ANNUAL
COMPANY
REPORT 2019
Real Estate Portfolio Performance &
Financial Development
PAGE
22
CONTENTS
alstria Annual Company Report 2019
PAGE
24
PAGE
19
03 AT A GLANCE
04 Our strategic cornerstones
06 Management letter
09 Portfolio key information
10 Financial key information
35 DEVELOPMENT
36 Our approach to internal growth
38 Case study: Gustav-Nachtigal-Str. 3 & 5
40 Case study: Geesthof
42 Current development projects
43 Refurbishment Candidates
2019
11 PORTFOLIO
12 Letting
19 Capital expenditure
22 Transactions
24 External valuation
27 Portfolio overview
45 FINANCIALS
46 P&L and FFO
47 Cash flow
48 Balance sheet
50 Financial debt
51 Outlook 2020
52 EPRA KPI’s
56 ALSTRIA’S SHARE
57 Share price performance
58 Shareholder structure
59 IR activities
60 CORPORATE SOCIAL
RESPONSIBILITY
61 Integral part of our business
62 Green Dividend
64 APPENDIX
65 Calculation of yields
67 Achieved UIRR 2006 – 2019
71 Valuation certificate
80 Management compensation scheme
81 Glossary
84 Imprint
AT A GLANCE
Hamburger Str. 1, Hamburg
Development project 2012 – 2013
Yield on cost: 7.4 %
AT A GLANCE
04 Our strategic cornerstones
06 Management letter
09 Portfolio key information
10 Financial key information
3
alstria Annual Company Report 2019 OUR STRATEGIC CORNERSTONES
WHO WE ARE
WHAT WE DO
WHAT WE OFFER
alstria office REIT-AG is Germany’s leading office real
estate company. As of December 31, 2019, we own and
manage a portfolio of 116 buildings with a lettable area
of around 1.5 million m² and a total value of EUR 4.5 bil-
lion. Our properties are located in the large and liquid
German office markets of Hamburg, Düsseldorf, Frankfurt,
Stuttgart, and Berlin, where we are represented by local
operating offices. As a fully integrated company, oriented
toward the long term, alstria’s 165 employees actively
manage our buildings throughout their entire life cycle.
KEY NUMBERS
Our corporate strategy is based on three pillars:
Letting real estate
Leasing our assets enables us to generate income that
forms the basis of our ability to pay out attractive divi-
dends over the long term.
LETTING
Exploiting value creation potential
We increase rental income and property values by mak-
ing substantial and steady investments in our portfolio.
CAPEX
Capital allocation
Depending on our perception of the real estate cycle,
we buy or sell properties to continuously optimize the
risk return profile of the portfolio.
TRANSACTION
Through our local presence, we offer our tenants modern
and efficient office space, as well as comprehensive local
services. Our company’s listing on the German stock
exchange gives our shareholders access to a first-class,
professionally and sustainably managed portfolio of office
properties in the most attractive cities of Europe’s stron-
gest economy. To our employees, we offer secure and
attractive jobs, on the basis of our sustainable strategy.
SHARE
4
alstria Annual Company Report 2019
€€
OUR LONG-TERM
PORTFOLIO STRATEGY
OUR LONG-TERM
FINANCING STRATEGY
%%%
OUR LONG-TERM
ACHIEVEMENTS
alstria pursues a total return business, and as such, our
balance sheet will shrink or grow depending on the arbi-
trage that exists between pricing of real estate in the
direct market and the public market. Our long-term goal
is to grow the company across our markets to a portfo-
lio value of around EUR 6.0 billion. In 2019, the private
market priced real estate much more aggressively than
in the public markets. We therefore saw limited oppor-
tunity to buy and more opportunity to sell and de-risk
the portfolio. We invest the proceeds from our disposals
into quality-enhancing measures within our own port-
folio, which offers higher yields than any acquisition in
the market.
PORTFOLIO OVERVIEW
We believe that in the current volatile macro-environ-
ment, maintaining a low leverage and a strong balance
sheet is of paramount importance. The current net LTV
stands at 27.1 % and represents the lowest level in the
company’s history. Our intention is to keep the LTV
level of the company at or around 35 % across a full real
estate cycle.
FINANCIAL PERFORMANCE
Our three-pillar strategy has generated an average
unlevered cash return of 8.0 % per annum for the
EUR 1.5 billion of assets that we have acquired, man-
aged, and sold back to the market since the company
was founded 13 years ago. We intend to stick to the strict
discipline that has enabled us to achieve this strong track
record in the past.
UIRR TABLE
5
alstria Annual Company Report 2019 MANAGEMENT LETTER
Dear ladies and gentlemen,
shareholders, business partners,
and tenants
In 2010, alstria was the first German real estate company
to publish a sustainability report. In 2013, three years prior
to the signature of the Paris Agreement, alstria was one of
a handful of European real estate companies to sign the
RE100 pledge1), in which we committed to procure 100 %
of our electrical energy from renewable sources (we ful-
filled this pledge in 2019). All in all, alstria has been able to
reduce its CO2 footprint2) for scopes 1 to 3 by 42.5 % since
2013 (or by 52,112 tCO2e per year). We have been acutely
aware of the ‘embodied carbon’ in real estate construction.
In October 2009, we publicly3) stated for the first time our
view that the most sustainable building is ‘the building
that was not built.’ Our stated policy and approach to real
estate is to stay away from green field development and
focus on improving the existing stock. More importantly,
we have been able to achieve all of the above while still
meeting our financial returns. We have reviewed our pro-
curement policy, incorporated the need for sustainable
building upgrades in our underwriting, and used every
other lever at our disposal to reach both our financial and
our sustainability goals. This journey is not over and is now
deeply rooted in the culture of alstria.
As we moved forward, we started asking ourselves if and
how we could do more and accelerate the path we were
taking to reduce our carbon footprint. Now that we have
put tools in place to measure and compare our properties,
we can identify the underperformers and the reasons for
their underperformance. If we were to decide to invest in
improving the footprint of these lagging properties now,
we could start doing better even faster. There is, however,
a catch. Most of these investments, while yielding positive
results from a carbon footprint perspective, would not
meet our financial hurdles. In other words, most of these
investments would cost the company.
We have detailed in our introduction to alstria’s latest sus-
tainability report4) why these investments would not yield
a positive return to alstria and why it is preferable (from a
financial point of view) not to pursue them. In order to reach
this conclusion, we have investigated them, applying the same
diligent approach that we apply to financial investments. The
only difference is that we have substituted CO2 return for
financial return. What we have tried to do is identify projects
that would yield the best CO2 outcomes for the money spent.
Rather than looking at return on investment, we looked at
CO2 saved per Euro invested. How much would our marginal
cost be for suppressing an additional ton of CO2?
We looked at a variety of different projects, but the numbers
we were getting out of this approach were underwhelming.
The best projects we had would cost between EUR 25,000
and 30,000 per annual tCO2e saved and have an average
life cycle of 25 years. Die-hard climate activists argue that
the right annual cost for a ton of carbon should be between
EUR 200 and 250. We were cruising 4 to 6 times higher
and 20 to 30 times higher than current CO2 pricing (around
EUR 25 per tCO2e). We paused and started looking around
to figure out what we were missing.
1) For more about RE100 please see www.there100.org/
2) Market based.
3) www.alstria.blogspot.com/2009/10/two-fridge-syndrome.html
4) www.alstria.com/sustainability/
6
alstria Annual Company Report 2019
We found a valuable source of information in various newly
released ‘Green Bond Impact’ reports, which financial insti-
tutions with green bonds outstanding started to publish.
These reports published the Euro amount invested through
green bonds in real estate assets as well as the annual CO2
impact. We could therefore benchmark our own numbers.
Green buildings
Invested
amount
(EUR m)
1,096.2
88.4
299.0
630.0
202.0
1,806.0
567.9
4,689.5
Avoided CO2
per year
(tCO2e)
23,027
Cost per avoided
tCO2e / year
(EUR)
47,603
309
286,073
4,893
61,108
12,992
48,491
2,500
80,800
116,000
15,569
3,743
151,715
163,464
28,688
Invested
amount
(EUR m)
3,816.2
Avoided CO2
per year
(tCO2e)
4,126,160
Cost per avoided
tCO2e / year
(EUR)
925
184.1
201.0
245.0
832.8
362.3
146,291
1,259
40,066
5,017
445,600
550
10,972,870
76
410,401
883
ING
SEB
KBC
Raiffeisen
Nordea
Berlin hypo
Westpac
Total
Renewable
ING
SEB
KBC
Nordea
Westpac
Commerzbank
Total
5,641.4
16,141,388
350
Source: www.green-dividend.com
Much to our surprise, these reports confirmed our own expe-
rience. The EUR 4.7 billion we identified that were invested
in real estate had an average yield of EUR 29,000 per annual
tCO2e saved, with the best yield being EUR 15,000 and
the worst as high as EUR 290,000 per annual tCO2e saved.
While compiling these numbers, we also realized that the
same green bond had much stronger CO2 yields when
invested elsewhere. The same pool of financial institutions,
using the same green bonds, invested EUR 5.7 billion in
renewables at an average yield of EUR 350 per annual
tCO2e saved. The best yield was EUR 76, and the worst
was EUR 5,000 per annual tCO2e saved.
As investment professionals, we can draw only one conclu-
sion looking at these numbers. If fighting climate change is
our primary objective, then real estate is the wrong asset
class to invest in. The marginal cost of saving a ton of CO2
seems to be 81 times higher in real estate than in renew-
able. Considering that the current CO2 pricing is around
EUR 25 per ton, it is likely that we would reach a similar
conclusion if comparing real estate with industrial compa-
nies or other economic activities.
As the saying goes, the road to hell is paved with good
intentions. While we took to heart speeding up the com-
pany carbon impact above and beyond what we were doing
as part of our day-to-day business, we were limiting our
thinking to our own realm. We were ignoring other poten-
tial investment opportunities simply because we could not
access them. In doing so, we were about to make a very
bad capital allocation decision. It does not make it better
that this misallocation of capital seems to be happening
on a much greater scale in the green bond universe, as
demonstrated by the numbers above.
What is the ‘Green Dividend’?1)
The Green Dividend is born out of the above and the fol-
lowing observations and / or beliefs:
› Any investment that yields positive financial returns and
is sustainably beneficial will be undertaken in any case
and does not need any additional incentive. As such, we
are renovating our assets and improving their environ-
mental footprint, industrial companies are implementing
projects to reduce costs and save primary goods, and B2C
companies are developing and selling environmentally
cleaner products for which consumers are ready to pay
more.
› The current pace of change being generated out of mar-
ket-driven investments is not enough to meet the CO2
targets of the Paris Agreement. If the situation was oth-
erwise, there would be no need for action.
› Any additional investment beyond economically justifia-
ble projects should be focused on maximizing the impact
of capital in terms of CO2 reduction, to achieve the most
efficient results at the lowest capital cost (the ‘Efficiency
Test’).
› While companies can identify the most efficient projects
within their portfolios, they might not have access to
investment opportunities that meet the Efficiency Test
in the wider economy.
› Finally, we believe that in the absence of more decisive
government intervention (in a form of more realistic car-
bon pricing), there needs to be a sense of coordinated
action to entice more cooperative behavior between the
different economic agents involved.
1) For more about the Green Dividend concept, please visit www.green-dividend.com
7
alstria Annual Company Report 2019 In theory, a dividend payment by a company signals a lack
of profitable investment opportunities and therefore a
return of capital to shareholders1). The Green Dividend is
intended for allowing a company to signal the existence
of financially nonviable investment opportunities in the
field of climate change and to provide the market with an
estimate of the CO2 yield of such investments. It allows
the market to understand a company’s marginal cost of
saving a ton of CO2.
Our intention in proposing a Green Dividend is to fill the
information gap that is, in our view, blurring most deci-
sion-making that requires more than a financial view. Our
intention is to provide more clarity to the market about
the potential opportunities that exist in the field of cli-
mate change mitigation. It is also to use the market (or,
more specifically, our shareholders) as a sounding board
on what is an efficient CO2 yield for a company to invest
toward achieving.
In practice, we have identified a limited number of invest-
ments2) that the company would not realize if we were to
rely solely on financial analysis. The company has no legal
or contractual obligation to execute these investments, and
they would not pay for the company’s current cost of capital.
As is customary at alstria, when we introduce a new idea,
we start small in order to assess its validity and viability. In
that spirit, we will propose increasing our dividend by one
cent (from EUR 0.52 to EUR 0.53 per share) at our next
general meeting. This one-cent increase to the dividend
will be proposed as our Green Dividend.
Shareholders will have the choice either to vote for get-
ting the additional one cent paid off or to vote against the
dividend increase. In the latter case, alstria would use the
proceeds (around EUR 1.8 million) to implement climate
change mitigation projects for an estimated CO2 yield of
1 tCO2e saved per year for every EUR 25,000 invested. The
company would report back to the AGM after the success-
ful implementation of the projects and present the actual
CO2 savings achieved.
We believe that climate change is the greatest challenge
that we will face in the coming years and are committed
to addressing this challenge. It has been pushed to the
forefront of every company’s and investor’s agenda. There
seems to be a general understanding that it is unlikely that
we will be able to reach the target of the Paris Agreement
if we keep going on with a ‘business as usual’ approach.
As a first step, we are earmarking EUR 1.8 million to accel-
erate the pace of action of the company in reducing its
carbon footprint. We have identified the projects that we
could implement and quantified the impact it could have.
We will be asking our AGM to take a majority vote that will
decide whether the company will pay the Green Dividend
to all the shareholders or keep the funds. If shareholders
decide to receive the Green Dividend, they will be able to
invest the proceeds in a more efficient climate mitigation
project. On the other hand, if shareholders ask the com-
pany to keep the Green Dividend, they will provide us with
a clear mandate to invest outside of our financial norms.
Whatever their decision is, alstria would have contributed
around 2 % of its dividend toward climate mitigation issues.
Our intention is to fully integrate the Green Dividend in our
dividend policy. We are looking forward to our discussions.
Kind regards
1) This is putting aside for a minute the specifics of REIT regimes.
2) Please see www.green-dividend.com for a more detailed description of these
investments, or pages 62– 63 of this report.
Olivier Elamine
Chief Executive Officer (CEO)
Alexander Dexne
Chief Financial Officer (CFO)
8
alstria Annual Company Report 2019 PORTFOLIO KEY INFORMATION
Our local offices
Graph 1: Tenant split
Annual rent EUR 208.3 million
HAMBURG
BERLIN
DÜSSELDORF
FRANKFURT
STUTTGART
Table 1: Investment regions
Table 2: Portfolio highlights
Number of
assets
Lettable area
(m²)
Investment volume
(EUR k)
Contractual rent
(EUR k)
Yield
(%)
Hamburg
Düsseldorf
Frankfurt
Stuttgart
Berlin
Others
Total
37
35
20
10
8
6
385,900
478,500
263,600
214,600
86,200
80,400
1,429,450
1,236,490
832,990
535,630
318,900
122,600
52,382
62,129
44,791
32,180
10,938
5,913
116
1,509,200
4,476,060
208,332
3.7
5.0
5.4
6.0
3.4
4.8
4.7
Number of properties
Market value (EUR m)
Contractual rent (EUR m)
Valuation yield (%)
Approx. lettable area (m²)
EPRA vacancy rate (%)
Lease length (years)
Average value per m² (EUR)
Average rent per m² (EUR per month)
11.1 % Daimler AG
11.0 % City of Hamburg
4.4 % German Government
3.9 % Deutsche Telekom (GMG)
2.9 % City of Frankfurt
2.0 % HOCHTIEF AG
64.7 % Others
Dec. 31, 2019
Dec. 31, 2018
116
4,476
208.3
4.7
118
3,985
197.0
4.9
1,509,200
1,577,000
8.1
6.3
2,966
12.62
9.7
4.8
2,525
12.25
9
alstria Annual Company Report 2019 FINANCIAL KEY INFORMATION
Table 3
EUR k
Revenues and earnings
Revenues
Net rental income
Consolidated profit for the period
FFO (after minorities)
Earnings per share (EUR)
FFO per share (EUR)
2019
2018
2017
2016
2015
187,467
162,904
581,221
112,571
3.27
0.63
193,193
169,068
527,414
114,730
3.02
0.65
193,680
172,911
296,987
113,834
1.94
0.74
202,663
179,014
176,872
116,410
1.16
0.76
115,337
102,140
–110,970
59,397
–1.15
0.61
Balance sheet
Investment property
Total assets
Equity
Liabilities
NAV per share (EUR)
Net LTV (%)
G-REIT key figures
G-REIT ratio (%)
Revenues plus other income
from investment properties (%)
EPRA key figures1)
EPRA earnings per share (EUR)
EPRA cost ratio A (%)2)
EPRA cost ratio B (%)3)
EPRA NAV per share (EUR)
EPRA NNNAV per share (EUR)
EPRA net initial yield (%)
EPRA ‘topped-up’ initial yield (%)
EPRA vacancy rate (%)
Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015
3,260,467
3,850,580
1,619,377
2,192,916
10.64
49.3
4,438,597
5,029,328
3,175,555
1,853,773
17.88
27.1
3,938,864
4,181,252
2,684,087
1,497,165
15.13
30.4
3,331,858
3,584,069
1,954,660
1,629,409
12.70
40.0
2,999,099
3,382,633
1,728,438
1,654,195
11.28
40.9
Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015
49.4
70.9
56.7
67.2
57.1
100
2019
0.61
26.1
21.7
100
2018
0.62
23.0
19.0
100
2017
0.68
19.6
16.4
100
2016
0.57
20.6
16.6
100
2015
0.42
26.1
22.1
Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015
10.91
10.66
5.0
5.3
11.2
12.71
12.45
4.6
5.0
9.4
15.14
14.96
4.0
4.4
9.7
11.31
10.81
5.0
5.4
9.2
17.91
17.61
3.3
3.8
8.1
Dividend
0.53
EUR per share
EPRA NAV
17.91
EUR per share
0.50
0.52
0.52
Proposal1)
0.52 0.53
17.91
15.14
10.91
11.31
12.71
2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
1) Of which EUR 0.01 Green Dividend.
Revenues
187.5
million EUR
FFO
112.6
million EUR
202.7
193.7
193.2 187.5
116.4
113.8
114.7 112.6
115.3
59.4
1) For further information please refer to EPRA Best Practices Recommendations, www.epra.com.
2) Incl. vacancy costs.
3) Excl. vacancy costs.
2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
10
alstria Annual Company Report 2019
PORTFOLIO
PORTFOLIO
12 Letting
19 Capital expenditure
22 Transactions
24 External valuation
27 Portfolio overview
Am Wehrhahn 33, Düsseldorf
Development project 2016 – 2018
Yield on cost: 6.9 %
11
alstria Annual Company Report 2019 ALSTRIA’S AVERAGE
NEW LEASING CONTRACT
Annual rent: EUR 254,000
Size: 1,300 m²
WAULT: 11 years
Rent per m² / month: EUR 16.20
LETTING
Leasing up office space is the core of
our business
alstria invests in five of the main metropolitan cities in Ger-
many. These are cities with a predicted positive demographic
trend for the foreseeable future. These cities offer young,
qualified people attractive and well-paid jobs, as well as a
diverse cultural environment and leisure activities. German
corporations are in competition to attract these talents in
a time of low unemployment. It has become clear that the
office space that a company can offer to its employees is
a key competitive advantage in the corporation race for
talents. As such demand for attractive, modern office space
has remained on a very strong footing in 2019 and alstria
has been positioning itself to make the best out of this
unique environment.
In 2019, we achieved the highest leasing volume in the
company's history, with 197,600 m² of new leases and
171,300 m² of lease extensions. This is a unique testimony to
the strength of our portfolio and the ability of the company
to create spaces that meet modern corporate demands.
Understanding client needs is the basis for a successful
leasing strategy and this in turn is the basis of our long-
term corporate success.
12
alstria Annual Company Report 2019 LEASES
New leases
2019 was a record year in terms of leasing for our company.
The signature of our two largest new contracts took place
in our development portfolio. It enabled us to increase the
pre-leasing rate in this sub-portfolio to 70 % and to increase
the annual contractual rent to EUR 26.0 million. At ‘Sol-
msstr. 27 – 37’ (Frankfurt) we let 30,900 m² and at ‘Gustav-
Nachtigal-Str. 3 & 5’ (Wiesbaden) a total of 26,000 m²,
both to public tenants and thus securing long-term cash
flows. Further substantial leasings were made, particularly
in the properties ‘Am Seestern 1’ (Düsseldorf), ‘Heerdter
Lohweg 35’ (Düsseldorf) and ‘T-Online-Allee 1’ (Darm-
stadt). Larger lease extensions were signed at ‘Alfredstr. 236’
(Essen) and ‘Vaihinger Str. 131’ (Stuttgart).
