
contributions (Amendments to IAS
19 'Employee Benefits')
Dec. 13, 2012
Amendments
to IAS 32
Offsetting financial assets
and financial liabilities
Jan. 1, 2017
None
Jul. 1, 2014
None
Jan. 1, 2014
Notes
disclosure
not yet endorsed
Amendment
to IAS 36
Impairment of assets – clarification
of disclosures required
Jan. 1, 2014
None
not yet endorsed
Amendment
to IAS 39
Novation of derivatives and conti-
nuation of hedge accounting
Apr. 4, 2013
not yet endorsed
Transition
Guidance
Amendments to IFRS 10,
IFRS 11 and IFRS 12
Investment
Entities
Amendments to IFRS 10,
IFRS 12 and IAS 27
Jan. 1, 2014
None
Jan. 1, 2014
Jan. 1, 2014
No material
effects
No material
effects
not yet endorsed
IFRIC 21
New interpretation: ‘levies’
Jan. 1, 2014
None
not yet endorsed
not yet endorsed
Improvements
to IFRSs
Improvements to IFRSs
2010 – 2012
Improvements
to IFRSs
Improvements to IFRSs
2011 – 2013
Jul. 1, 2014
None
Jul. 1, 2014
None
1) Shift for the mandatory application date for EU companies to January 1, 2014.
48
alstria Financial Report 2013 EU Endorsement
Content
Standards/
Interpre-
tationen
Applicable for
financial years
beginning
on/after
Effects
No material
No material
not yet endorsed
IFRS 9
classification and measurement’
Jan. 1, 2017
effects
Dec. 11, 2012
IFRS 10
Consolidated financial statements
Jan. 1, 2014
None
New Standard ‘Financial instruments:
Dec. 11, 2012
IFRS 11
Joint arrangements
Jan. 1, 2014
effects
Dec. 11, 2012
IFRS 12
entities
Jan. 1, 2014
disclosure
Disclosure of interests in other
Notes
Dec. 11, 2012
IAS 27
Separate financial statements
Jan. 1, 2014
None
Dec. 11, 2012
IAS 28
joint ventures
Jan. 1, 2014
None
Investments in associates and
not yet endorsed
Amendments
to IFRS 7
and IFRS 9
Mandatory effective date
and transition disclosure
Jan. 1, 2017
None
Amendments
contributions (Amendments to IAS
Defined benefit plans: employee
not yet endorsed
to IAS 19
19 'Employee Benefits')
Jul. 1, 2014
Dec. 13, 2012
to IAS 32
and financial liabilities
Jan. 1, 2014
disclosure
Amendments
Offsetting financial assets
None
Notes
not yet endorsed
to IAS 36
of disclosures required
Jan. 1, 2014
None
Amendment
Impairment of assets – clarification
not yet endorsed
to IAS 39
nuation of hedge accounting
Jan. 1, 2014
None
Amendment
Novation of derivatives and conti-
Apr. 4, 2013
Transition
Guidance
Amendments to IFRS 10,
IFRS 11 and IFRS 12
Investment
Amendments to IFRS 10,
Jan. 1, 2014
effects
No material
No material
not yet endorsed
Entities
IFRS 12 and IAS 27
Jan. 1, 2014
effects
not yet endorsed
IFRIC 21
New interpretation: ‘levies’
Jan. 1, 2014
None
Improvements
Improvements to IFRSs
not yet endorsed
to IFRSs
2010 – 2012
Jul. 1, 2014
None
not yet endorsed
to IFRSs
2011 – 2013
Jul. 1, 2014
None
Improvements
Improvements to IFRSs
1) Shift for the mandatory application date for EU companies to January 1, 2014.
Consolidated financial statements
› IFRS 9 ‘Financial instruments’
New standard issued November 12, 2009.
The standard addresses the classification
and measurement of financial assets and is
likely to affect the Group’s accounting of fi-
nancial assets. Application of the standard is
mandatory from January 1, 2017 onwards.
However, the standard is available for early
adoption subject to EU endorsement. The
Group has not yet assessed the full impact
of IFRS 9 on its reported figures.
In May 2011, the IASB issued a set of five
standards relating to group accounting,
which are described below.
›IFRS 10 ‘Consolidated financial
statements’
New standard issued on May 12, 2011. The
objective of IFRS 10 is to establish principles
for the presentation and preparation of con-
solidated financial statements for an entity
controlling one or more other entities. The
standard supersedes the guidelines on con-
solidation as outlined in the present IAS 27
‘Consolidated and Separate Financial State-
ments’ and SIC-12 ‘Consolidation – Special
Purpose Entities’. IFRS 10 is applicable to
annual reporting periods beginning on or
after January 1, 2014*. It is not expected
that the application of the new standard will
lead to a change in the companies included
in the consolidated 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. It ac-
counts for those rights and obligations in
accordance with that specific type of joint
arrangement. The standard supersedes IAS
31 ‘Interests in Joint Ventures’ and SIC-13
‘Jointly Controlled Entities – Non-Monetary
Contributions by Venturers’. IFRS 11 is ap-
plicable to annual reporting periods begin-
ning on or after January 1, 2014*. It is not
expected that the application of the new
standard will lead to changes in accounting
for joint ventures.
* Shift for the mandatory application date for EU
companies to January 1, 2014.
›IFRS 12 ‘Disclosures on interests
in other entities’
New standard issued on May 12, 2011. The
objective of IFRS 12 is to require the disclo-
sure of information that enables users of fi-
nancial statements to evaluate the nature of
and risks associated with the interests in oth-
er entities and the effects of those interests
on their financial position, financial perfor-
mance and cash flows. IFRS 12 is applicable
to annual reporting periods beginning on or
after January 1, 2014*. The Group expects
additional disclosure requirements.
›IAS 27 ‘Separate financial
statements’
New revised standard issued on May 12,
2011. IAS 27 (revised 2011) has the objec-
tive of setting standards to be applied when
accounting for investments in subsidiaries,
joint ventures, and associates if an entity
chooses to or is by local regulations required
to present separate (non-consolidated) fi-
nancial statements. Together with IFRS 10
‘Consolidated Financial Statements’, IAS 27
(2011) supersedes the previous version of
IAS 27 (2008) ‘Consolidated and Separate
Financial Statements’, including the related
interpretation SIC-12 ‘Consolidation – Spe-
cial Purpose Entities’. IAS 27 (revised 2011)
is applicable to annual reporting periods be-
ginning on or after January 1, 2014*. Since
none of alstria’s Group companies prepare
single entity financial statements in accord-
ance with IFRS, no impact on accounting
procedures is expected as a result of the re-
vised standard.
›IAS 28 ‘Investments in
associates and joint ventures’
New standard issued on May 12, 2011. The
objective of IAS 28 (revised 2011) is to set
the accounting for investments in associates
and to set the requirements for the applica-
tion of the equity method when account-
ing for investments in associates and joint
ventures. IAS 28 (2011), together with IFRS
12 ‘Disclosures of interests in other entities’,
supersedes the previous version of IAS 28
(2008) ‘Investments in Associates’. IAS 28
(revised 2011) is applicable to financial years
beginning on or after January 1, 2014 *.
49
alstria Financial Report 2013 Consolidated financial statements
It is not expected that the application of
the new standard will lead to a change in
accounting for joint ventures.
› Investment entities
An entity may only adopt the aforemen-
tioned standards IFRS 10 ‘Consolidated Fi-
nancial Statements’, IFRS 11 ‘Joint Arrange-
ments’, IFRS 12 ‘Disclosure of Interests in
Other Entities’, IAS 27 ‘Separate Financial
Statements (2011)’ and IAS 28 ‘Investments
in Associates and Joint Ventures 2011’ early,
if it then adopts all standards at the same
time.
›Effective date of IFRS 7 amend-
ments on application of IFRS 9
On 16 December 2011, the IASB issued
Mandatory Effective Date and Transition
Disclosures (Amendments to IFRS 9 and
IFRS 7), which: amends the effective date of
IFRS 9 Financial Instruments to annual pe-
riods beginning on or after 1 January 2017
modifies the relief from restating compara-
tive periods and the associated disclosures
in IFRS 7 Financial Instruments: Disclosures.
The amendments to IFRS 7 apply when an
entity first applies the requirements of IFRS
9 and so apply to annual periods beginning
on or after 1 January 2017 (or such other
date as when an entity applies IFRS 9).
›IAS 32 ‘Financial instruments:
presentation’
The IASB has revised the requirements for
offsetting financial assets and financial lia-
bilities and as a result has published amend-
ments to IAS 32 ‘Financial instruments:
presentation’ and IFRS 7 ‘Financial instru-
ments: disclosure’. The current offsetting
model in IAS 32 has basically been main-
tained and has solely been substantiated by
additional application guidance, which ap-
plies to annual periods beginning on or after
January 1, 2014*.
› Transition guidance
Amendments to IFRS 10 ‘Consolidated fi-
nancial statements’, IFRS 11 ‘Joint arrange-
ments’, and IFRS 12 ‘Disclosures of interests
* Shift for the mandatory application date for
EU companies to January 1, 2014.
50
in other entities’ – Transition Guidance. The
amendments clarify the transition guidance
in IFRS 10, which also grant additional re-
lief to the application of all three standards.
Similar to IFRS 10, IFRS 11 and IFRS 12 the
amendments are applicable to annual peri-
ods beginning on or after January 1, 2014*.
›Amendments to IAS 19
‘Employee benefits’
On November 21, 2013, the IASB pub-
lished further amendments to IAS 19. The
amendments clarify the requirements that
relate to how contributions from employ-
ees or third parties that are linked to service
should be attributed to periods of service.
In addition, it permits a practical expedient
if the amount of the contributions is inde-
pendent of the number of years of service.
The amendments are effective for annual
periods beginning on or after July 1, 2014,
with earlier application being permitted.
The amendments are not affecting the pres-
entation of the Group’s financial reporting.
›Amendment to IAS 36 ‘Impairment
of assets’
IAS 36 was amended by recoverable amount
disclosures for non-financial assets (further
clarification of disclosures is required). The
amendment is applicable to reporting peri-
ods beginning on or after January 1, 2014
and will have no consequences for the
Group’s financial reporting.
› Amendment to IAS 39 ‘Financial
instruments: recognition and
measurement’
The amendment relates to the novation of
derivatives and the continuation of hedge
accounting. According to the amendment
there is no need to discontinue hedge ac-
counting if a hedging derivative is novat-
ed, provided certain criteria are met. The
amendment is applicable to reporting peri-
ods beginning on or after January 1, 2014
and is available for early adoption. It is not
assumed that the amendment will have
consequences for the recognition and ac-
counting of derivative instruments of the
Group.
alstria Financial Report 2013 Consolidated financial statements
› IFRIC 21 ‘Levies’
The interpretation provides guidance on
when to recognise a liability for a levy im-
posed by a government. Guidance is given
for levies that are accounted for in accord-
ance with IAS 37 Provisions, Contingent Li-
abilities and Contingent Assets and those
for which where the timing and amount of
the levy is known and certain. The interpre-
tation is applicable to reporting periods be-
ginning on or after January 1, 2014 and is
not assumed to have material consequences
for the Group’s financial reporting.
›Annual improvement process IFRS
2010 – 2012
The International Accounting Standards
Board (IASB) issued ‘Annual Improvements
2010 – 2012’, a collection of amendments
to IFRSs, in response to issues addressed
during the 2010 – 2012 cycle. Eight stand-
ards (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS
16, IAS 24, IAS 38 und IAS 34) are affected
by the amendments. The improvements ap-
ply to annual periods beginning on or after
July 1, 2014 and will be of only minor, if any,
relevance for the Group.
›Annual improvement process IFRS
2011 – 2013
The International Accounting Standards
Board (IASB) issued ‘Annual Im-provements
2011 – 2013’, a collection of amendments to
IFRSs, in response to issues addressed dur-
ing the 2011 – 2013 cycle. Four standards
(IFRS 1, IFRS 3, IFRS 13, IAS 40) are affect-
ed by the amendments. The improvements
apply to annual periods beginning on or af-
ter July 1, 2014 and will be of only minor, if
any, relevance for the Group.
The Group did not early adopt any new or
amended standard or interpretation in 2013.
4 Basis of consolidation
The consolidated financial statements com-
prise the financial statements of alstria office
REIT-AG and its subsidiaries as at December
31, 2013. The subsidiaries’ financial state-
ments are prepared for the same reporting
year as the parent Company. Consistent ac-
counting policies are applied.
Subsidiaries are entities whose financial
and operating policies are controlled by the
Group. Generally, the Group holds more than
half of the voting rights of these companies.
Subsidiaries are fully consolidated from the
date onwards, on which the Group obtains
control, which is generally the date of acqui-
sition. They are excluded from the consol-
idated financial statements on the date on
which the Group ceases to have control over
them.
All intra-Group balances, transactions, in-
come and expenses as well as profits and
losses resulting from intra-Group transactions
are eliminated in full upon consolidation.
In accordance with IFRS 3, all business com-
binations are accounted for by means of the
acquisition method. The acquired assets and
liabilities are fully recognised at their fair value
irrespective of the ownership interest. These
are reflected in their carrying amounts on the
date on which control over the subsidiary is
obtained. A debit difference is recognised as
goodwill. Any credit difference remaining af-
ter reassessment is recognised immediately in
profit and loss. The disclosed hidden reserves
and charges are carried forward, amortised
or released, depending on the treatment of
the corresponding assets in the periods fol-
lowing the business combination.
The Company generally applies IFRS 3 to ac-
count for transactions under common con-
trol. Any credit and debit differences result-
ing from respective capital consolidations are
recognised as an increase or decrease in the
Group’s capital surplus.
Significant companies where alstria office
REIT-AG is directly or indirectly able to sig-
nificantly influence financial and operating
51
alstria Financial Report 2013 Consolidated financial statements
decisions (associates), or directly or indirectly
shares control (joint ventures), are accounted
for using the equity method.
The Group of consolidated companies in-
cludes 20 companies as well as two joint ven-
ture companies accounted for using the eq-
uity method.
Fully consolidated subsidiaries
The following subsidiaries are included in the
consolidated financial statements:
Group entity
(subsidiaries of alstria office REIT-AG)
Share
capital
( %)
alstria Bamlerstraße GP GmbH, Hamburg
100
Interests in joint ventures
The Group holds interests in two joint ven-
tures resulting in a carrying amount at the
end of the reporting period of EUR 21,001 k.
alstria office REIT-AG holds a share of 49 %
in each of the two joint ventures. The joint
ventures are Alstria IV. Hamburgische Grund-
besitz GmbH & Co. KG, Hamburg, and Al-
stria VII. Hamburgische Grundbesitz GmbH
& Co. KG, Oststeinbek.
The following carrying amounts are attribut-
able to the Group from its proportionate in-
terest in the joint ventures.
alstria Englische Planke GP
GmbH , Hamburg
alstria Gänsemarkt Drehbahn
GP GmbH, Hamburg
alstria Halberstädter Straße
GP GmbH, Hamburg
alstria Hamburger Straße 43
GP GmbH, Hamburg
alstria Ludwig-Erhard-Straße
GP GmbH, Hamburg
alstria Mannheim/Wiesbaden
GP GmbH, Hamburg
alstria office Bamlerstraße
GmbH & Co. KG, Hamburg
alstria office Englische Planke GmbH
& Co. KG, Hamburg
alstria office Gänsemarkt Drehbahn
GmbH & Co. KG, Hamburg
alstria office Halberstädter Straße
GmbH & Co. KG, Hamburg
alstria office Hamburger Straße 43
GmbH & Co. KG, Hamburg
alstria office Insterburger Straße GmbH
& Co. KG, Hamburg
alstria office Ludwig-Erhard-Straße
GmbH & Co. KG, Hamburg
alstria office Mannheim/Wiesbaden
GmbH & Co. KG, Hamburg
alstria office Steinstraße 5 GmbH &
Co. KG, Hamburg
alstria Portfolio 1 GP GmbH, Hamburg
alstria solutions GmbH, Hamburg
alstria Steinstraße 5 GP GmbH,Hamburg
In comparison to the consolidated financial
statements as at December 31, 2012 there
have been no changes to the consolidated
Group in financial year 2013.
52
EUR k
100
Non-current assets
Current assets
2013
2012
36,530
30,896
3,649
7,417
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Non-current liabilities
18,247
17,685
Current liabilities
Profit or loss for the period
2,800
273
4,187
– 734
5 Key judgements and estimates
The preparation of the consolidated financial
statements in accordance with IFRS requires
assumptions and estimates to be made for
various items, which have an effect on the re-
ported figures and disclosures of assets and
liabilities, as well as income and expenses. Ac-
tual amounts may differ from these estimates.
Judgements
Management has made the following dis-
cretionary decision in line with the Group’s
accounting policies. Apart from decisions in-
volving estimations, it has the most signifi-
cant effect on the amounts recognised in the
financial statements:
Operating lease commitments –
Group as lessor
The Group has entered into commercial
property leases on its investment proper-
ty portfolio. Based on an evaluation of the
terms and conditions of the arrangements
the Group has determined that all the signifi-
cant risks and rewards of ownership of these
properties remain with the Group. As a result
the contracts are treated and accounted for
as operating leases.
alstria Financial Report 2013 Consolidated financial statements
Estimates and assumptions
Together with other key sources of estima-
tion uncertainty the key assumptions con-
cerning the future, which were valid on the
reporting date, are discussed below. They
present a significant risk, possibly resulting in
necessary, material adjustments to the car-
rying amounts of assets and liabilities within
the next financial year. Applying estimates is
in particular necessary to:
› determine the fair value of investment
property;
› determine the fair value of derivative
financial instruments;
› determine the fair value of virtual shares
granted to management;
› determine the fair value of convertible
profit participation certificates; and
› determine the fair value of other provisions.
Especially when determining the fair value of
the investment property, alstria office REIT-AG
must apply and take into account numerous
estimated factors. The fair value measure-
ment was performed by an independent 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 future earnings. The ef-
fects of the most significant input parameters
on the valuation of the Group’s investment
properties are shown in » Note 10.1.
An independent third party performed a fair
value measurement of the derivative finan-
cial instruments. The market data compiled
thereof was included in the standard valua-
tion models. Thus, a normal level of estima-
tion uncertainty exists with respect to possi-
ble deviations from the market data applied.
We consider the models used to be adequate
and believe there is no reason to question
their applicability.
Until settlement the fair value of share-based
virtual shares granted to the Management
Board is measured at each balance sheet date.
They are accounted for as provisions. The pro-
portional expense incurred in the period com-
prises the addition to, and the reversal of, the
provision between two reporting dates and
the dividend paid during the respective peri-
od. This valuation requires the Company to
make estimates about certain parameters, and
hence they are subject to uncertainty. The fair
value of the virtual shares granted, is allocat-
ed to the vesting period subject to the terms
of the underlying share based incentive plan.
The resulting personnel expenses incurred
an addition to provisions of EUR 1,046 k
(December 31, 2012: EUR 563 k) and a provi-
sion of an amount of EUR 2,397 k as reported
in the consolidated financial statements as at
December 31, 2013. Furthermore provisions
include provisions for rental guarantees of an
amount of EUR 2,862 k. The amount of the
provision for rental guarantees is based on the
assessment of the probability of their use. This,
in turn, refers to information about the situ-
ation of the respective tenants and the likeli-
hood of them exercising the break option.
The fair value of convertible profit participation
certificates granted to the Group’s employees
was estimated at the respective granting dates
using a binary barrier option model based
on the Black-Scholes model; assumptions in-
clude automatic conversion once the barrier
is reached. The model takes into account the
terms and conditions upon which the instru-
ments were granted. This valuation requires
the Company to make estimates about these
parameters, and hence they are subject to un-
certainty.
At the end of reporting period the above-stat-
ed assets, liabilities and equity instruments,
which are particularly exposed to estimation
uncertainties, had the following impact on the
consolidated statement of financial position:
EUR k
Dec. 31, 2013 Dec. 31, 2012
Investment
property
Properties
held for sale
Positive fair values
of derivatives
Negative fair values
of derivatives
Other provisions
Valuation of
convertible profit
participation rights
and virtual shares
1,632,362
1,622,988
0
10,010
33,118
806
25,963
5,259
35,080
5,191
– 1,711
– 1,174
53
alstria Financial Report 2013 Consolidated financial statements
6 Seasonal or economic effects
on business
The business activities of alstria office
REIT-AG (primarily the generation of rev-
enues from investment properties) are not
generally affected by seasonality. However,
the sale of one or more large properties can
have a significant impact on revenues and
operating expenses.
Experience shows that the real estate market
tends to fluctuate as a result of factors such
as changes in consumers’ net income, GDP,
interest rates, consumer confidence, demo-
graphic factors and other factors inherent
to the market. Changes in the interest rate
might lead to a modified valuation of the in-
vestment property and derivatives.
7 Summary of significant
accounting policies
The following accounting and valuation
methods have been used to prepare the con-
solidated financial statements of alstria office
REIT-AG.
Investment property
Investment property comprises all proper-
ty that is held in order to generate rental in-
come or long-term value increases in assets.
It is neither used in production nor for ad-
ministrative purposes. It is recognised at ac-
quisition cost at the time of purchase. Costs
include transaction costs, which have to be
capitalised (particularly real estate transfer
tax). In accordance with IAS 40.17, costs in-
curred subsequently for dismantling, replace-
ment of parts or maintenance of property are
also included.
Costs of debt, which can be directly allocat-
ed to the acquisition, or production of invest-
ment property are capitalised in the year in
which they arise.
For subsequent measurement, the Company
uses the fair value model according to IFRS
13.61 et seq., which reflects an income cap-
italization approach combined with market
conditions at the end of the reporting period.
The valuation technique used is appropri-
ate in the circumstances and sufficient data
54
is available to measure fair value, maximis-
ing the use of relevant observable inputs and
minimising the use of unobservable inputs.
To increase consistency and comparability in
fair value measurements and related disclo-
sures, the IFRSs established a fair value hi-
erarchy that categorises the inputs used to
measure fair value into three levels. The fair
value hierarchy gives the highest priority to
quoted prices (unadjusted) in active markets
for identical assets or liabilities (Level 1 in-
puts) and the lowest priority to unobservable
inputs (Level 3 inputs).
› Level 1 inputs are quoted prices (unadjusted
in active markets for identical assets or li-
abilities that the entity can access at the
measurement date.
› Level 2 inputs are inputs other than quoted
prices included within Level 1 that are ob-
servable for the asset or liability, either di-
rectly or indirectly.
› Level 3 inputs are unobservable inputs for
the asset or liability.
The level of disclosure is more extensive for
Level 3 inputs.
Only inputs of level 2 and 3 are applicable
for property. The majority is categorised as
Level 3.
In addition, if inputs are categorized in dif-
ferent levels of the fair value hierarchy, the
entire fair value measurement is categorized
at the same level of the fair value hierarchy as
the lowest level input significant to the meas-
urement in question.
The property valuation process is normally
carried out by qualified external valuers us-
ing, when available, relevant market infor-
mation generated from transactions of com-
parable properties. Such information can be
regarded as an observable input.
A high degree of judgment may be required
from valuers when observable information is
not available or when significant adjustments
are made to the observable market informa-
tion. If the adjustments made are significant
to the entire measurement then the fair value
is to be categorized within Level 3.
alstria Financial Report 2013
Consolidated financial statements
Categorization in level 2 is possible to the ex-
tent that sufficient data is available and does
not require significant adjustments. This will
occur in the more transparent markets where
there is likely to be a significant number of
comparable transactions.
of unobservable inputs. The analysis above
showed that there was not a sufficient num-
ber of official comparable transactions to
derive any market values. Therefore, the fair
values were determined based on an income
approach in accordance with IFRS 13.61.
Disclosure categorization will be determined
by such factors as the nature, characteristics
and risks of the asset and on the level of fair
value hierarchy.
In estimating the fair value of the properties,
the highest and best use of the properties is
their current use. There has been no change
to the valuation method during the year.
The level of disaggregation of the following
quantitative disclosures is largely based on
asset type and geographical location (city/
country). The intention is to provide sufficient
detail to reflect the different characteristics
of assets and to provide enough information
for users to assess whether the entity’s views
about individual inputs differs from their own.
Inputs used in the valuation approach adopt-
ed by the Group for all its properties include
rental revenues, adjusted yield figures (e.g.
property based capitalization rates) and va-
cancy periods. Therefore the fair value meas-
urement used by the Group for valuation of
all investment properties is entirely catego-
rized as level 3.
Information about the significant unobserva-
ble inputs used and their sensitivities on the
fair values of the Group’s investment proper-
ty is presented in » Note 10.1.
Valuation process for
investment properties
The fair value hierarchy does not make any
statements concerning the applied valuation
techniques.
All market values were determined by Colliers
International UK plc, London, a renowned
appraiser and brokerage firm, as at Decem-
ber 31, 2013.
The basis for deriving the fair values as de-
fined by IFRS 13.61 should, if possible, be
based on valuation techniques that are ap-
propriate in the circumstances and for which
sufficient data is available to measure fair
value, thereby maximizing the use of relevant
observable inputs and minimizing the use
The method used is a hard-core and top slice
method, whereby rental income is horizon-
tally segmented. The hard-core portion rep-
resents the prevailing contractual rent. The
top slice represents the difference between
market rent and contractual rent. This meth-
od fulfils the requirements of the Red Book,
a set of international valuation standards set
forth by the Royal Institution of Chartered
Surveyors. In addition, the method used by
Colliers International UK plc. is also appropri-
ate and suitable for determining market val-
ues 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 ac-
cordingly. Group 1 contained properties with
anchor lease terms of five years or less and
Group 2 held properties with anchor lease
terms of more than five years.
Group 1 is for properties with leases set to
expire in five years or less: Hard-core and top
slice method, taking into account
› the contractual rent for the remaining term
of the lease;
› a vacancy period of between 12 and 24
months following the expiry of the lease;
› the necessary maintenance costs to re-let
the properties at a comparable rent level;
› re-lets at market rents;
› capitalisation rates reflecting the individual
risk of the property as well as the market
activity (comparable transactions);
› non-allocable operating costs of an amount
of 5 % of market rents p.a. and
› the net selling price.
55
alstria Financial Report 2013 Consolidated financial statements
Group 2 is for properties with anchor leases
that are let to tenants with strong credit rat-
ings on a long-term basis: Hard-core and top-
slice method, taking into account
› the contractual rent for the remaining term
of the lease;
› re-lets at market rents (accounting for the
difference between market rent and con-
tractual rent);
› capitalisation rates reflecting the individual
risk of the property as well as the market
activity (comparable transactions);
› non-allocable operating costs in the amount
of 5 % of market rents p.a. and
› the net selling price.