Table 4: Main new leases in 2019 ( > 1,500 m²)
Adress
Solmsstr. 27 – 37
City
Frankfurt
Gustav-Nachtigal-Str. 3 & 5 Wiesbaden
Am Seestern 1
Heerdter Lohweg 35
T-Online-Allee 1
Georg-Glock-Str. 18
Rotebühlstr. 98 – 100
Düsseldorf
Düsseldorf
Darmstadt
Düsseldorf
Stuttgart
Gustav-Nachtigal-Str. 5
Wiesbaden
Düsseldorf
Frankfurt
Frankfurt
Hamburg
Hamburg
Berlin
Hamburg
Cologne
Ratingen
Stuttgart
Hamburg
Kanzlerstr. 8
Platz der Einheit 1
Platz der Einheit 1
Amsinckstr. 28
Amsinckstr. 28
Schinkestr. 20
Amsinckstr. 34
Maarweg 165
Pempelfurtstr. 1
Epplestr. 225
Süderstr. 23
New leases > 1,500 m²
Others
Total
Lease start
July 01, 2021
Sept. 01, 2022
Oct. 01, 2020
May 01, 2020
May 01, 2020
May 01, 2020
Oct. 01, 2021
June 01, 2019
Mar. 01, 2020
July 01, 2019
July 01, 2019
May 01, 2020
July 01, 2020
Jan. 01, 2020
Sept. 01, 2019
Jan. 01, 2020
Apr. 01, 2019
July 01, 2020
Oct. 01, 2019
Lettable
area
(m²)
30,900
26,0002)
15,000
13,500
13,300
6,500
6,300
5,400
5,000
4,200
2,900
2,900
2,700
2,400
2,200
2,000
1,700
1,700
1,600
146,100
51,500
197,600
1) Disregarding parking, storage and other suplementary spaces.
2) Lease start for 18,400 m² on Sept. 1, 2021 and for 7,600 m² on Sept. 1, 2022.
Net rent
p. a.
(EUR k)
Net rent
per m²
(EUR)1)
Lease
length
(years)
Rent free
(in % of
lease length)
6,081
8,714
3,338
1,894
2,242
1,613
1,627
1,415
865
1,100
850
524
529
444
424
364
179
370
294
16.50
28.00
16.59
11.70
12.00
21.50
19.95
20.00
13.61
21.00
24.00
14.10
16.50
21.60
14.75
14.55
7.50
16.00
15.30
20.0
15.0
10.0
12.0
5.0
12.0
15.0
1.6
10.0
3.0
10.0
5.0
10.0
5.0
5.0
10.0
10.0
5.0
10.0
1.7
0.0
1.7
7.6
5.0
2.8
1.7
0.0
5.2
8.3
5.8
0.0
0.0
0.0
1.7
3.3
0.0
0.0
2.5
13
alstria Annual Company Report 2019
Leasing outlook
Commercial leases are generally signed for a limited period
of time. The standard rental agreement in Germany has a
term of 5 years (plus a 5-year extension option). In our
portfolio, 30.0 % of the leases (measured by the annual-
ized contract rent) expire over the next three years. In the
past, around 70 % of expiring contracts were extended by
the current tenants and 30 % were terminated. The latter
is our primary good that we will use to enhance our space
offering to tenants and realize higher rents for new leasings.
Table 5: Main lease renewals in 2019 ( > 5,000 m²)
City
Essen
Stuttgart
Stuttgart
Stuttgart
Frankfurt
Stuttgart
Düsseldorf
Düsseldorf
Frankfurt
Adress
Alfredstr. 236
Vaihinger Str. 131
Epplestr. 225
Hanns-Klemm-Str. 45
Olof-Palme-Str. 37
Epplestr. 225
Ivo-Beucker-Str. 43
Willstätterstr. 11–15
Insterburger Str. 16
Renewals > 5,000 m²
Others
Total
Lettable
area
(m²)
Net rent
p. a.
(EUR k)
Net rent
per m²
(EUR)1)
Lease
length
(years)
Rent free
(in % of
lease length)
4,150
3,785
3,412
1,889
1,601
1,574
1,208
757
826
11.41
13.63
14.40
10.13
12.20
14.68
11.50
9.25
11.50
4.0
1.0
2.0
5.0
6.2
1.0
5.0
9.6
3.0
0.0
0.0
0.0
0.0
6.8
0.0
0.0
3.5
8.3
30,300
21,400
19,700
14,900
10,400
8,900
8,000
7,700
5,500
126,800
44,500
171,300
1) Disregarding parking, storage and other suplementary spaces.
Graph 2: Lease expiries (in % of annual rent)
6.3 %
12.7 %
11.0 %
2020
2021
2022
14
alstria Annual Company Report 2019
RENTS
Like-for-like rental growth of 9.4 %
Capital values of real estate in the direct investment market
are at an all-time high. We therefore find more attractive
investment opportunities in our own portfolio than in the
direct market. Investing in our own portfolio, upgrading
the quality of our offerings and generating rental growth
were the factors driving the contractual rent growth in
2019. Our internal (like-for-like) growth amounted to 9.4 %.
This translates into an increase of the contractual rent from
EUR 189.9 million as of December 31, 2018 to EUR 208.3
million as of December 31, 2019. Table 6 shows that the
rental growth that was generated by the leasing activities in
our investment portfolio (EUR 2.4 million) and our devel-
opment portfolio (EUR 16.0 million) substantially overcom-
pensated the lower rental income from our transactions, as
we continued to be a net seller in 2019. In line with EPRA
BPR, table 6 also shows the development of contractual
rents over the past 24 months, where we have achieved
an EPRA like-for-like rental growth of 6.0 %.
Average rent grew to EUR 12.62 per m²
In 2019, continuing its growth trajectory, the average rent
per m² in our total portfolio increased by 3.0 % to EUR 12.62
per m² (see graph 3). Besides the like-for-like rental growth,
the development of the average rent per m² is an important
indicator and shows the impact of our active asset manage-
ment. Over the longer term, we grew our average rent per
m² by 2.8 % p. a., which is at the upper end of our target
to increase rents by 1 – 2 % beyond inflation.
Table 6: Change in rental income1)
Contractual rent as of Dec. 31, 2017
Contractual rent as of Dec. 31, 2018
+ / – Change in rent investment portfolio
o / w New leases / rent increases
o / w Lease expiries
+ / – Change in rent development portfolio
o / w New leases
o / w Lease terminations
+ / – Change in rent from transactions
o / w Rents from acquired assets
o / w Rents from disposed assets
Contractual rent as of Dec. 31, 2019
2 year period
(Dec. 31, 2017 – Dec 31, 2019)
1 year period
(Dec. 31, 2018 – Dec 31, 2019)
EUR k
202,002
3,016
14,811
– 11,795
9,014
23,809
– 14,795
– 5,699
8,685
– 14,384
208,332
%
100.0
1.5
7.3
– 5.8
4.5
11.8
– 7.3
– 2.8
4.3
– 7.1
103.1
EUR k
196,967
2,439
13,181
– 10,742
16,002
16,962
– 960
– 7,076
1,932
– 9,008
208,332
%
100.0
1.2
6.7
– 5.5
8.1
8.6
– 0.5
– 3.6
1.0
– 4.6
105.8
1) Based on a total portfolio of EUR 4,476 m (2019), EUR 3,985 m (2018) and EUR 3,409 m (2017).
Graph 3: Development of average rent in EUR per m²
Increase of CPI:
1.1 % p. a.
Rental growth over
CPI 2014 – 2019:
1.7 % p. a.
10.99
11.61
11.60
12.05
12.25
12.62
2014
2015
2016
2017
2018
2019
Growth of average
rent per m²:
2.8 % p. a.
15
alstria Annual Company Report 2019
COST OF LETTING
Effective rent rose to EUR 11.20 per m²
A rental contract does not come for free. Before a tenant
moves in, the landlord must bear the costs for tenant fit-outs
and broker fees. When applicable, concessions like rent-free
periods must also be considered. The base rent of a rental
contract is what is usually communicated. However, the
effective rent is a more useful indicator of the profitability
of a rental agreement. We calculate our effective rent by
accounting for all the costs incurred in a new lease and
deduct them from the base rent as shown in table 7. In 2019,
new leases for a leasable office space of 127,900 m² started.
The weighted average effective rent for these new leases
was EUR 11.20 per m² (+ 5.5 % compared to 2018), with a
weighted average lease term of 6.0 years. The new leases
thus generate a future rental income of EUR 123.6 million
(2018: EUR 69.5 million).
Table 7: Weighted average effective rent
per m² in EUR
Base rent
Tenant fit-outs
Broker fees
Rent concessions
Effective rent
Weighted average lease term (in years)
2019
13.41
–1.65
– 0.56
– 0.01
11.20
6.0
2018
13.78
– 2.35
– 0.48
– 0.33
10.62
5.7
2017
12.57
– 1.74
– 0.44
– 0.18
10.21
7.6
Am Seestern 1
Düsseldorf
16
alstria Annual Company Report 2019
VACANCY
EPRA vacancy rate down to 8.1 %
The significant lease-up with a net absorption of 83,900 m²
had a positive impact on our occupancy in 2019. Relative to
December 31, 2019, our EPRA vacancy rate fell by 160 bps
to 8.1 %. A more detailed analysis on vacancy is shown in
table 8, as it also includes our development assets, which
according to EPRA BPR are not part of the EPRA vacancy
rate. As shown in table 8, the total vacancy in our portfolio
decreased by 540 bps to 9.7 %.
Going forward, we expect a total vacancy rate of between
8 % and 12 %. The exact number depends on how much
vacancy we buy, how many fully leased properties we sell
and how many buildings we have under development.
Vacant space is the primary good we need to be able to
create value in our property portfolio.
Table 8: Vacancy schedule
Vacancy
rate
(%)
m²
Total lettable area – Dec. 31, 2018 (A) 1,577,000
Acquired space
Disposed space1)
Net new built space
Remeasurements
17,600
– 77,500
– 100
– 7,800
Total lettable area – Dec. 31, 2019 (C) 1,509,200
Vacancy – Dec. 31, 2018
(B)
237,600 15.1 (B / A)
Acquired vacancy
Disposed vacancy
Expiries and breaks
Renewals
New leases
900
– 8,500
285,000
– 171,300
– 197,600
Vacancy – Dec. 31, 2019
(D)
146,100 9.7 (D / C)
o / w Developments
38,500
EPRA vacancy rate2)
8.1
1) Disposed assets incl. assets held for sale as per Dec. 31, 2018.
2) For detailled calculation see table 24, page 52.
Heidenkampsweg 99
Hamburg
17
alstria Annual Company Report 2019 Average down period of 20 months
For our business model, the average down period of rental
space (which provides a dynamic picture of vacancy in the
portfolio) is a more meaningful indicator of leasing perfor-
mance than the vacancy rate (which, by contrast, provides
a static picture of vacancy). As of December 31, 2019, the
average down period for our vacant space was 20 months
(previous year: 15 months). This means that, on average,
we needed 20 months (including developments) to re-let
vacant space. The dynamic nature of our vacancy is shown
by the fact that year by year there is change in our ‘Top 5’
assets that contribute to the vacancy in our portfolio (see
graph 4), whose composition changes every year, thus
showing that there are no major structural vacancies in
our portfolio.
Graph 4: ‘Top 5’ vacant assets 2017 – 2019
Acquired vacancy
Development-related vacancy
111,400 m²
Regular expiries
29,800 m²
Solmstr. 27–37
12,300 m²
Heidenkampsweg 99 –101
10,200 m²
Gasstr. 18
8,100 m²
Amsinckstr. 28
20,300 m²
Am Wehrhahn 33
70,800 m²
17,500 m²
Carl-Reiss-Platz 1– 5
18,500 m²
Gustav-Nachtigal-Str. 3
25,200 m²
Heerdter Lohweg 35
19,900 m²
Am Seestern 1
20,400 m²
Am Seestern 1
66,200 m²
6,900 m²
Heidenkampsweg 99 –101
12,000 m²
Gasstr. 18
17,500 m²
Carl-Reiss-Platz 1– 5
15,500 m²
T-Online-Allee 1
14,300 m²
Heerdter Lohweg 35
2017
2018
2019
18
alstria Annual Company Report 2019
CAPITAL EXPENDITURE
Capex is the key to rental growth
In commercial real estate, there is little evidence for the will-
ingness of tenants to pay higher rents without an improve-
ment of the space quality. The most sustainable way to
increase rents is to invest money to improve the quality of
the building and the amount of incremental rent usually
is a function of the amount of capex that is invested. The
main challenge in this respect is to find the most efficient
combination of capex and rent increase to optimize the
return (i. e. yield on capex).
To maximize our yield on capex, we combine the local
knowledge of our Real Estate Operations team with the
know-how of our Development team. This allows us to
unlock the potential of our portfolio. The fact that our
portfolio is still leased below market levels gives us the
headroom to invest into the space, lift the rents and achieve
attractive returns of 6 – 7 % on our capex, which is much
more than what the direct investment market currently
offers.
ALSTRIA’S AVERAGE
DEVELOPMENT PROJECT
Size: 23,000 m²
Capex: EUR 30 million
Capex / m²: EUR 1,300
All-in cost yield: 6.3 %
2019
19
alstria Annual Company Report 2019
CAPEX / OPEX OF EUR 129.7 MILLION IN 2019
Capex volume substantially increased
To provide transparency on our capex, we split our total
capex into different categories in line with the new EPRA
BPR (table 9). Our development capex relates to the respec-
tive sub-portfolio, which undergoes a substantial refur-
bishment (capex > EUR 1,000 per m²). It was substantially
up in 2019 as we increased our capital allocation to the
refurbishment program because of the lack of viable alter-
native investment in the direct market.
The investment portfolio capex relates to our investment
portfolio and characterizes modernization capex and tenant
fit-outs, which usually amount to below EUR 1,000 per m².
The total portfolio capex amount of EUR 116.1 million
was capitalized in 2019. In addition to capitalized invest-
ments, we were constantly carrying out minor upgrades
(EUR 8.5 million) and ongoing repairs (EUR 5.1 million)
on our buildings, which were recognized in our income
statement and therefore also in our operating profit (FFO).
Overall, we invested a total of EUR 129.7 million into our
properties in 2019. In the context of the total portfolio,
this corresponds to an average amount of EUR 86 per m² or
around 4.3 % of the portfolio value (excluding land value).
Like-for-like growth yield of 5.9 %
Over the past 24 months, we leased 572,200 m² and gen-
erated an additional rent (like-for-like) of EUR 12.0 mil-
lion. The capex we spent over this period of time was
EUR 202.6 million, leading to a like-for-like growth yield
of 5.9 % (table 10).
Table 9: Property related capex / opex
EUR k
Acquisitions
Development
Investment portfolio
o / w Incremental lettable space
o / w No incremental lettable space
o / w Tenant incentives
o / w Other material non-allocated
types of expenditure
Capitalized interest
Total capital expenditure
Maintenance1)
Running repairs1)
Operating expenditure
Total Capex / Opex
1) Incl. in P&L and FFO.
2019
49,300
44,105
72,037
0
29,114
27,989
14,934
0
116,142
8,476
5,095
13,571
129,713
2018
107,300
2017
259,500
36,320
50,100
0
26,508
21,187
2,392
0
86,420
8,532
4,802
13,334
99,754
18,081
40,700
0
19,900
17,900
2,900
0
58,781
9,086
4,275
13,361
72,142
Table 10: Like-for-like growth yield
Change rental income 2018 and 20191)
o / w Investment portfolio
o / w Development portfolio
Capex 2018 and 20192)
Like-for-like growth yield
EUR k
12,029
3,016
9,014
202,562
5.9 %
1) See table 6, page 15.
2) See table 9, page 20 (EUR 116.1 m for 2019 and EUR 86.4 m for 2018).
TENANT OUT
REFURBISHMENT
RE-LETTING
TENANT IN
TENANT IN
20
alstria Annual Company Report 2019 DEVELOPMENT PORTFOLIO
Significant progress in the course of 2019
To effectively exploit the potential of our property portfolio,
we have around 8 % of portfolio volume under develop-
ment. The development buildings are sourced from our
investment portfolio and are intended to be returned into
the investment portfolio after completion. Our current
development pipeline comprises eight projects, with a total
lettable area of 184,000 m². In 2019, we took advantage of
the strong leasing market to pre-lease a substantial part of
our development portfolio, therefore significantly de-risking
the process. The two main projects in Gustav-Nachtigal-
Str. 3 & 5 (Wiesbaden) and Solmsstr. 27 – 37 (Frankfurt) are
fully leased and are in the process of refurbishment. The
assets will be handed over to the tenants in 2021 and 2022.
Rents on both buildings increased by 52 %, reflecting the
new quality of the assets.
Planned development capex of
EUR 238.4 million
For the current development portfolio, we plan a capex
volume of EUR 238.4 million, which is EUR 1,300 per m².
Taking into account the current book value, the required
capex and the rent that we will achieve after completion,
the all-in cost yield of our current development portfolio
will be around 6.3 %.
Table 11: Key data
Adress
City
Lettable
area
(m²)
OMV at start of
development
(EUR k)
Total capex
(EUR k)
Cost to
complete
(EUR k)
Target rent on
completion
(EUR k)
All-in-cost
yield
(%)
Besenbinderhof 41
Hamburg
Carl-Reiß-Platz 1– 5, TG
Mannheim
Deutsche Telekom Allee 7
Darmstadt
Georg-Glock-Str. 18
Düsseldorf
Gustav-Nachtigal-Str. 3 & 5 Wiesbaden
Rotebühlstr. 98 – 100
Solmsstr. 27 – 37
T-Online-Allee 1
Total
Stuttgart
Frankfurt
Darmstadt
5,000
17,500
24,700
10,800
26,100
8,400
30,900
60,600
184,000
(A)
6,500
16,900
40,100
28,800
28,800
22,000
68,000
140,100
351,200
(B)
11,300
40,600
16,800
14,900
63,700
15,700
43,600
31,800
10,100
38,000
16,800
3,400
53,700
14,000
37,500
29,900
(C)
(C/A+B)
1,198
3,400
3,500
2,649
8,710
2,059
6,081
9,500
6.7
5.9
6.2
6.1
9.4
5.5
5.4
5.5
6.3
238,400
203,400
37,097
Table 12: Pre-let status
Adress
Besenbinderhof 41
City
Hamburg
Carl-Reiß-Platz 1 – 5, TG
Mannheim
Deutsche Telekom Allee 7
Darmstadt
Georg-Glock-Str. 18
Düsseldorf
Gustav-Nachtigal-Str. 3 & 5 Wiesbaden
Rotebühlstr. 98 – 100
Solmsstr. 27 – 37
T-Online-Allee 1
Total
Stuttgart
Frankfurt
Darmstadt
Lettable
area
(m²)
Pre-letting
(% of target
rent)
Secured rent
(EUR k)
Target rent on
completion
(EUR k)
Expected
completion
date
Status
5,000
17,500
24,700
10,800
26,100
8,400
30,900
60,600
184,000
0
0
0
100
100
100
100
68
70
0
0
0
2,649
8,710
2,059
6,081
6,461
1,198
Construction
Q2 2021
3,400
3,500
2,649
8,710
2,059
6,081
9,500
Construction
Q4 2022
Planning
n/a
Construction
Q2 2020
Construction
Q3 2022
Construction
Q3 2021
Construction
Q3 2021
Planning
n/a
25,960
37,097
21
alstria Annual Company Report 2019 ACQUISITIONS IN THE CORE
Number of assets: 5
Avg. size: 3,600 m²
Avg. in-place rent: EUR 9.20 per m²
Market rent: EUR 13.80 per m²
TRANSACTIONS
Capital recycling optimizes the structure
of our portfolio
alstria is not a trading company and we do not bet on the
real estate cycle. As a long-term oriented investor and real
estate operator, we buy assets in our core regions whenever
we see the potential to improve the building quality and
to generate higher rents. This is the most sustainable way
to create value. When we acquire real estate assets, we
strive for internal rates of return (on an unlevered basis) of
6 % to 8 %, depending on the individual risk of the prop-
erty. Potential acquisition targets undergo a rigorous due
diligence and have to perform on an unlevered basis. Our
pricing discipline has remained unchanged, regardless of
the current low interest rate environment.
We do, however, review our investment on a regular basis
and assess the risk return prospect of holding the asset to
execute our business plan vs. the opportunity to sell the
asset in the market. If and when we believe there is a pricing
dislocation in the market, we try to take advantage of it,
either to buy more assets or to sell some assets. Our aim
is to systematically improve the overall risk return profile
of the portfolio.
DISPOSALS IN THE PERIPHERY
Number of assets: 6
Avg. size: 14,300 m²
Avg. in-place rent: EUR 8.30 per m²
22
alstria Annual Company Report 2019 ACQUISITIONS & DISPOSALS 2019
Buy the core – sell the periphery
In 2019, we saw and took advantage of the strong demand
for German office real estate to dispose of the weaker
assets in our portfolio (usually located in the periphery of
our core markets), with the intention to re-invest the sale
proceeds into the core of our markets, either through our
refurbishment program or, if available, through selective
acquisitions. As such, we were net seller for the year (we
sold EUR 139.7 million and acquired EUR 49.3 million of
assets). This capital re-allocation process is allowing us
to continuously improve the risk return of the portfolio.
Considering the current market environment, we expect
to remain being a net seller in 2020.
Unlevered return of 6.6 % in 2019
We measure the return on our properties over their entire
holding period, on the basis of an unlevered internal return
(UIRR = unlevered rate of return). Over their holding period,
the buildings sold in 2019 generated an unlevered profit
of EUR 49.2 million and an estimated UIRR of 6.6 %. This
result is in line with our target return and serves as proof
of our realistic view on real estate investments throughout
the cycle. The properties we disposed in 2019 were sold at
a gain of 11.2 % compared to the FY 2018 appraised value.
Table 13: Acquisitions
Lettable
area
(m²)
Vacancy
rate
(%)
Acquisition
price1)
(EUR k)
Annual
rent
(EUR k)
Transfer of
benefits and
burden
2,400
5,700
3,800
3,000
2,700
17,600
1.0
5.9
0.0
6.7
0.0
3.2
9,100
7,900
11,000
13,000
8,300
300
Feb. 01, 2019
400 Mar. 01, 2019
448
June 01, 2019
416 Apr. 30, 2019
335 Sept. 11, 2019
49,300
1,899
Adress
Lehrter Str. 17, Berlin
Handwerkstr. 4, Stuttgart
Maxstr. 3a, Berlin
Hauptstr. 98 – 99, Berlin
Adlerstr. 63, Düsseldorf
Total
1) Incl. 7 % transaction costs.
Table 14: Disposals
UIRR
Lettable
area
(m²)
Vacancy
rate1)
(%)
Transfer of
benefits and
burden
Historical
acquisition
price
(EUR k)
Annual
rent1)
(EUR k)
Gain
to book
value
(EUR k)
Disposal
price
(EUR k)
Rent
collected
(EUR k)
Total
capex
(EUR k)
Unlevered
profit
(EUR k)
UIRR2)
(%)
24,300
0.0 2015 – 2019
36,700 2,802
700
38,900
8,486 3,394
8,309
5.7
12,900
0.0 2015 – 2019
23,100
1,811 11,500
41,500
5,168
911
22,585 19.8
14,900
25.8 2015 – 2019
20,200
1,344
2,800
27,000
3,982
1,133
9,620 10.7
8,900
27.8 2015 – 2019
12,100
895
1,250
12,750
2,805
1,306
2,151
4.4
21,000
18.7 2007 – 2019
27,700
1,411
– 370
16,680
22,208 3,912
6,708
2.4
4,200
14.7 2015 – 2019
3,800
297 – 1,850
2,900
910
118
– 136 – 9.0
Adress
Opernplatz 2,
Essen
Ingersheimer Str. 20,
Stuttgart
Berner Str. 119,
Frankfurt
Stiftsplatz 5,
Kaiserslautern
W.-v.-Siemens Platz 4,
Laatzen
Balgebrückstr. 13,
Bremen
Total
86,200
12.7
123,600
8,560 14,030 139,730
43,559 10,774
49,237
6.6
1) At the time of the signing of the SPA.
2) Incl. 6 % transactions costs and 5 % real estate operating expenses.
23
alstria Annual Company Report 2019 EXTERNAL VALUATION
Valuation based on RICS standards
Our entire real estate portfolio is revalued at least once a
year by independent appraisers. Last years’ valuation was
conducted by Savills Advisory Services Germany. The val-
uation report can be found on pages 71 – 79 in this report.
In determining the value of our real estate portfolio, Sav-
ills applied the Hardcore and Top Slice (H & T) method in
accordance with the recommendations of the RICS (Royal
Institution of Chartered Surveyors). The H & T method divides
the cashflow of the property into two blocks being calcu-
lated individually and being summed up subsequently. To
derive the capital value, a yield is used, which is obtained
from transactions of comparable buildings. The Hardcore
block considers the cashflow as at the valuation date until
the expiry of the existing lease, while the Top Slice marks the
second phase from the beginning of the releasing based on
market rents. The cashflows consider management, main-
tenance and unrecoverable costs, as well as an appropriate
void period. Finally, the capital value (sum of Hardcore and
Top Slice) is corrected by costs for outstanding repairs, future
capital costs (refurbishment and releasing) and purchasers’
costs to calculate the net value of the property, which is
the amount reflected on our balance sheet.
24
alstria Annual Company Report 2019 PORTFOLIO VALUE
Increase of EUR 454.8 million
For the overall portfolio, the 2019 valuation process resulted
in a total increase of EUR 454.8 million (net of capex and
acquisitions) over the course of 2019. 104 properties experi-
enced an increase in value amounting to EUR 573.0 million,
while 8 buildings were devalued by a total of EUR 13.2 mil-
lion. The valuation increase not only reflects the change
in the underlying real estate market, but also mirrors the
capex spent on the portfolio (EUR 116.1 million).
Significant valuation gains were generated particularly by
the assets in Solmsstr. 27 – 37 (Frankfurt) and Gustav-Nachti-
gal-Str. 3 & 5 (Wiesbaden) reflecting the leasing progress
and in our long-term leased assets in Hamburg.
Portfolio value grew by 37 % since 2016
Over the past four years, our investment portfolio grew by
37 % to EUR 4.5 billion. During this time period, we sold
slightly more than we bought and concentrated our portfolio
to the core of our markets. We spent EUR 292.8 million
of capex to improve the quality of our assets. Finally, the
strong price increase in the German office market has led
to a valuation increase of EUR 1.1 billion since 2016. The
strong investment market was reflected by a yield that came
down from 6.2 % in 2016 to 4.7 % in 2019.
Graph 5: Portfolio value 2016 – 2019
EUR million
5,000
Valuation yield
Acquisitions
Standing portfolio
Valuation gain
Capex
Disposals
4,000
3,000
2,000
1,000
0
– 1,000
2016
2017
2018
2019
%
10
9
8
7
6
5
4
3
2
1
0
– 1
– 2
25
alstria Annual Company Report 2019
RANGE OF YIELDS
ERV yields between 3.3 % and 8.8 %
The valuation yield on our portfolio stands at 4.7 % as per
December 31, 2019, whereas the market yield (ERV yield)
amounts to 5.6 %. However, there is a wide range of yields
reflecting the characteristics of each individual property
(see Graph 6). The range of ERV yields (excluding develop-
ment portfolio assets) represents the difference between
the building with the lowest ERV yield and the building
with the highest ERV yield in the respective region. The
value within the range is the average ERV yield in the local
portfolio. The lower end of the yield usually represents
buildings with longer-term leases and the higher end of
the range represents properties with shorter leases in the
respective region.
Graph 6: Range of ERV yields1) in alstria’s portfolio
as of December 31, 2019
%
10
9
8
7
6
5
4
3
2
1
0
8.5
7.7
7.6
5.9
5.7
8.8
6.4
4.5
4.4
4.0
4.0
3.3
highest ERV yield
average ERV yield
lowest ERV yield
6.4
7.1
6.5
5.5
4.6
4.5
alstria’s average
ERV yield: 5.6 %
Hamburg Düsseldorf
Frankfurt
Stuttgart
Berlin
Others
1) The ERV yield is the market value of the asset (OMV) in relation to its market rent (ERV).
The valuation yield is 4.7 % as of Dec. 31, 2019.
26
alstria Annual Company Report 2019 ALSTRIA’S AVERAGE BUILDING
Size: 13,000 m²
Value: EUR 38.6 million
Value per m²: EUR 2,970
Rent per m²: EUR 12.62
PORTFOLIO OVERVIEW
116 buildings generating sustainable returns
We own and manage office buildings located in the large
German office markets and offer our investors an efficient
gateway into the German commercial real estate market. The
concentration on the big and liquid German office markets
presents a fair reflection of the underlying strength of the
German economy and at the same time allows us to effi-
cently manage sizable sub-portfolios from our local offices.
We usually prefer to own smaller assets concentrated in a
geographical area rather than larger assets. By construction,
our portfolio is therefore very granular, which allows us to
spread our operational risk over a much larger number of
assets. The average building has a leasable area of 13,000 m²
and a market value of EUR 38.6 million. We believe that
from a risk return perspective a greater number of smaller
assets is more beneficial than a smaller number of larger
assets, despite a higher management complexity.
MANAGE
SELL
BUY
27
alstria Annual Company Report 2019 PORTFOLIO MOVEMENT
Total portfolio value of EUR 4.5 billion
The value of our total property portfolio has grown by 12.4 %
to EUR 4.5 billion in 2019. To improve the transparency
of our reporting, we split the change into the impact from
transactions, capital expenditure and valuation. Table 15
shows that the portfolio movement has been driven pri-
marily by a positive valuation result of EUR 454.8 million in
2019, which was due to the combined effect of the strong
operational result and the strong underlying investment
market. We used this strong investment market to dis-
pose non-core assets, putting us into a net-seller position.
To capture the opportunities of the strong office market
and to meet the demand for high quality office space, we
invested an amount of EUR 116.1 million into our assets.
Besides our investment property portfolio, we held assets
for sale and the assets in our own use on our balance
sheet. The total portfolio value as per December 31, 2019
amounted to EUR 4.5 billion. A detailed asset-by-asset
portfolio description can be found on the following pages
and downloaded from our website www.alstria.com/
portfolio/
Table 15: Movements property portfolio
Investment properties as of Dec. 31, 2018
+ Transactions
o / w Acquisitions1)
o / w Disposals (book value)
+ Capital expenditure
o / w Development portfolio2)
o / w Investment portfolio
+ Valuation result
o / w Development portfolio1)
o / w Investment portfolio
+ Reclassification
o / w Assets held for sale (book value)
o / w Owner occupied properties
+ Other adjustments
EUR k
3,938,900
– 53,900
49,900
– 103,800
116,100
44,100
72,000
454,800
103,300
351,500
– 20,600
– 20,600
0
3,300
= Investment properties as of Dec. 31, 2019
4,438,600
+ Fair value of owner occupied properties as of
Dec. 31, 2019
+ Assets held for sale
– Other adjustment
23,000
19,600
– 5,100
= Total portfolio value as of Dec. 31, 2019
4,476,100
1) Including acquisition costs.
2) Assets classified as development assets as of Dec. 31, 2018 and Dec. 31, 2019.
Platz der Einheit 1
Frankfurt
28
alstria Annual Company Report 2019 TABLE 16: PORTFOLIO OVERVIEW
Lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
Investment portfolio
1,325,300
1,069,900
107,600
178,707,400
212,727,600 3,988,350,000
81,234,000
Current development portfolio
Total portfolio2)
183,800
163,100
38,500
29,624,800
35,737,100
487,710,000
34,908,600
1,509,200
1,233,000
146,100
208,332,200
248,464,700
4,476,060,000
116,142,500
5.4
11.8
6.3
5.9
54.2
10.8
14.3
34.8
16.2
1) According to the year-end valuation by Savills Advisory Services.
2) The entire portfolio is held as freehold assets.
Investment portfolio
Total
lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
Asset
Hamburg
Alte Königstr. 29 – 39
Alter Steinweg 4
Amsinckstr. 28
Amsinckstr. 34
Bäckerbreitergang 73 – 75
Basselweg 73
Borsteler Chaussee 111 – 113
City
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Buxtehuder Str. 9, 9a, 11, 11a
Hamburg
Drehbahn 36
Ernst-Merck-Str. 9
Essener Bogen 6 a – d
Essener Str. 97
Garstedter Weg 13
Gasstr. 18
Grindelberg 62 – 66
Hamburger Str. 1 – 15 (MOT)
Hamburger Str. 1 – 15 (MUC)
Hammer Steindamm 129
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
1) According to the year-end valuation by Savills Advisory Services.
4,300
32,000
8,700
6,600
2,700
2,700
5,400
7,700
25,700
17,500
5,400
1,400
3,600
26,100
18,400
9,500
12,700
7,200
3,600
28,000
8,200
6,500
2,600
1,900
3,600
5,100
20,200
15,200
4,500
900
2,700
21,200
17,400
8,300
0
6,300
0
0
200
3,300
0
0
0
1,500
0
100
0
0
0
12,000
0
400
200
0
637,100
738,200
16,200,000
0
4,502,000
5,403,600
147,000,000
158,000
1,587,400
1,555,300
30,800,000
3,245,800
647,700
562,200
295,600
654,200
622,400
3,688,100
3,093,300
741,900
158,800
390,300
2,130,900
2,362,300
1,934,200
2,467,900
620,000
1,192,400
22,300,000
3,467,500
610,200
328,500
678,100
922,500
16,500,000
– 18,200
6,790,000
13,900,000
12,000,000
0
82,600
8,300
4,394,500
118,400,000
173,900
3,444,800
100,600,000
3,647,600
734,400
173,800
476,900
9,810,000
2,220,000
8,270,000
0
11,500
900
4,353,500
56,000,000
4,233,000
2,761,300
61,400,000
2,152,600
35,400,000
2,743,700
42,200,000
776,700
14,400,000
244,000
– 98,300
28,100
0
6.4
6.4
6.7
5.3
5.2
6.1
3.2
6.4
16.4
10.0
3.5
2.4
1.4
4.3
6.4
3.2
3.5
6.4
0.0
0.0
n/a
193.8
0.5
0.4
3.1
0.0
0.1
11.5
4.3
2.5
0.0
8.8
0.0
3.0
3.8
0.0
8.9
15.3
62.1
39.4
25.0
4.5
7.8
1.7
9.6
25.8
12.2
11.0
3.4
12.7
9.1
18.0
– 3.0
2.9
29
alstria Annual Company Report 2019
Investment portfolio
Asset
Heidenkampsweg 44 – 46
Heidenkampsweg 51 – 57
Heidenkampsweg 99 – 101
Herthastr. 20
Johanniswall 4
Kaiser-Wilhelm-Str. 79 – 87
Kattunbleiche 19
Ludwig-Rosenberg-Ring 41
Max-Brauer-Allee 89 – 91
Nagelsweg 41 – 45
Öjendorfer Weg 9 – 11
Rahlstedter Str. 151 – 157
Schaartor 1
Sonninstr. 24 – 28
Steinstr. 10
Steinstr. 5 – 72)
Süderstr. 24
Total
Düsseldorf
Adlerstr. 63
Alfredstr. 236
Am Seestern 1
Am Wehrhahn 28 – 30
Am Wehrhahn 33
An den Dominikanern 6
Bamlerstr. 1 – 5
Berliner Str. 91 – 101
Carl-Schurz-Str. 2
City
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Düsseldorf
Essen
Düsseldorf
Düsseldorf
Düsseldorf
Cologne
Essen
Ratingen
Neuss
1) According to the year-end valuation by Savills Advisory Services.
2) Own used property, partly classified as property, plant and equipment.
Total
lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
4,500
10,200
19,400
3,300
14,100
5,600
12,400
4,900
9,800
6,900
6,100
2,900
5,200
22,200
26,800
22,400
6,600
4,000
9,400
18,900
2,700
10,500
4,400
9,800
4,100
7,000
6,300
5,900
2,900
4,400
19,900
22,200
18,700
6,200
400
0
6,900
0
0
0
0
100
0
100
0
0
0
1,100
0
100
300
444,400
1,695,400
1,804,900
335,600
585,900
8,010,000
1,812,500
36,300,000
233,000
139,000
3,263,500
50,400,000
8,621,900
404,400
6,610,000
1,940,400
2,148,800
63,900,000
– 2,300
– 300
1,191,200
1,717,700
534,600
1,022,700
1,000,200
637,100
329,600
962,400
2,633,900
3,689,100
4,360,700
1,254,200
33,900,000
– 45,600
1,583,300
47,300,000
560,400
11,200,000
1,182,500
25,700,000
83,300
85,600
0
1,156,700
23,500,000
1,229,700
727,000
364,100
14,400,000
7,040,000
1,184,200
28,000,000
3,566,500
72,400,000
4,259,100
123,200,000
4,806,500
125,800,000
0
0
– 47,100
130,800
637,000
– 39,900
985,700
1,131,300
23,000,000
2,588,100
380,900
313,500
26,700
52,381,900
63,431,900 1,414,850,000
28,797,900
420,400
7,820,000
– 3,800
11.8
2,700
30,300
35,700
2,600
24,100
27,500
33,100
33,900
12,700
900
27,700
31,800
1,500
18,100
0
28,400
24,100
12,700
0
0
6,200
400
4,600
0
700
6,400
3,700
335,000
4,150,000
5,608,200
368,600
4,520,400
3,396,000
3,837,700
3,871,000
4,587,000
83,700,000
0
5,856,600
93,300,000
4,817,200
441,600
9,050,000
163,400
5,660,400
125,000,000
8,204,700
4,284,100
91,600,000
4,098,700
61,600,000
4,471,900
63,600,000
0
199,300
275,800
426,900
938,700
1,358,900
17,000,000
3.6
3.5
4.8
1.4
15.2
2.7
16.4
6.7
6.4
8.7
6.4
6.4
3.2
5.8
6.4
8.3
4.2
7.3
4.0
8.7
5.3
5.9
5.6
2.3
5.3
2.9
10.1
2.9
22.3
0.0
0.2
4.5
0.0
0.2
0.0
0.3
0.0
0.0
1.5
9.0
0.0
1.4
46.0
7.8
n/a
–33.5
131.9
0.9
21.2
0.0
0.0
– 2.1
– 14.1
14.4
6.8
38.8
1.1
12.1
21.1
1.1
1.8
7.1
24.9
2.9
2.8
19.1
32.6
19.9
23.8
27.8
16.7
n/a
13.9
18.6
7.7
25.0
9.0
6.2
4.3
– 1.2
30
alstria Annual Company Report 2019 Total
lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
City
Ratingen
Meerbusch
Düsseldorf
Düsseldorf
Trier
Essen
Düsseldorf
Düsseldorf
Cologne
Düsseldorf
Düsseldorf
Düsseldorf
Düsseldorf
Cologne
Düsseldorf
Düsseldorf
Düsseldorf
Investment portfolio
Asset
D2-Park 5
Earl-Bakken-Platz 1
Elisabethstr. 5 – 112)
Emanuel-Leutze-Str. 11
Frauenstr. 5 – 9
Friedrich-List-Str. 20
Friedrichstr. 19
Gartenstr. 2
Gereonsdriesch 13
Graf-Adolf-Str. 67 – 69
Hansaallee 247
Hans-Böckler-Str. 36
Heerdter Lohweg 35
Horbeller Str. 11
Immermannstr. 40
Immermannstr. 59
Ivo-Beucker-Str. 43
Josef-Wulff-Str. 75
Kaistr. 16, 16a, 18
Kampstr. 36
Kanzlerstr. 8
Karlstr. 123 – 127
Maarweg 165
Pempelfurtstr. 1
Willstätterstr. 11 – 15
Total
5,700
8,000
10,200
8,300
16,900
9,000
2,200
4,800
2,500
4,900
5,700
7,700
5,100
7,200
9,100
7,500
900
7,900
1,300
4,700
2,100
2,900
4,300
6,500
0
0
300
1,100
100
0
0
400
0
500
0
0
739,100
1,175,200
2,173,100
716,800
9,220,000
1,175,200
20,000,000
2,343,100
52,700,000
443,100
309,400
38,700
936,700
1,183,600
18,700,000
579,200
1,530,300
1,477,600
1,936,700
1,466,700
27,700,000
21,200,000
377,500
909,600
384,800
555,200
776,400
453,300
8,900,000
1,028,800
16,900,000
469,200
620,600
782,600
8,710,000
10,300,000
13,700,000
1,155,900
1,312,800
29,900,000
– 1,100
0
50,300
– 6,500
– 13,900
11,600
197,000
4,000
37,600
33,400
14,300
3,405,600
5,633,600
74,500,000
6,283,600
6,600
8,200
6,500
8,000
Recklinghausen
19,900
Düsseldorf
Dortmund
Düsseldorf
Düsseldorf
Cologne
Ratingen
Düsseldorf
9,300
3,100
9,000
5,700
22,800
18,500
24,000
5,800
7,200
5,100
7,700
0
8,900
1,400
7,500
5,200
20,400
17,000
16,700
0
500
0
0
0
0
700
1,100
0
8,800
5,200
2,500
659,000
1,217,500
1,067,500
1,208,000
2,042,300
2,333,200
505,300
788,700
12,100,000
290,500
1,461,700
27,100,000
1,038,300
20,400,000
1,124,400
16,200,000
1,965,600
27,700,000
2,445,500
53,700,000
99,600
394,600
443,200
295,800
94,100
635,100
9,490,000
512,500
1,273,100
1,304,200
18,400,000
1,969,800
794,000
2,040,100
1,539,500
2,177,600
990,800
16,000,000
0
3,470,800
53,800,000
1,034,500
1,825,000
28,600,000
1,208,800
2,703,800
44,900,000
2,074,000
467,700
341,000
57,500
59,479,700
70,056,500
1,193,490,000
30,396,300
1) According to the year-end valuation by Savills Advisory Services.