Gains or losses arising from changes in the
fair values of investment property are dis-
closed in the income statement in the item
‘Net gain/loss from fair value adjustments
on investment property’ in the year in which
they arise.
Operating leases
Lease agreements that alstria office REIT-AG
has entered into with commercial tenants are
classified as operating leases under IFRS. Ac-
cordingly, alstria office REIT-AG acts as a les-
sor in numerous different types of operating
lease agreements for investment properties.
These leases generate the majority of pro-
ceeds and income for alstria office REIT-AG.
Furthermore, alstria office REIT-AG is, to a
limited extent, lessee within the scope of op-
erating lease agreements.
Impairments of assets
Intangible assets with an indefinite useful live
are not amortised; they are tested for im-
pairment on an annual basis.
Assets that are amortised, however, are
tested for impairment whenever triggering
events or changes in circumstances indicate
that the carrying amount may no longer be
recoverable.
Investment properties are derecognised
when they have either been disposed of or
when the investment property is permanent-
ly withdrawn from use and no future eco-
nomic benefit is to be expected from its dis-
posal. Any gains or losses on the retirement
or disposal of an investment property are rec-
ognised in the income statement in the year
of retirement or disposal.
Leases
In accordance with IAS 17 the lessee is consid-
ered to be the beneficial owner of leased as-
sets when the lessee bears all the risks and re-
wards incidental to the assets (finance lease).
If the lessee is deemed to be the beneficial
owner, the leased asset is recognised at fair
value or at the lower present value of the min-
imum lease payments at the inception date of
the lease. The corresponding leasing liability is
recorded as a lease commitment under other
non-current liabilities. The resulting lease pay-
ments are separated into an interest portion
and an amortizing portion, respectively. In the
reporting period the Group acquired a ground
lease for which the terms of IAS 17 apply. The
ground lease is categorized as a financial lease
and the leasehold rental payments are record-
ed as lease payments.
56
An impairment loss is recorded at an amount
equivalent to the excess of the carrying
amount over the recoverable amount. If the
reasons for an impairment loss cease to ap-
ply, the impairment loss is reversed as ap-
propriate, which is the maximum value that
would have resulted, if normal amortisation
had been charged.
Property, plant and equipment
Property, plant and equipment is stated at
cost less accumulated depreciation and ac-
cumulated impairment losses. Such costs
include replacement costs part of the plant
and equipment when that cost is incurred, if
the recognition criteria are met. All other re-
pair and maintenance costs are recognised in
profit or loss as incurred.
Depreciation of plant and equipment is calcu-
lated on a straight-line basis over the useful
life of the asset (three to 15 years). The useful
life of owner-occupied property is estimated
at 50 years. While the building is depreciated
on a scheduled basis, the land is not subject
to depreciation.
An item of property, plant and equipment is
derecognised upon disposal or when no fu-
alstria Financial Report 2013
Consolidated financial statements
ture economic benefits are expected from its
use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the
difference between the net proceeds of dis-
posal and the carrying amount of the asset) is
recorded in profit or loss in the year the asset
is derecognised.
The assets’ residual values, useful lives and
methods of depreciation are reviewed, and
adjusted if required, at the end of each finan-
cial year.
Borrowing costs, which can be directly al-
located to the acquisition or production of
property, plant and equipment are capital-
ised in the year in which they arise.
Intangible assets
Separately acquired intangible assets are
measured at cost upon initial recognition.
The cost of intangible assets acquired in a
business combination is its fair value on the
date of acquisition. Following initial recogni-
tion, intangible assets are carried at cost less
any accumulated amortisation and any accu-
mulated impairment losses. Internally gener-
ated intangible assets are not capitalised and
expenditure is reflected in profit or loss in the
year in which the expenditure is incurred.
The useful lives of intangible assets are as-
sessed to be either finite or infinite.
Intangible assets with finite lives are amor-
tised over their useful economic life and as-
sessed for impairment whenever there is an
indication that the intangible asset may be
impaired. The amortisation period and amor-
tisation method for an intangible asset with a
finite useful life is reviewed at least at the end
of each financial year.
Changes in the expected useful life or the
expected pattern of consumption of future
economic benefits embodied in the asset are
accounted for by changing the amortisation
period or method, as appropriate, and are
treated as changes in accounting estimates.
The amortisation expense on intangible as-
sets with finite lives is recognised in profit or
loss in the category of expenses consistent
with the function of the intangible asset.
Amortisation of licences is calculated on a
straight-line basis over the useful life of the
asset (three to eight years).
Currently, the Company does not have intan-
gible assets with indefinite useful lives.
Gains or losses arising from derecognition of
an intangible asset are measured as the dif-
ference between the net disposal proceeds
and the carrying amount of the asset and are
recognised in profit or loss when the asset is
derecognised.
Taxes
Current tax assets and liabilities for the cur-
rent and prior periods are measured at the
amount expected to be recovered from or
paid to the taxation 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.
The financial statements do not show any de-
ferred taxes as alstria office REIT-AG, is ex-
empt from income taxation due to its REIT
status.
Financial instruments
Pursuant to IAS 39, a financial instrument is
any contract that gives rise to both a financial
asset in one entity and a financial liability or
equity instrument in another entity. Financial
assets in particular comprise cash and cash
equivalents, trade receivables, as well as oth-
er loans and receivables issued by the enter-
prise, held-to-maturity investments and orig-
inal and derivative financial assets held for
trading. Financial liabilities frequently feature
a claim to their return in cash or by means of
other financial assets. In particular these in-
clude liabilities to banks and other creditors,
trade payables and derivative financial liabili-
ties. Financial assets and liabilities are gener-
ally set off against each other.
57
alstria Financial Report 2013 Consolidated financial statements
Financial assets
The recognition and measurement of finan-
cial assets is subject to the provisions of IAS
39. Depending on the following classification
as prescribed by IAS 39:
› held-to-maturity;
› measured at fair value through profit or loss;
› available-for-sale or
› loans and receivables
purpose of selling it in the short term. Unless
derivatives are designated as hedges they are
also categorised as held for trading.
Derivative financial instruments, which are
not part of an effective hedge pursuant to
IAS 39, must be classified as held for trading
and recognised in profit or loss at fair value. If
their fair value is negative, they are disclosed
under financial liabilities.
financial assets are either measured at amor-
tised 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 market prices. If the market for a
financial asset is not active (and for unlisted
securities), the Group determines its fair val-
ue by using valuation techniques. These in-
clude the use of recent arm’s length transac-
tions, reference to other instruments that are
substantially the same, discounted cash flow
analyses and option pricing models, making
maximum use of market inputs and relying
as little as possible on entity-specific inputs.
When financial assets are initially recognised,
they are measured at fair value plus transac-
tion costs. The former is applicable for all fi-
nancial assets whose fair value is not adjusted
for through profit or loss. Management de-
cides on the classification of financial assets
upon initial recognition and reviews the clas-
sification at the end of each reporting period.
A financial asset is derecognised when the
entity loses control of the contractual rights
that comprise the financial instrument.
All customary purchases and sales of finan-
cial assets are recognised on the trade date,
which is the date on which the Group com-
mits to purchase or sell the asset in question.
A purchase or sale of financial assets is cus-
tomary when it requires the delivery of as-
sets within the period generally established
by regulations or conventions in the market-
place.
assets
available-for-sale
Financial
are
non-derivatives that are either designated
in this category or not classified in any of
the other categories. They are included in
non-current assets unless the investments
mature within twelve months of the end of
the reporting period or management intends
to dispose of them in this period or the matu-
rity at the end of reporting period is less than
twelve months. Available-for-sale financial
assets are initially recognised at fair value and
subsequently carried forward at fair value.
Changes in the fair value of financial assets
classified as available for sale are recognised
in equity; in the case they are sold or impaired
their accumulated fair value adjustments are
recognised in the income statement.
The Group holds no financial assets, which
are classified as held to maturity according to
the classification as prescribed by IAS 39.
No items of financial assets have been cate-
gorised as ‘at fair value through profit or loss’.
Receivables
Receivables are classified as loans and receiv-
ables as defined by IAS 39 and initially meas-
ured at fair value and subsequently at amor-
tised cost, after deduction of any necessary
impairment. Amortised costs are computed
using the effective interest method less any
allowance for impairment. The calculation
takes into account any premium or discount
on acquisition and includes transaction costs
and fees that are an integral part of the effec-
tive interest rate.
Financial assets held for trading are financial
assets measured at fair value through profit
or loss. A financial asset is classified in this
category if it is acquired principally for the
Within the scope of the measurement of
trade receivables, a solvency check was
performed on the tenants (risk associat-
ed with the legal validity of receivables).
58
alstria Financial Report 2013 Consolidated financial statements
The result of which was that there were no
reasons for a rent reduction (delcredere risk).
This examination 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 resulting from receivables
being derecognised or impaired or due to
amortisation are recognised in profit or loss.
If there is objective evidence that an impair-
ment loss has been incurred, the amount of
the loss is measured as the difference be-
tween the asset’s carrying amount and the
present value of estimated future cash flows
discounted at the financial asset’s original ef-
fective interest rate (i.e. the effective interest
rate computed at initial recognition). The car-
rying amount of the asset is reduced directly.
The amount of the loss is recognised in profit
or loss.
If, in a subsequent period, the amount of the
impairment loss decreases and the decrease
can be objectively related to an event occur-
ring after the impairment was recognised, the
previously recognised impairment loss may
be reversed to the extent that the carrying
value of the receivable does not exceed its
amortised cost at the reversal date. Any sub-
sequent reversal of an impairment loss is rec-
ognised in profit or loss.
Provisions for impairments are made when
there is objective evidence (such as the prob-
ability of insolvency or significant financial dif-
ficulties 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 respective receivable is reduced
directly. Impaired assets are derecognised
when they are assessed as uncollectable.
Derivative financial instruments
and hedge accounting
The Group uses derivative financial instru-
ments such as interest rate swaps and caps
to hedge its risks associated with interest
rate fluctuations. Such derivative financial in-
stru-ments are initially recognised at fair val-
ue on the date on which a derivative contract
is entered into and are subsequently remeas-
ured at fair value. Derivatives are carried as
assets when their fair value is positive and as
liabilities when their fair value is negative.
The instruments reported as at December 31,
2013 were valued by an independent third
party. The fair value of derivative financial
instruments is determined by discounting
the expected future cash flows over the re-
maining life of the agreement based on cur-
rent market rates or term structures of inter-
est rates. Further details on the valuation of
derivative financial instruments under the fair
value hierarchy can be found in » Note 20.3.
When the Group first becomes party to the
contract it assesses whether embedded de-
rivatives are required to be separated from
host contracts. A reassessment can only oc-
cur if there is a change in the terms of the
contract that significantly modifies the cash
flows 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, financial management
defines the hedge relationship between the
hedging instrument and the hedged item.
Furthermore, the aim of the risk management
measure and underlying strategy when con-
cluding the hedge transaction are described.
Any gains or losses arising from changes in
fair value on derivatives during the period
that do not qualify for hedge accounting are
recognised immediately in profit or loss.
For the purpose of hedge accounting, hedg-
es are classified as cash flow hedges when
hedging exposure to variability in cash flows
is attributable to a particular risk associated
with a recognised liability.
59
alstria Financial Report 2013 Consolidated financial statements
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 objective and strategy for
undertaking the hedge. The documentation
includes the identification of the hedging in-
strument, the hedged item, the nature of the
risk that is being hedged and how the entity
will assess the hedging instrument’s effec-
tiveness in offsetting the exposure to chang-
es in the hedged item’s cash flows that are
attributable to the hedged risk. The applied
hedges are deemed to be highly effective in
achieving offsetting changes in fair value or
cash flows. They are assessed on an on-go-
ing basis to determine their effectiveness
throughout the financial reporting periods
for which they were designated.
Cash flow hedges, which meet the strict cri-
teria for hedge accounting, are accounted for
as follows:
› The effective portion of the gain or loss on
the hedging instrument is recognised direct-
ly in equity, while any ineffective portion is
recognised immediately in profit or loss.
› Amounts taken to equity are transferred
to profit or loss when the hedged trans-
action affects profit or loss, such as when
the hedged financial income or financial ex-
pense is realised.
The Group neither uses any financial deriva-
tives that qualify for the hedging of the fair
value of recognised assets or liabilities or a
firm commitment (fair value hedges), nor
such financial derivatives that qualify for the
hedging of a net investment in a foreign op-
eration (net investment hedge).
Cash and cash equivalents
Cash and short-term deposits in the con-
solidated statement of financial position are
comprised of current bank balances.
For the purposes of the consolidated cash
flow statement, cash and cash equivalents
include the cash and cash equivalents de-
fined above, other short-term highly liquid
investments with original maturities of three
months or less, and bank overdrafts.
60
Current bank balances are recognised at their
nominal amount.
Treasury shares
Company equity instruments which are re-
acquired (treasury shares) are deducted from
equity. No gain or loss is recognised in profit
or loss on the purchase, sale, issue or cancel-
lation of the Group’s own equity instruments.
Liabilities
Financial liabilities, in particular trade paya-
bles, are stated at the amount repayable and
are discounted if classified as non-current
and non-interest bearing.
Fair values are determined by discounting the
future contractually agreed cash flows by an
appropriate interest rate from the yield curve
at the end of the reporting period.
The recognition and measurement of finan-
cial liabilities is subject to the provisions of
IAS 39. Depending on the classification as
prescribed by IAS 39, which is:
› at amortised cost or
› measured at fair value through profit or loss
Financial liabilities are either measured at am-
ortised cost or at fair value and recognised
accordingly at the end of reporting period.
All loans and borrowings are initially recog-
nised at fair value less directly attributable
transaction costs. They have not been des-
ignated as ‘at fair value through profit or
loss’. After initial recognition, interest-bear-
ing loans and borrowings are subsequently
measured at amortised cost using the effec-
tive interest method. Gains and losses result-
ing from derecognition of amortisation are
recognised in profit or loss.
The component of the convertible profit
participation rights (Wandelgenussrechte),
which exhibits characteristics of a liability, is
recognised as a liability in the balance sheet,
net of transaction costs. Upon issuing the
jouissance shares, the fair value of the liabil-
ity component is determined using a market
rate for an equivalent non-convertible bond.
This amount is then classified as a financial li-
alstria Financial Report 2013 Consolidated financial statements
Revenue recognition
Revenues are recognised when it is probable
that the economic benefits will flow to the
Group and when it becomes reliably meas-
ureable. Revenue is measured at the fair
value of the consideration received, exclud-
ing discounts, rebates and other sales taxes
or du-ties. Revenues are recorded excluding
VAT. In addition, the following specific rec-
ognition criteria must be met before revenues
are recognised:
Rental income
Rental income from operating leases on in-
vestment properties is accounted for on a
straightline basis over the lease terms.
Interest income
Interest income is recognised as interest ac-
crues applying the effective interest rate. This
is the rate that discounts estimated future
cash receipts to the net carrying amount of
the financial asset over the expected life of
the financial instrument).
Income taxes
REIT-AGs are fully exempt from German cor-
porate income tax and trade tax. Hence, al-
stria office REIT-AG has been exempt from
tax with retrospective effect since January 1,
2007.
ability and measured at amortised cost until it
is extinguished on conversion or redemption.
A financial liability is derecognised when the
obligation from the liability is discharged or
cancelled or expires. If an existing financial
liability is replaced with a liability from the
same lender under substantially different
terms, or the terms of an existing liability are
substantially modified, the exchange or mod-
ification is treated as a derecognition of the
original liability. The new liability is recorded
and the difference in the respective carrying
amounts is recognised in profit or loss.
Provisions
Provisions are recognised where a present
obligation to third parties exists as a result of
a past event, where a future outflow of re-
sources is probable and where a reliable esti-
mate of that outflow can be made. Provisions
are measured, taking all risks into account
at the best estimate of future cash outflows
required to meet the obligation. If they are
non-current they are discounted. Provisions
are not offset with reimbursements.
Share-based payments
Share-based payments comprise cash-set-
tled liability awards and equity-settled equity
awards.
The fair value of equity awards is general-
ly determined by using a modified Black-
Scholes option-pricing model at the grant
date. It measures the total personnel expense
which is to be recognised in profit and loss for
the service period and which in turn increases
equity (paid-in capital) by the same amount.
Until settlement liability awards are meas-
ured at fair value at each balance sheet date,
they are classified 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.
Further details on the share-based payment
schemes are given in » Notes 17, 18 and 19
and in the remuneration report, respectively.
61
alstria Financial Report 2013 Consolidated financial statements
9.2 Income and expenses from
passed-on operating expenses
EUR k
2013
2012
Income from passed-on
operating expenses
Income from passed-on
operating expenses related
to the prior year
Expenses from passed-on
operating expenses
Expenses from passed-on
operating expenses related
to the prior year
16,361
15,967
193
434
16,554
16,401
– 16,361 – 15,967
– 706
– 1,212
– 17,067 – 17,179
Income less expenses
from passed-on operating
expenses
– 513
– 778
The expenses from passed-on operating ex-
penses that are directly attributable to invest-
ment property include, in particular, operat-
ing costs, maintenance and property based
taxes.
9.3 Real estate operating expenses
EUR k
Maintenance and
refurbishment
Vacancy costs
Running repairs
Taxes on land and
building
Property management
Other
2013
2012
5,218
3,190
1,253
170
26
605
4,900
3,166
1,203
50
427
652
10,462
10,398
8 Segment reporting
IFRS 8 requires a ‘management approach’,
under which information on segments is pre-
sented on the same basis used for internal re-
porting purposes.
The services offered by alstria office REIT-AG
exclusively focus on letting activities to com-
mercial property tenants in Germany. In ac-
cordance with IFRS 8, a single reporting seg-
ment is identified which comprises all of the
Groups’ operations.
The manner of reporting for this segment is
consistent with the internal reporting provid-
ed to the chief operating decision-maker. The
chief operating decision-maker is responsi-
ble for allocating resources to the operating
segments of an entity and assesses their per-
formance. The Group’s chief operating deci-
sion-maker is the Management Board.
tenants. Total
larg-
Revenues are generated by a
er number of
revenues
amount to EUR 104,224 k (previous year:
EUR 101,286 k), of which EUR 30,097 k and
EUR 15,656 k relate to leases to the two larg-
est customers of the Group. No other single
customer has neither in the financial year
2012 nor in the financial year 2013 contrib-
uted with 10 % or more to the consolidated
revenues.
9 Notes to the consolidated
income statement
9.1 Revenues
EUR k
2013
2012
Revenues from
investment property
104,224
101,286
Revenues from investment property chiefly in-
clude rental income from investment property.
62
alstria Financial Report 2013 Consolidated financial statements
9.4 Administrative expenses
On average the Group employed 61 employ-
ees in 2013 (2012: 55).
EUR k
Legal and consulting fees
Depreciation
Communication and marketing
IT maintenance
Travel expenses
Audit fee
(audit and audit related services)
Supervisory Board compensation
Leasing costs
Office area costs
Training & workshops
Recruitment
Insurances
Other
2013
2012
1,320
1,754
9.6 Other operating income
549
532
420
397
335
305
190
143
136
62
41
894
471
607
377
318
330
302
158
128
116
110
179
872
5,325
5,722
EUR k
Compensation payments and
other recharges
Income due to the reversal of
provisions in relation to rental
guarantees
Reimbursement of property taxes
Property management services
Income from the reversal
of accrued liabilities
Car use
Success fee
Income in relation to
development projects
Payments on provisions on
doubtful debts
2013
2012
1,926 1,130
946
429
186
88
64
0
0
0
293
0
0
110
387
52
579
326
80
496
3,932 3,160
9.5 Personnel expenses
Other
EUR k
Maintenance and
refurbishment
Vacancy costs
Running repairs
Taxes on land and
building
Property management
Other
2013
2012
5,218
3,190
1,253
170
26
605
4,900
3,166
1,203
50
427
652
10,462
10,398
EUR k
Salaries and wages
2013
2012
3,919
3,625
Social insurance contribution
580
524
Bonuses
Expenses for share-based
compensation
1,256
1,228
1,711
1,174
thereof relating virtual shares
1,046
thereof relating to the con-
vertible profit participation
certificates
665
564
610
Compensation payments and other reallo-
cations result from the early termination of
leases and refurbishment activities conduct-
ed by alstria. The latter refers to refurbish-
ments to which the tenants had originally
committed themselves upon entering into
the leasing contracts.
Amounts for retirement provisi-
ons and disability Management
Board
Other
202
122
186
112
7,790
6,849
Compensation payments also include charg-
es passed on to a former majority sharehold-
er in an amount of EUR 571 k. The compen-
sation has been incurred in connection with
the placement if alstria-shares of that share-
holder in the capital markets.
Convertible profit participation rights grant-
ed to employees do not only grant the right to
a conversion when the conditions apply, but
also to an annual payment equivalent to the
dividend amount paid out per share. There-
fore, expenses for share-based compensation
resulting from the convertible profit partici-
pation rights are to be recognised in equity
(for the conversion right) as well as against
liabilities (for the dividend entitlement). From
the total expense in relation to the profit par-
ticipation rights amounting to EUR 665 k,
EUR 541 k were recognised in equity (2012:
EUR 506 k), while EUR 124 k were recorded
in liabilities (2012: EUR 104 k).
An explanation for the reversal of provi-
sions for rental guarantees can be found in
» Notes 11.3.
The success fee for the previous year relates
to alstria acting as an agent in property trans-
actions.
Income due to development projects relates
to compensation received from tenants for
the restructuring of leased premises. They
can vary each year.
63
alstria Financial Report 2013
Consolidated financial statements
EUR k
2013
2012
Proceeds from the disposal of
investment property
Carrying amount of invest-
ment property disposed of
Valuation result of properties
held-for-sale
54,418
8,189
– 53,020 – 8,080
0
1,398
260
369
Fair value adjustments on financial deriva-
tives resulted in a net loss, which is broken
down as follows:
EUR k
2013
2012
Transfer of cumulated loss from
cash flow hedge reserve to inco-
me statement
Ineffective change of the fair
value of cash flow hedges
Change in fair value of financial
derivatives not qualifying as a
cash flow hedge
Net loss from fair value adjust-
ments on financial derivatives
– 2,988
– 986
– 7,798 – 1,069
3,232
675
– 7,554 – 1,380
In 2013, a loss amounting to EUR 2,988 k
related to cumulative losses from fair value
adjustments of cash flow hedge derivatives,
which were recorded in equity. The adjust-
ments resulted from the fact that the original-
ly hedged transactions are no longer expect-
ed to occur. Further details and explanation
on derivatives are presented in » Note 10.7.
9.7 Other operating expenses
EUR k
Donations
Impairments on trade receivables
Additions to provisions for
rental guarantees
Other miscellaneous
2013
2012
68
40
0
3
76
64
895
1
111
1,036
Explanations on additions to provisions for
rental guarantees in the previous year can be
found in » Notes 11.3.
9.8 Financial and valuation result
The financial result breaks down as follows:
EUR k
Financial income
Interest expenses
syndicated loan
2013
317
2012
657
– 13,471 – 14,383
Interest expenses other loans
– 9,036
– 9,385
Interest result derivatives
– 13,406 – 12,589
Interest expenses
convertible bond
– 2,697
0
Other interest expenses
– 119
– 250
Financial expenses
– 38,729 – 36,607
Net present value adjust-
ments due to the discount
of a leasing liability
Commitment fees
Other
Other financial expenses
– 413
– 20
– 271
– 704
0
– 18
– 117
– 135
Net financial result
– 39,116 – 36,085
Total interest income and expenses for finan-
cial assets and liabilities which are not finan-
cial derivatives were EUR 317 k interest in-
come (2012: EUR 657 k) and EUR 24,011 k
interest expenses; (2012: EUR 24,018 k), re-
spectively.
Total interest expenses calculated using the
effective interest method for financial lia-
bilities that are not recognised at fair value
through profit or loss were EUR 4,280 k (in-
terest expenses; 2012: EUR 1,700 k).
Within the two former financial years the
Group did not hold financial assets avail-
able for sale. Therefore the net result from the
disposal of financial assets available for sale
amounted, like in the previous year, to EUR 0.
64
alstria Financial Report 2013 Consolidated financial statements
9.9 Net result on the disposal of
investment property
EUR k
2013
2012
Proceeds from the disposal of
investment property
Carrying amount of invest-
ment property disposed of
Valuation result of properties
held-for-sale
54,418
8,189
– 53,020 – 8,080
0
1,398
260
369
The total loss from the disposal of objects
and portfolios sold below their carrying
value amounted to EUR 523 k in 2013 and
EUR 146 k in 2012.
9.10 Income taxes
alstria office REIT-AG obtained the G-REIT
status on January 1, 2007. At this time it was
subject to final taxation and has been tax-ex-
empt with regard to corporate tax and trade
tax effective since then.
Minor tax payment obligations may arise on
Group level for affiliates serving as a gener-
al partner of a partnership or REIT Service
Companies.
10 Notes to the consolidated
statement of financial
position – assets
10.1 Investment property
This item, which is comprised of all invest-
ment properties held by the Company, breaks
down as follows:
EUR k
Fair values
As of Jan. 1
2013
2012
1,622,988 1,528,589
Property acquisition
36,865
101,844
Capital expenditure
14,483
12,867
Disposals
– 42,000
– 8,080
Reclassification from
investment property
Transfers to held for sale
Net result from the adjust-
ment of the fair value of
investment property
0
0
– 606
– 9,750
27
– 1,876
As of Dec. 31
1,632,362 1,622,988
alstria office REIT-AG uses the fair value mod-
el pursuant to IAS 40.33 et seq. for subse-
quent measurement of investment property.
External appraisals were obtained for meas-
urement. For a detailed description of the val-
uation of assets, please see » Note 7.
Deferred income tax Due to its REIT tax
exemption, there were no impacts on profit
and loss, the financial statements, or equity or
profit and loss in 2012 and 2013 resulting from
deferred income tax.
The item on the income statement ‘net result
from fair value adjustments on investment
property’ of an amount of EUR 23,929 k is
attributable to a change in unrealized losses.
Investment property (in EUR)
The following table provides details of the
Group’s investment properties and infor-
mation about the fair value hierarchy as
at December 31, 2013:
Level 1 Level 2
Level 3
–
–
1,632,362
Fair value as
at Dec., 31.13
1,632,362
There were no transfers between Levels 1
and 2 during the year.