2) Own used property, partly classified as property, plant and equipment.
1.0
6.7
6.2
3.2
4.7
1.5
3.7
1.7
3.2
3.4
3.8
9.1
8.0
6.9
2.7
3.9
4.7
1.2
2.8
5.3
7.4
3.5
4.0
5.4
7.2
5.1
0.0
0.0
0.6
2.4
0.3
0.0
0.2
– 4.7
0.3
16.6
– 0.2
8.1
99.1
0.7
– 5.3
8.2
15.8
7.5
5.3
28.2
112.0
1.7
– 31.0
– 8.3
3.9
7.4
12.4
6.4
19.2
16.9
1.5
2.9
14.4
0.6
16.8
9.6
17.1
19.6
10.0
24.7
23.7
4.1
40.9
– 6.1
23.4
31.8
6.4
19.4
7.2
– 13.5
4.2
12.4
31
alstria Annual Company Report 2019 Total
lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
Investment portfolio
Asset
Frankfurt
Am Hauptbahnhof 6
Goldsteinstr. 114
Gustav-Nachtigal-Str. 4
Hauptstr. 45
Insterburger Str. 16
Mainzer Landstr. 33a
Mergenthalerallee 45 – 47
Olof-Palme-Str. 37
Platz der Einheit 12)
Siemensstr. 9
Stresemannallee 30
Taunusstr. 45 – 47
Wilhelminenstr. 25
Total
Stuttgart
Breitwiesenstr. 5 – 7
Eichwiesenring 1
Epplestr. 225
Handwerkstr. 4
Hanns-Klemm-Str. 45
Hauptstätter Str. 65 – 67
Kupferstr. 36
Kurze Str. 40
Vaihinger Str. 131
Total
City
Frankfurt
Frankfurt
Wiesbaden
Dreieich
Frankfurt
Frankfurt
Eschborn
Frankfurt
Frankfurt
Neu-Isenburg
Frankfurt
Frankfurt
Darmstadt
Stuttgart
Stuttgart
Stuttgart
Stuttgart
Böblingen
Stuttgart
Stuttgart
Filderstadt
Stuttgart
1) According to the year-end valuation by Savills Advisory Services.
2) Own used property, partly classified as property, plant and equipment.
7,700
8,500
800
8,100
13,000
3,300
5,100
10,400
30,100
9,600
9,000
7,300
8,400
5,900
7,900
700
7,000
12,900
2,800
4,800
9,300
600
800
800
0
300
100
1,900
0
28,700
4,300
9,300
7,700
5,500
3,500
900
0
700
1,100
1,582,200
1,066,400
101,100
1,449,700
1,816,700
615,100
308,400
1,608,500
6,628,500
1,112,400
1,357,200
1,076,900
1,169,200
1,712,800
38,300,000
1,195,300
19,500,000
166,800
1,340,000
1,026,100
25,200,000
2,042,600
31,900,000
683,300
477,900
15,000,000
5,650,000
137,600
540,000
800
183,500
452,500
22,700
78,900
1,695,200
27,000,000
524,800
7,963,000
197,400,000
3,979,000
1,251,500
17,200,000
1,438,400
26,400,000
1,235,900
29,500,000
1,303,600
21,700,000
65,000
441,300
66,300
409,000
121,300
106,000
11,500
19,892,300
22,192,400
456,090,000
6,901,400
25,100
12,300
107,200
5,700
14,900
8,600
5,100
5,900
21,400
206,200
20,100
5,100
101,700
2,100
14,100
7,700
4,700
4,200
18,500
178,200
0
800
1,500
600
0
0
0
1,500
3,091,100
1,556,200
3,878,600
60,100,000
506,200
1,910,200
30,300,000
88,500
16,609,400
17,181,600
260,000,000 10,395,700
395,100
1,897,200
1,735,600
584,100
504,300
669,500
7,610,000
1,966,900
30,000,000
1,736,800
43,500,000
752,800
701,700
10,800,000
8,320,000
0
560,700
– 13,300
– 700
118,500
121,800
0
3,785,200
3,633,900
54,300,000
4,400
30,158,200
32,432,000
504,930,000
11,777,400
5.7
5.0
0.4
8.2
3.8
1.9
1.3
6.2
3.6
3.5
4.2
3.4
4.6
4.4
5.5
5.0
2.9
4.4
5.5
7.9
3.3
3.2
2.2
3.6
0.6
21.3
17.1
1.9
– 0.7
3.3
9.9
0.0
– 5.1
0.3
3.7
0.2
3.0
0.0
3.1
– 1.7
– 1.3
n/a
0.0
1.2
2.1
2.8
0.0
1.0
0.0
19.8
5.1
2.4
10.0
13.2
0.9
2.7
3.1
11.7
29.0
17.5
7.4
6.7
8.7
8.2
10.6
n/a
9.5
11.5
6.9
4.0
5.8
11.2
32
alstria Annual Company Report 2019 Investment portfolio
Asset
Berlin
Am Borsigturm 13 – 17, 19,
27 – 29, 31 – 33
Am Borsigturm 44 – 46, 52 – 54
Darwinstr. 14 – 18
Hauptstr. 98 – 99
Holzhauser Str. 175 – 177
Lehrter Str. 17
Maxstr. 3a
Rankestr. 172)
Schinkestr. 20
Tempelhofer Damm 146
Uhlandstr. 85
Total
Others
Arndtstr. 1
Balgebrückstr. 13
Friedrich-Scholl-Platz 1
City
Berlin
Berlin
Berlin
Berlin
Berlin
Berlin
Berlin
Berlin
Berlin
Berlin
Berlin
Hannover
Bremen
Karlsruhe
Werner-von-Siemens-Platz 1
Laatzen
Total
1) According to the year-end valuation by Savills Advisory Services.
2) Own used property, partly classified as property, plant and equipment.
Total
lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
15,300
15,100
0
1,713,400
2,407,100
36,800,000
86,700
10,700
22,500
3,000
7,900
2,400
3,800
4,900
2,600
3,600
9,500
8,400
21,400
2,500
7,600
2,300
3,700
4,000
2,400
1,700
6,300
700
0
200
300
0
0
400
200
300
600
105,600
203,100
0
991,200
1,448,100
22,300,000
3,412,100
5,603,800
107,400,000
416,500
841,500
337,300
448,100
705,700
444,400
586,100
671,800
13,200,000
1,125,900
20,000,000
30,200
657,600
539,000
10,900,000
11,800,000
0
20,600
1,354,200
25,300,000
375,300
705,700
730,300
13,800,000
0
11,300,000
202,000
1,041,400
2,275,100
46,100,000
44,300
86,200
75,400
2,700
10,937,700
17,518,600
318,900,000
1,067,800
2.7
3.3
7.1
2.0
2.6
1.3
2.1
3.3
5.0
4.9
4.6
4.5
7.0
13.7
0.7
n/a
11.2
n/a
n/a
14.5
64.6
7.8
3.0
20.7
26.9
17.4
19.3
n/a
25.0
n/a
n/a
28.9
46.8
8.7
2.3
33.7
10,900
4,200
26,800
21,000
62,900
7,300
3,800
26,800
18,000
55,900
0
600
0
3,900
4,500
1,272,400
1,341,600
29,500,000
– 32,200
12.6
296,600
2,877,700
1,411,000
5,857,700
373,700
3,090,000
2,000
3,246,000
51,000,000
2,349,400
2,134,800
16,500,000
– 26,400
7,096,100
100,090,000
2,292,800
3.6
6.0
0.7
6.0
5.0
– 13.8
10.0
– 21.6
– 1.9
12.5
– 34.9
7.4
– 3.2
4.8
33
alstria Annual Company Report 2019 Development assets
Asset
Besenbinderhof 41
Carl-Reiß-Platz 1 – 5
Carl-Reiß-Platz TG
Deutsche Telekom Allee 7
Georg-Glock-Str. 18
Gustav-Nachtigal-Str. 3
Gustav-Nachtigal-Str. 5
Rotebühlstr. 98 – 100
Solmsstr. 27 – 37
T-Online-Allee 1
Total
City
Hamburg
Mannheim
Mannheim
Darmstadt
Düsseldorf
Wiesbaden
Wiesbaden
Stuttgart
Frankfurt
Darmstadt
Total
lettable area
(m²)
Office space
(m²)
Vacancy
(m²)
Contractual
annual net rent
(EUR)
ERV 1)
(EUR)
OMV 1)
(EUR)
Capex
(EUR)
Wault
(years)
∆ Rental income
(2018 / 19)
(%)
∆ OMV
(2018 / 19)
(%)
5,000
17,500
0
24,700
10,800
18,500
7,600
8,400
30,900
60,600
3,500
14,800
0
23,300
10,200
16,500
6,900
6,400
27,400
54,000
184,000
163,000
5,000
17,500
0
0
500
0
0
0
0
0
0
1,198,100
14,600,000
1,177,600
3,130,500
21,000,000
2,561,800
55,200
269,300
1,510,000
0
3,646,700
2,648,800
6,078,300
2,632,000
2,022,300
6,080,900
3,911,300
39,700,000
– 16,500
2,457,600
43,000,000 11,524,800
3,585,400
63,700,000
7,356,600
1,513,200
27,300,000
2,643,300
2,059,000
30,700,000
1,673,300
6,161,700
108,400,000
6,130,100
15,500
38,500
6,460,600
11,451,000
137,800,000
1,857,600
29,624,800
35,737,100
487,710,000
34,908,600
0.0
0.0
2.2
0.2
10.2
16.0
15.0
12.6
20.0
6.0
11.8
n/a
n/a
26.8
1.0
> 100
> 100
> 100
24.2
> 100
– 48.9
54.2
128.1
39.3
0.7
– 2.5
34.4
225.0
255.7
39.5
41.1
– 1.6
34.8
1) According to the year-end valuation by Savills Advisory Services.
DOWNLOAD
Portfolio overview (Excel)
www.alstria.com/portfolio/
34
alstria Annual Company Report 2019 DEVELOPMENT
DEVELOPMENT
36 Our approach to internal growth
38 Case study: Gustav-Nachtigal-Str. 3 & 5
40 Case study: Geesthof
42 Current development projects
43 Refurbishment Candidates
Poststr. 11, Hamburg
Development project 2010 – 2011
Sold 2012
Profit: EUR 59.6 million
35
alstria Annual Company Report 2019 OUR APPROACH TO INTERNAL GROWTH
Jesko, you head up the development at alstria.
Can you briefly describe how your department is
structured?
We are specialists in the revitalization and extension of office
buildings of all ages. Our experienced team of architects,
engineers, urban planners and business economists has a
wealth of experience in the field of retrofitting old assets.
When we do so, we do not necessarily keep the office
use, but always strive to achieve the best for the asset. We
have indeed converted office assets into residential assets
or hotels, and even into a theatre. The responsibility for
success is always clearly defined: Every project manager
leads his project from conception to successful completion.
Development is an integral part of alstria’s
business model. Why do buildings need substantial
modernization from time to time?
Buildings are depreciating assets and they have a life cycle.
While the structure can be used for more than 100 years,
the technical lifetimes of windows, facades, heating and
plumbing are more likely to be 30 – 40 years and of cool-
ing, ventilation, lifts and lighting only 20 – 30 years. The
requirements of the users regarding room concepts, func-
tionality and equipment are changing even faster. In terms
of design, 10 years is already a new generation. The aim
of our development projects in existing buildings is to
meet the requirements of tomorrow's tenants while con-
tinuing to use the building substance in a sustainable and
cost-saving manner.
Many real estate companies concentrate on
transactions and the rental business, but engage
external service developers for their refurbishment
projects. alstria runs an integrated approach.
What is the advantage of doing the development
work in-house?
First of all, it is always interesting to keep the development
margin for yourself, as long as you can manage the risk. As
we only develop properties within our own portfolio, we
know the buildings inside and out and we are in a posi-
tion to design and plan the project while the asset is still
yielding, which saves us a lot of time. Furthermore, every
sale and subsequent purchase of a property costs alstria
time and transactions costs.
We save these costs and keep the building if the devel-
oped product fits into our core portfolio. If we come to
the conclusion that it makes sense to sell the building after
the development, we are open to do that. The disposal
proceeds and the realized gains usually fund the next devel-
opment projects. Service development also has the decisive
disadvantage that the service provider bears significantly
less risk than the owner. This motivates risky decisions and
is therefore not sustainable.
Jesko Lohr
Head of Development
36
alstria Annual Company Report 2019 Construction capacities are scarce and the prices
for construction services are rising. How does alstria
ensure that projects are completed on time and on
budget?
This is indeed an important point. Yields are compressing
as property prices are growing faster than rents. To keep
returns at an economically viable level, our clear target is
to optimize rental growth in relation to capital expenditure,
i. e. to realize an efficient yield on cost. This concept usually
allows us to be better off than the market, but we cannot
escape the price increases entirely. The overall economic
forecast must be adequately reflected in the expected rent
and cost planning of development projects. Our experience
shows that we achieve good results by tailoring the spec-
ifications to the respective core competencies of efficient
specialist companies with whom we make early contact. For
these individual contracts, services critical to deadlines can
be prioritized at a very early stage in order to compensate
for the longer order or delivery times.
How do you manage the risks?
Are the projects already pre-leased
before construction begins?
Long-term vacancies are one of the fundamental risks in
project development. That is why we always aim to cre-
ate a unique, convincing product. In the long term, this is
considerably more valuable than a high pre-leasing rate.
Our projects are the best proof of this. In fact, we usu-
ally succeed in binding tenants at an early stage with our
convincing product. However, these leasings often only
take place after the start of construction. Despite our high
product quality, we always assume target rents carefully
and keep a close eye on the rental space during the plan-
ning process. At the same time, our risks are manageable
due to the project sizes, as we never have more than 10 %
of our space under development at any moment in time.
The average investment volume currently is EUR 30 million
per project, which limits the risk. Last but not least, the
comprehensive experience and interdisciplinary compe-
tence of our employees in conjunction with clear project
responsibility is also crucial for risk management.
alstria’s Development Team
37
alstria Annual Company Report 2019 CASE STUDY:
GUSTAV-NACHTIGAL-STR. 3 & 5
WIESBADEN
With an expected investment volume of EUR 63 million, the
project at Gustav-Nachtigal-Str. 3 & 5 in Wiesbaden is the
largest development project in alstria’s corporate history.
Verena and Markus, our responsible project managers, give
more insight into the project.
Markus Wydmuch
Developer
Verena Intorp
Senior Developer
Recently, our Frankfurt team signed a lease
agreement for 26,000 m² with a term of 15 years for
Gustav-Nachtigal-Str. 3 & 5. This is a great success
because the campus is now fully leased.
Yes, indeed. Now we can start the construction work. The
buildings in Gustav-Nachtigal-Str. 3 and 4 have been part
of our portfolio since 2008. In combination with the neigh-
boring building Gustav-Nachtigal-Str. 5, which we acquired
last year, we were able to market a campus with 26,000 m²
of leasable space. Our colleagues in Frankfurt have been in
contact with the Federal Agency for Real Estate regarding a
lease to a major federal institution for the past two years.
In the case of such a tenant, negotiations are complex and
lengthy due to the involvement of various authorities and
the complex development measures. But all these efforts
have paid off, because in the end we have more than tripled
the annual rent on the buildings and will realize a return
of more than 9 % for our shareholders.
38
alstria Annual Company Report 2019 Since you now have planning security, you will face
special challenges with the refurbishment of the
How difficult is it to consider the tenants’ needs in a
building. What makes this project so special?
project like this?
We bring the buildings optically and technically up to date.
Sustainability plays a decisive role here, as the German gov-
ernment intends to make the buildings climate-neutral by
2050. Fire protection is also an important issue. In addition,
tenants' quality demands have risen sharply in recent years,
and in this case the requirements for the building itself and
the embedded technology are particularly high. Usually the
ratio here is 70 % (building) to 30 % (technology), but in
this project it is 50 % to 50 %. For example, we will install
four times as many sockets and data connections at each
workstation as is normally the case.
A high-quality tenant such as the federal agency usually
expresses strict requirements in terms of its real estate
needs. In a project like this one, we tailor our project to
the tenant’s needs, and have a joint definition of the final
product with the tenant's teams. The final rent that will
be paid by the tenant is not only a function of the location
of the asset, but also a function of the quality of the space
that we have produced, and the duration of its commit-
ment to the space.
We have already successfully finalized extensive
developments in recent years. What is the approach
to this special project?
In general, every revitalization should create a unique prop-
erty. The tenant should recognize the building through its
significance and individual appearance. This is how we stand
out from our competitors. The project in Wiesbaden is a little
different because the function of the building is the abso-
lute focus here. Our flexible development concept allows
us to successfully implement even the highest requirements
in terms of technology. We are in close coordination with
the tenant in order to optimally realize his specifications
together with the external service providers. Through close
exchange with all parties involved, we have developed a
common understanding of the tasks and approaches and
are well on the way to completing this demanding project
successfully and on time.
39
alstria Annual Company Report 2019 CASE STUDY: GEESTHOF
HAMBURG
Built in 1927, the ‘Geesthof’ in the heart of Hamburg
impresses with its architecture, which is typical of the
1920s. In 2018, we started the refurbishment of the his-
toric building and today the project managers Klara and
Matthias give us some exclusive insights behind the facade
of the Geesthof.
Matthias Lehmann
Senior Developer
Klara Meister
Developer
Klara and Matthias, could you please give us some
The development of the Geesthof is quite complex.
more details about the project?
How did you prepare for the construction phase?
The Geesthof is a listed property, which was occupied
by the City of Hamburg until 2018. The last substantial
refurbishment took place more than 30 years ago and the
Second World War caused considerable damage to the
building, so that over the last 100 years the building has
lost its original appearance. The move out of the City of
Hamburg now gives us the opportunity to reconstruct and
comprehensively modernize this historic building in the
heart of Hamburg. The Geesthof has been part of Hamburg's
history since the 1920s. We started the project with the
aim of giving the building back its former look and ensuring
a sustainable use over the next decades.
In simple terms, we started looking at the options the
building offers. For this purpose, we carried out a feasibility
study. Within the scope of this study, we examined which
types of use the Geesthof provides due to its location and
structural characteristics. Taking these aspects and history
into account, we then designed a concept for how the
Geesthof should look after modernization.
40
alstria Annual Company Report 2019 The appearance of the Geesthof is impressive
with its expressionistic front, south-eastern facade
in Bauhaus style and art nouveau elements in the
interior. Were these elements included in the
concept?
Yes, of course. Due to the historical appearance, we have
developed a concept in the style of the 1920s, which inte-
grates influences from the art of that time. The charm of the
existing building structure is reinterpreted and combined
with modern elements. During the Second World War, the
Geesthof was badly damaged, losing almost two floors and
its distinctive crown. We will put the crown back on the
building and return it to the original form it has lost. At
this point, we also see our duty as a responsible citizen,
as we have a direct impact on the appearance of the cities
in which we invest.
In August 2018, the City of Hamburg moved out
of the Geesthof. Was this the starting signal for
the construction work?
Yes, we were in a position to start right away because we
had developed a coherent concept, the approval planning
and the building application had been submitted and the
contractors were ready. This is important because we want
to keep vacancies in our buildings as short as possible. As
we are planning an open office concept, we started with
the demolition of the non-load-bearing walls. Here we
found a historical wall painting from the 1920s, created
by the artist Otto Fischer-Trachau, whose works during
the Nazi era belonged to the so-called degenerate art.
We included the painting in our planning concept and it
will be professionally restored. As the mural, like many
other parts of the Geesthof, is under a preservation order,
we coordinate closely with the relevant authorities. The
cooperation is excellent, and the monument protection
authority supports us in our project to give the Geesthof
back its original appearance.
Can you already foresee when the development will
be completed and the Geesthof will be filled with life
again?
The complexity of the Geesthof with all its special archi-
tectural characteristics is very exciting and challenging to
implement. In addition to the buildings’ historical value
for the cityscape, we also have clear financial targets. We
plan to invest EUR 11 million into the building. The con-
siderable improvement in the quality of the space will
allow for significantly higher rents, so that we will achieve
a return of around 6 %. Our team is working with great
commitment at the Geesthof and we are aiming for com-
pletion in mid-2021.
41
alstria Annual Company Report 2019 CURRENT DEVELOPMENT PROJECTS
Georg-Glock-Str. 18, Düsseldorf
Carl-Reiß-Platz 1 – 5, Mannheim
T-Online-Allee 1, Darmstadt
Lettable area:
Post refurbishment rent: EUR 21.40 per m²
10,800 m²
Lettable area: 17,500 m²
Letting status: vacant
Lettable area: 60,600 m²
In-place rent: EUR 12.00 per m²
Rotebühlstr. 98 – 100, Stuttgart
Solmsstr. 27 – 37, Frankfurt
Deutsche-Telekom-Allee 7, Darmstadt
Lettable area:
Post refurbishment rent: EUR 20.10 per m²
8,400 m²
Lettable area:
Post refurbishment rent: EUR 16.40 per m²
30,900 m²
Lettable area: 24,700 m²
In-place rent: EUR 12.30 per m²
42
alstria Annual Company Report 2019 REFURBISHMENT CANDIDATES – MID-TERM
Immermannstr. 40, Düsseldorf
Lettable area: 8,200 m²
In-place rent: EUR 13.20 per m²
Garstedter Weg. 13, Hamburg
Lettable area: 3,600 m²
In-place rent: EUR 9.10 per m²
Maxstr. 3a, Berlin
Lettable area: 3,800 m²
In-place rent: EUR 9.80 per m²
Taunusstr. 45 – 47, Frankfurt
Lehrter Str. 17, Berlin
Heidenkampsweg 44 – 46, Hamburg
Lettable area: 7,300 m²
In-place rent: EUR 13.70 per m²
Lettable area: 2,400 m²
In-place rent: EUR 11.70 per m²
Lettable area: 4,500 m²
In-place rent: EUR 8.90 per m²
43
alstria Annual Company Report 2019 REFURBISHMENT CANDIDATES – LONG-TERM
Alter Steinweg 4, Hamburg
Lettable area: 32,000 m²
In-place rent: EUR 11.70 per m²
Karlstr. 123 – 127, Düsseldorf
Lettable area: 5,700 m²
In-place rent: EUR 11.70 per m²
Sonninstr. 24 – 28, Hamburg
Lettable area: 22,200 m²
In-place rent: EUR 9.80 per m²
Am Hauptbahnhof 6, Frankfurt
Uhlandstr. 85, Berlin
Lettable area: 7,700 m²
In-place rent: EUR 18.50 per m²
Lettable area: 9,500 m²
In-place rent: EUR 9.80 per m²
An den Dominikanern 6, Cologne
Lettable area: 27,500 m²
In-place rent: EUR 10.30 per m²
44
alstria Annual Company Report 2019 FINANCIALS
FINANCIALS
46 P & L and FFO
47 Cash flow
48 Balance sheet
50 Financial debt
51 Outlook 2020
52 EPRA KPI’s
45
Große Bleichen 23 – 27, Hamburg
Development project 2014 – 2016
Sold 2017
Profit: EUR 58.3 million
alstria Annual Company Report 2019 P&L AND FFO
FFO margin up to 60.0 %
In 2019, the operating performance of our company was in
line with our plans. Due to the disposal of properties and
a corresponding reduction of our lettable area, revenues
fell slightly by EUR 5.7 million, from EUR 193.2 million
to EUR 187.5 million in the course of 2019. The consol-
idated net result increased to EUR 581.2 million in 2019
(EUR 527.4 million in 2018) and was substantially impacted
by the revaluation result of our property portfolio.
The FFO (after minorities) amounted to EUR 112.6 million,
which is in line with the forecasted level of EUR 112.0 mil-
lion. The decline by EUR 2.1 million compared to the prior
year period is directly linked to the lower revenue base but
was partly compensated by lower financing costs. However,
the FFO margin increased to 60.0 % in 2019 and was up
by 60 bps compared to the prior year period.
FFO adjustments 2019
Table 17 provides information on the adjustments we made
to reconcile our P&L into our FFO. In general, non-cash and
non-recurring items do not contribute to the FFO, as the
purpose of this number is to give a clear picture of the oper-
ating performance of the company. The most meaningful
adjustments we made are the revaluation result (non-cash)
and the disposal gain (non-recurring), but also the release
of accruals (EUR 10.5 million) and other one-off items
(EUR 3.2 million), which are included in other operating
income. Other operating expenses were adjusted by one-
off items amounting to EUR 5.2 million and non-cash items
of EUR 8.5 million related to the increase of the minority
share in alstria office Prime Portfolio GmbH & Co. KG.
Table 17: Consolidated income statement
for the period from January 1 to December 31, 2019
2019
2018
EUR k
Revenues
Service charge income
Real estate operating expenses
Net rental income
Administrative expenses
Personnel expenses
Other operating income
Other operating expenses
Net result from fair value adjustments
on investment property
Gain on disposal of investment property
Net operating result
Net financial result
Share of the result of joint ventures
Net result from fair value adjustments
on financial derivatives
Pre-tax income (EBT)
Income tax expense
Consolidated profit / loss for the period
Minorities
Consolidated profit after minorities /
Funds from operations (FFO)
Maintenance capex
Adjusted funds from operations (AFFO)
Number of shares outstanding (k)
FFO per share (EUR)
AFFO per share (EUR)
P&L Adjustments
0
0
0
0
1,106
2,544
– 13,644
13,824
187,467
37,038
– 61,601
162,904
– 9,545
– 18,441
16,185
– 15,230
454,767
17,350
607,990
– 27,460
– 170
0
580,360
861
581,221
0
– 454,767
– 17,350
– 468,287
3,331
126
0
– 464,830
– 861
– 465,691
– 2,959
581,221
– 468,650
FFO
187,467
37,038
– 61,601
162,904
– 8,439
– 15,897
2,541
– 1,406
0
0
139,703
– 24,129
– 44
0
115,530
0
115,530
– 2,959
112,571
– 14,276
98,295
177,593
0.63
0.55
P&L Adjustments
0
0
0
0
794
1,304
– 9,728
12,752
193,193
39,160
– 63,285
169,068
– 8,834
– 15,910
10,656
– 13,746
398,954
14,887
555,075
– 29,497
– 70
2,452
527,960
– 546
527,414
– 398,954
– 14,887
– 408,719
1,238
0
– 2,452
– 409,933
546
– 409,387
– 3,297
527,414
– 412,684
FFO
193,193
39,160
– 63,285
169,068
– 8,040
– 14,606
928
– 994
0
0
146,356
– 28,259
– 70
0
118,027
0
118,027
– 3,297
114,730
– 11,924
102,806
177,416
0.65
0.58
46
alstria Annual Company Report 2019 CASH FLOW
FFO in line with operating cash flow
The FFO of a real estate company should be comparable to its operating cash flow. In
2019, our operating cash flow was EUR 122.0 million, slightly higher than the FFO gen-
erated (EUR 112.6 million), thereby underscoring the conservative character of our FFO
calculation. In recent years, both figures have developed to square perfectly with our
expectations. Our operating cash flow over the past five years was at 101.4 % of our FFO.
Table 18: Consolidated statement of cash flows
for the year ended December 31, 2019
EUR k
1. Cash flows from operating activities
Consolidated profit for the period
Interest income
Interest expense
Result from income taxes
Unrealized valuation movements
Other non-cash income (–) / expenses (+)
Gain (–) / loss (+) on disposal of investment properties
Depreciation and impairment of fixed assets (+)
Decrease (+) / Increase (–) in trade receivables and other assets that are
not attributed to investing or financing activities
Decrease (–) / increase (+) 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
2019
2018
581,221
– 575
28,035
– 861
527,414
–745
30,241
546
–445,940 –389,465
5,616
–14,887
794
663
–17,350
1,106
867
–1,055
– 1,093
146,073
814
–24,674
– 520
121,693
–369
158,090
745
–26,658
–13,163
119,014
EUR k
2. Cash flows from investing activities
Acquisition of investment properties
Proceeds from sale of investment properties
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 investment in financial assets
Proceeds from the repayment of financial assets
Net cash used in / generated from investing activities
3. Cash flows from financing activities
Cash received from cash equity contributions
Payment of transaction costs of issue of shares
Payments for the acquisition of minority interests
Distributions on limited partnerships of minority shareholders
Proceeds from the issuing of bonds and borrowings
Payments of transaction costs / redemption of leasing obligations
Payments of dividends
Payments of the redemption of bonds and borrowings
Net cash used in financing activities
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
2019
2018
–164,915
–253,119
139,777
–179
–287
7,350
–238,864
36,567
119,200
–139
–2,145
0
0
0
– 220,551 – 136,203
193,072
0
–2,611
0
–101
–73
–1,941
–1,947
60,000
393,596
–151
– 1,141
–92,257
–92,170
–34,000 –108,088
48,010
264,178
165,320
132,899
298,219
30,821
102,078
132,899
47
alstria Annual Company Report 2019 BALANCE SHEET
Value of investment properties up by 12.7 %
The balance sheet of our company is as simple and transpar-
ent as it can be. All real estate and associated land are 100 %
owned by the company. These real estate assets are on the
assets side of our balance sheet and currently account for
89 % of our balance sheet total (including owner- occupied
space). Cash / cash equivalents and financial assets make
up 10 %, and other assets account for just 1 % of the bal-
ance sheet total. The increase of the balance sheet total by
EUR 848.1 million to EUR 5.0 billion as per December 31,
2019, was mainly driven by the increase of our investment
properties, which grew by 12.7 % to 4.4 billion in 2019,
reflecting revaluation gains and capital expenditure. Cash
and financial assets were up by EUR 365 million following
the placement of a capital market bond in September 2019.
The proceeds will serve to repay the maturing debt coming
up in 2020 and 2021 in the amount of EUR 363.8 million.
On the liabilities side, the company’s equity is the largest
item, representing 63 % of the balance sheet total. Finan-
cial liabilities account for 34 % and other liabilities for 3 %
of the balance sheet. Total equity was up by 18.3 % to
EUR 3.2 billion as a result of net profit contribution in
2019. Financial debt was temporarily up by EUR 390.0
million due to the bond placement. With the repayment
of the maturing debt in 2020 / 2021, the level of debt will
substantially decline.
Table 19: Consolidated balance sheet
as of December 31, 2019
Assets
EUR k
Non-current assets
Investment property
Equity-accounted investments
Property, plant and equipment
Intangible assets
Financial assets
Total non-current assets
Current assets
Trade receivables
Financial assets
Tax receivables
Other financial receivables
Cash and cash equivalents
Assets held for sale
Total current assets
Dec. 31,
2019
Dec. 31,
2018
4,438,597
1,070
19,055
232
39,108
4,498,062
3,938,864
8,589
18,972
349
36,737
4,003,511
3,877
199,750
1,231
8,601
298,219
19,588
531,226
6,865
0
43
8,314
132,899
29,620
177,741
Total assets
5,029,328
4,181,252
Equity and liabilities
EUR k
Equity
Share capital
Capital surplus
Retained earnings
Revaluation surplus
Total equity
Non-current liabilities
Liabilities minority interest
Long-term loans, net of current
portion
Other provisions
Other liabilities
Total non-current liabilities
Current liabilities
Liabilities minority interest
Short-term loans
Trade payables
Profit participation rights
Liabilities of current tax
Other provisions
Other current liabilities
Total current liabilities
Total liabilities
Dec. 31,
2019
Dec. 31,
2018
177,593
1,448,709
1,545,768
3,485
3,175,555
177,416
1,538,632
964,554
3,485
2,684,087
70,504
64,013
1,661,080
1,226
11,532
1,744,342
1,336,090
1,275
5,010
1,406,388
24
50,590
4,611
457
5,793
2,505
45,451
109,431
1,853,773
47
14,171
4,400
530
5,945
5,477
60,207
90,777
1,497,165
Total equity and liabilities
5,029,328
4,181,252
48
alstria Annual Company Report 2019 BALANCE SHEET RATIOS
Solid balance sheet
As of December 31, 2019, our G-REIT equity ratio reached
a new record level of 70.9 % and clearly exceeded the
legally required figure of 45 %. At the same time, our net
LTV fell further to 27.1 %.
IFRS NAV per share + 18.3 %
Our IFRS net asset value per share rose by EUR 2.77 to
EUR 17.88 as of the reporting date. The revaluation of our
properties resulted in an increase of EUR 2.56 per share,
and the operating profit covered the dividend payment in
May 2019.
Table 20: Balance sheet ratios
EUR k
2019
2018
Table 21: Movement in net asset value (NAV)
EUR
per share
EUR k
Investment properties
4,438,597 3,938,864
IFRS NAV as of Dec. 31, 20181)
2,684,087
Carrying amount of owner occupied
properties
Assets held for sale
Equity value of JV
(A)
17,217
19,588
1,070
17,585
29,620
8,589
Carrying amount of immovable
assets
Adjustments to fair value of
owner occupied properties
(B) 4,476,472 3,994,657
5,240
1,144
Fair value of immovable assets
(C) 4,481,712 3,995,801
Cash on balance sheet
(D)
497,969
132,899
IFRS equity
(E) 3,175,555 2,684,087
Interest bearing debt
(F) 1,711,700 1,345,700
Portfolio revaluation
Profit on disposals
Adjusted profit for the year
Dividend payment
Other adjustments
IFRS NAV as of Dec. 31, 2019
EPRA NRV as of Dec. 31, 20192)
EPRA NTA as of Dec. 31, 20192)
EPRA NDV as at Dec. 31, 20192)
1) Fully diluted.
2) Calculation see table 27, page 54.
454,767
17,350
109,104
– 92,257
2,504
3,175,555
3,492,621
3,180,892
3,128,097
15.11
2.56
0.10
0.61
– 0.52
0.01
17.88
19.67
17.91
17.61
G-REIT equity ratio (%)
Corporate LTV (%)
(E) / (B)
(F) / (B)
Corporate Net LTV (%) (F-D) / (B-A)
70.9
38.2
27.1
67.2
33.8
30.4
49
alstria Annual Company Report 2019
FINANCIAL DEBT
Proactive debt management
Over the course of 2019, we continued to actively shape
the structure of our financial liabilities. The main event on
the debt side was the refinancing of the capital market
bond we issued in 2015 with a volume of EUR 327 million
(coupon: 2.25 %). This bond will be redeemed toward the
end of 2020. Given the favorable refinancing conditions,
we decided for an early issuance of a new bond, which had
a volume of EUR 400 million at a coupon of 0.5 %. The
lower cost of debt will substantially reduce our financing
expenses going forward.
Net debt / EBITDA of 8.5
Besides the LTV, the net debt / EBITDA is a widely accepted
KPI with regard to the indebtedness of a real estate company.
In the current stage of the cycle after a multi-year upswing
in real estate prices, we regard the net debt / EBITDA as
an important indicator, because it is not impacted by the
volatility of property valuation. Our net debt / EBITDA
was roughly stable at 8.5 and therefore meets our target
level as per December 31, 2019. A second debt indicator
that is not blurred by property valuation and therefore is
a sensible indicator for the indebtedness of a real estate
company is the net debt per m², which stood at EUR 804
as per December 31, 2019.
1) Assuming repayment of Schuldschein (EUR 37 m) and bond (EUR 327 m)
maturing in 2020/21 using available cash.
Table 22: Cash cost of debt1)
as of December 31, 2019
Nominal amount
(EUR k)
Cost of debt
(%)
Bonds
Bank debt
Schuldschein
Total
1,075,000
195,900
77,000
1,347,900
1.3
1.1
2.5
1.3
Average
maturity
(years)
5.7
6.3
5.0
5.8
Graph 7: Net debt / EBITDA
2017
2018
2019
9.1
8.3
8.5
Graph 8: Sources of financing1)
Graph 9: Debt maturity profile1)
Debt EUR 1,348 m
Schuldschein EUR 77 m
Bank debt EUR 196 m
Bonds EUR 1,075 m
Equity EUR 3,176 m
Schuldschein
Bank debt
Bonds
EUR million
400
350
300
250
200
150
100
50
0
2020
2021
2022
2023 2024 2025 2026 2027 2028
50
alstria Annual Company Report 2019
OUTLOOK 2020
Based on the current portfolio, we expect revenues of
EUR 179 million and an FFO of EUR 108 million for the
2020 fiscal year. The slight year-on-year decline in revenues
is mainly due to the disposal of properties. With regard to
our transaction activities, we will continue to take advan-
tage of the strong investment market in Germany and most
likely remain a net seller in 2020. However, the new leases
signed in 2019 are a solid foundation for our top line and
bottom line growth in the years to come.
Lower revenues will also have an impact on our operating
profit (FFO) in 2020. However, declining cost will partially
compensate for the loss in rental income. Our FFO margin
is expected to exceed previous years level.
This report contains forward-looking statements about
expected developments. These statements are based on
current assessments and naturally subject to risks and uncer-
tainties. Actual events may differ from those described
herein.
Carl-Reiß-Platz 1 – 5
Mannheim
51
alstria Annual Company Report 2019 EPRA KPI’S
EPRA earnings
Earnings reported in the income statement as required
under IFRS do not provide stakeholders with the most
relevant information on the operating performance of real
estate companies. For real estate investment companies, a
key measure of a company’s operational performance and
the extent to which its dividend payments to shareholders
are underpinned by earnings is the level of income arising
from operational activities. Unrealized changes in valua-
tion, gains or losses on disposals of properties and other
non-operating items are therefore taken out.
EPRA vacancy
Vacancy disclosures are not consistently defined in the real
estate industry. Consistent disclosure of vacancy measures
will always be a challenge between companies because
property markets around Europe have different charac-
teristics and each measure can serve a different purpose.
To encourage the provision of comparable and consistent
disclosure of vacancy measures, EPRA has identified a single
vacancy measure that can be clearly defined and is shown
in table 24.
Table 23: EPRA earnings & earnings per share
EUR k
Earnings per IFRS income statement
2019
2018
581,221
527,414
(a) Changes in value of investment properties, development
properties held for investment and other interests
– 454,767
– 398,954
(b) Profits or losses on disposal of investment properties, devel-
opment properties held for investment and other interests
– 17,350
– 14,887
(c) Tax on profits or losses on disposals
(d) Changes in fair value of financial instruments
(e) Acquisition costs on share deals
(f) Deferred tax in respect to EPRA adjustments
(g) Adjustments (a) to (c) above in respect of joint ventures
(h) Non-controlling interest on adjustments
EPRA earnings
EPRA earnings per share (EUR)
0
2,731
250
0
0
0
– 2,452
0
0
0
– 3,141
– 2,813
108,695
108,308
0.61
0.62
Table 24: EPRA vacancy rate
EUR k
Estimated rental value (ERV)
ERV of vacant space
Vacancy rate (%)
Dec. 31, 2019 Dec. 31, 2018
212,728
17,263
8.1
220,912
21,435
9.7
52
alstria Annual Company Report 2019
EPRA NAV and EPRA NNNAV
The target of the EPRA NAV is to provide stakeholders
with the most relevant information on the fair value of the
assets and liabilities within a true real estate investment
company with a long-term investment strategy. It adjusts
the company’s IFRS NAV. Adjustments are made to include
properties and other investment interests at fair value and
to exclude certain items that are not expected to crystallize
in a long-term investment property business model.
New EPRA NAV metrics
However, the evolution of property companies into actively
managed entities, including non-property operating activ-
ities, has resulted in more active ownership, higher asset
turnover, and the shifting of balance sheet financing from
traditional bank lending into capital markets. Therefore,
EPRA has set up a new standard on NAV reporting, con-
taining three different metrics (see table 26).
Table 25: EPRA NAV per share
Table 26: EPRA cost ratio
EUR k
Dec. 31,
2019
Dec. 31,
2018
EUR k
NAV (IFRS equity ex. minority interest) 3,175,555 2,684,087
Share ‘A’ (outstanding shares)
177,593
177,416
Administrative / operating expense line
per IFRS income statement
2019
2018
–52,904
–48,898
355
5,065
–160
28
5,594
–79
17.88
15.13
Service fees / recharges
0
0
0
0
Management fees
Share of joint ventures expenses
Exclude:
177,593
177,416
Investment Property Depreciation
0
298
EPRA Costs
(including direct vacancy costs) (A)
3,175,555 2,684,087
Direct vacancy costs
EPRA Costs
(excluding direct vacancy costs) (B)
–47,644
–43,057
8,077
7,482
–39,567
–35,575
5,746
1,143
Gross Rental Income less ground rents
187,467
193,193
Dilluted NAV per share (EUR)
17.88
15.13
NAV per share (EUR)
Effect of exercise of options, convert-
ibles and other equity interests
‘New’ Shares B
Share A + B
Diluted NAV, after the exercise
of options, convertibles and other
equity interests
Revaluation of investment properties
(if IAS 40 cost option is used)
Fair value adjustments of financial
instruments
EPRA NAV
EPRA NAV per share (EUR)
Fair value of financial instruments
Fair value of debt
EPRA NNNAV
– 177
394
3,181,125 2,685,624
17.91
– 177
15.14
– 394
– 53,204
– 30,619
3,127,744 2,654,611
EPRA NNNAV per share (EUR)
17.61
14.96
Less: service fee and service
charge costs components
of gross rental income
5,065
–5,594
Gross rental income
(C)
182,402
187,599
EPRA cost ratio (%)
(including direct vacancy costs) (A / C)
EPRA cost ratio (%)
(excluding direct vacancy costs) (B / C)
26.1
23.0
21.7
19.0
53
alstria Annual Company Report 2019 New EPRA NAV reporting standard
The objective of the EPRA Net Reinstatement Value measure
is to highlight the value of net assets on a long-term basis.