The Group has considered the nature, char-
acteristics and risks of its properties as well
as the level of the fair value hierarchy with-
in which the fair value measurements are
categorised in determining the appropriate
classes of investment property. The following
factors have been applied to determine the
appropriate classes.
65
alstria Financial Report 2013 Consolidated financial statements
a) The real estate segment: Within all invest-
ment portfolios the majority of the lettable
area is dedicated to offices. Therefore all
investment properties belong to one asset
class: offices.
As a result three appropriate classes of invest-
ment properties have been identified:
› Germany – Office – Level 3 – short
WAULT (0 to 5 years),
b) The geographical location of all properties
› Germany – Office – Level 3 – medium
is Germany.
WAULT (> 5 to 10 years),
c) The level of fair value hierarchy for all in-
› Germany – Office – Level 3 – long WAULT
vestment properties is level 3.
(> 10 years).
d) There are
larger differences between
the contractual lease terms. This also af-
fects the weighted average lease length
(WAULT) for each investment property. A
distinction is made between objects with a
short, medium and long WAULT.
Quantitative information about fair value measurements
using unobservable inputs (level 3)
EUR k, unless stated otherwise
Range
Fair value at
Dec. 31, 2013
Valuation
technique
Unobservable
inputs
Min. Max.
Weighted
average
Portfolio
Offices Germany
1,632,362
hard-core
and top slice
Estimated rental value
(EUR/sqm/month)
Adjusted yield (%)
Void period of office
leases expiring within
next 5 years (months)
0 ≤ WAULT ≤ 5 years
Offices Germany
715,017
hard-core
and top slice
Estimated rental value
(EUR/sqm/month)
Adjusted yield (%)
Void period of office
leases expiring within
next 5 years (months)
5 < WAULT ≤ 10 years
Offices Germany
367,325
hard-core
and top slice
Estimated rental value
(EUR/sqm/month)
Adjusted yield (%)
Void period of office
leases expiring within
next 5 years (months)
WAULT > 10 years
Offices Germany
550,020
hard-core
and top slice
Estimated rental value
(EUR/sqm/month)
Adjusted yield ( %)
Void period of office
leases expiring within
next 5 years (months)
5.7
4.3
19.2
13.2
12.0
24.0
6.2
4.9
19.1
13.2
10.6
6.1
16.2
10.3
6.7
12.0
24.0
16.2
8.4
5.2
17.1
8.0
11.9
6.1
12.0
18.0
16.5
5.7
4.3
17.0
5.8
10.3
5.0
12.0
12.0
12.0
66
alstria Financial Report 2013
Consolidated financial statements
Sensitivity of measurement
to variance of significant
unobservable input
The decrease in the estimated rental income
decreases the fair value.
reporting period. The transaction volume for
the properties amounted to EUR 36,460 k.
For more information about changes to the
immovable property, please refer to the
‘Transactions’ section in the Group manage-
ment report 2013 » see page 8f.
An increase in the vacancy periods decreases
the fair value.
An increase in the adjusted yield decreases
the fair value.
Borrowing costs that would have had to be
capitalised as construction costs were not
incurred during the reporting period (2012:
EUR 0 k).
A decrease in the estimated rental income
leads to an increase in the adjusted yield; an
increase in the estimated rental income leads
to a decrease in the adjusted yield.
Disclosures concerning expenses/income as
recorded in the income statement pursuant
to IAS 40.75 (f) include:
A decrease in the vacancy period leads to an
increase in the adjusted yield; an increase in
the vacancy period leads to a decrease in the
adjusted yield.
The external assessor has carried out sensitiv-
ity analyses on their fair value assessments,
which show the effect of changes to capitali-
sation rates on fair market values.
Value of investment properties (EUR million)
Capitalisation rates (%)
– 0.25
0.00
0.25
2013
1,713
1,632
1,560
2012
1,697
1,623
1,553
In financial year 2013 benefits and obliga-
tions were transferred for ten properties, two
of which were classified as ‘assets held for
sale’ as at December 31, 2012. The transac-
tion volume amounted to EUR 53,680 k.
An area of land was acquired in Düsseldorf
(owned through leasehold before) in the
second quarter of 2013. This transaction
led to an increase in investment property of
EUR 405 k.
Capital expenditure (EUR 14,483 k) is com-
prised of subsequent acquisition and produc-
tion costs relating to property acquisitions
and refurbishment projects.
Furthermore, the Group acquired two invest-
ment properties for which the transfer of ben-
efits and obligations was completed in the
› EUR 104,224 k (2012: EUR 101,286 k) rent-
al income from investment property;
› EUR 7,272 k (2012: EUR 7,232 k) operat-
ing expenses (including repairs and main-
tenance) directly allocable to investment
property from which rental income was gen-
erated during the period under review; and
› EUR 3,190 k (2012: EUR 3,166 k) operat-
ing expenses (including repairs and main-
tenance) arising from investment property
which did not generate rental income dur-
ing the period under review.
Investment properties (including held-for-
sale investment properties) of an amount of
EUR 1,632,362 k (2012: EUR 1,632,998 k)
served as collaterals for bank loans.
10.2 Equity accounted investment
At the end of the reporting period, two
companies in which alstria office REIT-AG
holds a share of 49 % were treated as joint
ventures and accounted for using the equi-
ty method. The carrying amount of the joint
ventures at the end of the reporting peri-
od was EUR 21,001 k (December 31, 2012:
EUR 18,183 k).
For further information please refer » to Note 4.
67
alstria Financial Report 2013
Consolidated financial statements
10.3 Property, plant and equipment
EUR k
Acquisition and production cost
As at Jan. 1, 2013
Additions
As at Dec. 31, 2013
Accumulated amortization,
depreciation and write-downs
As at Jan. 1, 2013
Additions
As at Dec. 31, 2013
Net book values as
at Dec. 31, 2013
EUR k
Acquisition and production cost
As at Jan. 1, 2012
Additions
Reclassifications from
investment property
Disposals
As at Dec. 31, 2012
Accumulated amortization,
depreciation and write-downs
As at Jan. 1, 2012
Additions
As at Dec. 31, 2012
Net book values as
at Dec. 31, 2012
Plant
Furniture and
fixtures
Own occupied
property
Total 2013
1,169
0
1,169
1,134
19
1,153
16
883
47
930
318
113
431
499
5,019
0
5,019
285
93
378
4,641
7,071
47
7,118
1,737
225
1,962
5,156
Plant
Furniture and
fixtures
Own occupied
property
Total 2012
1,150
19
0
0
1,169
1,117
17
1,134
35
625
259
0
– 1
883
223
95
318
565
4,343
70
606
0
5,019
202
83
285
4,734
6,118
348
606
– 1
7,071
1,542
195
1,737
5,334
The useful life of the assets is estimated to be
between three to 15 years for plant, furniture
and fixtures and 33.33 to 50 years for the
own-occupied properties.
Plant is comprised of miscellaneous items
such as fire extinguishers or a control panel
for a closed-circuit television system.
alstria office REIT-AG occupies areas for its
own use in two of its office buildings in Ham-
burg and Düsseldorf. Therefore, the own-
er-occupied areas of the properties are cat-
ego-rised as ‘property, plant and equipment’
according to IAS 16.
In order to secure Group liabilities, the prop-
erties are pledged via land charges.
68
alstria Financial Report 2013
EUR k
Acquisition and production cost
As at Jan. 1, 2013
Additions
As at Dec. 31, 2013
Accumulated amortization,
depreciation and write-downs
As at Jan. 1, 2013
Additions
As at Dec. 31, 2013
Net book values as
at Dec. 31, 2013
EUR k
Acquisition and production cost
As at Jan. 1, 2012
Additions
Reclassifications from
investment property
Disposals
As at Dec. 31, 2012
Accumulated amortization,
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
Own occupied
Plant
fixtures
property
Total 2013
Furniture and
Own occupied
Plant
fixtures
property
Total 2012
1,169
0
1,169
1,134
19
1,153
16
1,150
19
0
0
1,169
1,117
17
1,134
35
883
47
930
318
113
431
499
625
259
0
– 1
883
223
95
318
565
5,019
0
5,019
285
93
378
4,641
4,343
70
606
0
5,019
202
83
285
4,734
7,071
47
7,118
1,737
225
1,962
5,156
6,118
348
606
– 1
7,071
1,542
195
1,737
5,334
Consolidated financial statements
10.4 Intangible assets
EUR k
Acquisition and
production cost
As of Jan. 1
Additions
Disposals
As of Dec. 31
Accumulated amortisation,
depreciation and write-downs
As of Jan. 1
Additions
Disposals
As of Dec. 31
Licences
2013
2012
1,480
1,192
332
0
288
0
1,812
1,480
1.013
327
0
742
271
0
1.340
1.013
Net book values as at Dec. 31
472
467
The useful life of the intangible assets is es-
timated to be between three to eight years.
The intangible assets consist of software li-
cences and licences to other rights in an
amount of EUR 369 k and EUR 103 k, re-
spectively.
10.5 Assets held for sale
At the end of the previous reporting period
only investment properties held for sale were
disclosed under assets held for sale. The level
of fair value hierarchy within which the fair
value measurements are categorised is level
3. The valuation of the held for sale proper-
ties is based on two unobservable input pa-
rameters: (i) the contractual disposal price for
the asset and (ii) the expected disposal costs
to be borne by the Group. Since the expect-
ed disposal expenses are of minor influence
to the valuation the significant unobserva-
ble input, the contractual disposal price, cor-
responds the carrying amount of the assets
held for sale.
In estimating the fair value of the properties,
the highest and best use of the properties is
their current use. There has been no change
to the valuation method during the year.
10.6 Receivables and other assets
Due to the specific nature of the business,
the Group considers receivables due up to
one year to be current. The following table
presents an overview on the receivables of
the Group:
EUR k
Trade receivables
Rent receivables
Accounts receivables
from affiliates
Other receivables
Accrued receivables
for ‘Rent free periods’
Deposit account
Prepayments
Receivables and
other assets
Other receivables
Dec. 31,
2013
Dec. 31,
2012
3,708
3,656
89
89
4,768
1,639
130
454
6,991
2,998
1,624
142
2,048
6,812
Except for EUR 1,639 k of receivables
(December 31, 2012: EUR 1,624 k) from an
escrow holder all receivables are due within
one year from the end of the reporting peri-
od. The fair value of all receivables is equal to
their carrying amount.
Trade receivables were written down by
EUR 40 k (December 31, 2012: EUR 64 k)
due to rent payments in arrears. Apart from
trade receivables no other receivables, were
impaired.
As at December 31, 2013, trade receivables
of an amount of EUR 991 k (December 31,
2012: EUR 1,343 k) were past due but not
yet impaired. These relate to a number of in-
dependent customers for whom there is no
recent history of default.
The ageing analysis of these trade receivables
is as follows:
EUR k
Trade receivables
Up to 3 months
3 to 6 months
Over 6 months
Total
Dec. 31,
2013
Dec. 31,
2012
662
87
242
991
820
103
420
1,343
69
alstria Financial Report 2013
Consolidated financial statements
All receivables from rental agreements and
property disposals, as well as insurance re-
ceivables and derivative financial instruments,
have been assigned to the lenders » Note 11.2
in order to secure the Group’s loans.
On June, 7 2013, alstria issued a convertible
bond for a total amount of EUR 79,400 k. Due
to the terms and conditions of the convertible
bond, the conversion right has to be separate-
ly accounted as an embedded derivative.
A total of EUR 4,768 k of other receivables is
made up of accruals resulting from the recog-
nition of total rental revenues on a straight-
line basis over the entire term of the lease
agreements (rent smoothing).
An amount of EUR 1,229 k of receivables is
included in previous year’s receivables and
other assets of EUR 2,048 k. They result
from charges passed on to a former majori-
ty shareholder that were incurred in connec-
tion with the placement of that shareholder’s
shares on the capital market.
10.7 Derivative financial instruments
The following derivative financial instruments
existed at the end of reporting period:
In line with alstria’s hedging strategy, a new
interest rate forward cap agreement with a
notional value of EUR 380,870 k and a cap
rate of 0.0000 % was entered to hedge the
variable interest payments. The cap will be-
come effective on July 20, 2015 and will ex-
pire on September 30, 2020. This transaction
was executed on September 11, 2013.
The interest rate forward cap agreement
will replace the existing interest rate for-
ward swap with a notional amount of
EUR 380,870 k, a swap rate of 2.9900 % and
a maturity to July 20, 2015.
Forwad-Cap3)
0.0000 Sept. 30, 2020
380,870
31,932
Strike p.a.
(%) Maturity date
Notional
(EUR k)
Fair value
(EUR k)
Notional
(EUR k)
Fair value
(EUR k)
Dec. 31,
2013
Dec. 31,
2012
3.0000 Sept. 30, 2019
4.6000 Oct. 20, 2015
42,500
47,902
641
3
42,500
47,9021)
2.9900
Jul. 20, 2015
380,870
– 15,769
0
471,272
– 15,125
42,500 2)
3.0000 Dec. 17, 2018
3.2500 Dec. 31, 2015
3.3000 Oct. 20, 2014
3.3000 Oct. 20, 2014
56,000
11,327
0
0
541
2
0
0
0
56,000
11,500
22,876
7,871
395
8
0
403
0
395
5
2
1
2.1940 Dec. 31, 2014
37,283
– 858
37,283
– 1,632
2.9900
Jul. 20, 2015
0
0
472,500
– 33,448
104,6104)
31,617
608,030
– 34,677
575,882
16,492
650,530
– 34,274
n/a
Jun. 14, 2018
7,8845)
– 9,336
7,156
0
– 34,274
Product
Cap
Cap
Swap
Interest rate
derivatives –
held for trading
Cap
Cap
Cap
Cap
Swap
Swap
Interest rate
derivatives –
cash flow hedges4)
Total Interest rate
derivatives
Embedded
Derivative
Total
1) Not effective before July 10, 2013
2) Notional excluding the EUR 47,902 k not effective
before July 10, 2013
3) Not effective before July 20, 2015
4) Notional excluding the EUR 380,870 k not effective
before July 20, 2015
5) Underlying number of shares for conversion in
thousand
70
alstria Financial Report 2013
Consolidated financial statements
For more information, please refer to the
financial management section in the Group
management report, » page 15.
The value changes of the derivatives are re-
flected in various items in the balance sheet.
The following table shows the change in fi-
nancial derivatives since December 31, 2012:
Changes in financial derivates
EUR k
Hedging instruments as
at Dec. 31, 2012
Effective change in fair values
cash flow hedges
Ineffective change in fair values
cash flow hedges
Net result from fair value changes in
financial derivatives not qualifying
for cash flow hedging
Reclassification of cumulated loss
from equity to income statement
Changes in accrued interests
concerning financial derivatives
Acquisitions
Disposals
Hedging instruments as
at Dec. 31, 2013
Financial assets
Financial liabilities
Cash flow
hedge
reserve Non-current
Current
Non-current
Total
– 22,137
403
403
– 35,081 – 34,275
11,820
49
0
0
2,988
0
0
0
– 10,129
0
0
0
42,152
0
– 7,329
32,475
0
0
114
0
0
127
0
644
11,771
11,820
2,331
– 7,798
3,118
3,232
0
0
118
118
– 12,453
29,826
4,233
4,233
– 25,963
7,156
The notional amount of the financial deriv-
atives, which includes cash flow hedges and
derivatives not qualifying for cash flow hedg-
ing, effective at the end of the reporting pe-
riod is EUR 575,882 k (December 31, 2012:
EUR 650,530 k).
Derivatives of a notional amount of
EUR 471,272 k (December 31, 2012:
EUR 42,500 k) are not designated as a cash
flow hedge.
An increase in the fair values of derivatives of
an amount of EUR 11,820 k that are effective
in a cash flow hedge has been recognised in
the hedging reserve in 2013 (2012: decrease
of EUR 5,363 k).
The ineffective portion that arises from cash
flow hedges amounted to a fair value loss of
EUR 7,798 k (2012: loss of EUR 1,069 k) and
is recognised in profit or loss.
Further gains totalling EUR 3,232 k (2012:
gain of EUR 675 k), which were due to the
market valuation of derivatives not included
in hedge accounting, were recorded in the in-
come statement 2013.
A loss of EUR 2,988 k (2012: EUR 986 k)
relates to cumulative losses from cash flow
hedges for which the forecast transaction is
no longer expected to occur as loans were re-
paid prematurely.
in a total
Overall, this results
loss of
EUR 7,554 k (2012: loss of EUR 1,380 k),
which is recorded as ‘net result from fair val-
ue adjustments on financial derivatives’.
71
Forwad-Cap3)
0.0000 Sept. 30, 2020
380,870
31,932
Dec. 31,
2013
Dec. 31,
2012
Strike p.a.
(%) Maturity date
Notional
(EUR k)
Fair value
(EUR k)
Notional
(EUR k)
Fair value
(EUR k)
3.0000 Sept. 30, 2019
4.6000 Oct. 20, 2015
42,500
47,902
641
3
42,500
47,9021)
395
2.9900
Jul. 20, 2015
380,870
– 15,769
0
0
56,000
11,500
22,876
7,871
8
0
0
5
2
1
471,272
– 15,125
42,500 2)
403
541
395
3.0000 Dec. 17, 2018
3.2500 Dec. 31, 2015
3.3000 Oct. 20, 2014
3.3000 Oct. 20, 2014
56,000
11,327
0
0
0
2
0
0
0
2.1940 Dec. 31, 2014
37,283
– 858
37,283
– 1,632
2.9900
Jul. 20, 2015
472,500
– 33,448
104,6104)
31,617
608,030
– 34,677
575,882
16,492
650,530
– 34,274
Product
Cap
Cap
Swap
Interest rate
derivatives –
held for trading
Cap
Cap
Cap
Cap
Swap
Swap
Interest rate
derivatives –
cash flow hedges4)
Total Interest rate
derivatives
Embedded
Derivative
Total
n/a
Jun. 14, 2018
7,8845)
– 9,336
7,156
0
– 34,274
1) Not effective before July 10, 2013
4) Notional excluding the EUR 380,870 k not effective
2) Notional excluding the EUR 47,902 k not effective
before July 20, 2015
before July 10, 2013
3) Not effective before July 20, 2015
5) Underlying number of shares for conversion in
thousand
alstria Financial Report 2013
Consolidated financial statements
10.8 Cash and cash equivalents
EUR k
Dec. 31, 2013
Dec. 31, 2012
Bank balance
82,782
118,548
Bank balances earn interest at floating inter-
est rates based on daily bank deposit rates. As
at the end of the reporting period, EUR 252 k
(December 31, 2012: EUR 252 k) of the cash
and cash equivalents were restricted. The
amount corresponds to accrued interest obli-
gations and other amounts that are not at the
Company’s free disposal.
11 Notes to the consolidated
statement of financial position
– equity and liabilities
11.1 Equity
For detailed information on equity please re-
fer to the consolidated statement of changes
in consolidated equity.
Share capital
Thousand
Dec. 31, 2013 Dec. 31, 2012
Ordinary share
of EUR 1 each
78,933
78,933
Capital reserve
The capital reserve changed as follows during
the financial year:
EUR k
As of Jan. 1
Contributions to
capital reserve
Transaction costs
of issue of shares
2013
2012
769,412
751,084
0
0
53,778
– 1,310
Payment of dividends
– 39,467
– 34,705
Share-based payments
Conversion of convertible
participation rights
541
0
506
59
As of Dec. 31
730,486
769,412
The new shares generated from the cap-
ital increase in the previous financial year
were issued and sold at a price of EUR 8.50
per share. The issue proceeds by which the
nominal share capital increase was exceed-
ed amounted to EUR 53,778 k. They were
recognised in capital reserves. The share
placement resulted in an overall increase in
the capital reserve of EUR 52,468 k, due to
additions of EUR 53,778 k and expenses of
EUR 1,310 k.
On December 31, 2013 alstria office RE-
IT-AG’s share capital remained unchanged at
an amount of EUR 78,933,487, represented
by 78,933,487 non-par value bearer shares.
An increase of EUR 541 k (2012: EUR 506 k)
resulted from the vesting of the convertible
profit participation certificates as granted to
the Group’s employees.
The majority of the shares in the Company
are in free float.
Dividend payments released from capital re-
serves totalled EUR 39,476 k (EUR 0.50 per
outstanding share).
The following table shows the reconciliation
of the number in shares outstanding:
Hedging reserve
Number of shares
2013
2012
EUR k
Dec. 31, 2013 Dec. 31, 2012
Shares outstanding
on Jan. 1
Issue of new shares
Conversion of conver-
tible participation rights
78,933,487 71,703,625
0
0
7,170,362
59,500
As of Dec. 31
78,933,487 78,933,487
Hedging reserve
– 7,329
– 22,137
For further details on the change in hedging
reserve please refer » to Note 10.7.
72
alstria Financial Report 2013
EUR k
As of Jan. 1
Contributions to
capital reserve
Transaction costs
of issue of shares
2013
2012
769,412
751,084
0
0
0
53,778
– 1,310
506
59
Payment of dividends
– 39,467
– 34,705
Share-based payments
541
Conversion of convertible
participation rights
As of Dec. 31
730,486
769,412
Consolidated financial statements
Treasury shares
As of December 31, 2013, the Company held
no treasury shares.
By resolution of the Annual General Meet-
ing held on June 8, 2011, the Company’s
au-thorisation to acquire treasury shares was
renewed. According to the resolution, alstria
office REIT-AG is authorised to acquire up to
10 % of the capital stock until June 8, 2016.
There is no intention to make use of this au-
thorisation at present.
Retained earnings
Retained earnings as at December 31, 2013
totalled an amount of EUR 42,024 k. Since
the payment of the dividend could not be
generated from positive retained earnings at
the time the dividend was paid, the amount
of the dividend payouts in 2013 was released
from the capital reserve.
11.2 Financial liabilities
EUR k
Loans
Syndicated loan
Other loans
Convertible bond
Total
EUR k
Loans
Syndicated loan
Other loans
Total
Non-current
Current
Total
Loan Accrued interest
Total current Dec. 31, 2013
534,794
220,984
66,708
822,486
0
73,178
0
73,178
29
582
97
708
29
73,760
97
73,886
534,823
294,744
66,805
896,372
Non-current
Current
Total
Loan Accrued interest
Total current Dec. 31, 2012
555,610
326,495
882,105
5,460
4,121
9,581
26
379
405
5,486
4,500
9,986
561,096
330,995
892,091
The table shows the long-term loans, net of
the current portion as stated under non-cur-
rent
liabilities. Furthermore, the current
amount that is due within one year is shown,
which is recorded as short-term loans under
current liabilities.
amount of EUR 896.372 k (EUR 822.486 k
non-current and EUR 73.886 k current) takes
into account interest liabilities and transac-
tion costs to be allocated under the effec-
tive interest method upon raising liabilities.
Financial liabilities with a maturity of up to
one year are recognised as current loans.
As at December 31, 2013, the total repayable
amount of the loans drawn by alstria office
REIT-AG was EUR 913,892 k (December 31,
2012: EUR 896,984 k). The lower carrying
In the second quarter of financial year 2013,
alstria office REIT-AG issued a convertible
bond generating proceeds of EUR 79,400 k.
73
alstria Financial Report 2013
Consolidated financial statements
The convertible bond has a term to maturity
of five years. It will be redeemed at 100 %
of its principal amount. The bond has a cou-
pon of 2.75 % p.a., payable in quarterly in-
stalments in arrears and an initial conversion
price of EUR 10.0710.
The issuing volume resulting from the con-
vertible bond loan amounts to EUR 79,400 k
and is included in financial liabilities in full. It
is divided into a loan portion and a financial
liability in the form of an embedded deriva-
tive. The carrying amount of the convertible
bond liability therefore lies below its nominal
amount. The initial recognition of these two
components was at fair value, which corre-
sponds to the emission volume. As a part of
the allocation of the issue proceeds, the fair
value of the embedded derivative was deter-
mined and the residual value less transaction
costs was assigned to the loan component.
Subsequently, the loan component is valued
at amortised cost. The derivative component
is, however, valued at fair value at the end
of subsequent reporting periods. Upon con-
version into shares both components, which
are discontinued upon conversion of the
bond, are reclassified as equity. alstria office
REIT-AG issued this bond based on the au-
thorisation received from the Annual Gener-
al Meeting in 2013. The convertible loan has
a carrying amount without accrued interests
of EUR 66,708 k and a fair market value of
EUR 73,439 k.
alstria refinanced its main credit facility on
September 30, 2013. A syndicate consisting
of four banks has provided a credit facility to-
talling EUR 544,100 k (‘syndicated loan’). Out
of this nominal amount, EUR 538,963 k had
been drawn as of December 31, 2013 (De-
cember 31, 2012: EUR 564,721 k under the
former, replaced credit facility agreement).
The carrying amount was EUR 534,794 k as
of December 31, 2013 (December 31, 2012:
EUR 561,070 k under the former, replaced
credit facility agreement). The difference be-
tween the notional amount and the carrying
amount is due the allocated transaction costs
accounted under the effective interest rate
method.
74
The loan agreement has a term to maturity
of seven years until September 30, 2020. The
syndicated loan was arranged by UniCred-
it Bank AG, Munich and underwritten by
HSH Nordbank AG, Hamburg, Berlin-Han-
noversche Hypothekenbank AG, Berlin, and
Landesbank Hessen-Thüringen Girozentrale,
Frankfurt on the Main. As a result of the
disposal of six office buildings alstria repaid
EUR 25,756 k on its syndicated loan in the
reporting period 2013.
To secure the liabilities of the syndicated
loan, receivables from rental and property
purchase agreements as well as insurance re-
ceivables and derivative financial instruments
were assigned to the lenders, liens were
granted on bank accounts and the registra-
tion of land charges was agreed » Note 10.6.
alstria office REIT-AG entered into a new
floating rate loan in March 2011 in connec-
tion with the acquisition of two office build-
ings. 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 11,328 k has been drawn, has
a total amount of EUR 14,600 k. It matures at
the end of 2015.
Two other new floating rate loans were tak-
en up in November 2011. Both have an in-
terest rate based on the three-months EURI-
BOR rate plus a spread of 135 basis points
and a term to maturity until December 17,
2018. The loans serve to refinance a newly
acquired portfolio of six investment proper-
ties. An amount of EUR 56.000 k was drawn
as at December 31, 2013. In the third quarter
of 2012 a loan agreement for a credit facil-
ity of EUR 42,500 k has been entered into.