Assets and liabilities that are not expected to crystallize in
normal circumstances such as the fair value movements on
financial derivatives and deferred taxes on property valua-
tion surpluses are therefore excluded. Since the aim of the
metric is to also reflect what would be needed to recreate
the company through the investment markets based on its
current capital and financing structure, related costs such
as real estate transfer taxes are included.
The underlying assumption of the EPRA Net Tangible Assets
measure assumes entities buy and sell assets, thereby crys-
tallizing certain levels of deferred tax liability.
Shareholders are interested in understanding the full extent
of liabilities and resulting shareholder value if company
assets are sold and / or if liabilities are not held until maturity.
For this purpose, the EPRA Net Disposal Value provides the
information with a scenario where deferred tax, financial
instruments and certain other adjustments are calculated
to the full extent of their liability, including tax exposure
not reflected in the balance sheet, net of any resulting
tax. This measure should not be viewed as a ‘liquidation
NAV’ because, in many cases, fair values do not represent
liquidation values.
Table 27: New EPRA NAV metrics
EUR k
EPRA NRV
EPRA NTA EPRA NDV
IFRS equity attributable to shareholders
3,175,555
3,175,555
3,175,555
Include / exclude
I) Hybrid instruments
Dilluted NAV
Include:
0
0
0
3,175,555
3,175,555
3,175,555
II. a) Revaluation of IP (if IAS 40 cost option is used)
5,746
5,746
5,746
II. b) Revaluation of IPUC (if IAS 40 cost option is used)
II. c) Revaluation of other non-current investments
III.) Revaluation of tenent leases held as finance leases
IV.) Revaluation of trading properties
0
0
0
0
0
0
0
0
0
0
0
0
Dilluted NAV at fair value
3,181,301
3,181,301
3,181,301
Exclude:
V) Deferred tax in relation to fair value gains of IP
VI) Fair value of financial instruments
VII) Goodwill as a result of deferred tax
VIII. a) Goodwill as per the IFRS balance sheet
VIII. b) Intangibles as per the IFRS balance sheet
Include:
IX) Fair value of fixed interest rate debt
X) Revaluation of intangibles to fair value
0
– 177
0
–
–
–
0
XI) Real estate transfer tax / acquisition costs
311,497
0
– 177
0
0
– 232
–
–
0
0
–
–
–
0
– 53,204
–
–
NAV
Fully diluted number of shares
NAV per share
3,492,621
3,180,892
3,128,097
177,593
177,593
177,593
19.67
17.91
17.61
54
alstria Annual Company Report 2019 EPRA Yield
There is variation in the nature and extent of yield disclosures
and yield measurements used are not consistently defined.
Consistent disclosure of yield measurements such as net
initial yield, ‘topped-up’ yields and equivalent yields will
always be a challenge between companies because each
measure serves a different purpose depending on the user
and the local property market. To encourage the provision
of comparable and consistent disclosure of yield measures
across Europe, EPRA has defined two yield measures shown
in table 28.
EPRA NIY is calculated as the annualized rental income
based on the cash rents passing at the balance sheet date
minus non-recoverable property operating expenses,
divided by the gross market value of the property. The
EPRA ‘topped-up’ NIY is calculated by making an adjust-
ment to the EPRA NIY in respect of the expiration of rent-
free periods (or other unexpired lease incentives such as
discounted rent periods and step rents).
Table 28: EPRA Yield
EUR k
Portfolio value
Investment properties
(on balance sheet)
Trading property
Development assets
Completed portfolio
Acquisition cost
Dec. 31,
2019
Dec. 31,
2018
4,438,597 3,938,864
19,588
29,620
– 487,710
– 187,830
3,970,475 3,780,654
258,081
245,743
Gross up completed property
portfolio valuation
(A)
4,228,556 4,026,397
Income
Contractual rent
208,332
196,967
Contractual rent developments
– 29,625
– 2,175
Contractual rent
(excluding developments)
Rent-free periods
Annualized cash passing rent
Property outgoings
178,707
194,792
– 19,391
– 12,524
159,316
182,268
– 17,871
– 19,479
Annualized net cash rents
(B)
141,445
162,789
Rent free periods
19,391
12,524
’Topped-up‘ net annulized rent (C )
160,836
175,313
EPRA Net initial yield (%)
EPRA ’topped-up’ Net initial
yield (%)
(B/A)
(C/A)
3.3
3.8
4.0
4.4
Elisabethstr. 5 – 11
Düsseldorf
55
alstria Annual Company Report 2019 SHARE
ALSTRIA’S SHARE
57 Share price performance
58 Shareholder structure
59 IR activities
56
Ernst-Merck-Str. 9, Hamburg
Development project 2016 – 2018
Yield on cost: 5.8 %
alstria Annual Company Report 2019 SHARE PRICE PERFORMANCE
42.5 % total shareholder return in 2019
alstria measures the performance of its shares based on
the development of total shareholder return (TSR). The
TSR includes the development of the share price plus the
dividend reinvested. For 2019, the TSR of alstria's share
was 42.5 % and therefore performed much better than
most of its peers and also clearly beat the broad market.
The strong performance was primarily a reflection of the
strong NAV growth. alstria's share clearly outperformed
the broad German stock indices in 2019 (DAX30: 25.5 %,
MDAX: 31.2 %) and the European sector indices (EPRA
Europe: 29.4 %). As the real estate business requires a long-
term perspective, multi-year performance is an important
indicator of the attractiveness of our share. Over the past
five years (2015 – 2019), the average annual TSR has been
14.4 %, once again demonstrating the strength of our busi-
ness model in a strong real estate market.
Table 29: Key share data
ISIN
DE000A0LD2U1
Symbol
AOX
Market segment
Financial Services
Industry group
Real Estate
Prime sector
Prime Standard, Frankfurt
Indices
FTSE EPRA / NAREIT Global Real Estate Index Series,
FTSE EPRA / NAREIT Europe Real Estate Index Series, MDAX,
RX REIT Index, GPR 250 Index Series, GPR 250 REIT Index Series,
EURO STOXX 600
Designated Sponsor M. M. Warburg & CO
Graph 10: Share price development
alstria
EPRA Europe Index
EPRA Global REITs Index
%
160
140
120
100
80
60
January 2019
December 2019
57
alstria Annual Company Report 2019 SHAREHOLDER STRUCTURE
100 % free float
alstria’s shares are 100 % free float as defined by Deutsche
Börse. More than 95 % of the outstanding shares are held
by institutional investors, mainly large pension funds and
specialized real estate investors. At the end of 2019, alstria's
top 20 investors held approximately 60 % of the outstand-
ing shares. Geographically, approximately 24 % of alstria's
shareholders are located in the USA / Canada and 21 % in
Asia. European investors hold 55 % of the shares, of which
16 % are held by shareholders domiciled in France, 10 %
in the UK, 8 % in Germany and 6 % in the Netherlands.
Our international shareholder structure is a consequence
of our REIT status, as REIT is a globally established brand
for listed real estate companies.
Coverage by analysts
The interest of analysts and financial journalists in the
development of alstria office REIT-AG remained high in
2019. A total of 19 investment banks and brokers regularly
reported on the development of the company. alstria thus
continues to be one of the best-covered companies in the
German MDAX.
Table 30: Key share data
Number of shares
thereof outstanding
Closing price1)
Market capitalization
Free float
Average daily trading volume
(all exchanges)
thereof XETRA
Share price: high1)
Share price: low1)
1) Xetra closing share price.
thousand
thousand
EUR
EUR k
%
EUR k
EUR k
EUR
EUR
Dec. 31, 2019
Dec. 31, 2018
177,593
177,593
16.75
177,416
177,416
12.20
2,974,690
2,164,475
100.0
2019
8,797
6,049
17.60
11.91
100.0
2018
9,935
5,042
13.49
11.87
Free-Float
100
%
58
alstria Annual Company Report 2019 Helsinki
Amsterdam
London
Brussels
Paris
Hamburg
Frankfurt
Munich
Zurich
roadshow activities and available to investors for discussions
on all aspects of corporate governance. As capital market
bonds with a volume of EUR 1 billion are the main source
of our debt financing, the special information requirements
of our investors in the bond market are also an integral part
of our investor relations work. In addition to our presence
at roadshows and conferences, we conducted several prop-
erty tours with analysts and shareholders, particularly in
Hamburg, Frankfurt and Düsseldorf.
Digital communication with investors has always played an
important role for alstria. All interested parties are invited
to participate in the presentation of our annual and quar-
terly results via live stream on alstria's website. All relevant
information is available on our website ww.alstria.com/
investor/
59
Toronto
Boston
Chicago
New York
IR ACTIVITIES
260 meetings with investors
In 2019, alstria's investor relations activities remained
focused on informing investors, financial analysts and the
business press about the company's performance and the
market environment. Management roadshows and par-
ticipation in numerous investment conferences in Europe
and the USA ensured a continuous dialogue between the
company and its shareholders. Over the course of the year,
we held more than 260 meetings with investors and ana-
lysts in Germany and abroad. In addition to management
personnel, our supervisory board was also involved in the
alstria Annual Company Report 2019 CSR
CORPORATE
SOCIAL
RESPONSIBILITY
61 Integral part of our business
62 Green dividend
60
Kaiser-Wilhelm-Str. 79 – 87, Hamburg
Development project 2013 – 2014
Yield on cost: 7.0 %
alstria Annual Company Report 2019 INTEGRAL PART OF OUR BUSINESS
A TYPICAL
ALSTRIA BUILDING
measures
13,635 m²
emits per year
325 tCO2e
Sustainability is at the core of what we do
Sustainability is an integral part of our business strategy,
governance, and operations. The integration of sustainability
into the design, construction, and operation of our proper-
ties helps us to ensure that our buildings continue to meet
the needs of their tenants and surrounding communities
while also minimizing our impact on the environment.
We take responsibility for climate change
Toward decarbonizing our portfolio, we managed to procure
100% renewable energy for the electricity that we con-
trol and achieved our RE100 target in 2018. Our business
activities also emitted 42% less carbon emissions com-
pared to the base year 2013. Finally, our comprehensive
sustainability strategy was recognized with numerous ESG
ratings, including MSCI, CDP, and ISS-oekom.
For further information, please visit the sustainability sec-
tion of our website and our sustainability report 2018 / 19.
www.alstria.com/sustainability/
consumes
123 kWh
energy per m²/year
Reporting date: Dec. 31, 2018.
accommodates
8 tenants
offers
150 parking
spaces
61
alstria Annual Company Report 2019
GREEN DIVIDEND HOW DOES IT WORK?
The Company indentifies projects that
would not be financed solely based on
financial criteria, as well as expected
non financial benefits.
A Euro amount needed to finance these
projects is proposed to the Annual General
Meeting as ‘Green Dividend’.
Shareholders are asked to cast their vote
for the payout or against the payout
(majority rule apply).
€€
1 Cent
per share
VOTE FOR
THE PAYOUT
The dividend is paid out
and the projects are not
implemented.
VOTE AGAINST
THE PAYOUT
The dividend is not paid out and
the projects are implemented by
the Company, which will report on
progress at the next Annual General
Meeting.
62
alstria Annual Company Report 2019 PROJECTS THAT WOULD BE FINANCED WITH THE GREEN DIVIDEND
Öjendorfer Weg 9 – 11, Hamburg
Hammer Steindamm 129, Hamburg
Heating performance: 107 KW per m²
Heating performance: 97 KW per m²
Underperformance:
35 %
Underperformance:
30 %
Lowering demand: Windows, LED
Lowering demand: Windows
Renewable energy:
Solar panels
Renewable energy:
Solar panels
Potential saving:
Investment:
CO2 yield:
45 tCO2e per year
EUR 750,000
EUR 16,500 per tCO2e
saved annually
Potential saving:
Investment:
CO2 yield:
50 tCO2e per year
EUR 950,000
EUR 19,000 per tCO2e
saved annually
In-place rent:
EUR 8.70 per m²
In-place rent:
EUR 7.20 per m²
There is no technical, legal or contractual reason why these
investment would need to be realized. The existing equip-
ment is properly maintained and reflects the current con-
tractual agreement between alstria and the tenant. The
investments described would not offer alstria its expected
returns and would only be undertaken with the aim of
improving alstria‘s carbon footprint.
63
alstria Annual Company Report 2019 APPENDIX
APPENDIX
65 Calculation of yields
67 Achieved UIRR 2006 – 2019
71 Valuation certificate
80 Management Compensation Scheme
81 Glossary
84 Imprint
64
Schaartor 1, Hamburg
Development project 2013 – 2014
Yield on cost: 6.8 %
alstria Annual Company Report 2019 CALCULATION OF YIELDS
Different yields – but all are based on the
same portfolio value
The calculation of portfolio yields is sometimes confusing,
as it is always the same portfolio, but a different outcome.
In tables 31 – 33, we summarized the calculation schemes
of the different yields that we use to indicate the valuation
of our portfolio. It is important to note that the calculations
are different, but they all start on the same basis, which is
the portfolio value, conducted by our external appraisers.
Our own portfolio yield of 4.7 % is the contractual rent
in relation to the portfolio value on our balance sheet
(table 31).
The EPRA calculation (table 32) starts at the same basis
but corrects the portfolio value for development assets and
trading properties. On the income side, the EPRA concept
also adjusts for the impact of rent-free periods and property
costs (‘property outgoings’).
Table 31: alstria’s calculation
Table 32: EPRA calculation
EUR k
Portfolio value
Investment properties
(on balance sheet)
Value of own used property
Assets held for sale
Other adjustments
Dec. 31,
2019
Dec. 31,
2018
EUR k
4,438,597 3,938,864
Portfolio value
Investment properties
(on balance sheet)
22,964
19,588
– 5,089
18,728
Trading property
29,620
Development assets
0
Completed portfolio
Prepayments of properties
0
– 1,944
Acquisition cost
Dec. 31,
2019
Dec. 31,
2018
4,438,597 3,938,864
19,588
29,620
– 487,710
– 187,830
3,970,475 3,780,654
258,081
245,743
Total portfolio value
(A)
4,476,060 3,985,268
Income
Gross up completed property
portfolio valuation
(A)
4,228,556 4,026,397
Contractual rent
(B)
208,332
210,425
Real estate operating expenses (5 %)
– 10,417
– 10,521
Income
Contractual rent
208,332
196,967
Contractual net rent
Yield (%)
Net yield (%)
(C )
(B / A)
(C / A)
197,916
199,903
4.7
4.4
5.3
5.0
Contractual rent developments
– 29,625
– 2,175
Contractual rent
(excluding developments)
Rent-free periods
Annualized cash passing rent
Property outgoings
178,707
194,792
– 19,391
– 12,524
159,316
182,268
– 17,871
– 19,378
Annualized net cash rents
(B)
141,445
162,890
Rent free periods
19,391
12,524
’Topped-up‘ net annulized rent (C )
160,836
175,414
EPRA Net initial yield (%)
(B/A)
EPRA ’topped-up’ Net initial
yield (%)
(C/A)
3.3
3.8
4.0
4.4
65
alstria Annual Company Report 2019
Our appraiser uses a different methodology (table 33),
again starting with the portfolio value he calculated, and
which is reflected on our balance sheet. Adjustments are
made for the value of our own used properties, estimated
acquisition costs and capital costs (required capex), as the
appraiser calculates the market yield from the perspective
of the buyer. On the income side, adjustments are made
for property expenses and an estimated rent reversion.
Table 33: Savills’ calculation1)
EUR k
Portfolio value
Dec. 31, 2019
Dec. 31, 2018
Investment properties (on balance sheet)
4,438,597
3,936,920
Value of own used property
Assets held for sale
Other adjustments
Total portfolio
Acquisition cost
Capital cost
Gross value
Income
Initial passing gross rents
Non-recoverable expenses
Initial net rents
Reversions
Estimated net rents
(A)
(B)
(C)
(D)
(E)
(F)
(G)
Savills Net initial yield
Savills Reversionary yield
(F/A + B)
(G/A + B)
1) Yields 2019 and 2018 not fully comparable.
22,964
19,588
– 5,089
4,476,060
311,497
363,313
5,150,870
182,513
– 22,708
159,806
65,952
230,575
3.3 %
4.8 %
18,728
29,620
0
3,985,268
272,197
271,297
4,528,762
185,619
– 14,788
170,831
48,799
219,630
4.0 %
5.2 %
66
alstria Annual Company Report 2019 Region
Ownership start Disposal date
Total
lettable area
(m²)
Gross purchase
price1)
(EUR k)
Rent
Collected2)
(EUR k)
Capex
(EUR k)
Disposal
proceeds
(EUR k)
Unlevered
profit
(EUR k)
ACHIEVED UIRR 2006 – 2019
Average UIRR of 8.0 % from 2006 – 2019
The company’s history, over the past 13 years, impressively
demonstrates our ability to achieve an unlevered IRR of
7 – 8 % per year over the cycle. This result is based on a port-
folio consisting of 80 individual properties with a volume
of EUR 1.5 billion, which we bought, managed and sold
on the market between 2007 and 2019 (see table 34). We
achieved this result, on the one hand, through our asset
management skills and, on the other hand, by applying a
strict acquisition discipline. Low interest rates have never
tempted us to enter into risky transactions and pure spec-
ulation on future market-driven rental growth has never
motivated us to buy properties. Instead, we always took
a realistic view of the rental market and increased rents
through quality-enhancing investments.
Table 34: Unlevered returns (UIRR) 2006 – 2019
Asset
Balgebrückstr. 13
City
Bremen
Werner-von-Siemens-Platz 1
Laatzen
Stiftplatz 5
Opernplatz 2
Berner Str. 119
Brödermannsweg 5 – 9
Ingersheimer Str. 20
Jagenbergstr. 1
Gathe 78
Washingtonstr. 16
Harburger Ring 17
Lötzener Str. 3
Eschersheimer Landstr. 55
Frankfurter Str. 71 – 75
Doktorweg 2 – 4
Carl Benz Str. 15
1) Incl. 6 % transaction costs.
2) Incl. 5 % real estate operating expenses.
Kaiserslautern
Essen
Frankfurt
Hamburg
Stuttgart
Neuss
Wuppertal
Dresden
Hamburg
Bremen
Frankfurt
Eschborn
Detmold
Others
Others
Others
Düsseldorf
Frankfurt
Hamburg
Stuttgart
Düsseldorf
Düsseldorf
Others
Hamburg
Others
Frankfurt
Frankfurt
01.11.2015
29.02.2020
01.04.2007
29.02.2020
01.11.2015
01.11.2015
31.10.2019
30.01.2019
01.11.2015
30.04.2019
01.11.2015
28.02.2019
01.11.2015
31.03.2019
01.10.2007
01.10.2007
01.10.2007
01.10.2007
31.12.2018
01.01.2019
31.12.2018
31.08.2018
01.11.2015
30.06.2018
01.11.2015
01.11.2015
01.04.2018
01.03.2019
Düsseldorf
01.04.2008
31.12.2017
4,153
21,027
8,942
24,271
14,852
1,374
12,895
20,400
8,400
20,500
3,600
5,000
8,700
6,700
9,800
Ludwigsburg
Stuttgart
01.11.2015
30.08.2017
32,500
3,798
27,693
12,079
36,743
20,199
2,260
23,142
49,660
11,331
16,801
3,392
3,445
27,300
15,700
8,569
19,300
910
22,208
2,805
8,486
3,982
430
5,168
30,644
10,827
12,715
2,260
803
3,018
2,500
4,889
2,764
118
3,912
1,306
3,394
1,133
48
911
3,804
1,535
3,535
4,352
98
606
206
699
294
2,900
16,675
12,750
40,000
27,000
4,300
41,500
23,400
9,120
28,080
10,000
3,600
44,000
16,200
11,300
19,600
UIRR
(%)
– 0.9
2.4
4.4
5.7
10.7
21.0
19.8
0.0
5.9
8.7
8.3
7.4
– 136
6,708
2,151
8,309
9,620
2,403
22,585
145
6,883
20,066
4,486
749
19,112
20.1
2,794
6,921
2,770
5.9
7.5
6.3
Disclaimer: The data shown in the table above can differ from the IFRS accounting numbers.
67
alstria Annual Company Report 2019
Table 34: Unlevered returns (UIRR) 2006 – 2019
Asset
Vichystr. 7 – 9
City
Bruchsal
Grosse Bleichen 23 – 27 (JV)
Hamburg
Zellescher Weg 18 – 25a
Dresden
Region
Ownership start Disposal date
Stuttgart
Hamburg
Others
01.11.2015
30.08.2017
01.01.2010
31.08.2017
01.04.2006
31.01.2017
Feldstr. 16 / Gutenbergstr.
Weiterstadt
Frankfurt
Gutenbergstr. 1
Oskar-Messter-Str. 22a – 24a
Nägelsbachstr. 26 /
Nürnberger Str. 41
Lina-Ammon-Str. 19
Richard-Wagner-Platz 1
Bahnhofstr. 1 – 5
An den Treptowers 3
Ludwig-Erhard-Str. 49
Taunusstr. 34 – 36
Ismaning
Ismaning
Erlangen
Nürnberg
Nürnberg
Heilbronn
Berlin
Leipzig
Munich
Wandsbeker Chaussee 220
Hamburg
Munich
Munich
Others
Others
Others
Stuttgart
Berlin
Others
Munich
Hamburg
01.11.2015
01.11.2015
01.11.2015
01.11.2015
01.11.2015
01.11.2015
01.11.2015
31.12.2016
31.12.2016
31.12.2016
31.12.2016
31.12.2016
31.12.2016
30.11.2016
01.11.2015
30.09.2016
01.04.2006
30.09.2016
01.11.2015
31.08.2016
01.10.2007
30.06.2016
Dortmund
Düsseldorf
01.10.2007
31.12.2016
Max-Eyth-Str. 2
Landshuter Allee 174
Hofmannstr. 51
Dieselstr. 18
Emil-von-Behring-Str. 2
Arnulfstr. 150
Munich
Munich
Ditzingen
Frankfurt
Munich
Halberstädter Str. 17
Magdeburg
Siemensstr. 31 – 33
Englische Planke 2
Hamburger Str. 43 – 49
Spitzweidenweg 107
Ernsthaldenstr. 17
Max-Brauer-Allee 41 – 43
Ditzingen
Hamburg
Hamburg
Jena
Stuttgart
Hamburg
Joliot-Curie-Platz 29 – 30
Halle
1) Incl. 6 % transaction costs.
2) Incl. 5 % real estate operating expenses.
Munich
Munich
Stuttgart
Frankfurt
Munich
Others
Stuttgart
Hamburg
Hamburg
Others
Stuttgart
Hamburg
Others
05.06.2007
30.06.2016
01.04.2007
30.06.2016
22,151
01.04.2007
25.06.2016
01.04.2007
01.04.2006
01.04.2006
01.04.2007
01.04.2011
28.12.2006
03.03.2008
31.12.2015
31.12.2015
30.11.2015
01.11.2015
31.12.2014
30.11.2014
31.10.2014
03.03.2008
31.05.2014
01.06.2008
31.03.2014
02.05.2008
31.12.2013
9,639
9,308
5,871
7,527
15,051
4,623
21,777
2,880
2,472
3,226
1,080
20,200
18,300
6,539
14,200
12,200
12,400
11,600
11,200
6,800
14,700
85,400
6,290
11,200
3,156
7,042
7,151
Total
lettable area
(m²)
Gross purchase
price1)
(EUR k)
Rent
Collected2)
(EUR k)
Disposal
proceeds
(EUR k)
Unlevered
profit
(EUR k)
12,600
31,164
8,576
6,700
12,800
16,700
18,500
15,100
14,400
28,400
209,300
10,307
26,400
5,671
7,791
11,342
41,764
3,100
15,370
16,258
10,417
28,620
12,065
36,010
1,993
2,714
4,569
1,325
1,668
11,912
7,977
385
917
1,445
1,526
1,191
1,106
2,224
12,188
7,746
1,404
3,026
434
3,071
21,009
0
9,254
8,074
5,089
12,097
2,804
18,227
1,064
1,663
1,665
475
Capex
(EUR k)
347
5,774
183
33
465
8
949
0
221
654
965
267
28
226
73
1,849
782
8,986
3,696
138
304
900
431
401
106
662
852
19
– 6,722
– 36.8
13,400
83,300
10,500
7,350
14,100
18,400
11,200
15,100
17,000
33,650
2,121
58,274
9,718
1,002
1,752
3,137
1,191
3,485
6,820
228,431
30,354
9,450
26,830
5,920
4,625
14,000
44,987
13,395
12,800
16,500
6,200
22,300
15,530
41,662
1,415
3,300
6,150
610
6,622
1,806
3,049
– 2,805
3,881
23,450
1,309
2,988
8,177
568
4,878
5,838
23,478
380
1,587
2,395
– 259
UIRR
(%)
8.4
17.3
11.1
15.1
13.9
19.0
8.0
24.5
24.3
14.7
6.9
6.9
6.4
– 5.1
4.3
6.2
34.1
2.9
6.6
0.8
2.5
15.2
9.1
3.7
10.0
7.2
– 5.3
Disclaimer: The data shown in the table above can differ from the IFRS accounting numbers.
68
alstria Annual Company Report 2019 Table 34: Unlevered returns (UIRR) 2006 – 2019
Asset
City
Region
Ownership start Disposal date
Total
lettable area
(m²)
Gross purchase
price1)
(EUR k)
Rent
Collected2)
(EUR k)
Capex
(EUR k)
Disposal
proceeds
(EUR k)
Unlevered
profit
(EUR k)
Bornbarch 2 – 12
Norderstedt
Hamburg
Johannesstr. 164 – 165 /
J.-Gagarin-Ring 133 – 135
Am Roten Berg 5
Schweinfurter Str. 4
Helene-Lange-Str. 6 / 7
Kanalstr. 44
Lothar-Streit-Str. 10b
Erfurt
Erfurt
Würzburg
Potsdam
Hamburg
Zwickau
Others
Others
Others
Others
Hamburg
Others
01.05.2012
01.04.2006
31.12.2013
31.10.2013
12,351
5,846
03.03.2008
31.07.2013
01.01.2007
30.06.2013
01.04.2006
30.06.2013
03.03.2008
31.05.2013
01.04.2006
23.05.2013
Benrather Schlossallee 29 – 33 /
Ludolfstr. 3
Düsseldorf
Düsseldorf
01.04.2008
01.02.2013
Zwinglistr. 11 / 13
Schopenstehl 24 /
Kleine Reichenstr. 2
Am Gräslein 12
Poststr. 11
Dresden
Hamburg
Nürnberg
Hamburg
Others
Hamburg
Others
Hamburg
03.03.2008
31.12.2012
01.08.2009
30.06.2012
01.04.2006
31.03.2012
01.06.2006
30.03.2012
Bertha-von-Suttner-Platz 17
Bonn
Düsseldorf
01.04.2006
30.09.2011
Kümmellstr. 5 – 7
Lenhartzstr. 28
Schloßstr. 60
Steckelhörn 12
Gänsemarkt 36
Gorch-Fock-Wall 15, 17
Eserwallstr. 1 – 3
Rheinstr. 23
Mecumstr. 10
Vahrenwalder Str. 133
Bonner Str. 351 / 351 a
Steubenstr. 72 – 74
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Augsburg
Darmstadt
Düsseldorf
Hannover
Cologne
Mannheim
Regensburger Str. 223 – 231
Nürnberg
1) Incl. 6 % transaction costs.
2) Incl. 5 % real estate operating expenses.
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Others
Frankfurt
Düsseldorf
Others
Düsseldorf
Frankfurt
Others
01.06.2006
01.06.2006
09.11.2010
09.11.2010
01.06.2006
22.09.2010
01.06.2006
22.09.2010
01.06.2006
31.03.2010
01.06.2006
31.03.2010
01.04.2006
01.04.2006
01.04.2006
01.04.2006
01.04.2006
01.04.2006
01.04.2006
31.12.2009
31.12.2009
31.12.2009
31.12.2009
31.12.2009
31.12.2009
31.12.2009
5,284
5,076
3,292
8,094
1,034
4,941
2,924
2,122
2,708
7,356
1,388
15,666
1,131
11,945
14,720
20,900
7,700
5,564
2,696
8,638
7,142
10,907
4,070
8,938
6,466
8,127
2,756
7,950
6,866
10,854
1,583
8,684
1,982
3,509
3,769
36,302
1,624
26,325
1,788
15,141
36,616
66,341
16,013
10,583
5,060
21,452
16,869
23,192
7,898
15,489
1,357
3,791
791
2,875
2,705
4,624
599
2,614
725
498
1,344
5,211
990
6,094
466
4,009
7,797
12,889
3,368
2,510
1,132
4,377
3,529
5,259
1,896
3,582
660
187
35
161
232
488
30
510
31
999
71
10,320
5,850
1,060
4,530
5,700
15,000
350
7,620
2,640
5,040
4,552
1,328
– 940
– 706
1,307
8,281
– 665
1,040
1,352
1,031
3,400
904
30,100
120,839
59,648
50
305
23
200
390
644
168
126
57
219
176
263
95
179
2,100
25,279
4,221
17,001
35,200
68,700
15,500
10,556
4,197
18,128
18,587
21,736
7,844
14,877
1,416
4,744
2,875
5,669
5,992
14,603
2,686
2,358
212
834
5,071
3,541
1,748
2,791
UIRR
(%)
68.8
2.7
– 9.7
– 1.9
3.0
14.3
– 11.6
2.7
15.4
8.0
4.3
17.0
16.7
4.6
28.8
9.1
4.2
5.5
4.3
7.7
1.5
1.4
10.2
5.4
7.6
6.3
Disclaimer: The data shown in the table above can differ from the IFRS accounting numbers.
69
alstria Annual Company Report 2019 Table 34: Unlevered returns (UIRR) 2006 – 2019
Asset
Poststr. 51
Eppendorfer Landstr. 59
Ottenser Marktplatz 10 / 12
Marburger Str. 10
Gorch-Fock-Wall 11
Nikolaistr. 16
Düsternstr. 10
Osterbekstr. 96
City
Hamburg
Hamburg
Hamburg
Berlin
Hamburg
Leipzig
Hamburg
Hamburg
Richard-Strauß-Allee 10 – 14a Wuppertal
Schellenbecker Str. 15 – 21
Wuppertal
Total
1) Incl. 6 % transaction costs.
2) Incl. 5 % real estate operating expenses.
Region
Ownership start Disposal date
Hamburg
Hamburg
Hamburg
Berlin
Hamburg
Others
Hamburg
Hamburg
Düsseldorf
Düsseldorf
01.06.2006
07.10.2009
01.06.2006
30.09.2009
01.06.2006
30.09.2009
01.04.2008
29.09.2009
01.06.2006
30.06.2009
01.01.2007
01.06.2006
30.11.2008
31.10.2008
01.06.2006
30.09.2008
01.04.2006
01.04.2006
13.07.2007
13.07.2007
Total
lettable area
(m²)
Gross purchase
price1)
(EUR k)
Rent
Collected2)
(EUR k)
Capex
(EUR k)
Disposal
proceeds
(EUR k)
Unlevered
profit
(EUR k)
1,681
3,293
934
6,219
8,693
1,191
2,156
7,393
1,258
1,854
7,347
7,423
2,687
13,155
20,405
2,438
4,463
10,067
1,394
1,944
1,283
1,228
470
747
2,886
363
583
1,126
139
177
64
61
24
37
144
18
29
56
7
9
6,500
6,622
2,375
12,950
19,600
2,000
4,950
11,000
1,545
2,155
372
365
134
504
1,936
– 93
1,040
2,003
284
379
774,204
1,325,927
348,087
92,116
1,524,501
452,640
UIRR
(%)
1.8
1.7
1.8
3.9
3.3
– 2.0
11.6
9.9
21.3
20.5
8.0
Disclaimer: The data shown in the table above can differ from the IFRS accounting numbers.
70
alstria Annual Company Report 2019 VALUATION CERTIFICATE
Project ‘Portfolio of alstria office REIT-AG’
A. Executive Summary
Opinion of Market Value
as at 31 December 2019
on behalf of
alstria office REIT-AG
Steinstraße 7
20095 Hamburg
Germany
Commercial Portfolio of alstria office REIT-AG
Valuation date: 31 December 2019
Client
alstria office REIT-AG
Steinstraße 7
20095 Hamburg
Germany
Prepared by
Savills Advisory Services Germany GmbH & Co. KG
Taunusanlage 19
60325 Frankfurt am Main
Germany
Portfolio Overview
Subject to this report are 116 commercial properties with
a total lettable area of approx. 1,521,084 sqm. The prop-
erties are located mainly in the north, west and southwest
of Germany.
Tenure
All properties are held on the German equivalents of free-
hold title
Location Analysis
Approx. 57 % of the total gross rental income are gener-
ated by the top three locations Hamburg, Stuttgart and
Düsseldorf.
Top 10 municipalities by current rental income
# Municipality
1 Hamburg
2 Stuttgart
3 Düsseldorf
4 Frankfurt am Main
5 Essen
6 Berlin
7 Darmstadt
8 Ratingen
9 Köln
10 Karlsruhe
> 10 Remaining
Lettable area
sqm
Lettable units
number
Current rental
income
EUR p. a.
Average
remaining
lease term
years
Current rental
income with
lease expiry
385,956
193,903
227,578
120,315
72,386
86,253
104,946
58,118
59,423
26,762
–
–
–
–
–
–
–
–
–
–
50,553,738
28,863,930
25,105,341
15,363,234
11,567,625
10,519,177
8,979,115
6,197,259
6,026,918
2,877,705
185,442
21,803
16,162,061
7.59
4.27
5.46
4.41
3.22
4.40
3.94
4.87
5.35
6.01
6.22
95.9
99.6
98.3
97.3
99.7
95.4
99.0
99.5
98.3
100.0
97.3
71
alstria Annual Company Report 2019 B. Valuation Results
C. Instructions and Sources of Information
I. Total Rental Income (‘Current Rent’)
According to the provided tenancy schedule, the current
rental income as at 31 December 2019 amounts to:
We are of the opinion that the Market Value of the free-
hold interests in the subject properties as at 31 December
2017 is:
I. Scope of Instruction
EUR 182,512,997 p. a.
(ONE HUNDRED EIGHTY TWO MILLION FIVE
HUNDRED TWELVE THOUSAND NINE HUNDRED
AND NINETY SEVEN EURO)
Report Date
13 January 2010
II. Opinion of Net Estimated Rental Value
(ERV)
The estimated rental value as at 31 December 2019 amounts to:
EUR 248,464,720 p. a.
(TWO HUNDRED FORTY EIGHT MILLION FOUR
HUNDRED SIXTY FOUR THOUSAND SEVEN
HUNDRED AND TWENTY EURO)
III. Opinion of Market Value
We are of the opinion that the Market Value of the free-
hold interests in the subject properties as at 31 December
2019 is:
4,476,060,000 EUR
(FOUR BILLION FOUR HUNDRED SEVENTY SIX
MILLION AND SIXTY THOUSAND EURO)
Market Value in EUR per sqm
Gross Multiplier on Current Rent
Gross Multiplier on Market Rent
Net Initial Yield (NIY) on Current Rent in %
Net Yield (NY) on Market Rent in %
2,943
24.52
18.01
3.34
4.80
Instruction
In accordance with the Instruction Letter dated 01 August
2017, the 1. Amendment dated 06 December 2017 and
2. Amendment dated 19 March 2019, we carried out a
valuation of all 116 commercial properties of the respec-
tive portfolio.
Please note that since the last valuation (30 June 2019)
the following properties were acquired respectively sold:
› VU2197 – Adlerstraße 63, 40211 Düsseldorf (purchased)
› VU2154 – Stiftsplatz 5, 67655 Kaiserslautern (sold)
Therefore, the valuation portfolio comprises 116 commer-
cial properties at the valuation date of 31 December 2019.
Instructing Party
This valuation statement is addressed to and may be relied
upon by:
alstria office REIT-AG
Steinstraße 7
20095 Hamburg
Germany
Hereinafter referred to as ‘Client’
Conflict of Interest
We hereby confirm that we have no existing potential
conflict of interest in providing the valuation report, either
with the Principal or with the properties.
Furthermore, we confirm that we will not benefit (other
than from receipt of the valuation fee) from this valuation
instruction.
Currency
The relevant currency for this valuation is EUR.
Portfolio Assumption
Each property will be valued individually, and no discount
or addition is made in the aggregate value to reflect the
fact that it may form part of a portfolio.
Tenure
All properties are held on the German equivalent of free-
hold title.
Purpose of Valuation
The Instructing Party requires this valuation for accounting
purposes.
Disclosure of Excerpts of Savills’ Reports in the Com-
pany Reports
Savills agrees to the disclosure of an excerpt of Savills’
reports (which include the Valuation Certificate and Annex
1 thereto but exclude any other Annexes or information)
in the Company Reports of the Instructing Party (‘Com-
pany Report’) with the proviso, and under the condition,
that Savills is liable to the Instructing Party only, and no
third party (in particular no recipients of the Company
Reports) may raise any claims against Savills in connection
with Savills’ report or the disclosure of parts thereof in the
Company Report. The Instructing Party shall procure that
72
alstria Annual Company Report 2019
the Company Reports contain (i) a statement that the dis-
closure in the Company Reports is made on a non-reliance
basis, and no third party (other than the Instructing Party)
will be entitled to raise claims against Savills, and (ii) the
information that the knowledge of the excerpts of Savills’
report disclosed in the Company Reports do not constitute
a sufficient basis for business decisions of the recipients of
the Company Reports.
Reliance
Our valuation is for the use of the party to whom it is
addressed only and for the specific purpose referred to
above. No responsibility is accepted to any other party
than the instructing party.
Liability
The liability of Savills is limited to a maximum amount of
EUR 3 million under Sec. 6 of the General Terms. Savills is
prepared to increase this maximum amount for this instruc-
tion up to EUR 50m (fifty million EUR). This increased
maximum amount is valid for this instruction only and
does not apply for any other present or future instructions,
agreements or legal relationships between the Instructing
Party and Savills. Where there is more than one Addressee
to this Report, the aforementioned maximum amount of
our liability is a total limit to be allocated between the
Addressees, such allocation being entirely a matter for
the Addressees. Savills does not accept any duty, liability
or responsibility to any party other than the Instructing
Party with respect to the report unless and to the extent
otherwise agreed with such party in writing.
Basis of Valuation
Our valuation has been carried out in accordance with the
RICS Valuation – Global Standards 2017 (the ‘Red Book’)
published by the Royal Institution of Chartered Surveyors
(RICS), London, which was effective from 1 July 2017. We
have been instructed to value the properties on the basis of
Market Value in accordance with Valuation Practice State-
ments VPS 4 of the RICS Valuation – Professional Standards
(the ‘Red Book’) which is defined as follows:
‘The estimated amount for which an asset or liability should
exchange on the valuation date between a willing buyer and
a willing seller in an arm’s length transaction after proper
marketing and where the parties had each acted knowledg-
ably, prudently and without compulsion.’
Furthermore, we confirm that the determined Market
Value corresponds with the German ‘Verkehrswert’ (§194
BauGB) and is also conform to the International Valuation
Standards (IVS).
Date of Valuation
31 December 2019
Savills’ Team
The responsible project managers for this valuation were
Klaus Trautner MRICS, CIS HypZert (F) and Christian Quandt
CIS HypZert (F) who are well experienced in the valuation
of office properties.
Besides the project manager the following Savills team was
involved in the valuation of the subject properties:
Nature and Source of Information relied on
The valuation has been substantially and mainly based
upon the information supplied to us by the Instructing
Party and / or entitled advisors. For details please refer to
the chapter ‘Sources of Information and Inspection’.
› Drazenko Grahovac MRICS
› Sebastian Arndt
› Erik Matthes MRICS
› Magda Podniece MRICS
› Tanja Künne
› Desiree von Holt
› Oliver Risopp
› Konstantinos Yfantidis
Verification, Liability
This report contains many assumptions, some of a general
and some of a specific nature. Our valuations are based
upon certain information supplied to us by others. Some
information we consider material may not have been pro-
vided to us.
We recommend that the addressee of this report satisfies
itself on all these points, either by verification of individual
points or by judgement of the relevance of each particular
point in the context of the purpose of our valuations. Our
valuations should not be relied upon pending this verifi-
cation process.
Should any of the information or assumption on which
Savills’ valuation is based be subsequently found incorrect
or incomplete our value conclusion may be incorrect so
that our valuation may need to be amended. Savills there-
fore cannot accept any liability for the correctness of this
assessment or for any loss or damage resulting there from.