The floating rate loan, which is based on the
three-months EURIBOR rate plus a spread of
180 basis points has a term to maturity until
September 30, 2019. It was paid out to the
Group on December 28, 2012.
The current portion of the loan refers to
scheduled repayments and accrued interest
on the loans.
alstria Financial Report 2013 Consolidated financial statements
The variable interest of the loans is payable
on a quarterly basis, whereby the standard
margin and borrowing costs for the market
are added to the respective EURIBOR rate.
Due to the variable interest rate, there are no
significant differences between the carrying
amounts and fair value with the exception of
transaction costs.
A total of EUR 98,130 k (December 31, 2012:
EUR 100,945 k) in financial liabilities from
non-recourse loans relates to two fixed in-
terest rate loans. At the end of the report-
ing period, these loans had a fair value of
EUR 100,574 k
(December 31, 2012:
EUR 102.906 k). The fair value estimation
is based on the discounted cash flows using
quoted prices for loans with equivalent risk
and maturity as a discount rate (level 2 in fair
value hierarchy).
As at December 31, 2013, the loans and the
convertible bond were reduced by trans-
action costs of EUR 7,087 k (December 31,
2012: EUR 5,418 k).
The average debt maturity as at the end of the
reporting period increased to 5.3 years com-
pared to 3.0 years as of December 31, 2012.
The average interest rate of the Group's loans
was 3.6 % at the end of the reporting period.
The carrying amounts of the loans are all
reported in euros.
The liabilities exposed to an interest rate risk
are due as follows:
EUR k
Dec. 31, 2013 Dec. 31, 2012
Up to 1 year
More than 1 year
Total
42,843
693,520
736,363
6,646
789,393
796,039
The following loans are secured by land charges:
EUR k
Dec. 31, 2013 Dec. 31, 2012
Financial liabilities
secured by land
charges
thereof on invest-
ment property
829,567
892,091
824,926
887,357
75
alstria Financial Report 2013 Consolidated financial statements
11.3 Provisions
EUR k
Provisions
Due
Total
Due
up to
1 year
in more
than 1 year
Dec. 31,
2013
up to
1 year
in more
than 1 year
Rental guarantee
490
2,372
Provision virtual
share liabilities
1,525
2,015
872
3,244
2,862
2,397
5,259
0
0
0
3,829
1,362
5,191
Total
Dec. 31,
2012
3,829
1,362
5,191
In connection with of the sale of properties,
the Group has committed itself to compen-
sate buyers for possible shortfalls in rental in-
come for rental agreements existing with cer-
tain tenants at the disposal date that are not
extended. A provision amount of EUR 2.862
k was calculated as the net present value of
possible cash outflow due to this rental guar-
antee for which a realisation is more likely
than not. The commitment relates to a six-
year rental period starting in 2014 and has
led to contingent liabilities see » Note 12.2.
As at December 31, 2012, the provision
for the rental guarantees amounted to
EUR 3,829 k. The decrease in this provision
of an amount of EUR 21 k results from the
change in the net present value due to the
expiration and discount rate changes. The
remaining EUR 946 k reduction in the pro-
vision for rental guarantee is based on the
modification in the expectation of realisation,
which takes into account new information of
the tenants’ situation, with respect to them
using their possible break option.
In addition EUR 2,397 k (December 31,2012:
EUR 1,472 k) were recognised as a provision
for awarding the Long-Term and Short Term
Incentive Plan see » Note 18.
Due
Total
Due
Total
up to
1 year
in more
Dec. 31,
than 1 year
2013
up to
1 year
in more
Dec. 31,
than 1 year
2012
EUR k
Trade payables
Other trade payables
Other current liabilities
Accruals for outstanding
invoices
Security deposit
Advance rent payments
received
Accrued bonuses
Value added tax liabilities
Customers with credit
balances
Supervisory Board
compensation
Auditing costs
Building lease
for disposals
Consultancy costs
Miscellaneous
other liabilities
Advance payments received
3,474
3,474
3,435
996
1,544
1,238
485
425
305
266
0
0
0
283
8,977
1,052
742
3,474
3,474
3,735
3,735
3,435
2,048
1,544
1,238
485
305
266
0
0
0
5,071
758
1,309
1,210
561
302
286
361
2,640
18
425
1,103
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,735
3,735
5,071
1,500
1,309
1,210
561
1,103
302
286
2,640
18
416
6.387
6,748
283
416
1,052
10,029
14,035
7,129
21,164
76
alstria Financial Report 2013
Consolidated financial statements
11.4 Trade payables and
other liabilities
EUR k
Trade payables
Other trade payables
Other current liabilities
Accruals for outstanding
invoices
Security deposit
Advance rent payments
received
Accrued bonuses
Value added tax liabilities
Customers with credit
balances
Supervisory Board
compensation
Auditing costs
Building lease
Advance payments received
for disposals
Consultancy costs
Miscellaneous
other liabilities
Due
Total
Due
Total
up to
1 year
in more
than 1 year
Dec. 31,
2013
up to
1 year
in more
than 1 year
Dec. 31,
2012
3,474
3,474
3,435
996
1,544
1,238
485
425
305
266
0
0
0
283
8,977
0
0
0
1,052
0
0
0
0
0
0
0
0
0
0
3,474
3,474
3,735
3,735
3,435
2,048
1,544
1,238
485
5,071
758
1,309
1,210
561
425
1,103
305
266
0
0
0
302
286
361
2,640
18
283
416
0
0
0
742
0
0
0
0
0
0
3,735
3,735
5,071
1,500
1,309
1,210
561
1,103
302
286
6.387
6,748
0
0
0
2,640
18
416
1,052
10,029
14,035
7,129
21,164
There are no future minimum payments ob-
ligations at the end of the reporting period
2013 anymore because due to the termina-
tion of the leasehold in the reporting period no
leasehold liability existed. The disclosed carry-
ing amounts approximate their fair values.
Trade payables relate to operating costs not
yet invoiced of EUR 1,489 k (December 31,
2012: EUR 2,492k), liabilities from project de-
velopment, rental activities and third-party real
estate management services of EUR 1,985 k
(December 31, 2012: EUR 1,243 k).
The property lease liability existing at the end
of the previous reporting period EUR 6,748 k
resulted from a property leasehold acquired
within the previous financial year, that mean-
while no longer exists. The leasehold original-
ly matured in December 2088.
77
alstria Financial Report 2013
Consolidated financial statements
The annual lease payment amounted to EUR
381 k and was attached to the development
of the annual average consumer price index
in Germany.
The fair value of the leasehold as at Decem-
ber 31, 2012 amounted to EUR 7,130 k.
The following table presents the future mini-
mum lease payments as per end of the report-
ing period 2012 and their discounted values
for future periods.
EUR k
Maturity property lease
< 1 year
1 – 5 years
> 5 years
Total
Less:
Future financing costs
Discounted value of mini-
mum lease payments
Dec. 31, 2013
Discounted value
of minimum
lease payments
Minimum lease
payments
Dec. 31, 2012
Discounted value
of minimum
lease payments
Minimum lease
payments
0
0
0
0
0
0
361
1,263
5,124
6,748
0
0
0
0
381
1,523
27,035
28,939
22,191
6,748
At the end of the reporting period 2013 no
future minimum payment obligations are
shown as no leasehold liability was incurred
due to its termination.
11.5 Trust assets and liabilities
At the end of the reporting period, al-
stria office REIT-AG held trust assets
worth EUR 1,639 k (December 31, 2012:
EUR 1,624 k) and liabilities worth EUR 996 k
(December 31, 2012: EUR 758 k), in particu-
lar from rent deposits.
11.6 Deferred taxes
According to its REIT status, alstria office RE-
IT-AG has been fully tax exempt regarding
income taxes from January 1, 2007 onwards.
Therefore, there are neither deferred taxes at
the end of reporting period nor at the end of
the prior years’ reporting period.
12. Other notes
12.1 Compensation of the Manage-
ment Board and Supervisory Board
Management Board In 2013, the over-
all compensation of the members of the
Management Board totalled EUR 2,192 k
(2012: EUR 2,193 k). On the reporting date,
liabilities for the compensation of the mem-
bers of the Management Board amounted to
EUR 378 k (2012: EUR 360 k). Under the stock
option programme of alstria office REIT-AG
members of the Management Board held
non-transferable stock options for 375,000
shares of alstria office REIT-AG as at Decem-
ber 31, 2013 and 2012, respectively. The stock
options had been granted under the regime
of the meanwhile terminated stock option
programme implemented in 2007. Details of
the stock option programme are also inclu-
ded in » Note 17.
78
alstria Financial Report 2013
Consolidated financial statements
As at December 31, 2013 379,768 virtual
shares were granted to the members of the
Management Board, resulting from a subse-
quent cash-settled sharebased incentive plan
implemented in 2010 (see also » Note 18).
Supervisory Board Pursuant to the Articles
of Association, Supervisory Board members’
fixed annual payment amounted to EUR 305 k
(2012: EUR 302 k).
Further information on disclosures according
to Section 314 paragraph 1 no. 6a HGB (Ger-
man Commercial Code) and IAS 24.17 is pro-
vided in the remuneration report (» see pages
111 to 117) that is part of the corporate gov-
ernance statement.
12.2 Other financial commitments
and contingencies
With respect to the sale of properties, at the
disposal date the Group has committed itself
to compensate buyers for possible shortfalls
in rental income in case rental agreements
existing with certain tenants are not extend-
ed. Contingencies out of this commitment
amounted to EUR 456 k (December 31,
2012: EUR 670 k). The commitment 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
Company does not expect any claims from
these rental guarantees.
The same circumstances led to provisions for
rental guarantees (see » Note 11.3)
The decrease in this commitment from
EUR 670 k to EUR 456 k is based on the ex-
tension of the lease term of part of the rental
areas in question, resulting in the termination
of the rental guarantee originally granted for
these areas.
As at December 31, 2013, there were no
rental agreements for the administrative
prem-ises subject to with a minimum lease
term. An amount of EUR 292 k of future fi-
nancial obligations arose from other leasing
agreements. EUR 138 k of them have a resid-
ual maturity up to one year and the remain-
der, EUR 154 k, a remaining maturity of one
to five years.
Annual lease payments of an amount of
EUR 381 k were resulted from a proper-
ty leasehold that existed on December 31,
2012. The development of the lease payment
rate was connected to the development of
the annual average consumer price index in
Germany. As at December 2013 the property
leasehold ceases to exist.
Operating lease commitments –
Group as lessor
The Group has entered into commercial prop-
erty leases on its investment property portfo-
lio, which consists of the Group’s offices and
commercial real estate. These non-cancella-
ble leases have remaining terms to maturity
of between one and 22 years. Most leases in-
clude an indexation clause, i.e. allowing rent-
al charges to be raised annually according to
prevailing market conditions.
Future minimum rental charges receivable as
agreed on in non-cancellable operating leas-
es are as follows:
EUR k
Dec. 31,
2013
Dec. 31,
2012
Within 1 year
96,965
98,079
After 1 year but not
longer than 5 years
More than 5 years
281,798
323,480
296,037
314,741
702,243
708,857
79
alstria Financial Report 2013 Consolidated financial statements
12.3 Consolidated cash flow
statement
The cash flow statement shows how the
Group’s cash and cash equivalents have
changed in the course of the financial year
as a result of cash received and paid. In ac-
cordance with IAS 7, a distinction is made
between cash flows from operating activities
and cash flows from investing and financing
activities.
13 Related party relationships
13.1 Preliminary remarks
Related parties are members of the manage-
ment of alstria office REIT-AG (Management
Board and Supervisory Board) and close fam-
ily members of these persons. Related par-
ties also include entities with controlling in-
fluence over the Group and entities with joint
control over, or significant influence on, al-
stria office REIT-AG.
Cash flows from investing and financing ac-
tivities are calculated on the basis of pay-
ments, whereas cash flows from operating
activities are derived indirectly based on the
consolidated profit for the year.
The majority of alstria office REIT-AG’s shares
are free float shares. No person or entity has
a controlling influence over the Company.
alstria office REIT-AG is the ultimate parent
company of the Group.
Joint ventures over which alstria office RE-
IT-AG has joint control are also considered
related parties.
In the view of alstria office REIT-AG’s man-
agement, all transactions with related parties
entered into in financial year 2013 have been
undertaken at terms of arm’s length transac-
tions or under conditions in alstria office RE-
IT-AG’s favour.
13.2 Remuneration of key
management personnel
For a detailed description of the remunera-
tion of key management personnel, please
refer to » Note 12.1 and the remuneration
report (» see pages 111 to 117).
13.3 Related party transactions
At the end of the reporting period, the
Group recorded receivables of an amount of
EUR 89 k (December 31, 2012: EUR 89 k)
from joint ventures. Furthermore, alstria office
REIT-AG received EUR 142 k (2012: EUR 701
k) from the joint venture as a compensation
for services connected to real estate.
No further transactions with related parties
arose during the reporting period.
Net cash generated from operating activi-
ties for the financial year 2013 amounted to
EUR 50,114 k. The increase compared to the
reporting period 2012 (EUR 45,735 k) result-
ed mainly from higher rental revenues and
lower payments for interest expenses.
Cash flow from investing activities is impact-
ed by the cash outflows resulting from the
acquisitions of two investment properties
and a piece of land and investments in exist-
ing properties (cash outflow EUR 58,506 k).
Cash inflows of EUR 51,040 k relate to pay-
ments received for the sale of investment
properties. Payments for capital contribution
in joint ventures generated cash outflows of
an amount of EUR 3,370 k.
Cash flows from financing activities mainly
reflect refinancing activities with payments
for the redemption of borrowings of an
amount of EUR 606,592 k and cash proceeds
from taking on loans (EUR 544,100 k) and
issuing a convertible bond (EUR 79,400 k).
Dividend payments resulted in cash outflows
of EUR 39,467 k. Furthermore cash outflows
were made for the acquisition and termina-
tion of financial derivatives (EUR 46,512 k).
Cash and cash equivalents reported in the
cash flow statement relate to all liquidity
items disclosed in the balance sheet, i.e. cash
at hand and bank balances.
80
alstria Financial Report 2013 Consolidated financial statements
14 Earnings per share
Basic earnings per share are calculated as
the quotient of the profit attributable to the
shareholders and the weighted average num-
ber of shares outstanding during the finan-
cial year – except for the average number of
treasury shares held by the Company itself.
Diluted earnings per share amounts are cal-
culated by dividing the profit attributable to
ordinary owners of the parent company by
the weighted average 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 ordi-
nary shares into ordinary shares.
The following reflects the income and share
data used in the earnings per share compu-
tations:
Earnings per share
2013
2012
Profit attributable to the
shareholders (EUR k)
Average number of shares
outstanding (thousands)
38,945
39,911
78,933
77,848
Basic earnings per share
0.49
0.51
(EUR per share)
The potential conversion of shares in relation
to the convertible bond could dilute basic
earnings per share in the future:
Diluted earnings per share
2013
2012
Diluted profit attributable to
the shareholders (EUR k)
Average diluted number of
shares (thousands)
Diluted earnings per share
(EUR)
39,896
39,911
86,818
77,848
0.46
0.51
There were no dilution effects resulting from
the granted stock options or the convertible
profit participation rights during the period
under review, as the related vesting condi-
tions were not satisfied as at the end of the
reporting period.
For further information concerning granted
stock options and convertible profit partici-
pation rights, please see » Notes 17 and 19.
There have been no other transactions in-
volving ordinary shares or potential ordinary
shares between the reporting date and the
date of completion of these financial state-
ments.
alstria office REIT-AG is authorised to issue up
to EUR 39,353 k shares as conditional capi-
tal. These contingently issuable shares could
potentially dilute basic earnings per share in
the future, but were not included in the cal-
culation of diluted earnings per share because
they are non-dilutive for the period presented.
15 Dividends paid
EUR k
2013
2012
Dividends on ordinary
shares1) not recognised as
a liability as at Dec. 31
Dividend per share
(without treasury shares)
39,467
34,705
0.50
0.44
1) Refers to all shares except treasury shares at the
dividend payment date.
The Annual General Meeting of alstria of-
fice REIT-AG held on May 29, 2013, re-
solved
totalling
to distribute dividends
EUR 39,467 k (EUR 0.50 per outstand-
ing share). The dividend was distributed on
Mai 30, 2013. The dividends paid out in 2012
totalled EUR 34,705 k (EUR 0.44 per share
outstanding).
16 Employees
During the period from January 1 to Decem-
ber 31, 2013, the Company on average em-
ployed 61 employees (January 1 to Decem-
ber 31, 2012: on average 55 employees). The
average was calculated based the total num-
ber of employees at the end of each quarter.
On December 31, 2013, 63 people (Decem-
ber 31, 2012: 59 people) were employed at
alstria office REIT-AG, excluding the Man-
agement Board members.
81
alstria Financial Report 2013 Consolidated financial statements
17 Stock option programme
On March 27, 2007, the Supervisory Board of
the Company resolved to establish a stock op-
tion programme for the members of the Man-
agement Board. The Supervisory Board fixed
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 first tranche
of stock options to the Management Board.
The main terms of the stock option pro-
gramme resolved by the Supervisory Board
can be summarised as follows:
Under the stock option programme, up to
2,000,000 options entitling to the subscrip-
tion 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
first tranche was granted by the Supervisory
Board in 2007, subject to the conditions be-
low. The exercise price for the stock options
granted in 2007 is EUR 16.
In 2011 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 unaf-
fected.
At the beginning of the reporting period,
515,625 stock options outstanding existed.
Therefore, the amount of stock options out-
standing as at the end of reporting period re-
mained unchanged. None of these stock op-
tions are exercisable. The personnel expenses
resulting from the allocation of the fair values
of the stock options at the granting date over
the vesting period amounted to EUR 0 k in
2013 and 2012.
The fair values of the options outstanding
were estimated at the respective granting
dates using a Black-Scholes model and par-
tial-time barrier options, taking into account
the terms and conditions upon which the in-
struments were granted. The following table
lists the inputs to the model used for the de-
termination of the fair value of the stock op-
tions granted:
82
Fair value of stock
options granted on
Dividend yield (%)
Risk-free interest rate (%)
Mar. 27,
2007
Sept. 5,
2007
3.60
4.21
3.60
4.29
Expected volatility (%)
30.00
30.00
Expected life of
option (years)
Exercise share price (EUR)
Labour turnover rate (%)
Stock price as of
valuation date (EUR)
Estimated fair value of
one stock option at the
granting date (EUR)
4.50
16.00
0.00
4.50
16.00
0.00
16.00
13.93
3.17
2.28
Expected volatility is based on the historical
volatility of comparative listed companies and
was calculated as an average of these com-
parables.
The term of each stock option is seven years
beginning with the respective issue date. The
stock options may only be exercised if the
current stock exchange price of the Compa-
ny’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-sub-
sequent trading days of the Frankfurt Stock
Exchange prior to the commencement of the
respective exercise period. The stock options
may only be exercised after the expiration of
a vesting period of two years, and then dur-
ing the four exercise periods each year. Each
exercise period lasts 30 days, commencing
with the day of announcement of the results
for the first, second and third quarter, and the
day of the Company’s Annual General Meet-
ing. There are no cash settlement alternatives.
18 Share-based remuneration
On March 2, 2010, the Company’s super-
visory board established a new share-based
remuneration system as part of the success
based remuneration for members of the
Management Board. The share-based remu-
neration is made up of a long-term compo-
nent, the Long-Term Incentive Plan (LTIP),
and a short-term component, the Short-Term
Incentive Plan or STIP. The remuneration
type is a cash-settled and share-based pay-
ment transaction respectively.
alstria Financial Report 2013 Expected volatility (%)
30.00
30.00
Fair value of stock
options granted on
Dividend yield (%)
Risk-free interest rate (%)
Expected life of
option (years)
Exercise share price (EUR)
Labour turnover rate (%)
Stock price as of
valuation date (EUR)
Estimated fair value of
one stock option at the
granting date (EUR)
Mar. 27,
Sept. 5,
2007
3.60
4.21
4.50
16.00
0.00
2007
3.60
4.29
4.50
16.00
0.00
16.00
13.93
3.17
2.28
Consolidated financial statements
Under the LTIP, alstria office REIT-AG grants
virtual shares, which give an entitlement to
conversion into cash payments after four
years.
The development of the virtual shares until
December 31, 2013 is shown in the following
table:
The amount of the conversion payment is
based on the number of virtual shares, multi-
plied by the average stock market price of al-
stria’s shares on the Frankfurt Stock Exchange
during the last 60 trading days prior to the
relevant maturity date, plus an amount equal
to the sum of the dividend per share paid by
the Company to its shareholders between the
grant date and the maturity date, but in no
event higher than 250 % of the average stock
market price of alstria’s shares on the Frank-
furt Stock Exchange in the last 60 trading days
prior to the relevant grant date, multiplied by
a specified discretionary factor.
The discretionary factor is a multiplier that
can vary between 0.8 and 1.2, and is subject
to the individual performance of each partici-
pant during the respective holding period.
The assessment of the target achievement
depends on the absolute return of the alstria
share price (absolute total shareholder return)
and in an equal amount on the relative per-
formance of alstria's share in relation to the
EPRA/NA-REIT Index Europe Ex UK (relative
total shareholder return).
Since payment per vested virtual share de-
pends on the average quoted price of alstria's
shares for 60 trading days, the quoted aver-
age prior to the end of the reporting period
essentially represents the fair value of each
virtual share.
Virtual shares under the short-term varia-
ble remuneration (STIP) were granted for
the first time on March 3, 2011. The virtu-
al shares resulting from the STI are subject
to a minimum vesting period of two years.
Virtual STI shares are converted into a cash
amount after the expiry of the vesting pe-
riod. This cash amount is calculated based
on the number of virtual shares, multiplied
by the share price of one alstria share at that
time, which is in turn calculated based on a
reference period.
Number
of virtual
shares
Dec. 31, 2013
Dec. 31, 2012
LTI
STI
LTI
STI
Jan. 1
267,665 24,629 175,711 11,718
Granted in
the reporting
period
Converted
into cash in
the reporting
period
86,114 13,078
91,954 12,911
0 –11,718
0
0
Dec. 31
353,779 25,989 267,665 24,629
The 11,718 virtual shares converted into
cash under the STIP resulted in payments
to the management board in an amount of
EUR 121 k within the business year 2013.
In 2013, the LTI and the STI generated remu-
neration expenses amounting to EUR 1,046 k
(2012: remuneration expenses of EUR 563 k)
and provisions amounting to EUR 2,397 k
(December 31, 2012: EUR 1,472 k). The
Group recognises the liabilities arising from the
vested virtual shares under other provisions.
19 Convertible profit partici-
pation rights programme
On September 5, 2007, the Supervisory
Board of the Company resolved the issuance
of convertible profit participation certificates
(‘certificates’) to employees of the Compa-
ny and to employees of companies in which
alstria office REIT-AG, directly or indirectly,
holds a majority interest. Members of alstria
office REIT-AG’s Management Board are not
considered employees of the Company in
terms of this convertible profit participation
rights programme. With its resolution, the
Supervisory Board fixed the details of the
convertible profit participation rights pro-
gramme in accordance with an authorisation
granted by the general meeting of sharehold-
ers of March 15, 2007. The convertible profit
participation rights programme was renewed
by the Supervisory Board with minor modi-
fications in 2012 in accordance with an au-
thorisation granted by the general meeting of
shareholders of April 24, 2012.
83
alstria Financial Report 2013 Consolidated financial statements
The main terms of the programme Board can
be summarised as follows:
The nominal amount of each certificate is
EUR 1.00 and is payable upon issuance. Un-
der the current programme, starting in 2012,
a maximum of 500,000 certificates in an ag-
gregate nominal amount of up to EUR 500 k
may be issued.
The certificates are issued as nontransferable
rights and are neither sellable nor pledgeable
or otherwise chargeable.
The maximum term of each certificate is five
years.
During its term, each certificate entitles the
holder to a preferred disbursement from the
Company’s annual net profit. The profit share
corresponds to the dividend per share of the
Company for a full business year of the Com-
pany. For certificates held by a beneficiary for
less than a full business year of the Company,
the profit share is reduced pro rata temporis.
Each certificate shall be converted into one
non-par-value bearer share of the Company
on the second, third, fourth or fifth anniver-
sary 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 trad-
ing days (market condition). For 85,500 cer-
tificates issued on June 18, 2012 and 111,800
certificates issued on June 7, 2013, this mar-
ket condition was fulfilled until the end of the
financial year 2013.
Upon conversion of a certificate, the benefi-
ciary shall pay an additional conversion price
to the Company for each certificate to be
converted. The conversion price shall be the
aggregate proportionate amount in the Com-
pany’s share capital of the shares each certif-
icate entitles the holder to subscribe for and
shall be payable in addition to the offer price.
The fair values of the inherent options for
conversion 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 auto-
matically 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 agree-
ments under the employee profit participation
programme were in existence during the year.
Granting date of tranche
Dividend yield (%)
Risk-free interest rate (%)
Expected volatility (%)
Expected life of option (years)
Exercise share price (EUR)
Labour turnover rate (%)
Stock price as of valuation date (EUR)
Estimated fair value of one option for
conversion at the granting date
Jun. 6,
2008
4.70
4.65
35.00
2.00
2.00
10.00
11.03
Jun. 9,
Jun. 18,
Jun. 7,
2011
4.23
1.67
47.00
2.00
2.00
10.00
10.40
2012
5.76
0.04
38.00
2.00
2.00
10.00
7.64
2013
5.68
0.04
25.00
2.00
2.00
10.00
8.80
8.76
8.25
5.45
6.18
Number of certificates
Granting date of tranche
Jan. 1, 2013
Jun. 6,
2008
Jun. 9,
2011
Jun. 18,
2012
Jun. 7,
2013
35,500
73,000
86,000
Expired due to time lapse
– 35,500
0
0
Expired due to termination of employment
Converted
Granted
Dec. 31, 2013
0
0
0
0
– 500
– 500
0
0
0
0
111,800
111,800
72,500
85,500
111,800
269,800
Total
194,500
– 35,500
– 1,000
0
0
0
0
0
Total expenses relating to convertible profit
participation rights were EUR 665 k in 2013
» Note 9.5.
84
alstria Financial Report 2013 Consolidated financial statements
The following table lists the inputs to the
model used for the determination of the fair
value of the options for conversion:
Granting date of tranche
Dividend yield (%)
Risk-free interest rate (%)
Expected volatility (%)
Expected life of option (years)
Exercise share price (EUR)
Labour turnover rate (%)
Stock price as of valuation date (EUR)
Estimated fair value of one option for
conversion at the granting date
Expected volatility is based on the histori-
cal volatility of alstria and comparative listed
companies and was calculated as an average
of these comparable figures.
20 Financial risk management
20.1 Managing financial risk factors
The group’s activities expose it to a variety
of financial risks such as: interest rate risks,
credit risks and liquidity risks. The group’s
overall risk management programme focuses
on the unpredictability of financial markets
and seeks to minimise potential adverse ef-
fects on the group’s financial performance.
The group makes use of derivative finan-
cial instruments to hedge certain exposures
to risk. Risk management is carried out by
a central treasury function (group treasury)
within the finance and controlling depart-
ment under policies approved by the Board
of Directors. Group treasury identifies, evalu-
ates and hedges financial risks in close co-op-
eration with the CFO. The Management
Board provides written principles for overall
risk management, as well as policies covering
specific areas, such as interest rate risk, credit
risk, making use of derivative financial instru-
ments and non-derivative financial instru-
ments, and the investment of excess liquidity.
The financial instruments chiefly used by the
Group are bank loans and derivative financial
instruments. The main purpose of the bank
loans is to finance the business activities of
alstria office REIT-AG. In addition, the Group
also owns various financial assets, such as
Jun. 6,
2008
4.70
4.65
35.00
2.00
2.00
10.00
11.03
Jun. 9,
Jun. 18,
Jun. 7,
2011
4.23
1.67
47.00
2.00
2.00
10.00
10.40
2012
5.76
0.04
38.00
2.00
2.00
10.00
7.64
2013
5.68
0.04
25.00
2.00
2.00
10.00
8.80
8.76
8.25
5.45
6.18
cash and shortterm deposits, which arise di-
rectly from business activities.
Derivative financial instruments comprise in-
terest swaps and caps. The purpose of these
derivative financial instruments is to hedge
against interest risks arising from the Group’s
business activities and its funding.
The main risks arising from the Group’s fi-
nancial instruments are cash flow risks, inter-
est rate risks and liquidity risks. The Group
is exposed to credit risks mainly where de-
rivative financial instruments are held as as-
sets and via its bank balances. The amount
that best presents the maximum credit risk is
the carrying amount of the financial assets.
The Management Board decides on strate-
gies and processes for managing specific risk
types. These are defined in the following par-
agraphs.
Risks that could arise as a result of the financial
crisis are seen mainly in a potential de-fault of
payment by a major tenant. Due to the fact
that all of the Company’s main ten-ants are
public institutions or still highly rated, the risk
of default of payments is currently limited.
alstria office REIT-AG’s syndicated loan facility
agreement allows for a loan to value (LTV) ra-
tio of up to 70 %. The Company managed to
keep the LTV ratio for the syndicated loan on
the relevant test date at 53.4 %. The risk of a
breach of covenant is effectively countered.
85
alstria Financial Report 2013 Consolidated financial statements
The following table presents the single
LTV ratios and covenants for the Group loans
as at the end of the reporting period:
Existing loan agrements as per December 31, 2013
Principal amount
outstanding (EUR K)
Current LTV
(%)
LTV covenant
(%)
538,963
47,902
42,670
28,503
69,626
11,328
56,000
39,500
834,492
79,400
913,892
53.4
70.2
64.0
54.8
61.5
51.5
46.1
40.6
50.9
55.8
70.0
80.0
80.0
62.5
75.0
80.0
60.0
65.0
Loan
Syndicated loan
Non-recourse loan #1
Non-recourse loan #2
Non-recourse loan #3
Non-recourse loan #4
Loan #5
Loan #6
Loan #7
Total loans
Maturity
Sept. 30, 2020
Oct. 20, 2015
Dec. 31, 2014
Jun. 30, 2014
Jan. 31, 2017
Dec. 31, 2015
Dec. 17, 2018
Sept. 30, 2019
Convertible bond
Jun. 14, 2018
Total as at Dec. 31, 2013
Apart from the risks mentioned above, the
Group is not exposed to any commodity or
currency risks.
a) Interest rate risk
The following table sets out the carrying
amount of the Group’s financial instruments,
which are exposed to interest rate risk by ma-
turity:
EUR k
< 1 year
1 – 2 years
2 – 3 years
3 – 4 years
> 4 years
Total
Financial year as
at Dec. 31, 2013
Variable interest
Syndicated loan
Other loans
Total
Financial year as
at Dec. 31, 2012
Variable interest
Syndicated loan
Other loans
Total
0
42,843
42,843
0
24,863
59,057
59,057
0
24,863
5,460
1,186
6,646
0
559,261
72,576
72,576
59,057
618,318
0
0
0
0
0
0
514,100
538,963
123,000
224,900
637,100
763,863
0
564,721
98,500
231,319
98,500
796,040
Due to the extensive portfolio of non-cur-
rent financial liabilities with a variable interest
rate, alstria office REIT-AG is exposed to risks
from fluctuations in market interest rates. The
interest base for the financial liability (loan) is
the three-month EURIBOR rate, which is ad-
justed every three months. A number of dif-
ferent derivative financial instruments were
acquired to secure the interest expense. The
terms to maturity of the derivatives corre-
sponds to the terms to maturity of the loans.
The derivative financial instruments relate
to interest swaps for which the Company
agrees to exchange the difference between
86
Cap
Cap
Swap
Cap
Cap
Cap
Cap
Swap
Swap
Total
Dec. 31, 2013
Dec. 31, 2012
Product
Strike p. a.
Maturity
Notional
Fair value
Notional
date
(EUR k)
(EUR k)
(EUR k)
Fair value
(EUR k)
3.0000 Sept. 30, 2019
42,500
641
42,500
395
4.6000 Oct. 20, 2015
47,902
3
47,9021)
2.9900
Jul. 20, 2015
380,870
– 15,769
Interest rate derivatives –
held for trading
471,272
– 15,125
42,5002)
Forwad-Cap3)
0.0000 Sept. 30, 2020
380,870
31,932
0
0
3.0000 Dec. 17, 2018
56,000
541
56,000
3.2500 Dec. 31, 2015
11,327
3.3000 Oct. 20, 2014
3.3000 Oct. 20, 2014
2
0
0
11,500
22,876
7,871
2.1940 Dec. 31, 2014
37,283
– 858
37,283
– 1,632
2.9900
Jul. 20, 2015
0 472,500
– 33,448
0
0
0
Interest rate derivatives –
cash flow hedges
Total Interest rate
derivatives
Embedded Derivative
n/a
Jun. 14, 2018
7,8845)
1) Not effective before July 10, 2013.
3) Not effective before July 20, 2015.
2) Notional excluding the EUR 47,902 k not effective before July 10, 2013.
4) Notional excluding the EUR 380,870 k not effective before July 20, 2015.
5) Underlying number of shares for conversion in thousand.
104,6104)
31,617 608,030
– 34,677
575,882
16,492 650,530
– 34,274
– 9,336
7,156
– 34,274
403
395
8
0
0
5
2
1
0
alstria Financial Report 2013
Consolidated financial statements
fixed and variable interest rate amounts with
contracting partners at specified intervals.
The amounts are calculated by reference to
an agreed-upon notional principal amount.
In addition, interest caps were acquired; that
is, the interest is capped at a predetermined
maximum. If the maximum interest rate is ex-
ceeded, the difference between the actual in-
terest rate and the cap rate is paid out.
The derivative financial instruments of alstria
office REIT-AG are presented below:
Product
Strike p. a.
Maturity
date
Notional
(EUR k)
Fair value
(EUR k)
Notional
(EUR k)
Fair value
(EUR k)
Dec. 31, 2013
Dec. 31, 2012
Cap
Cap
Swap
3.0000 Sept. 30, 2019
42,500
641
42,500
4.6000 Oct. 20, 2015
47,902
3
47,9021)
2.9900
Jul. 20, 2015
380,870
– 15,769
0
Interest rate derivatives –
held for trading
471,272
– 15,125
42,5002)
Forwad-Cap3)
0.0000 Sept. 30, 2020
380,870
31,932
0
Cap
Cap
Cap
Cap
Swap
Swap
3.0000 Dec. 17, 2018
56,000
541
56,000
3.2500 Dec. 31, 2015
11,327
3.3000 Oct. 20, 2014
3.3000 Oct. 20, 2014
0
0
2
0
0
11,500
22,876
7,871
2.1940 Dec. 31, 2014
37,283
– 858
37,283
– 1,632
2.9900
Jul. 20, 2015
0
0 472,500
– 33,448
395
8
0
403
0
395
5
2
1
EUR k
< 1 year
1 – 2 years
2 – 3 years
3 – 4 years
> 4 years
Total
Financial year as
at Dec. 31, 2013
Variable interest
Syndicated loan
Other loans
Total
Financial year as
at Dec. 31, 2012
Variable interest
Syndicated loan
Other loans
Total
0
42,843
42,843
0
24,863
59,057
59,057
0
24,863
514,100
538,963
123,000
224,900
637,100
763,863
5,460
1,186
6,646
0
559,261
72,576
72,576
59,057
618,318
0
564,721
98,500
231,319
98,500
796,040
0
0
0
0
0
0
Interest rate derivatives –
cash flow hedges
Total Interest rate
derivatives
104,6104)
31,617 608,030
– 34,677
575,882
16,492 650,530
– 34,274
Embedded Derivative
n/a
Jun. 14, 2018
7,8845)
Total
– 9,336
7,156
0
– 34,274
1) Not effective before July 10, 2013.
2) Notional excluding the EUR 47,902 k not effective before July 10, 2013.
3) Not effective before July 20, 2015.
4) Notional excluding the EUR 380,870 k not effective before July 20, 2015.
5) Underlying number of shares for conversion in thousand.
These interest rate swaps and interest rate
caps are used to hedge the obligation under-
lying the loans.
The following table shows the sensitivity of
the Company’s loans on consolidated profit
or loss and equity due to a reasonably pos-
sible change in the interest rates (due to the
effect on the floating interest loans). All var-
iables remain constant; the effects from the
derivative financial instruments were not fac-
tored into this calculation.
87
alstria Financial Report 2013
Consolidated financial statements
Interest expenses p. a.
EUR k
+ 100 bps
– 50 bps
2013
8,490
2012
7,116
– 3,865
– 3,558
The fair market value of derivative financial
instruments is also subject to interest rate
risks. A change in the interest rate would give
rise to the following changes of the respec-
tive fair market values:
aa) Impact on equity
Financial derivates qualifying for cash
flow hedge accounting
EUR k
+ 100 bps
– 50 bps
2013
17,879
– 9,556
2012
13,205
– 3,397
a b) Impact on the income statement
and resulting effects on equity
Financial derivates not qualifying for cash
flow hedge accounting
Impact from interest rate changes of the
3-month-EURIBOR:
EUR k
+ 100 bps
– 50 bps
2013
5,638
– 1,840
2012
1,254
– 263
Impact from changes in share price of the al-
stria office REIT-AG share (only relates to the
embedded derivative):
EUR k
2013 2012
Share price compared to year end
price 2013 (EUR 9.15)
+ 10 per cent
– 10 per cent
– 4,262
3,602
n/a
n/a
88
b) Credit risk
Except for credit risks relating to accounts re-
ceivable balances, credit risks are managed at
the group level.
The department responsible for the operat-
ing business property management manages
and analyses credit risks in relation to each
reletting activity, before standard payment
and lease terms and conditions are offered.
Credit risk arises from cash and cash equiva-
lents, derivative financial instruments and de-
posits with banks and financial institutions, as
well as credit exposures to customers, includ-
ing outstanding receivables and other com-
pensatory commitments. Banks and financial
institutions only are accepted as counter-
parties, and only if they are independently
rated parties with a minimum rating of ‘in-
vestment grade’. If tenants are independent-
ly rated, these ratings are applied. If there is
no independent rating, the credit quality of
the tenant is assessed, taking into account his
financial position, past experience and other
factors. Credit limits to tenants are generally
not provided. Lease receivables from tenants
are settled in bank transfers usually due at
the beginning of each payment term. Tenants
must pay a deposit or provide other warran-
ties prior to the start of a lease term.
c) Liquidity Risk
The Company continually monitors the Group-
wide risk of potential liquidity bottlenecks us-
ing a liquidity-planning tool. The tool uses the
expected cash flows from business activities
and the maturity of the financial liabilities as
a basis for analysis. The long-term refinancing
strategy of the Group ensures the medium and
long-term liquidity requirements. Such fore-
casting takes the Group’s debt financing plans,
covenant compliance, compliance with internal
balance sheet targets and, if applicable, exter-
nal regulatory or legal requirements – for ex-
ample, G-REIT equity ratio into consideration.
At the end of the reporting period, the nom-
inal financial liabilities had the following ma-
turities in line with their contractual maturity
(based on the three-month EURIBOR as at
December 31, 2013 plus the weighted aver-
age margin of 162 basis points for the Group’s
loans).
alstria Financial Report 2013 Consolidated financial statements
Financial year as at Dec. 31, 2013
EUR K
Interest
Loans
Convertible Bond
Financial
derivatives
Trade payables
Other liabilities
< 1 year 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years > 5 years
Total
20,689
73,178
0
20,826
60,975
0
23,286
26,872
0
23,945
63,867
25,457
39,298
153,501
76,000 561,100
861,992
0
79,400
0
79,400
11,161
4,457
– 3,958
– 6,316
– 8,487 – 17,744
– 20,887
3,475
8,977
0
0
0
0
0
0
0
0
0
0
3,475
8,977
117,480
86,258
46,200
81,496
172,370 582,654 1,086,458
Financial year as at Dec. 31, 2012
EUR k
Interest
Loans
Financial
derivatives
Trade payables
Other liabilities
< 1 year 1 – 2 years 2 – 3 years 3 – 4 years 4 – 5 years > 5 years
Total
18,346
18,502
12,814
9,461
102,911
620,236
5,887
2,009
3,581
5,026
64,156
63,867
98,500
896,984
14,220
13,464
6,555
3,735
9,180
0
7
0
7
0
0
7
0
0
8
0
0
34,239
3,735
6,713
15,922
54,942
134,884
639,612
7,903
67,456 110,239 1,015,036
The following chart shows the related future
undiscounted cash flows of financial liabilities.
The most significant liability is a syndicat-
ed loan provided by four banks totalling
EUR 538,963 k
(December 31, 2012:
EUR 564,721 k). The second major item in
liabilities is comprised of loans entered into
as a result of the Group’s refinancing strat-
egy totalling an amount of EUR 295,529 k
(December 31, 2012: EUR 332,264 k). To se-
cure these liabilities, receivables from rental
and property purchase agreements as well as
insurance receivables and derivative financial
instruments were assigned to the lenders; liens
were granted on bank accounts and charges
registered on the land. Obligations arising
from floating interest bank loans were fully
secured. Land charges for real estate property
with a carrying amount of EUR 1,632,362 k
were provided as collaterals.
20.2 Capital management
Capital management activities are aimed at
maintaining the Company’s classification as a
REIT in order to support its business activities
and maximise shareholder value.
The Company actively manages its capital
structure and makes adjustments in response
to changes in economic conditions. In order
to maintain or adjust the capital structure,
the Group can make a capital repayment
to its shareholders or issue new shares. No
changes were made to the aims, guidelines
and processes as at December 31, 2013, and
as at December 31, 2012.
The capital structure is monitored by the
Company using the key performance indica-
tors (KPIs) relevant for classification as a REIT.
The REIT equity ratio, which is the ratio of
equity to immovable assets, is the most im-
portant KPI. According to the Group’s strat-
egy, the REIT equity ratio shall be between
45 % and 55 % within the relevant term pro-
vided by the REIT law. The G-REIT status is
unaffected as long as the G-REIT ratio at the
end of the business year is not below 45 %
for three consecutive business years.
89
alstria Financial Report 2013 Consolidated financial statements
The following KPIs are also used to manage
capital:
KPI´S according to German REIT law
%
Equity ratio acc. to German REIT law
Immovable assets
Revenues gained from immovable assets
Income gained from disposal of immovable assets
2013
50.87
92.93
100.00
23.66
2012 G-REIT covenant
50.04
92.74
100.00
20.99
> 45
>75
>75
< 501)
1) Within five years based on the average property value during this period.
The following table shows the carrying
amounts and fair value of all financial instru-
ments disclosed in the consolidated financial
statements:
Carrying
amount
Non-
financial
assets
Financial assets
Assets at
fair value
through
profit
and loss
0
0
Derivatives
for hedging
0
0
Total Fair value
3,708
3,708
89
89
644
32,474
33,118
33,118
Loans and
receivables
3,708
89
0
0
0
0
Assets as per
balance sheet
(EUR k) as of
Dec. 31, 2013
Trade receivables
3,708
89
33,118
Accounts receivable
from joint ventures
Derivatives
Receivables and
other assets
Cash and cash
equivalents
6,991
4,768
2,223
82,782
0
82,782
0
0
0
0
2,223
2,223
82,782
82,782
Total
126,688
4,768
88,802
644
32,474 121,920
121,920
Carrying
amount
Non-
financial
liabilities
Financial liabilities
Liabilities as
per balance sheet
(EUR k) as of
Dec. 31, 2013
Long-term loans
822,486
Derivatives
Short-term loans
Trade payables
Other liabilities
Total
25,963
73,886
3,474
10,030
935,839
Other
liabilities
Derivatives
for hedging
Total
Fair value
822,486
0
822,486
831,661
0
25,963
73,886
3,474
8,486
0
0
0
25,963
73,886
3,474
8,486
25,963
73,886
3,474
8,486
908,332
25,963
934,295
943,470
0
0
0
0
1,544
1,544
90
alstria Financial Report 2013 Consolidated financial statements
Carrying
amount
Non-
financial
assets
Financial assets
Assets as per
balance sheet
(EUR k) as of
Dec. 31, 2012
Trade receivables
3,656
Accounts receivable
from joint ventures
Derivatives
Receivables and
other assets
Cash and cash equi-
valents
Total
89
806
118,548
129,911
Assets at
fair value
through
profit
and loss
0
0
Derivatives
for hedging
Total
Fair
value
0
0
3,656
3,656
89
806
89
806
403
403
0
0
0
3,814
3,814
0 118,548 118,548
Loans and
receivables
3,656
89
0
0
0
0
0
118,548
2,998
126,107
403
403 126,913 126,913
6,812
2,998
3,814
Carrying
amount
Non-
financial
liabilities
Financial liabilities
Liabilities as
per balance sheet
(EUR k) as of
Dec. 31, 2012
Long-term loans
Derivatives
Short-term loans
Trade payables
Other liabilities
Total
882,105
35,080
9,986
3,735
21,164
952,070
Other
liabilities
Derivatives
for hedging
Total
Fair
value
882,105
0
882,105
889,484
0
35,080
35,080
35,080
9,986
3,735
17,215
913,041
0
0
0
9,986
3,735
9,986
3,735
17,215
17,215
35,080
948,121
955,501
0
0
0
0
3,949
3,949
91
alstria Financial Report 2013 Consolidated financial statements
An independent expert determined the fair
value of the derivative financial instruments
by discounting the expected future cash
flows at prevailing market interest rates.
Net gains and losses from financial instru-
ments are as follows:
21 Significant events after the
end of the reporting period
No events that must be reported pursuant
to IAS 10 (Events after the Reporting Period)
occurred after the end of the reporting peri-
od December 31, 2013.
22 Utilisation of exempting
EUR k
2013
2012
provisions
Financial instruments at fair
value through profit or loss
– 7,554
– 1,380
Loans and receivables
– 40
– 64
Total
– 7,594
– 1,444
The following German subsidiaries included
in the consolidated financial statements of
alstria office REIT-AG have made use of the
exemption granted in Section 264b HGB:
Net losses during the reporting period result-
ed from valuation losses and, in the case of
loans and receivables, from the write-down
of trade receivables.
› alstria office Bamlerstraße
GmbH & Co. KG, Hamburg
› alstria office Englische Planke
GmbH & Co. KG, Hamburg
› alstria office Gänsemarkt Drehbahn
GmbH & Co. KG, Hamburg
› alstria office Halberstädter Str.
GmbH & Co. KG, Hamburg
› alstria office Hamburger Str. 43
GmbH & Co. KG, Hamburg
› alstria office Insterburger Straße
GmbH & Co. KG, Hamburg
› alstria office Ludwig-Erhard-Straße
GmbH & Co. KG, Hamburg
› alstria office Mannheim/Wiesbaden
GmbH & Co. KG, Hamburg
› alstria office Steinstraße 5
GmbH & Co. KG, Hamburg
20.3 Determination of fair value
The fair value of financial instruments that are
not traded in an active market (for example,
over-the-counter derivatives) is determined
by using valuation techniques. These valua-
tion techniques maximise the use of observa-
ble market data where it is available and rely
on entity-specific estimates as little as possi-
ble. If all significant inputs required to ascer-
tain the fair value of an instrument are ob-
servable, the instrument is included in level 2.
An independent expert determined the fair
value of the derivative financial instruments
by discounting the expected future cash
flows at prevailing market interest rates. Fu-
ture cash flows are estimated at the end of
the reporting period based on forward inter-
est rates from observable yield curves as well
as contractually agreed interest rates. These
are discounted at a rate that reflects the cred-
it risk of various counterparties.
All of the Group’s financial instruments, which
are measured at fair value in the balance sheet
are valued applying the level 2 valuation
measurement approach. This only applies to
the Group’s financial derivatives, as there are
no other financial instruments that are meas-
ured in the balance sheet at fair value.
92
Date
Topic
Launch convertible bond
Jun. 7, 2013
offering
Aug. 5, 2013
Half-year results
Sept. 10, 2013
syndicated loan
Successful refinancing of
Name of person subject to the
disclosure requirement
Olivier Elamine
Member of the
Management Board
Alexander Stuhlmann
Member of the
Supervisory Board
Function
Classification of the
financial instrument
ISIN
Place
Transaction
Transaction date
Price per share (EUR)
Number of shares
Deal volume (EUR)
Share
Buy
XETRA
9.087
3,000
DE000A0LD2U1
DE000A0LD2U1
Jun. 10, 2013
Dec. 12, 2013
27,263.28
26,410.08
Share
Buy
XETRA
8.803
3,000
alstria Financial Report 2013
Consolidated financial statements
23 Disclosures pursuant to
Wertpapierhandelsgesetz
(German Securities Trading Act)
23.1 Ad-hoc announcement
The following table summarizes the an-
nouncements pursuant to Sec. 15 para. 1 Ger-
man Securities Trading Act (WpHG) as pub-
lished by the Company in the reporting year:
Date
Topic
Jun. 7, 2013
Launch convertible bond
offering
Aug. 5, 2013
Half-year results
Sept. 10, 2013
Successful refinancing of
syndicated loan
23.2 Directors’ dealings
The following table summarizes the transac-
tions reported to the Company pursuant to
Sec. 15a para. 1 WpHG during the reporting
period:
Name of person subject to the
disclosure requirement
Function
Classification of the
financial instrument
ISIN
Transaction
Place
Transaction date
Price per share (EUR)
Number of shares
Deal volume (EUR)
Olivier Elamine
Member of the
Management Board
Alexander Stuhlmann
Member of the
Supervisory Board
Share
Share
DE000A0LD2U1
DE000A0LD2U1
Buy
XETRA
Buy
XETRA
Jun. 10, 2013
Dec. 12, 2013
9.087
3,000
27,263.28
8.803
3,000
26,410.08
93
alstria Financial Report 2013 Consolidated financial statements
23.3 Voting right notifications
Information according to Section 160 para. 1
No. 8 German Stock Corporation Act (AktG):
The following table shows share holdings in
the Company that were in place on the bal-
ance sheet date 2013, that were commu-
nicated to us pursuant to Section 21 para.
1 WpHG and have been published pursuant
to Section 26 para. 1 WpHG. Moreover, share
holdings were considered that were in place
until the date of the preparation of the finan-
cial statements, that were communicated to
Voting
rights
(new) (%)
Strike
threshold
(%)
No. Shareholders, registered office
1 Stichting Pensioenfonds ABP, Heerlen, Netherlands
2 APG Groep N.V., Heerlen, Netherlands
3 APG Algemene Pensioen Groep N.V., Heerlen, Netherlands
4 CNP Assurances, Paris, France
5 RECM S.à r.l., Luxembourg, Luxembourg
6 Natixis S.A., Paris, France
7 Natixis Alternative Assets S.A., Luxembourg, Luxembourg
8 BPCE S.A., Paris, France
9 Ministry of Finance of the state of Norway (on behalf of the state of
Norway), Oslo, Norway
10 Norges Bank (Central Bank of Norway) Oslo, Norway
11 Morgan Stanley Investment Management Limited,
London, United Kingdom
12 Morgan Stanley Investments (UK), London, United Kingdom
13 Morgan Stanley Group (Europe), London, United Kingdom
14 Morgan Stanley International Limited, London, United Kingdom
15 Morgan Stanley International Holdings Inc, Wilmington, Delaware, USA
16 Henderson Global Investors (Holdings) plc, London, United Kingdom
17 Henderson Global Investors Limited, London, United Kingdom
18 Henderson Group plc, London, United Kingdom
19 Société Fédérale de Participations et d'Investissement/Federale Participa-
tieen Investeringsmaatschappij SA/NV (‘SFPI/FPIM’), Brussels, Belgium
20 Belgian Ministry of Finance (on behalf of the Kingdom of Belgium),
Brussels, Belgium
21 Shamrock Cedobar Limited, Dublin, Ireland
22 Cypress Grove International DL.P., New York, USA
23 CG Delaware Apellas Limited, Valletta, Malta
24 CGI Partners L.P., Delaware, USA
25 Cypress Grove International Associates LLC, Delaware, USA
26 Grove International Partners LLP, Delaware, USA
27 Coronation Fund Managers Ltd, Cape Town, South Africa
28 Coronation Investment Management (Pty) Ltd, Cape Town, South Africa
29 Coronation Asset Management (Pty) Ltd, Cape Town, South Africa
30 Morgan Stanley, Wilmington, Delaware, USA
31 BNP Paribas Investment Partners S.A., Paris, France
3.45
3.45
3.45
5.14
0
0
0
0
3.01
3.01
2.80
2.80
2.80
2.80
2.80
2.90
2.90
2.90
2.97
2.97
0
0
0
0
0
0
2.90
2.90
2.90
2.99
5.02
32 BNP Paribas Investment Partners UK Ltd, London, United Kingdom
3.001
1) Attribution pursuant to Section 22 para. 1 Sentence 1 No. 1 WpHG.
2) Attribution pursuant to Section 22 para. 1 Sentence 1 No. 6 WpHG.
94
3
3
3
5
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3,5
3,5
3,5
3,5
3,5
3,5
3
3
3
3
5
3
Attribution of
voting rights
Contains 3 % or more of voting rights from
APG Groep N.V., APG Algemene Pensioen Groep N.V.
APG Algemene Pensioen Groep N.V.
Norges Bank (Central Bank of Norway)
Date of change
Apr. 1, 2011
Apr. 1, 2011
Apr. 1, 2011
Dec. 7, 2012
Mar. 12, 2013
Mar. 12, 2013
Mar. 12, 2013
Mar. 12, 2013
Apr. 29, 2013
Apr. 29, 2013
May 24, 2013
May 24, 2013
May 24, 2013
May 24, 2013
May 24, 2013
Sept. 16, 2013
Sept. 16, 2013
Sept. 16, 2013
Nov. 5, 2013
Nov. 5, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Dec. 10, 2013
Dec. 10, 2013
Dec. 10, 2013
Dec. 20, 2013
Jan. 02, 2014
Jan. 03, 2014
Yes1)
Yes1)
No
No
No
No
No
No
Yes1)
No
Yes2)
Yes2), 3)
Yes2), 3)
Yes2), 3)
Yes2), 3)
Yes2), 3)
Yes2)
Yes2), 3)
Yes1), 2), 3)
Yes1), 2), 3)
No
No
No
No
No
No
Yes2), 3)
Yes2), 3)
Yes2)
Yes2), 3)
Yes1), 2), 3)
Yes1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
alstria Financial Report 2013 Consolidated financial statements
us pursuant to Section 21 para. 1 WpHG and
have been published pursuant to Section 26
para. 1 WpHG. The Company did not receive
any notifications pursuant to Section 20 para.
1 and 4 AktG or pursuant to Section 21 para.
1a WpHG during the reporting period.
Voting
rights
(new) (%)
Strike
threshold
(%)
No. Shareholders, registered office
1 Stichting Pensioenfonds ABP, Heerlen, Netherlands
2 APG Groep N.V., Heerlen, Netherlands
3 APG Algemene Pensioen Groep N.V., Heerlen, Netherlands
4 CNP Assurances, Paris, France
5 RECM S.à r.l., Luxembourg, Luxembourg
6 Natixis S.A., Paris, France
7 Natixis Alternative Assets S.A., Luxembourg, Luxembourg
8 BPCE S.A., Paris, France
Norway), Oslo, Norway
9 Ministry of Finance of the state of Norway (on behalf of the state of
10 Norges Bank (Central Bank of Norway) Oslo, Norway
11 Morgan Stanley Investment Management Limited,
London, United Kingdom
12 Morgan Stanley Investments (UK), London, United Kingdom
13 Morgan Stanley Group (Europe), London, United Kingdom
14 Morgan Stanley International Limited, London, United Kingdom
15 Morgan Stanley International Holdings Inc, Wilmington, Delaware, USA
16 Henderson Global Investors (Holdings) plc, London, United Kingdom
17 Henderson Global Investors Limited, London, United Kingdom
18 Henderson Group plc, London, United Kingdom
19 Société Fédérale de Participations et d'Investissement/Federale Participa-
tieen Investeringsmaatschappij SA/NV (‘SFPI/FPIM’), Brussels, Belgium
20 Belgian Ministry of Finance (on behalf of the Kingdom of Belgium),
Brussels, Belgium
21 Shamrock Cedobar Limited, Dublin, Ireland
22 Cypress Grove International DL.P., New York, USA
23 CG Delaware Apellas Limited, Valletta, Malta
24 CGI Partners L.P., Delaware, USA
25 Cypress Grove International Associates LLC, Delaware, USA
26 Grove International Partners LLP, Delaware, USA
27 Coronation Fund Managers Ltd, Cape Town, South Africa
28 Coronation Investment Management (Pty) Ltd, Cape Town, South Africa
29 Coronation Asset Management (Pty) Ltd, Cape Town, South Africa
30 Morgan Stanley, Wilmington, Delaware, USA
31 BNP Paribas Investment Partners S.A., Paris, France
32 BNP Paribas Investment Partners UK Ltd, London, United Kingdom
3.001
3.45
3.45
3.45
5.14
0
0
0
0
3.01
3.01
2.80
2.80
2.80
2.80
2.80
2.90
2.90
2.90
2.97
2.97
0
0
0
0
0
0
2.90
2.90
2.90
2.99
5.02
3
3
3
5
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
5
3
3,5
3,5
3,5
3,5
3,5
3,5
Date of change
Apr. 1, 2011
Apr. 1, 2011
Apr. 1, 2011
Dec. 7, 2012
Mar. 12, 2013
Mar. 12, 2013
Mar. 12, 2013
Mar. 12, 2013
Apr. 29, 2013
Apr. 29, 2013
May 24, 2013
May 24, 2013
May 24, 2013
May 24, 2013
May 24, 2013
Sept. 16, 2013
Sept. 16, 2013
Sept. 16, 2013
Nov. 5, 2013
Nov. 5, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Nov. 11, 2013
Dec. 10, 2013
Dec. 10, 2013
Dec. 10, 2013
Dec. 20, 2013
Jan. 02, 2014
Jan. 03, 2014
Attribution of
voting rights
Yes1)
Yes1)
No
No
No
No
No
No
Yes1)
No
Yes2)
Yes2), 3)
Yes2), 3)
Yes2), 3)
Yes2), 3)
Yes2), 3)
Yes2)
Yes2), 3)
Yes1), 2), 3)
Yes1), 2), 3)
No
No
No
No
No
No
Yes2), 3)
Yes2), 3)
Yes2)
Yes2), 3)
Yes1), 2), 3)
Yes1)
Contains 3 % or more of voting rights from
APG Groep N.V., APG Algemene Pensioen Groep N.V.
APG Algemene Pensioen Groep N.V.
–
–
–
–
–
–
Norges Bank (Central Bank of Norway)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1) Attribution pursuant to Section 22 para. 1 Sentence 1 No. 1 WpHG.
2) Attribution pursuant to Section 22 para. 1 Sentence 1 No. 6 WpHG.
3) Attribution in connection with Section 22 para. 1 Sentence 2 WpHG.
4) Attribution in connection with Section 22 para. 1 Sentence 3 WpHG.
95
alstria Financial Report 2013 Consolidated financial statements
24 Declaration of compliance
pursuant to Section 161
AktG (Aktiengesetz: German
Stock Corporation Act)
The declaration of compliance required by
Section 161 AktG regarding the recommen-
dations of the German Corporate Govern-
ance Code developed by the government
commission has been submitted by the Man-
agement Board and the Supervisory Board
and is made permanently available to the
public on alstria office REIT-AG’s website.
www.alstria.com
It is included in the declaration of corporate
management according to Section 289a HGB.
25 Auditor’s fees
On May 29, 2013, the general meeting elect-
ed Deloitte & Touche GmbH Wirtschaftsprü-
fungsgesellschaft, Dammtorstrasse 12, Ham-
burg, to audit the separate and consolidated
financial statements for the financial year
2013. The fees for auditing services amount-
ed to EUR 260 k in 2013. Other consulting
services accumulated to EUR 75 k.
26. Management Board
During the financial year, the Company’s
members of the Management Board were:
Olivier Elamine,
Chief Executive Officer (CEO)
Alexander Dexne,
Chief Financial Officer (CFO)
The attached remuneration report contains
details of the principles for the definition of
the Management Board and Supervisory
Board’s remuneration.
27 Supervisory Board
Pursuant to the Company’s Articles of As-
sociation (Section 9), the Supervisory Board
consists of six members, who are elected by
the general meeting of shareholders. The ex-
piration of the term of office is identical for
all members, and ends with the closing of the
annual general meeting of shareholders in
the year 2016.
96
During the financial year 2013, the members
of the Supervisory Board were:
Alexander Stuhlmann, (Chairman)
Hamburg, Germany
Management consultant,
Managing Director,
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
Chairman of the Supervisory Board
› LBS Bausparkasse Schleswig-Holstein-
Hamburg AG
Member of the Supervisory Board
› Ludwig Görtz GmbH
Member of the Administrative 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, Freshfields
Bruckhaus Deringer LLP
› Freshfields 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
Uzès, France
Managing Director,
Chambres de l'Artémise S. à r. l.
› Belvédère SA
Non-Executive Board Member
alstria Financial Report 2013 Consolidated financial statements
Roger Lee
Paris, France
Real Estate Investment Manager,
Captiva Capital Management SAS
› Captiva Capital Management Ltd
Director
› Caposition SARL
Director
› Captiva Capital Management GmbH
Director
› Captiva International Partners LLP
Partner
Richard Mully
Cobham (Surrey), United Kingdom
Private Investor, Starr Street Limited
› Starr Street Limited
Director
› Aberdeen Asset Management PLC
Director
› Hansteen Holdings PLC
Director
› ISG plc
Director
› from September 1, 2013 onwards
St Modwen Properties PLC
Director
Marianne Voigt
Berlin, Germany
Businesswoman,
Managing Director,
bettermarks GmbH
Hamburg, February 14, 2014
The Management Board
Olivier Elamine
CEO
Alexander Dexne
CFO
97
alstria Financial Report 2013 Independent auditors' report
Responsibility
statement
To the best of our knowledge we confirm
that, in accordance with the applicable re-
porting principles, the consolidated financial
statements give a true and fair view of the
assets, liabilities, financial position and profit
or loss of the Group, and the Group manage-
ment report includes a fair review of the de-
velopment and performance of the business
and the position of the Group, together with
a description of the principal opportunities
and risks associated with the expected devel-
opment of the Group.
Hamburg, February 14, 2014.
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
Alexander Dexne
CFO
98
alstria Financial Report 2013 Independent auditors' report
Independent auditors'
report
We have audited the consolidated financial
statements prepared by alstria office REIT-AG,
Hamburg/Germany - comprising the income
statement and statement of comprehensive
income, consolidated statement of financial
position, statement of cash flows, statement
of changes in equity and the notes to the
consolidated financial statements - and the
group management report for the business
year from January 1 until December 31, 2013.
The preparation of the consolidated financial
statements and the group management re-
port in accordance with IFRS, as adopted by
the European Union (EU), and the additional
requirements of German commercial law pur-
suant to § 315a (1) HGB (‘German Commer-
cial Code’) are the responsibility of the Parent
Company's Management Board. Our respon-
sibility is to express an opinion on the consol-
idated financial statements and on the group
management report based on our audit.
We conducted our audit of the consolidat-
ed financial statements in accordance with
§ 317 HGB and German generally accepted
standards for the audit of financial statements
promulgated by the Institut der Wirtschafts-
prüfer. Those standards require that we plan
and perform the audit such that misstate-
ments materially affecting the presentation
of the net assets, financial position and re-
sults of operations in the consolidated finan-
cial statements in accordance with the appli-
cable financial reporting framework and in
the group management report are detected
with reasonable assurance. Knowledge of the
business activities and the economic and legal
environment of the Group and expectations
as to possible misstatements are taken into
account in the determination of audit proce-
dures. The effectiveness of the accounting-re-
lated internal control system and the evidence
supporting the disclosures in the consolidated
financial statements and the group manage-
ment report are examined primarily on a test
basis within the framework of the audit. The
audit includes assessing the annual financial
statements of those entities included in con-
solidation, the determination of entities to be
included in consolidation, the accounting and
consolidation principles used and significant
estimates made by the Management Board,
as well as evaluating the overall presentation
of the consolidated financial statements and
the group management report. We believe
that our audit provides a reasonable basis for
our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our
audit, the consolidated financial statements
of alstria office REIT-AG, Hamburg/Germany,
comply with IFRS, as adopted by the EU, the
additional requirements of German commer-
cial law pursuant to § 315a (1) HGB and give
a true and fair view of the net assets, finan-
cial position and results of operations of the
Group in accordance with these requirements.
The group management report is consistent
with the consolidated financial statements
and as a whole provides a suitable view of the
Group's position and suitably presents the op-
portunities and risks of future development.
Hamburg/Germany, February 14, 2014
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Reiher
Wirtschaftsprüfer
ppa. Deutsch
Wirtschaftsprüferin
99
alstria Financial Report 2013 Corporate governance
Corporate governance
REPORT OF THE
SUPERVISORY BOAR D
Dear Shareholders,
In this report we give an overview on the
supervision and advising of the Company’s
management by the Supervisory Board, the
main topics discussed by the plenary Super-
visory Board and the work of its committees,
the audit of the annual and consolidated fi-
nancial statements as well as the Company’s
corporate governance during the reporting
period.
Supervision and advising of the
Company’s management
During the reporting period 2013, we per-
formed the duties required by the statuto-
ry provisions and the Company's articles of
association. We advised and supervised the
Management Board of the Company and the
conduct of business and were intensively in-
volved 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 development of the business and finan-
cial situation of the Company, on planning,
important business events and on current
risks, on risk management and on the Com-
pany’s compliance. The Management Board
and Supervisory Board cooperated to set the
strategic direction of the Company. Between
meetings, the Management Board further in-
formed the Supervisory Board of important
events orally and in writing. The Chairman of
the Supervisory Board regularly met with the
Management Board to exchange informa-
tion and advice on matters of the strategy,
the planning, the business development, the
current risks, the risk management and the
compliance of the Company.
100
We have intensively consulted with the Man-
agement Board on all transactions requiring
our approval. After careful examination and
consultation, the Supervisory Board vot-
ed on all matters brought to its attention as
dictated by law, the articles of association or
rules of procedure of either the Management
Board or the Supervisory Board. This includ-
ed the Company’s budget planning.
In financial year 2013, the Supervisory Board
had four ordinary meetings and one extraor-
dinary meeting. All members of the Super-
visory Board attended every ordinary meet-
ing of the Supervisory Board. Moreover, one
written resolution was adopted based on
detailed information provided to the board
members for assessment. In 2014 there was
one additional meeting of the Supervisory
Board prior to the finalisation of this report.
In all ordinary meetings of the Supervisory
Board the Supervisory Board discussed the
situation and development of the Company,
its business performance, its market and de-
velopment of risks and financial results (quar-
terly and half-year financial reports, financial
statements of alstria office REIT-AG and the
consolidated financial statements) with the
Management Board
Focal points of discussion
In financial year 2013, the Company is-
sued a convertible bond of an amount of
EUR 79.4 m and replaced and refinanced the
Company’s syndicated loan with an amount
of EUR 544 m. In addition to the real estate
transactions executed in financial year 2013
and to the regularly recurring topics, the Su-
pervisory Board and its committees particu-
larly focused on these successfully executed
projects in the reporting period.
During its financials meeting in February
2013, the Supervisory Board dealt with the
consolidated financial statements, the finan-
cial statements as at December 31, 2012 and
the management reports and discussed them
alstria Financial Report 2013 Corporate governance
with the auditors. The Supervisory Board
approved the financial statements of alstria
office REIT-AG as well as the consolidated fi-
nancial statements as at December 31, 2012,
and joined the proposal of the Management
Board regarding the appropriation of the
profit. The Supervisory Board decided on its
resolution proposals and its report to the an-
nual general meeting for financial year 2012
and on the corporate governance statement,
which includes the declaration of compliance
with the recommendations of the German
Corporate Governance Code. Based on the
nomination and remuneration committee’s
recommendation, the Supervisory Board dis-
cussed and passed resolution on the amount
of the short-term variable remuneration of
the members of the Management Board for
financial year 2012. It hereby considered their
individual performance and also discussed
the variable remuneration of the members
of the Management Board for financial year
2013. Finally, Supervisory Board and Man-
agement Board discussed possible real estate
transactions.
In its extraordinary meeting in May 2013,
Management Board and Supervisory Board
discussed the refinancing of the Company’s
syndicated loan and granted its approval.
Topics of the ordinary meeting following the
annual general meeting in May 2013 were
the establishment of a special committee that
was authorised to issue all necessary approv-
als and declarations for issuing a convertible
bond. Further topics were a report from the
Management Board regarding a completed
acquisition and certain disposals of properties
- transactions that were all not subject to the
approval of the Supervisory Board.
In its meeting in September 2013, the Super-
visory Board approved the conclusion of an
interest hedge agreement for the new syn-
dicated loan agreement. Management Board
and Supervisory Board discussed real estate
transactions, which had been carried out to
date in 2013 and those planned for the fu-
ture. They approved the Company’s budget
for financial year 2013, which was adapted
during the year regarding acquisitions and
disposals. The Supervisory Board dealt with
the current amendments of the German Cor-
porate Governance Code and amended the
rules of procedure for the nomination and re-
muneration committee. Furthermore, the Su-
pervisory Board discussed the positive results
of the review of the efficiency of its work,
which was carried out by the members of the
Supervisory Board by means of a question-
naire. Finally, first management level employ-
ees and the departments they manage were
introduced to the Supervisory Board.
After intensive discussion with the Manage-
ment Board the Supervisory Board passed
resolution on the business and budget plan-
ning for financial year 2014 in its meeting in
November 2013. Based on a corresponding
recommendation from the nomination and
remuneration committee, the Supervisory
Board amended the rules of procedure for
the Management Board. The Supervisory
Board dealt with the new recommendations
of the German Corporate Governance Code
and with the objectives regarding the com-
position of the Supervisory Board as last de-
termined in November 2011 (Diversity State-
ment). Furthermore, Management Board
and Supervisory Board discussed acquisition
and financing possibilities.
The resolution passed by written circulation
procedure in April 2013 concerned the pro-
posals of the Supervisory Board to the share-
holders to be addressed the ordinary annual
general meeting for financial year 2012.
In its financials meeting in February 2014,
the Supervisory Board dealt with the consol-
idated financial statements and the financial
statements for the year ending December 31,
2013 and with the Management Board’s rec-
ommendation for the profit appropriation.
We passed resolution on our report to the
annual general meeting for financial year
2013 and the Corporate Governance Report,
which includes the declaration of compliance
with the recommendations of the German
Corporate Governance Code. The Superviso-
ry Board also dealt with the variable remu-
neration for the members of the Manage-
ment Board.
101
alstria Financial Report 2013 Corporate governance
Committees of
the Supervisory Board
The Supervisory Board has six members. It
has formed three permanent committees to
support the Supervisory Board in its work,
each of them composed of three members.
The composition of the committees is de-
scribed in the Company’s Corporate Govern-
ance Statement on pages: » 104 to 110 of the
annual report.
To the extent permitted by law, the commit-
tees have been given decision-making pow-
ers in some cases. In other cases they prepare
the resolutions of the Supervisory Board by
making proposals. During the Superviso-
ry Board’s meetings, the committee’s chair-
men report on the result of their committees’
work. In financial year 2013, the Supervisory
Board’s committees focused on the following
topics:
The audit committee had three meetings
in financial year 2013, all of which were at-
tended by the Chief Financial Officer. In the
course of auditing the accounts of the Com-
pany, the audit committee dealt with the
consolidated financial statements and the fi-
nancial statements as at December 31, 2012
and the management reports. It discussed
the documents with the independent audi-
tors and carried out a respective preliminary
examination of the annual and consolidated
financial statements and the Management
Board’s recommendation for the appropri-
ation of profit and submitted correspond-
ing proposals for resolution. Further topics
were the recommendation to the Superviso-
ry Board regarding the proposed resolution
to the annual general meeting for the choice
of the auditors and the auditor’s independ-
ence as well as the additional services per-
formed by them. Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft, Hamburg
branch has been appointed as auditors and
the audit committee resolved upon the en-
gagement agreement, setting the key audit
areas. In addition, the Company’s account-
ing process, the risk management system and
the included main risks, the effectiveness of
the internal controlling and audit system and
the compliance system were discussed. Final-
ly, the audit committee dealt with the results
102
of the Company’s internal audit and exam-
ined the efficiency of its own work. The eval-
uation revealed a consistently high efficiency.
The nomination and remuneration commit-
tee, which also carries out the tasks of a nom-
ination committee, met three times during
the financial year. The committee discussed
the amount of the short-term variable remu-
neration of the members of the Management
Board for financial year 2012, considering
their individual performance, as well as the
parameters for the variable remuneration of
the Management Board members for financial
year 2013. It provided the Supervisory Board
with corresponding resolution proposals. The
nomination and remuneration committee,
furthermore, examined the efficiency of its
own work and prepared the resolution of the
Supervisory Board regarding the amendments
to the rules of procedure for the Management
Board. It also dealt with the new recommen-
dations of the German Corporate Governance
Code and prepared proposals regarding the
handling of these recommendations for the
Supervisory Board.
In financial year 2013, the investment com-
mittee had four meetings and made one
decision in writing after circulation of de-
tailed documents to the members. It gave
its approval for advisory services by the law
firm Freshfields Bruckhaus Deringer LLP, of
which the member of the Supervisory Board,
Dr Johannes Conradi, is a partner. Further-
more, the investment committee examined
the efficiency of its own work. The members
of the investment committee discussed the
real estate transactions executed in financial
year 2013 with the other Supervisory Board
members in the meetings of the entire Super-
visory Board. Due to their size, the transac-
tions were not subject to the approval of the
Supervisory Board or its committee.
In financial year 2013, the Supervisory Board
additionally established a four-member spe-
cial committee that was authorised to issue
all necessary approvals and declarations in
the course of issuing of a convertible bond
with underlying shares of an amount of up to
10 % of the Company’s share capital, exclud-
ing of the shareholder’s subscription rights.
alstria Financial Report 2013 Corporate governance
The special committee held four telephone
conferences in June 2013 to discuss matters
concerning the issue of the convertible bond
and approved it accordingly. The composition
of the special committee is described in the
Company’s Corporate Governance Statement
on pages: » 104 to 110 of the annual report.
No member of the committees participated
in less than half of its respective committee’s
meetings.
Audit of the annual financial
statements and consolidated
financial statements
Deloitte & Touche GmbH Wirtschaftsprü-
fungsgesellschaft, Hamburg branch, audited
the financial statements and the management
report of alstria office REIT-AG and its con-
solidated financial statements, including the
management report of the Group for the fi-
nancial year running from January 1 until De-
cember 31, 2013. All reports were prepared
by the Management Board, and issued with
unqualified audit certificates.
The members of the Supervisory Board were
immediately after their preparation presented
with the financial statements and the man-
agement report of alstria office REIT-AG, the
consolidated financial statements including
the management report of the Group, along
with the auditors’ report, as well as with the
Management Board’s recommendation for
the appropriation of the annual net profit. The
Supervisory Board examined the documents
provided by the Management Board in detail,
both in its audit committee and at a plenary
meeting. In the meeting of the audit commit-
tee, the auditors presented the material find-
ings of their audit (including the audit of the
internal control and risk management system)
and were available for questions. The audit
committee prepared the Supervisory Board’
review and reported to the plenary in the
presence of the auditors of the financial state-
ments of alstria office REIT-AG and the con-
solidated financial statements. The attendees
of the plenary meeting examined and dis-
cussed both the annual financial statements
of the Company and the consolidated finan-
cial statements prepared by Management
Board and the findings of the auditors. There
were no objections to the final results of the
review by the Supervisory Board. The Supervi-
sory Board approved the financial statements
of alstria office REIT-AG and its consolidated
financial statements. The financial statements
are thus confirmed. The Supervisory Board
also shared the Management Board’s recom-
mendation for the appropriation of the profit.
Corporate Governance
In the reporting period the Supervisory Board
also dealt with whether alstria office REIT-AG
fulfils the recommendations of the German
Corporate Governance Code. The Manage-
ment Board and the Supervisory Board last
issued the annual declaration of compliance
with the German Corporate Governance
Code in February 2014, in accordance with
Section 161 AktG; it was subsequently made
permanently available to shareholders on the
Company’s website. In their declaration, the
Management Board and Supervisory Board
explained that most of the recommendations
of the German Corporate Governance Code
have been, or will be, implemented, in addition
to which recommendations were, or will not
be, followed, and the reasons for this decision.
For its own composition the Supervisory Board
decides on specific objectives (‘Diversity State-
ment’), which are published in the Company’s
Corporate Governance Report, together with
the status of their implementation. Based on
a self-assessment of the members of the Su-
pervisory Board in Autumn 2013, we were
able to conclude that the composition of the
Supervisory Board as at December 31, 2013
meets these objectives. No conflicts of inter-
est arose during the financial year 2013, nei-
ther concerning members of the Supervisory
Board nor the Management Board.
The Supervisory Board would like to thank
the Management Board and all employees
for their dedication and their successful work
in financial year 2013.
Hamburg, February 2014
For the Supervisory Board
Alexander Stuhlmann
Chairman of the Supervisory Board
103
alstria Financial Report 2013 Corporate governance
CORPORATE GOVERNANCE
STATEMEN T
The Management Board and Supervisory
Board of alstria office REIT-AG (‘alstria’) are
aware of their responsibility for the corporate
governance of the Company, which is un-
dertaken with due regard to the Company’s
shareholders, employees and tenants. This
sense of responsibility is expressed, amongst
others, in a transparent corporate governance
with the aim of facilitating the confidence of
alstria’s shareholders, employees, tenants and
the public in the management and supervi-
sion of the Company. In this statement, the
Management Board and Supervisory Board
report on alstria’s corporate governance ac-
cording to Section 3.10 of the German Cor-
porate Governance Code (‘Code’) and Sec-
tion 289a para. 1 of the German Commercial
Code (HGB). This statement includes the dec-
laration of compliance according to Section
161 of the German Stock Corporation Act,
the relevant information on corporate gov-
ernance practices, a description of the oper-
ating 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
alstria's value-oriented corporate manage-
ment has already implemented many of the
principles of the most recent version of the
German Corporate Governance Code (dated
May 13, 2013) to an extent beyond what is
legally required. The principles and recom-
mendations of the Government Commission
appointed by the German Federal Ministry of
Justice contain internationally and national-
ly recognised standards for effective and re-
sponsible corporate management.
The Company’s declaration of compliance
with the recommendations of the German
Corporate Governance Code is published on
the Company’s website (www.alstria.com).
After careful consideration, alstria has chosen
not to follow some of the recommendations
of the Code. These items and the reasons for
104
the Company’s nonconformity are detailed
in the declaration of compliance issued by
the Management Board and the Supervisory
Board on February 27, 2014:
Declaration of compliance
dated February 27, 2014
‘Apart from the exceptions stated below,
the Company has complied with the recom-
mendations of the ‘Government Commis-
sion German Corporate Governance Code
as amended on May 15, 2012 since the pri-
or declaration of compliance dated February
28, 2013. The Company intends to continue
to comply with the recommendations of the
Code as amended on May 13, 2013 with the
following exceptions:
Deductible for D&O insurance for
the Supervisory Board, Section 3.8
The D&O insurance for the Supervisory
Board of alstria office REIT-AG does not com-
prise a deductible. The Management Board
and Supervisory Board believe that the mem-
bers of the Supervisory Board will carry out
their duties responsibly irrespective of any
such deductible.
Change of performance targets for
elements of variable remuneration,
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 that the FFO achieved in a financial year
is positively and materially impacted by new
acquisitions, the Supervisory Board adjusts the
FFO target accordingly. In doing so, the Su-
pervisory Board makes sure that the Manage-
ment Board is not incentivised to enter into ac-
quisitions for short-term personal benefit. The
impact of any acquisition on the management
remuneration is solely linked to multi-year re-
muneration elements, therefore, aligning the
interest of the Management Board with those
of the Company and its shareholders. Vice
versa, the Supervisory Board intends to also
adapt the FFO target to disposals.
alstria Financial Report 2013 Corporate governance
Determination of a level of benefits
for the private pension plan, Sec-
tion 4.2.3 (newly introduced with
code amendment on May 13, 2013)
As the Company has opted for a defined con-
tribution model for the private pension plan
of the Management Board members for rea-
sons of transparency and risk management,
the Supervisory Board has not fixed a level
of benefits for the private pension plan of the
Management Board members. The Supervi-
sory Board believes that it is in the best inter-
est of the company to have a defined contri-
bution model rather than a defined benefit
model, as the defined contribution does not
create any unforeseen future liability for the
Company.
Discussion of the half-year and quar-
terly financial reports between the
Supervisory Board or its audit com-
mittee and the Management Board
prior to publication, Section 7.1.2
Prior to their publication, the half-year and
quarterly financial reports are made available
to the Supervisory Board. Furthermore, the fi-
nancial reports are discussed with the Super-
visory Board in detail soon after their publica-
tion. In the event that there are considerable
differences to the budget or business plan au-
thorised by the Supervisory Board, the Super-
visory Board is given the opportunity to dis-
cuss the figures with the Management Board
before they are published. The Management
Board and Supervisory Board consider this ap-
proach to be appropriate and adequate.’
All other recommendations of the German
Corporate Governance Code dated May 13,
2013 are fully implemented. alstria has ap-
pointed a corporate governance officer with-
in 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 necessary. In this way, alstria
ensures consistent compliance with these
principles. Analysis, supervision and trans-
parency are the measures undertaken to lay
the foundation for fair and efficient corpo-
rate management. They will remain the key
criteria in future.
Working methods of the
Management Board and the
Supervisory Board
The Management Board and the Superviso-
ry Board cooperate closely and faithful 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 Chief Executive Officer
and Alexander Dexne as Chief Financial Of-
ficer. The Management Board is responsible
for running alstria in the interest of the Com-
pany with the aim of sustainably increasing
the Company’s value. It sets the business
goals and – in conjunction with the Super-
visory Board – the strategic direction of the
Company. The tasks of the Management
Board and the allocation of responsibilities
between the individual members of the Man-
agement Board are stipulated in the rules of
procedure and the role sort for the Manage-
ment Board. The members of the Manage-
ment Board are obligated to immediately
disclose any conflicts of interest to the Su-
pervisory Board. The members of the Man-
agement Board may only conduct secondary
activities, particularly memberships in the
Supervisory Boards of companies not affiliat-
ed with the Group, with the approval of the
Supervisory Board. The members of alstria’s
Management Board had no conflicts of in-
terest in the reporting year. The members of
the Management Board serve on no super-
visory boards of listed companies outside of
the Group or in supervisory boards of com-
panies with comparable requirements. Major
business transactions between the Company
and members of the Management Board, or
with any persons or companies in close as-
sociation with them, require the approval
of the Supervisory Board. All such business
transactions must be concluded at customary
commercial conditions. There were no such
contracts during the reporting period. The
Management Board pays attention to diver-
sity in filling its management positions and
aims to adequately consider women for these
positions. As at December 31, 2013, 44.44 %
of the management positions at alstria were
held by female employees.
105
alstria Financial Report 2013 Corporate governance
The Supervisory Board appoints the mem-
bers of the Management Board and monitors
and advises the Management Board on man-
agement issues. The Management Board in-
volves the Supervisory Board in any decisions
of fundamental importance for the Compa-
ny. The rules of procedure for the Supervi-
sory Board stipulate that certain, significant
business transactions by the Company are
subject to the approval of the Supervisory
Board. For example, the acquisition or dis-
posal of real estate property for a consider-
ation of more than EUR 30 m, entering into
financing agreements with a volume of more
than EUR 30 m, entering or prematurely ter-
minating lease contracts with an annual con-
sideration of more than EUR 2 m, or investing
in Company assets (modernisation meas-
ures) with an annual total sum of more than
EUR 2 m, if such investments have not al-
ready been included in the budget approved
by the Supervisory Board. In its report to
the annual general meeting the Supervisory
Board reports on its activities in the financial
year 2013. The report is presented on pages
» 100 to 103 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 is
comprised of the following members:
Member
Profession
Alexander Stuhlmann
(Chairman)
Management consultant,
Manager, Alexander Stuhl-
mann GmbH
Dr. Johannes Conradi
(Vice-Chairman)
Lawyer and Partner,
Freshfields Bruckhaus
Deringer LLP
Managing Director, Cham-
bres de l‘Artemise SARL
Director and Real Estate
Investment Manager,
Captiva Capital Manage-
ment SAS
Director, Investment Advi-
sor and Manager,
Starr Street Limited
Businesswoman, Mana-
ging Director, bettermarks
GmbH
Benoît Hérault
Roger Lee
Richard Mully
Marianne Voigt
106
The periods of office of all supervisory mem-
bers expire at the end of the annual general
meeting in which the shareholders resolve to
discharge them with respect to their activi-
ties for financial year 2015. No changes took
place in the composition of the Supervisory
Board in 2013.
No former members of the Management
Board sit on the Supervisory Board. The Su-
pervisory Board is composed of members
who have the necessary knowledge, compe-
tence and professional experience to properly
carry out their duties. The Supervisory Board
of alstria office REIT-AG first specified the
goals for its composition in November 2010.
In November 2012, the Supervisory Board re-
viewed and revised the goals for its compo-
sition, especially with regard to the amend-
ments of the German Corporate Governance
Code issued in the year 2012.
With due consideration of the specific situa-
tion of the Company, the Supervisory Board
of alstria specified the following goals for
the composition of the Supervisory Board in
November 2012, which are to be considered
in its nominations to the shareholders in the
general meeting:
1. Diversity
The members of the Supervisory Board
shall have the knowledge, skills and expert
experience required to successfully com-
plete their tasks, especially in the capital
market and the German real estate mar-
ket.
2. Women
At least one member of the Supervisory
Board shall be female.
3. Experience abroad
At least two members of the Supervisory
Board shall have acquired reasonable in-
ternational experience.
4. Independence
At least three members of the Supervisory
Board shall have no business or personal
relations, which could cause a substantial
and not temporary conflict of interest,
with the Company, its executive bodies,
alstria Financial Report 2013 Corporate governance
a controlling shareholder or an enterprise
associated with the latter.
5. Independent financial expert
At least one independent member of the
Supervisory Board shall have expertise in
accounting or audit of annual statements.
6. Other conflicts of interest
At least three members of the Superviso-
ry Board shall not have any consulting or
representation duties with main tenants,
lenders or other business partners of the
Company.
7. Age limit
Members of the Supervisory Board shall
generally not be older than 70 years of age.
In November 2013 the Supervisory Board as-
sessed the implementation of the goals again
and came to the conclusion that 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 con-
cerns and tasks of the committee.
The audit committee monitors the Compa-
ny’s financial reporting process, engages the
independent auditors to prepare audit re-
ports, determines the key audit areas and the
independent auditors’ compensation, and is
responsible for issues surrounding risk man-
agement, internal control, internal audit and
compliance. The audit committee was com-
prised of Marianne Voigt, as Chair, and Dr Jo-
hannes Conradi and Roger Lee as members.
The investment committee decides on the
approval of the Supervisory Board concern-
ing the acquisition or disposal of real estate
property or other assets worth between
EUR 30 m and EUR 100 m. Transactions of
a value greater than this amount are to be
presented to the entire Supervisory Board
for approval. The investment committee,
furthermore, decides on the approval of the
Supervisory Board regarding the conclusion,
renewal or early termination of lease agree-
ments with third parties with a total annu-
al consideration of more than EUR 2 m as
well as regarding contracts with Superviso-
ry Board members according to Section 114
German Stock Corporation Act (Aktienge-
setz, AktG). Up until December 31, 2013,
the investment committee was comprised of
Richard Mully, as Chair, and Benoît Hérault
and Alexander Stuhlmann as members.
The nomination and remuneration commit-
tee, which also carries out the function of a
nomination committee, prepares resolutions
of the entire Supervisory Board for the ap-
pointment and dismissal of members of the
Management Board, for the Management
Board’s compensation system and for the
total remuneration of individual members of
the Management Board. Furthermore, it deals
with the resolution of, or amendments to,
the rules of procedure for the Management
Board, as well as the approval of certain oth-
er activities and primary contracts of mem-
bers of the Management Board. Apart from
the amount of compensation, 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. Finally, the nomination and
remuneration committee prepares the res-
olutions of the Supervisory Board regarding
the proposal of the appointment of suitable
Supervisory Board members at annual gener-
al meetings. The nomination and remunera-
tion committee was comprised of Alexander
Stuhlmann, as Chair, and Dr Johannes Conradi
and Richard Mully as members.
In May 2013, the Supervisory Board addi-
tionally formed a special committee bonds in
the course of the issue of convertible bonds.
Its members were Dr Johannes Conradi, as
Chair, and Roger Lee, Benoît Hérault and
Richard Mully as further members.
The Supervisory Board reports on the activ-
ities of the committees of the Supervisory
Board during the financial year 2013 in its re-
port to the annual general meeting on pages
» 100 to 103 of the annual report.
107
alstria Financial Report 2013 Corporate governance
Remuneration of the Managment
Board and Supervisory Board
The compensation system for the Manage-
ment Board and the Supervisory Board is laid
out in the remuneration report for financial
year 2013. The report also entails a break-
down of the remuneration of each member
of the Management Board and the Supervi-
sory Board for financial years 2012 and 2013.
In the annual general meeting on June 16,
2010, the shareholders passed resolution on
the approval of the remuneration system for
the members of the Management Board with
a large majority.
Stock option programme and
similar securities-oriented
incentive systems
Stock option programme and long
term incentive plan
In March 2007, the Supervisory Board adopt-
ed a stock option programme for the mem-
bers of the Management Board and issued a
first and only tranche of stock option rights to
the Management Board pursuant to the au-
thorisation granted by the shareholders in the
annual general meeting on March 15, 2007.
In March 2010 the stock option programme
was replaced by a long-term incentive plan,
which entails a new long-term remuneration
component. Nonetheless, the programme
continues in the scope of the tranche granted
in 2007. The term of the stock options grant-
ed ends in financial 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 financial year 2010. The
stock option programme and long-term in-
centive plan are described in the remunera-
tion report on pages » 111 to 117 of the an-
nual report.
Employee participation programme
Pursuant to the authorisation granted by the
shareholders in the annual general meet-
ing on March 15, 2007, the Management
Board was authorised to issue up to a total
of 500,000 convertible profit participation
certificates with a total nominal value of
EUR 500,000 until March 15, 2012. The
rights were issuable to alstria’s employees
and employees of companies directly or in-
108
directly controlled by alstria according to the
definition of the employee profit participa-
tion programme. Members of the Manage-
ment Board are not considered employees for
the purposes of this plan.
After expiration of the aforementioned au-
thorisation, the annual general meeting on
April 24, 2012 further authorised the Man-
agement Board to issue up to a total of
500,000 convertible profit participation certif-
icates until April 23, 2017. The certificates are
issuable to alstria’s employees and employees
of companies directly or indirectly controlled
by alstria according to the definition of the
employee profit participation programme.
Each convertible profit participation certifi-
cate issued under the employee participation
programmes can be converted into an alstria
bearer share once the share price exceeds the
price on the day the certificate was issued by
5 % or more on at least seven non-consec-
utive trading days. Conversion is only carried
out on predefined dates and only when the
subscriber pays the conversion price and is
still employed at alstria or one of its subsidiar-
ies on the date of conversion. The maximum
term for a convertible profit participation cer-
tificate is five years.
A total of 300,100 certificates were issued
in the course of this now expired employee
profit participation programme 2007. So far,
a total of 165,500 convertible profit partici-
pation rights resulting from this programme,
were converted into shares of the Company.
Furthermore, up to now, 197,800 profit par-
ticipation certificates have been issued in the
course of the new employee profit participa-
tion programme 2012.
Directors' Dealings – Securities
transactions subject to reporting
requirement
Pursuant to Section 15a of the German Secu-
rities Trading Act (Wertpapierhandelsgesetz,
WpHG) the Management Board and Super-
visory Board of alstria office REIT-AG, as well
as related parties (family members), are re-
quired to notify the Company of their own
transactions involving Company shares. In
addition to the acquisition and sale of alstria
alstria Financial Report 2013
Corporate governance
shares, every buy or sale transaction related
to alstria shares (e.g., the purchase or sale of
options on alstria shares) has to be report-
ed. The Company must be informed of such
transactions within five working days and
publish them immediately. However, the for-
mer only applies when the total value of the
transactions is EUR 5,000 or more within one
calendar year. All transactions reported to al-
stria were duly published in the relevant me-
dia throughout Europe and can be found on
the Company’s website (www.alstria.com).
Relationship to the
shareholders of the Company
alstria office REIT-AG respects the rights of its
shareholders and makes best efforts to guar-
antee the exercise of those rights to the extent
stipulated by law or its 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 the participation
in our annual general meeting. Sharehold-
ers have the option of exercising their voting
rights personally or by an authorised repre-
sentative at the annual general meeting or by
sending voting instructions to their proxies.
The invitation to the annual general meeting
includes an explanation of how voting instruc-
tions can be issued. The articles of association
do not stipulate an option to vote by mail.
Now already shareholders have the possibility
to vote before the date of the annual general
meeting by authorising a proxy, so that the ad-
ditional option of voting by mail would not fa-
cilitate the exercise of the shareholders’ rights.
Upon request it is possible to send invitations
and documents for shareholders’ general
meetings to the shareholders electronically.
The invitation and the documents to be made
available for viewing prior to the upcoming
annual general meetings in accordance with
the provisions of law will be published on the
Company’s website together with additional
documents pursuant to Section 124a of the
German Stock Corporation Act (Aktienge-
setz, AktG) and the agenda. The results of
the votes will likewise be published on the
website of the Company following the annu-
al general meeting.
Communication with the public
In sharing information with people outside of
the Company, the Management Board fol-
lows the principles of transparency, prompt-
ness, openness, clarity and equal treatment
of shareholders. In particular, alstria informs
its shareholders and the interested pub-
lic about the situation of the Company and
significant business events through financial
reports, analyst and press conferences, press
and ad-hoc announcements and the annual
general meeting. The website of alstria in-
cludes information on the Company and its
shares, especially the financial reports, share
price tracking and announcements about the
acquisition or disposal of Company shares
or related financing instruments pursuant
to Section 15a WpHG. Moreover, alstria’s
financial reports and website include a fi-
nancial calendar which indicates all dates of
importance to shareholders. All announce-
ments and information are additionally pub-
lished in English.
Financial reporting and auditing
alstria regularly informs shareholders and
third parties by publishing its consolidated,
half-year and quarterly financial statements
in the course of each financial year. The con-
solidated financial statements are prepared in
accordance with the International Financial
Reporting Standards (IFRS). For legal reasons
(calculating dividends, creditor protection),
financial statements for alstria office REIT-AG
are also prepared in accordance with the Ger-
man Commercial Code (HGB).
The consolidated financial statements and
the financial statements of alstria office
REIT-AG are audited by both the independ-
ent auditor selected by the shareholders in
the general meeting, and by the Superviso-
ry Board. The audit committee of the Super-
visory Board appoints an external auditing
firm, after examining its independence, to
audit the financial statements and negotiates
the auditing fees. Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft, Hamburg
branch, was appointed to audit the annual
and half-year financial statements of alstria
office REIT-AG and of the Group for financial
year 2013. The auditors participate in the ple-
nary sessions of the audit committee and the
109
alstria Financial Report 2013 Corporate governance
Sustainability
alstria’s sustainability approach is based on a
three-pillar model, taking the impact of busi-
ness on the following pillars into account: the
economy, the environment and social issues.
As a commercial organization, alstria’s main
objective is to optimize its long-term sus-
tainable value. It strives to generate the best
yield possible on its equity over time. alstria’s
approach to sustainability does not solely fo-
cus on environmental matters, but considers
economic and social impacts of its actions as
well. alstria balances the risk / benefit of the
three aspects before making any decisions
and adapts its actions to what it feels is the
most viable course of action. The result of
this approach is that alstria might not always
take the decisions that maximize the short-
term benefit, but it strives to always take the
route that will yield the best long-term pros-
pects.
alstria's sustainability approach and
its
achievements in the three sustainability fields
as well as future targets are described in de-
tail in the Company’s yearly sustainability
report which is available on the Company’s
website » www.alstria.com.
Hamburg, February 2014
The Management Board
The Supervisory Board
Supervisory Board to advise on the consoli-
dated financial statements and the financial
statements of alstria office REIT-AG and to
present the key findings of the audit.
Compliance
In accordance with Section 4.1.3 of the Ger-
man Corporate Governance Code, the Man-
agement 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 shareholders, ten-
ants and employees depend crucially on the
behaviour of each individual employee.
For this reason, alstria developed a code of
conduct, listing guidelines for behaviour and
orientation for resolving conflicts (e. g. con-
flicts of interest), thereby serving as a model
for correct behaviour for all employees of the
Group. The code of conduct is published on
the Company’s website (www.alstria.com).
alstria set up a compliance organisation to
communicate the values inherent in the code
of conduct and Company guidelines and to
monitor compliance with these values. The
compliance officer is responsible for commu-
nicating these values by answering questions
on the implementation of the code and by
offering in-house training for all employees.
Compliance is monitored through colleagues,
supervisors and the compliance officer as
well as via regular investigation by audi-
tors. alstria has also set up a hotline through
which employees can anonymously report
any violations of the code of conduct or the
Company internal guidelines. Furthermore,
the Management Board regularly discusses
Company compliance with the Supervisory
Board’s audit committee.
Violations of the code of conduct will not be
tolerated; they will be fully investigated and
the violators punished. This can be anything
from disciplinary measures to dismissal, a
claim for damages or even prosecution.
110
alstria Financial Report 2013 Corporate governance
REMUNERATION REPORT*
Remuneration of the
Management Board members
The remuneration system for the members of
the Management Board is determined by the
Supervisory Board and is reviewed regularly.
The Supervisory Board is of the opinion that
an adequate remuneration for the members
of the Management Board is provided, which
is based on customary market terms and con-
ditions and, in particular, also takes account
of the lasting success of the Company. The
remuneration system for the members of the
Management Board described below was de-
veloped by involving an external, independ-
ent remuneration expert. The shareholders
approved it in the general meeting for finan-
cial year 2009; since then it has been applied
without changes. The remuneration structure
complies with the German Stock Corporation
Act (AktG) and - except for the deviations de-
clared in the Compliance Statement according
to Sec. 161 AktG - with the recommendations
of the German Corporate Governance Code.
1 Structure of the Management
Board remuneration
The Supervisory Board determines a target
remuneration for each board member. The
target remuneration consists of a fixed basic
salary, a short-term and a long-term variable
component and ancillary benefits (benefits in
kind) for each Management Board member.
The majority of the target remuneration is
made up of variable components which are
dependent on achieving annual or multi-year
targets as described below. The system also
provides for caps for the different variable el-
ements of the remuneration.
Fixed remuneration
The fixed remuneration is a basic salary, which
is independent of performance and paid as a
salary on a prorated basis each month. The
fixed remuneration amounts to approx. 40 %
of the total target remuneration excluding an-
cillary benefits per financial year.
The criteria for determining the appropriate-
ness of the remuneration of the Manage-
ment Board, which are used as part of the
remuneration system, are among others:
Variable remuneration
The variable remuneration amounts to ap-
proximately 60 % of the total target remuner-
ation, and is composed of two parts: a Short
Term Incentive and a Long Term Incentive.
› the duties of each individual Management
Board member,
› his or her personal performance,
› the financial situation of the Company,
› the success and future prospects
of the Company,
› customary practice regarding remuneration
relative to its peer companies and
› the remuneration structure of the Company.
* This remuneration report forms an integral part of the
audited Group management report and notes to the
annual financial statements.
111
alstria Financial Report 2013 Start of
Reference share
End of defer-
deferral period
price in EUR
ral period
Number of
virtual shares
Number of
virtual shares
Olivier Elamine Alexander Dexne
STI 2011
STI 2012
LTI 2010
LTI 2011
LTI 2012
LTI 2013
2012
2013
2010
2011
2012
2013
8.69
9.45
8.08
10.43
8.70
9.29
2014
2015
2014
2015
2016
2017
7,101
7,193
54,455
42,186
50,575
47,363
5,810
5,885
44,554
34,516
41,379
38,751
Corporate governance
The table below summarizes the main char-
acteristics of each of the two programmes:
Short Term Incentive (STI)
Long Term Incentive (LTI)
Approx. % of total
target remuneration
20 %
Performance measured
against (targets)
Like for Like
budgeted FFO
20 %
20 %
Total Shareholder Return
relative to EPRA NA-REIT
Europe Ex-UK
Absolute Total
Shareholder Return
(according to WACC)
Min/max target
achievement
50 %/150 %
50 %/150 %
50 %/150 %
Discretionary factor
0.8 / 1.2
Deferred component
25 %
0.8 / 1.2
100 %
Form of the deferred
component
Virtual shares
Virtual shares
Deferral period
2 years
4 years
0.8 / 1.2
100 %
Virtual shares
4 years
Reference share price
Average share price
for previous 20 days
Average share price
for previous 60 days
Average share price
for previous 60 days
Payout cap for the
deferred components
250 % of deferred
amount
Virtual shares
multiplied with 250 %
of reference share price
on granting date
Virtual shares
multiplied with 250 %
of reference share price
on granting date
Performance target FFO for STI
As the amount of the STI for a financial year is
mainly based on the achievement of a funds
from operations (‘FFO’), the Supervisory
Board adapts the FFO target for a financial
year if the FFO is impacted by acquisitions
and disposals. In doing so the Superviso-
ry Board makes sure that the Management
Board is not incentivised to enter into transac-
tions for short-term personal benefit.
Min. / max. target achievement
Reflects the minimum performance that
needs to be achieved in order for any payout
to occur (threshold), as well as the maximum
performance that is considered in the pay-
out calculation (cap).
Discretionary factor
Reflects the discretionary factor that the Su-
pervisory Board can apply to reflect individu-
al performance of each board member.
Deferred component
Reflects the part of the variable remunera-
tion which is deferred.
Reference share price
Share price used to convert the target amount
into virtual shares when they are granted
and to convert virtual shares into a payout
amount at the end of the deferral period.
Virtual shares
The number of virtual shares granted is equal
to the deferred component amount divided
by the reference share price.
Payout amount
› For the STI, the payout amount at the end
of the deferral period is equal to the number
of virtual shares multiplied by the reference
share price, thereby adding back any divi-
dend per alstria share paid by the Company
during the deferral period.
› For the LTI, the number of virtual shares is
adjusted at the end of the deferral period,
reflecting the degree of achievement of the
performance target. The pay-out amount
is equal to the number of virtual shares
(i) multiplied by the reference share price
(ii) plus the dividend per alstria share paid
during the deferral period and (iii) multiplied
by the discretionary factor.
112
alstria Financial Report 2013
Corporate governance
The table below summarizes the number of
virtual shares outstanding under the existing
STI and LTI program.
Start of
deferral period
Reference share
price in EUR
End of defer-
ral period
Number of
virtual shares
Number of
virtual shares
Olivier Elamine Alexander Dexne
STI 2011
STI 2012
LTI 2010
LTI 2011
LTI 2012
LTI 2013
2012
2013
2010
2011
2012
2013
8.69
9.45
8.08
10.43
8.70
9.29
2014
2015
2014
2015
2016
2017
7,101
7,193
54,455
42,186
50,575
47,363
5,810
5,885
44,554
34,516
41,379
38,751
Ancillary benefits
The members of the Management Board
furthermore receive ancillary benefits in the
form of benefits in kind, which essentially
consist of insurance premiums, pension ben-
efits and the private use of a company car.
2 Remuneration of the
Management Board in the
financial year 2013
The total target remuneration for the mem-
bers of the Management Board in the
last financial year amounted to a total of
EUR 2,192 k. The total amount paid to the
Management Board in the last financial year
amounted to a total of EUR 1,464 k (includ-
ing pay-outs on vested virtual shares from
the STI 2010).
The individual Management Board remu-
neration is presented based on model tables
according to the German Corporate Govern-
ance Code as amended on May 13, 2013.
Reference is explicitly made to the fact that
the hypothetical maximum amounts can
only be attained, when all conditions named
in the table ‘Conditions to attain maximum
amounts’ occur at the same time.
113
alstria Financial Report 2013
Corporate governance
Remuneration for the members of the management board
for financial years 2012 and 2013
Benefits granted
in EUR k
Total amount fixed compensation
and ancillary benefits
Fixed compensation1)
Ancillary benefits2)
Total amount one-year variable compensation
One-year variable compensation (STI 2012)
One-year variable compensation (STI 2013)
Total amount multi-year variable compensation
498
STI 2012 (1 plus 2 years)
STI 2013 (1 plus 2 years)
LTI 2012 (4 years)
LTI 2013 (4 years)
2012
452
2013
451
440
12
173
1733)
–
585)
–
4407)
440
11
173
–
1733)
498
–
585)
–
–
4407)
Total amount fixed and variable compensation
1,123
1,122
Service cost9)
Total
84
84
1,207
1,206
Olivier Elamine
(CEO)
2013 (min.)
2013 (max.)10)
451
440
11
0
–
0
0
–
0
–
0
451
84
535
451
440
11
312
–
3124)
2,240
–
2606)
–
1,9808)
3,003
84
3,087
Total amount fixed compensation and ancillary
2012
379
2013
379
2013 (min.)
2013 (max.)10)
Alexander Dexne
(CFO)
Benefits granted
in EUR k
benefits
Fixed compensation1)
Ancillary benefits2)
Total amount one-year variable compensation
One-year variable compensation (STI 2012)
One-year variable compensation (STI 2013)
Total amount multi-year variable compensation
STI 2012 (1 plus 2 years)
STI 2013 (1 plus 2 years)
LTI 2012 (4 years)
LTI 2013 (4 years)
Service cost9)
Total
Total amount fixed and variable compensation
360
19
142
1423)
407
475)
3607)
–
–
–
928
58
986
360
19
142
–
–
–
1423)
407
475)
3607)
928
58
986
379
360
19
0
–
0
0
–
0
–
0
379
58
437
379
360
19
255
–
–
–
2554)
1,833
2136)
1,6208)
2,467
58
2,525
1) annual base salary according to service contracts
2) includes benefits for company car
3) 75 % of the STI target value for the respective
financial year
7) LTI target value for the respective financial year
8) maximum attainable pay-out amount for the LTI after
holding period of 4 years (1.5 x granted virtual shares x
(2.5 x share price on grant date) x 1.2)
4) maximum attainable pay-out amount for 75 % of the
STI after 1 year (target value STI x 0.75 x 1.5 x 1.2)
9) includes benefits for insurances and pension plans
10) hypothetical maximum attainanble pay-out amount
5) 25 % of the STI target value for the respective
financial year
6) maximum attainable pay-out amonut for 25 %
of the STI after 1 plus further 2 years
(target value STI x 0.25 x 1.5 x 1.2) x 2.5)
under the condition that all assumptions described in
the table ‘Conditions to attain maximum amounts’
are fulfilled
Allocation/benefits paid out
2013
2012
2013
2012
Olivier Elamine
(CEO)
Alexander Dexne
(CFO)
Total amount fixed compensation
and ancillary benefits
Fixed compensation1)
Ancillary benefits2)
Total amount one-year variable compensation
One-year variable compensation (STI 2011)3)
One-year variable compensation (STI 2012)3)
Total amount multi-year variable compensation
STI 2010 (1 plus 2 years)4)
Other
Total amount fixed and variable compensation
Service cost5)
Total
451
440
11
204
–
204
67
67
0
722
84
806
452
440
12
185
185
–
0
0
0
637
84
721
379
360
19
167
–
167
54
54
0
600
58
658
379
360
19
151
151
–
0
0
0
530
58
588
1) annual base salary according to service contracts
2) includes benefits for company car
3) pay-out amount for 75% of the STI after 1 year
for the respective previous year
4) pay-out amount for 25% of the STI after 1 plus further
2 years
5) includes benefits for insurances and pension plans
114
alstria Financial Report 2013
Corporate governance
Benefits granted
in EUR k
Total amount fixed compensation and ancillary
benefits
Fixed compensation1)
Ancillary benefits2)
Total amount one-year variable compensation
One-year variable compensation (STI 2012)
One-year variable compensation (STI 2013)
Total amount multi-year variable compensation
STI 2012 (1 plus 2 years)
STI 2013 (1 plus 2 years)
LTI 2012 (4 years)
LTI 2013 (4 years)
Total amount fixed and variable compensation
Service cost9)
Total
Alexander Dexne
(CFO)
2012
379
2013
379
360
19
142
1423)
–
407
475)
–
3607)
–
928
58
986
360
19
142
–
1423)
407
–
475)
–
3607)
928
58
986
2013 (min.)
2013 (max.)10)
379
360
19
0
–
0
0
–
0
–
0
379
58
437
379
360
19
255
–
2554)
1,833
–
2136)
–
1,6208)
2,467
58
2,525
Conditions to attain maximum amounts for variable remuneration elements granted in 2013:
One-year variable compensation 1. FFO 2013 = EUR 69.4 m (budgeted FFO of EUR 46.3 m is
achieved by 150 %)
2. SB resolves on discretionary factor of 1.2
Multi-year variable compensation
LTI (4 years) 1. absolute TSR ≥ 8 %, i.e. total shareholder return for alstria
investors over 4 years of 8 % p.a. or more
2. relative TSR (TSR vs. EPRA) ≥ 25 %, i.e alstria overperforming
EPRA/NA-REIT Europe Index Ex UK by 25 %
3. Company share price increases by 250 %
(share price of EUR 9.29 on granting date > share price of
EUR 23.225 on payment date after 4 years)
4. SB resolves on discretionary factor of 1.2
STI (1 plus 2 years)
share price of Company shares increases by 250 % (e.g.: share
price of EUR 9 on deferral date > share price of EUR 22.5 on
payment date after 2 years)
115
Allocation/benefits paid out
2013
2012
2012
Olivier Elamine
(CEO)
Alexander Dexne
(CFO)
2013
Total amount fixed compensation
and ancillary benefits
Fixed compensation1)
Ancillary benefits2)
Total amount one-year variable compensation
One-year variable compensation (STI 2011)3)
One-year variable compensation (STI 2012)3)
Total amount multi-year variable compensation
STI 2010 (1 plus 2 years)4)
Total amount fixed and variable compensation
Other
Service cost5)
Total
451
440
11
204
–
204
67
67
0
722
84
806
452
440
12
185
185
–
0
0
0
637
84
721
379
360
19
167
–
167
54
54
0
600
58
658
379
360
19
151
151
–
0
0
0
530
58
588
alstria Financial Report 2013
Corporate governance
3 Other mandatory disclosures
Benefits upon premature termina-
tion of Management Board duties
If membership of the Management Board
is terminated, members have agreed to a
post-contractual 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 compen-
sation payment for this period equivalent to
their last fixed 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 remain-
ing term of the service contract, however, are
capped at a value of two years’ remunera-
tion. Benefits to be paid by the Company, if
the appointment is terminated by the death
of the board member, amount to the fixed
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.
Additional information on share-
based remuneration components
The long-term incentive (LTI) was imple-
mented in 2010 and replaced the Company’s
stock option programme 2007. The members
of the Management Board were granted a
single tranche of stock options in the course
of the stock option programme 2007 in fi-
nancial year 2007. The term to maturity for
these stock options ends in financial year
2014. In financial year 2013 no expenses
arose from the stock options granted in fi-
nancial year 2007.
The details of the stock option programme
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 ex-
ceeds the exercise price by 20 % or more on
at least seven non-consecutive trading 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 exercise period lasts 30 days
beginning on the date of publication of the
Company’s results for the first, second and
third quarters and the date of the Compa-
ny’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 is EUR 19.20.
116
alstria Financial Report 2013 Corporate governance
Remuneration of the
Supervisory Board members
1 Structure of the Supervisory
Board remuneration
The members of the Supervisory Board each
receive an annual fixed remuneration in the
amount of EUR 40 k. The Chairman of the
Supervisory Board receives an additional an-
nual amount of EUR 20 k, the Vice-Chairman
receives an additional amount of EUR 10 k.
Members who sit on the Supervisory Board
for only part of a year receive a remuneration
pro rata. Membership in the audit committee
entails the member to a separate remuner-
ation of EUR 10 k, whereby the chair of the
audit committee receives EUR 15 k. Member-
ship in other committees does not give enti-
tlement to any additional remuneration.
2 Remuneration of the Supervisory
Board in financial year 2013
The total remuneration for the Superviso-
ry Board members in 2013 amounted to
EUR 305 k. The individual remuneration of the
members of the Supervisory Board for financial
years 2013 and 2012 is composed as follows:
EUR k
Supervisory Board
member
Function on the
Supervisory Board
Function on the
Audit Committee
Remuneration
for 2012
Remuneration
for 2013
Alexander Stuhlmann
chairman
n/a
60.00
60.00
Chairman
(until Dec. 31,2012)
Dr. Johannes Conradi
vice-chairman
Benoît Hérault
Roger Lee
Richard Mully
member
(since Apr. 24, 2012)
member
member
n/a
member
n/a
Marianne Voigt
member
Daniel Quai
Total
member until
Mar. 31, 2012
Chairman
(since Jan. 1, 2013)
member (since
Apr. 24, 2012)
member until
Mar. 31, 2012
65.00
60.00
27.54
50.00
40.00
40.00
50.00
40.00
46.89
55.00
12.43
301.86
n/a
305.00
117
alstria Financial Report 2013 REIT disclosures
REIT disclosures
REIT DECLARATION
Statement of the
management board
In relation with our financial statements ac-
cording to Section 264 of the German Com-
mercial Code (Handelsgesetzbuch, HGB) and
our consolidated financial statements ac-
cording to Section 315a HGB as per Decem-
ber 31, 2013, the management board issues
the following declaration regarding compli-
ance with the requirements of Sections 11
to 15 of the REIT Act (German Real Estate
Investment Trust Act) and regarding the cal-
culation of the composition of income subject
to and not subject to income tax for the pur-
pose of Section 19 paragraph 3 REIT Act in
conjunction with Section 19a REIT Act:
1. As per balance sheet date, 82.17 % of al-
stria’s shares were free float according to
Section 11 paragraph 1 REIT Act. This was
disclosed to the German Federal Financial
Supervisory Authority (BaFin).
2. In accordance with Section 11 paragraph
4 REIT Act, as per 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 dis-
tribution obligation and the reserves pur-
suant to Section 12 paragraph 2 REIT Act
a) as per the balance sheet date the immov-
able assets amounted to EUR 1,659,441
k which equals to 92.93 % of the assets,
therefore at least 75 % of the assets be-
long to the immovable 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 454 k and
therefore 0.03 %.
movable assets pursuant to the consolidat-
ed financial statements according to Sec-
tion 12 paragraph 3 and 4 REIT Act
a) for the financial year 2013, the entire sales
revenues of the Group plus other earnings
from immovable assets amounted to EUR
105.9 m. This equals 100 % of total reve-
nues plus other earnings from immovable
assets;
b) the sum of the sales revenue plus the
other earnings from immovable assets
of REIT service companies amounted to
EUR 186 k in the financial year 2013. This
equals 0.18 % of total revenue plus other
earnings from immovable assets.
5. In the financial year 2013, a dividend pay-
ment of EUR 39,467 k for the prior finan-
cial year was distributed to the sharehold-
ers. The financial year 2012 did not result
in a net income according to commercial
law pursuant to Section 275 HGB.
6. alstria office REIT-AG’s dividend does not
derive from already taxed parts of the profit.
7. Since 2009, the Group has realised 23.66 %
of the average portfolio of its immovable
assets and therefore did not trade with real
estate according to Section 14 REIT Act.
8. On balance sheet date the Group’s equity as
shown in the consolidated financial state-
ments according to Section 12 paragraph
1 REIT Act was EUR 844.1 m. This equals
to 50.9 % of the value of the immovable
assets which are shown in the consolidated
financial statements in conformance with
Section 12 paragraph 1 REIT Act.
alstria office REIT-AG
Hamburg, February 14, 2014
4. In relation to the sum of the entire sales
revenue plus the other earnings from im-
Olivier Elamine
CEO
Alexander Dexne
CFO
118
alstria Financial Report 2013 REIT disclosures
REIT MEMORANDUM
We summarised the result of our audit in an
auditor'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 Sec-
tion 1 (4) of the Act on German Real Estate
Stock Corporations with listed Shares (REIT
Act)
To alstria office REIT-AG, Hamburg
As auditor of the annual financial statements
and the consolidated financial statements of
alstria office REIT-AG, Hamburg, for the fi-
nancial year from January 1 to December 31,
2013, we have audited the information giv-
en in the attached declaration of the Man-
agement Board members for the compliance
with the requirements of Section 11 to 15 of
the REIT Act and the composition of the pro-
ceeds concerning the pretaxation of proceeds
according to Section 19 (3) and Section 19a
REIT Act as of December 31, 2013 (hereinaf-
ter referred to as ‘REIT declaration’). The in-
formation given in the REIT declaration is in
the responsibility of the Management Board
of the Company. Our responsibility is to ex-
press an opinion on the information given
based on our audit.
We conducted our audit considering the au-
dit guidance promulgated by the Institut der
Wirtschaftsprüfer (Institute of Public Auditors
in Germany) (IDW): Particularities concerning
the audit of a REIT stock corporation accord-
ing to Section 1 (4) REIT Act, a pre-REIT stock
corporation according 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 performed
our audit to make a judgment with reason-
able assurance if the free float ratio and the
maximum stock ownership per shareholder
according to Section 11 (1) and (4) REIT Act
agrees with the announcements due to Sec-
tion 11 (5) REIT Act as of December 31, 2013
and if the provided information concerning
the requirements of Section 12 to 15 REIT Act
and the composition of the proceeds concern-
ing the pre-taxation of proceeds according to
Section 19a REIT Act is appropriate. It was
not part of our engagement to fully assess
the companies tax assessments or position.
Within our audit procedures we compared
the information concerning the free float ra-
tio and the maximum stock ownership per
shareholder according to Section 11 (1) and
(4) REIT Act provided within the REIT declara-
tion with the announcements due to Section
11 (5) REIT Act as of December 31, 2013 and
agreed the provided information concerning
the requirements of Section 12 to 15 REIT Act
with the information disclosed in the annual
financial statements and the consolidated fi-
nancial statements of the Company. Further-
more we tested the adjustments made to the
valuation of immovable assets held as invest-
ment 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 findings of our
audit, the information given in the REIT dec-
laration concerning the free float 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,
2013 and the information provided concern-
ing the compliance with Section 12 to 15 REIT
Act and the composition of the proceeds con-
cerning the pretaxation of proceeds according
to Section 19a REIT Act are appropriate.
This memorandum is solely provided for sub-
mission to the tax authorities of the city of
Hamburg within the tax declaration accord-
ing to Section 21 (2) REIT Act.
Hamburg/Germany, February 14, 2014
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
sgd. Gerald Reiher
Wirtschaftsprüfer
(German Public Auditor)
sgd. p.p. Annika Deutsch
Wirtschaftsprüferin
(German Public Auditor)
119
alstria Financial Report 2013 Other information
Glossary
… do you speak alstria ?
The real estate industry has developed its
own language with many technical terms. In
order to facilitate understanding, we’ve add-
ed a glossary.
A
AFFO (adjusted funds from
operations)
The AFFO is equal to the FFO (funds from
oper ations) with adjustments made for capi-
tal expenditures used to maintain the quality
of the underlying investment portfolio.
Annual financial statements
The annual financial statements include the
balance sheet and the profit and loss account
of a company. In respect of a joint stock
company, these are prepared by the Man-
agement Board, audited by a chartered ac-
countant 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 Su-
pervisory Board and the balance sheet audi-
tor. It passes resolutions on the appropriation
of the annual profit shown, on mea s ures for
raising capital, on changes to the articles of
association and other fundamental issues; it
is the only body which can approve the deci-
sions made by the Supervisory Board and the
Management Board.
Asset management
Value-driven management and /or optimisa-
tion of real estate investments through let-
ting management, refurbishment, reposition-
ing and tenant management.
120
C
Cash flow
The cash flow statement shows how the cash
and cash equivalents of the Group changed
in the course of the financial year as a re-
sult of cash received and paid. In accordance
with IAS 7, a distinction is made between
cash flows from operating activities and cash
flows from investing and financing activities.
CO2
Carbon dioxide, a gas produced primari-
ly through the combustion of fossil fuels. It
is believed to be the main cause of climate
change.
Consolidated statement of financial
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 financial state-
ments.
Contractual rent
At a given date, the contractual rent reflects
the total annualised rent taking into consider-
ation 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 fu-
ture signed lease contract.
CSR (Corporate Social
Responsibility)
A form of corporate self-regulation integrat-
ed into a business model. The term is used in-
terchangeable with the terms ‘sustainability’,
and ‘Environmental, Social and Governance
(ESG)’.
alstria Financial Report 2013 Other information
D
DAX
The German Share Index (DAX) reflects the
value trend of the 30 most important Ger-
man shares. In addition to the market pric-
es, 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 es-
tablishes a system for the assessment and the
certification of sustainable buildings.
FFO (funds from operations)
alstria calculates FFO as EBT, decreased/in-
creased by the net gain/loss from fair val-
ue adjustment on investment property, de-
creased/increased by the net gain/loss from
fair value adjustment on financial derivatives,
increased/reduced by the profit/loss on dis-
posal of investment property, decreased/in-
creased by the net gain/loss from fair value
adjustments on investment property of joint
ventures, decreased/increased by non-recur-
ring items, plus non-cash-expenses and less
cash taxes paid.
E
G
EPRA (European Public Real Estate
Association)
The EPRA index is the well-known interna-
tional index which tracks the performance
of the largest Euro pean and North Ameri-
can listed property companies. The European
Public Real Estate Association (EPRA) is an or-
ganisation that represents the interests of the
major European property management com-
panies and supports the development and
market presence of European public property
companies. Its members include companies
such as alstria office REIT-AG, financial ana-
lysts, investors, advisors and auditors.
F
Fair value (or open market value
[OMV])
The estimated amount for which a property
should exchange on the date of valuation be-
tween a willing buyer and a willing seller in
an arm’s-length transaction after proper mar-
keting, wherein the parties had each acted
knowledgeably, prudently and without com-
pulsion. The fair value for alstria’s investment
properties is reviewed regularly by external
appraisers.
G-REIT
Real Estate Investment Trusts are public listed
companies, fully tax transparent, which sole-
ly invest in properties.
I
IFRS (international financial report-
ing standards)
IFRS are adopted by the International Ac-
counting Standards Board (IASB). The ob-
jective is to achieve uniformity and trans-
parency in the accounting principles that are
used by companies and other organisations
worldwide for financial reporting. IFRS have
applied to listed companies since January 1,
2005.
Investment property
Property, land and buildings, which are held
as financial investments to earn rents or for
growth and not used for the Company’s own
purpose. The value of the investment proper-
ty is determined according to IAS 40.
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alstria Financial Report 2013
Other information
J
O
Joint venture
Legally independent entity formed between
two or more parties to undertake econom-
ic activity together. It is jointly controlled by
the parties under a contractual arrangement
whereby decisions on financial and operating
policies essential to the operation, perfor-
mance and financial position of the venture
require each party’s consent.
L
LTV (loan to value) and Net LTV
alstria calculates loan to value (LTV) by divid-
ing the total loans outstanding to finance in-
vestment properties by the value of all mort-
gaged 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.
N
NAV (net asset value)
Reflects the economic equity of the Compa-
ny. 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 financial position, which ac-
counts for the carrying amount and the fair
value of financial instruments and financial li-
abilities, adjusted for hidden reserves and hid-
den losses in immovable assets and financial
liabilities.
Office building
Property where at least 75 % of the lettable
area is destined to office use (disregarding
potential ground floor retail).
P
Passing rent
Annual gross rental income as per a certain
date, excluding the net effects of straight-lin-
ing for lease incentives.
Property management
Property management is the management of
real estate assets including the processes, sys-
tems and man power required to manage the
life cycle of a building.
R
Road shows
Corporate presentations to institutional in-
vestors.
S
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
specified term.
SDAX
Small Cap Index; it contains, with variable
weighting, the prices of the 50 most impor-
tant, in terms of market capitalisation and
turnover, German joint stock companies
which are not included in DAX or MDAX. In
addition to dividend payments, subscription
right proceeds are also included when calcu-
lating the index.
122
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Other information
Share
The term share describes both the member-
ship rights (holding in the joint stock compa-
ny) and the security which embodies these
rights. The holder of a share (shareholder) is
a ‘sharer’ in the assets of the joint stock com-
pany. Their rights are protected by the regu-
lations contained in the Companies Act.
Supervisory Board
The Supervisory Board is one of the three
executive bodies of a joint stock compa-
ny: Annual General Meeting, Management
Board and Supervisory Board. The Supervi-
sory Board appoints the Management Board
and provides supervision and advice regard-
ing management of the Company’s business.
Share capital
The capital stipulated in a corporation’s ar-
ticles of association. The articles also speci-
fy 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 affects or is affected by some aspect of
an organisation’s products, operations, mar-
kets, industries and outcomes.
Stock exchange
The stock exchange is the market (meeting
place for supplies and demands) for securi-
ties. Stock exchange dealing takes place in the
Federal Republic of Germany in certain plac-
es 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 con-
tracts for securities which are not admitted
to any of the market segments may not be
accepted or negotiated in the dealing room
during trading hours.
Sustainability
Alignment of an organisation’s products
and services with stakeholder expectations,
thereby adding economic, environmental
and social value.
T
Transparency
A principle that allows those affected by ad-
ministrative decisions, business transactions
or charitable work to know not only the ba-
sic facts and figures but also the mechanisms
and processes. It is the duty of civil servants,
managers and trustees to act visibly, predict-
ably and understandably.
V
Vacant space
Vacant space refers to the sum of all lettable
space that at the end of a calendar year is un-
occupied or offered for lease.
Valuation yield
Key performance indicator, which is deter-
mined at a given date by the contractual rent
in relation to the fair value of the property.
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Other information
2014 Events
January
Wk M T W T
1
2
3
4
5
1
8
15
22
29
2
9
16
23
30
6
13
20
27
7
14
21
28
March
Wk M T W T
9
10
11
12
13
14
3
10
17
24
31
4
11
18
25
5
12
19
26
6
13
20
27
May
Wk M T W T
18
19
20
21
22
5
12
19
26
6
13
20
27
7
14
21
28
1
8
15
22
29
S
5
12
19
26
S
2
9
16
23
30
S
4
11
18
25
F
3
10
17
24
31
F
7
14
21
28
F
2
9
16
23
30
S
4
11
18
25
S
1
8
15
22
29
S
3
10
17
24
31
February
Wk M T W T
5
6
7
8
9
3
10
17
24
4
11
18
25
5
12
19
26
6
13
20
27
April
Wk M T W T
14
15
16
17
18
3
10
17
24
1
8
15
22
29
2
9
16
23
30
7
14
21
28
June
Wk M T W T
22
23
24
25
26
27
2
9
16
23
30
3
10
17
24
4
11
18
25
5
12
19
26
July
Wk M T W T
27
28
29
30
31
1
8
15
22
29
2
9
16
23
30
3
10
17
24
31
7
14
21
28
F
4
11
18
25
S
5
12
19
26
S
6
13
20
27
August
Wk M T W T
31
32
33
34
35
4
11
18
25
5
12
19
26
6
13
20
27
7
14
21
28
124
F
7
14
21
28
F
4
11
18
25
F
6
13
20
27
F
1
8
15
22
29
S
1
8
15
22
S
5
12
19
26
S
7
14
21
28
S
2
9
16
23
30
S
2
9
16
23
S
6
13
20
27
S
1
8
15
22
29
S
3
10
17
24
31
alstria Financial Report 2013 Other information
September
Wk M T W T
36
37
38
39
40
1
8
15
22
29
2
9
16
23
30
3
10
17
24
4
11
18
25
November
Wk M T W T
44
45
46
47
48
3
10
17
24
4
11
18
25
5
12
19
26
6
13
20
27
F
5
12
19
26
F
7
14
21
28
S
6
13
20
27
S
1
8
15
22
29
S
7
14
21
28
S
2
9
16
23
30
October
Wk M T W T
40
41
42
43
44
1
8
15
22
29
2
9
16
23
30
6
13
20
27
7
14
21
28
December
Wk M T W T
49
50
51
52
1
1
8
15
22
29
2
9
16
23
30
3
10
17
24
31
4
11
18
25
F
3
10
17
24
31
F
5
12
19
26
S
4
11
18
25
S
6
13
20
27
S
5
12
19
26
S
7
14
21
28
Conferences / Roadshows
March 28
Publication of the annual report
Financial report (Hamburg)
May 6
Publication of Q1 report
Interim report (Hamburg)
May 14
Annual General Meeting
Hamburg
August 5
Publication of Q2 report
Half-year interim report
(Hamburg)
November 4
Publication of Q3 report
Interim report (Hamburg)
Publication of sustainability
report 2014
Stay updated about our Investor Relations
events. Visit our website:
›› www.alstria.com/investors
125
alstria Financial Report 2013 Other information
Augmented Reality
This report will offer you Augmented Reality
experience. In this report look for the ‘Aug-
mented Reality’-logo.
This will indicate that the picture will interact
with your phone.
In order to access it you need to: With an
iPhone/iPad: Download and install the alstria
app from apple’s App Store.
Open the app, and tap on the Aurasma tab.
Aim at the desired picture and you should ac-
cess the augmented reality in a few seconds.
With an Android phone: Download the Aur-
asma Lite app from Google Play.
Launch the Aurasma Lite app, and search for
‘alstria’. Once the alstria channels are found,
subscribe to both of them.
Now aim at the desired picture and you
should access the augmented reality in a few
seconds.
Try it on our logo right now to see how this
works.
For more information about Aurasma, please
visit: » www.aurasma.com
126
alstria Financial Report 2013
Other information
Imprint
alstria office REIT-AG is a member of DIRK
(Deutscher Investor Relations Verband, the
German Investor Relations Association).
Other reports issued by alstria office REIT-AG
are posted on the Company’s website.
Forward-looking statements
This annual report contains forward-looking
statements. These statements represent as-
sessments which we have made on the basis
of the information available to us at the time.
Should the assumptions on which the state-
ments are based not occur, or if risks should
arise the actual results could differ materially
from the results currently expected.
Note
This report is published in German (original
version) and English (non-binding transla-
tion).
Concept, design and realisation
Teresa Henkel, Anne von Holten
Contact Investor Relations
Ralf Dibbern
Phone › +49 (0) 40 22 63 41-329
› +49 (0) 40 22 63 41-229
Fax
E-mail › rdibbern@alstria.de
127
alstria Financial Report 2013 Notes
128
alstria Financial Report 2013 alstria office REIT-AG
www.alstria.com
Bäckerbreitergang 75
20355 Hamburg, Germany
Phone › + 49 (0) 40 22 63 41-300
› + 49 (0) 40 22 63 41-310
Fax
Friedrichstrasse 19
40217 Düsseldorf, Germany
Phone › + 49 (0) 211 30 12 16-600
› + 49 (0) 211 30 12 16-615
Fax