General Terms and Conditions
The ‘General Terms and Conditions’ (Appendix V) of Savills
Advisory Services Germany GmbH & Co. KG apply to this
agreement. We specifically draw your attention to these.
73
alstria Annual Company Report 2019 II. Sources of Information and Inspection
Information Sources
For the purpose of this update valuation we have relied
on our initial valuation certificates as at 29 January 2018,
14 January 2019, 30 July 2019 and the following new
information, provided to us by the client:
› Rent roll for the properties including future leases infor-
mation received by email on 06 January 2020
› Information regarding penalty payments for potential
break options received by email on 05 November 2019
› Information regarding development properties received
by email on 14 November 2019
› Final capex list as at 31 December 2019 received by email
on 26 November 2019
› Additional specific documents in course of the Q & A
process
Furthermore we relied (which means we assumed that the
respective information provided by alstria is complete,
correct, up to date and not misleading) on the following
information for the one new subject property:
› Land register copies of
› Land register excerpts,
› Cadastral maps,
› Excerpts regarding public easements,
› Building permissions,
› Information regarding planning law (land utilization plan,
development plan, information from planning authorities)
Unless otherwise stated in the Report, Savills based its
valuations on the aforementioned documents and infor-
mation received in the course of the initial and update
valuations as at 31 December 2017, 31 December 2018
and 30 June 2019.
We have also included the following sources into our val-
uation report:
› Savills Research
› Local Land Valuation Boards and other local authorities
› Geoport
› Empirica
› RIWIS online database
Extent of Inspections
For the purpose of this valuation (as at 31 December 2019)
4 subject properties were fully inspected by Savills in Octo-
ber 2019.
112 subjected properties were not inspected for this valua-
tion (as at 31 December 2019). Nevertheless, we have been
carried out inspections for 75 subject properties between
April and May 2019 and for 37 subject properties between
August 2017 and September 2017. We have assumed that
there were no material changes on the properties that
could have an impact on the valuation during the time of
the inspection and the valuation date.
All conclusions made by Savills with regard to the condition
and the actual characteristics of the land and buildings have
been based on our inspection of the subject properties
and on the documents and information provided (please
see above).
In the event that only partial internal inspections were pos-
sible, it will be assumed that the parts that were inspected
are typical of the remainder.
For the avoidance of doubt, Savills did not carry out any
building or structural surveys of the subject properties nor
tested any of the electrical, heating or other services.
The properties were not measured as part of Savills’ inspec-
tion, nor were the services or other installations tested.
All Savills’ conclusions resulting from the inspections are
based purely on visual investigations without any assertion
as to their completeness.
Furthermore, investigations that might cause damage to the
subject properties have not been carried out. Statements
about parts of the structure or materials that are covered
or otherwise inaccessible are based on the information or
documents provided (or on assumptions, respectively).
D. Valuation Methods
I. H&T (Hardcore & Top Slice)
In determining the market value for commercial proper-
ties we therefore have applied the Hardcore and Top Slice
Method (H&T). Using the H&T method, the cash flows
from the property are divided into two blocks with the
cash flow of each block being calculated individually and
being summed up subsequently.
The H&T method is a static calculation approach which
makes no explicit refection of rental growth: the effects of
rental growth and potential changes in other market and
financial factors are implicit in the yield, which is normally
obtained from the analysis of comparable transactions.
Hardcore considers the cash flow as at the date of valuation
until the expiry of the existing lease and therefore consid-
ers the contractual rents. Management and maintenance
costs as well as other unrecoverable costs of the owner are
deducted from the current achievable gross annual yield
(Gross Income). The remaining Net Income is capitalized
by the annuity factor.
74
alstria Annual Company Report 2019 Top slice marks the second phase from the beginning of
reletting, if required under consideration of an appropriate
vacancy period. The calculation of cash flows is based on
the estimated market rent. The costs of any outstanding
repairs (‘deferred maintenance’) or other capital costs that
would be immediately incurred are deducted from the
total capital value. Future capital costs (e. g. renovation or
refurbishment before renewed letting) are estimated and
discounted for an appropriate period before being deducted.
After the deduction of the purchaser’s costs (real prop-
erty transfer tax, notary and agent costs) and immediately
required capital expenditure, the result is the Net Value.
E. Valuation Considerations
In case of any discrepancies with our General Assumptions
and Conditions, our individual valuation assumptions as
described in the following do prevail. If any of the afore-
mentioned assumptions (General or individual valuation
assumptions or other) are subsequently found to be incorrect
or invalid, our opinion of value may need to be reconsidered.
I. Portfolio Considerations
› Public encumbrances
› Planning law, zoning specification
› Historical listings
› Soil and building contamination
According to this information, we are of the opinion that
the further legal aspects do not affect the use of the subject
properties, therefore we have assumed no impact of value.
1. Legal Aspects
2. Technical Aspects
Land Register
According to the provided land register excerpts, all prop-
erties are held on freehold title
In this chapter we comment on our individual considerations
in order to arrive with our opinion of value.
There are several encumbrances regarding the subject prop-
erties like pipeline way leaves, cable rights, right of ways
and restricted personal easement.
Please note that our opinion of value is carried out on the
basis of a number of assumptions. In the absence of any
information to the contrary in the Report, our indication of
value is based on our General Assumptions and Conditions
enclosed in Appendix V to this Report.
For the subject property VU2107 – Hamburg, there is a
superstructure payment in an amount of EUR 6,383.71 p. m.
(Überbaurente) in favour of the respective owner of land
register Uhlenhorst folio 3403. We have considered these
costs in our valuation approach.
Our General Assumptions and Conditions will be amended
by our individual considerations, including underlying indi-
vidual valuation assumptions, as described in the following
sections. Our individual considerations are based on these
additional assumptions which were adopted specifically
with respect to our opinion of value of the assets which
are subject to this Report.
Except for the subject property VU2107 – Hamburg, we
are of the opinion that the encumbrances and restrictions
registered under Section II do not affect the use of the
subject properties. They are therefore assumed to have
no impact on value.
Further legal Aspects
We were provided with some information regarding legal
issues. This legal information partially include information
regarding:
Maintenance Backlog and Capital Expenditure
Based upon the inspection as well as the documents and
information provided by the client we have assumed that
the continuing repair and maintenance of the properties
have been carried out accordingly.
We were provided with a Capital expenditures overview
with estimations for ‘Major Refurbishment costs’ and for
‘Re-letting costs’ for vacant units.
The total Capital expenditures for major refurbish-
ments amount to ca. EUR 261.22m and for re-letting to
EUR 102.09m.
This leads to total Capital expenditures of ca. EUR 363.31m
for the 77 subject properties (ca. 8.0 % of the portfolio
value).
We have considered the costs for Capital expenditures in
our valuation approach.
Please refer to Appendix II (‘Detailed Valuation Overview’)
for more details of individual aspects.
75
alstria Annual Company Report 2019 3. Tenancy Aspects
Applied ERVs range as follows in the subject portfolio:
Our valuation is based on the rent roll for the subject prop-
erties received from the client via email on 06 January 2020.
We assume that the document reflect the status quo of all
tenancies as at valuation date 31 December 2019 to a true
and comprehensive extent. Please note that we cannot
accept any reliance on the correctness nor the complete-
ness of the provided information of tenancies.
For details of all tenancies, please refer to pp. 7 of the
‘Detailed Valuation Overview’ in Appendix II.
II. Basic Cash Flow Considerations
In the following section, we like to comment on all input
parameters in our valuation model. Besides a general
description of each parameter, the applied ranges of those
parameters will be stated, too. For more detailed informa-
tion on a property level please refer to Appendix II ‘Detailed
Valuation Overview’.
The Estimated Rental Value (ERV)
Estimated rental values (‘market rents’) indicated in this
report are those which have been adopted by us as appro-
priate in assessing the capital value or the letting potential
of the property, being subject to market conditions that are
either current or are expected in the short term. They are
based on our experience of the markets and our knowledge
of actual comparable market activity.
For the purpose of comparison, we considered market
evidence by assessment of actual lettings of units with the
same or the closest comparable use, where applicable and
available. In few cases we also considered asking rents.
Market rent
Office
Storage
Nursing home
Retail
Other Area
Hotel
Surgery
Residential
Restaurant
Fitness
Theatre
Cinema
External Parking
Internal Parking
Antenna
Advertisement
Other Unit
* weighted by sqm / units
Minimum
EUR per
sqm p. m.
Maximum
EUR per
sqm p. m.
Average*
EUR per
sqm p. m.
–
0.50
8.25
–
–
11.25
8.50
5.00
1.49
5.50
3.25
9.25
–
–
–
–
–
28.00
10.00
13.00
75.00
50.00
12.00
22.50
14.50
25.00
9.50
3.25
9.25
180.00
180.00
2,350.00
1,200.00
1,869.16
13.56
5.00
10.51
17.82
6.85
11.56
12.55
12.63
9.28
6.82
3.25
9.25
46.03
72.84
613.07
239.82
171.18
Our individually-applied rental values are included for
each unit in the ‘Detailed Valuation Overview’ enclosed
in Appendix II to this report.
Non-Recoverable Costs
Ancillary costs of a property are generally costs of
› ongoing maintenance,
› management and
› other non-recoverable costs.
These costs can generally be allocated to the responsibility
of tenants in commercial leases – at least to a very high
degree of total costs – whereas there are much stricter
regulations for residential leases. Residential tenants may
only be obliged to bear services charges as defined in the
Ordinance of Services Charges (Betriebskostenverordnung)
but must never – by law – be made responsible for costs
of maintenance or management.
For the purpose of valuing the subject properties, we did
not receive details of the amount of non-recoverable costs
which remains to be borne by the owner. Therefore, we
applied common appropriate assumptions in our valuation.
For costs of ongoing maintenance we have assumed the
following for the respective types of use:
Maintenance
Office
Storage
Nursing home
Retail
Other Area
Hotel
Surgery
Residential
Restaurant
Fitness
Theatre
Cinema
External Parking
Internal Parking
* weighted by sqm / units
Minimum
EUR per
sqm p. a.
Maximum
EUR per
sqm p. a.
Average*
EUR per
sqm p. a.
7.00
7.00
4.00
7.50
–
7.50
7.50
7.50
7.50
7.50
8.50
9.00
–
–
10.00
10.00
4.00
10.00
10.00
7.50
9.00
11.00
10.00
9.00
8.50
9.00
80.00
80.00
8.04
8.08
4.00
8.02
7.27
7.50
7.61
8.10
8.13
7.99
8.50
9.00
29.93
76.60
76
alstria Annual Company Report 2019 Our approach considers both, that commercial tenants bear
a considerable portion of maintenance costs, i.e. in their
units and of all fixtures and fittings, but that it is also likely
that the owner shall bear costs of maintaining the roof and
structure (‘Dach und Fach’). We assume the applied cost
estimation to be sufficient to at least maintain the respec-
tive property in the current condition.
The portfolio contains three elderly homes (#2133, #2139
and #2155) which are leased on a triple-net-basis. For these
properties we applied only maintenance costs of EUR 4.00
per sqm and partially 0.5 % for other non-recoverable costs.
For the subject properties we have allowed management
costs as a percentage of the annual market rent:
Management costs
Minimum
% of
Market Rent
Maximum
% of
Market Rent
Average
% of
Market Rent
Office
Storage
Nursing home
Retail
Other Area
Hotel
Surgery
Residential
Restaurant
Fitness
Theatre
Cinema
External Parking
Internal Parking
Antenna
Advertisement
Other Unit
1.00
1.00
1.00
1.00
1.00
1.00
2.00
1.01
1.00
2.00
2.50
3.00
1.00
1.00
1.00
1.00
1.00
4.00
3.00
2.00
4.00
3.00
3.00
3.00
8.59
3.00
3.00
2.50
3.00
3.00
3.00
3.00
3.00
3.00
1.93
1.84
1.21
2.61
1.95
2.15
2.67
1.84
2.82
2.46
2.50
3.00
1.88
1.96
2.46
2.90
1.59
Our approach is to reflect a common level of management
costs under consideration of the type and complexity of
the asset and relevant utilisation(s). We generally assumed
the subject asset to require a normal management effort.
We considered other non-recoverable costs between of
0.50 % and 15.00 % of the market rent for the subject
properties, VU2122, VU2133, VU2139, VU2155, VU2156,
VU2107 and VU2186.
The other non-recoverable costs such as:
› leasing commissions (for rental agents)
are taken into account by the applied yields as in our ini-
tial valuation.
Reletting Costs (tenant improvement costs for unit
fit-out)
These costs were taken into account in accordance with
the provided Reletting Capital expenditures by the client
which amount to ca. EUR 102.09m. Please see section
I. 2. Technical Aspects for detailed numbers.
Non-Recoverable Costs on Vacancy
These are generally non-recoverable service charges, for
example any operational costs, which may need to be
borne by the landlord should a tenant become unable to
pay for any reason (e.g. insolvency) or in the general case
of vacancy. These costs are incurred in addition to the reg-
ular non-recoverable ancillary costs as explained above.
Vacancy costs
Office
Storage
Nursing home
Retail
Other Area
Hotel
Surgery
Residential
Restaurant
Fitness
Theatre
Cinema
* weighted by sqm / units
Minimum
EUR per
sqm p. a.
Maximum
EUR per
sqm p. a.
Average*
EUR per
sqm p. a.
–
–
1.00
0.25
–
1.50
1.50
0.25
1.00
1.00
1.00
0.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.00
0.50
1.93
1.84
1.21
2.61
1.95
2.15
2.67
1.84
2.82
2.46
1.00
0.50
Please note that these costs will only be applied to vacant
space and only for the assumed duration of vacancy.
Void Periods for Currently Vacant Space &
Future Void Periods on Renewed Letting
Voids generally represent the time period between the
expiry of a lease and the start date of a new lease.
Depending on the quality of situation and the respective
property, the current rental situation and the local vacancy
rate we have assumed an initial void period for current
vacancy and future void periods until re-letting after the
expiry of leases of rental units.
In the absence of more detailed information of actual
non-recoverable costs in the case of vacancy, we consid-
ered non-recoverable ancillary costs per sqm p.m. for vacant
area as follows:
There is currently some initial vacancy in the subject prop-
erties. For these units, we have estimated ‘Void Periods
of Current Vacancy’ which are starting at the beginning of
77
alstria Annual Company Report 2019 Void Period after expiry of leases
Minimum
month
Maximum
month
Average *
month
Leased rental units by alstria office REIT-AG
Alstria office REIT-AG currently occupies rental areas and
in the following properties:
the next full month following the reference date of this
valuation (the ‘projection date’).
We have assumed the following void periods for current
vacancy:
Void period of current vacancy
Minimum
month
Maximum
month
Average *
month
Office
Storage
Retail
Other Area
Surgery
Residential
External Parking
Internal Parking
Antenna
Advertisement
Other Unit
* weighted by market rent
3.00
2.00
9.00
6.00
18.00
12.00
3.00
2.00
9.00
6.00
9.00
30.00
30.00
24.00
24.00
18.00
24.00
26.00
30.00
18.00
6.00
12.00
15.57
12.99
15.31
11.80
18.00
23.53
17.11
13.96
15.71
6.00
10.85
Office
Storage
Nursing home
Retail
Other Area
Hotel
Surgery
Residential
Restaurant
Fitness
Theatre
Cinema
External Parking
Internal Parking
Antenna
Advertisement
Other Unit
* weighted by market rent
3.00
3.00
12.00
6.00
–
12.00
12.00
1.00
6.00
12.00
10.00
12.00
3.00
3.00
2.00
2.00
–
4.00
3.00
2.00
4.00
3.00
3.00
3.00
8.59
3.00
3.00
2.50
3.00
3.00
3.00
3.00
3.00
3.00
12.08
11.14
13.49
11.96
11.26
15.45
15.25
4.73
15.05
12.00
10.00
12.00
12.76
12.35
10.38
5.70
6.32
We have set a void period of current vacancies of 0 months
for hotel, nursing home, restaurant, fitness, theatre and
cinema because these types of use are currently fully let.
The above discussed considerations are shown as the num-
ber of months for each existing unit within the rent roll in
the ‘Detailed Valuation Overview’ enclosed in Appendix
II to this report.
Those units which are currently let and which become
vacant in the future will be subject to the ‘Void Periods
after Expiry of Leases’.
For all units where leases expire in the future and during
the upcoming DCF term of 10 years, we considered the
following void periods:
Remaining lease time until lease expiry
For current lease contracts without fixed lease expiry date
we applied half of the previous rental period as remaining
lease term (e. g. a lease contract is running for 6 years as
at valuation date, than we applied 3 years as remaining
lease term).
› VU2053: Steinstraße 5 – 7, Hamburg
› VU2054: Friedrichstraße 19, Düsseldorf
› VU2118: Elisabethstraße 5 –11, Düsseldorf
› VU2150: Platz der Einheit 1, Frankfurt am Main
› VU2176: Rankestraße 17, Berlin
For each of these properties we have agreed to make a
Special Assumption that alstria office REIT-AG occupies
the accommodation on a typical commercial Dach und
Fach lease term for a duration of 5 years commencing on
the valuation date, and is paying the applied Market rent.
This Special Assumption is made on the basis that alstria
office REIT-AG undertakes to enter into such a lease either
of these properties be sold.
Permanent Void Allowance / Structural Vacancy
At the date of valuation the portfolio of alstria office REIT-AG
has a total vacancy area of 285,661 sqm. We have appointed
3,375 sqm of this area as structurally vacant. The Portfolio
thus has a cumulative vacancy rate of approximately 18.8 %.
78
alstria Annual Company Report 2019 Lettable
Area
Structurally
Vacant Area
sqm
17,566
14,113
4,895
9,473
10,169
10,192
33,905
18,543
5,061
sqm
%
41 0.23
38 0.27
88
171
1.79
1.80
301 2.96
58 0.57
889 2.62
925 4.99
534 10.55
45
104
161
0.15
1.16
6.17
19 0.72
Structural Vacancy
Subject Property
Property Adress
VU2032 Ernst-Merck-Straße 9
VU2039 Johanniswall 4
VU2044 Ludwig-Rosenberg-Ring 41
Municipality
Hamburg
Hamburg
Hamburg
VU2106 Hamburger Straße 1 – 15 (MOT) Hamburg
VU2118 Elisabethstraße 5 – 11
VU2125 Heidenkampsweg 51 – 57
VU2137 Berliner Straße 91 – 101/
Brandenburger Straße 2 – 6
VU2138 Pempelfurtstraße 1
VU2145 Mergenthalerallee 45 – 47
Düsseldorf
Hamburg
Ratingen
Ratingen
Eschborn
VU2150 Platz der Einheit 1
Frankfurt am Main 30,158
VU2179 Kanzlerstraße 8
VU2180 Am Wehrhahn 28 – 30
VU2197 Adlerstraße 63
Düsseldorf
Düsseldorf
Düsseldorf
8,993
2,610
2,686
Applied calculations Yields
We applied the following range of yields for the subject
portfolio considering the individual cash-flows, locations,
as well as use types and building qualities.
Internal yields and rates
Office
2.80
12.00 %
15.57 %
Minimum
Maximum
Average *
* Equivalent Yield weighted by Gross Present Value
Costs of Transaction
For our opinion of value, we applied costs of transaction
as follows:
› Real Estate Transfer Tax: 4.50 % – 6.50 % (depending on
federal state relevant to an asset)
0.25 % – 0,50 %
0,50 % – 1.00 %
› Notary fees:
› Agency fees:
These costs are chosen as they are common in ordinary
course of business, i. e. in an asset deal, and for the sub-
ject type of properties. Costs of transaction may, however,
differ in the actual individual case – depending on the type
of transaction.
Closure
Finally, in accordance with the recommendations of the
RICS, we would state that this report is provided solely
for the purpose stated above. It is confidential to and for
the use only of the party to whom it is addressed, and no
responsibility is accepted to any third party for the whole
or any part of its contents. Any such parties rely upon this
report at their own risk. Neither the whole nor any part
of this report or any reference to it may be included now,
or at any time in the future, in any published document,
circular or statement, nor published, referred to or used
in any way without our written approval of the form and
context in which it may appear.
For and on behalf of
Savills Advisory Services Germany GmbH & Co. KG
Draženko Grahovac MRICS
RICS Registered Valuer
Klaus Trautner MRICS
RICS Registered Valuer,
CIS HypZert(F)
79
alstria Annual Company Report 2019
MANAGEMENT COMPENSATION SCHEME
Transparent and in-line with shareholders interest
› More detailed information on management compensation can be found in the
Annual Report 2019 – IFRS Financial Report.
N
TIVE (LTI)
ENSATIO
P
M
O
C
K
C
O
T
S
D
E
R
R
E
F
E
D
N
E
C
N
I
M
R
E
T
-
G
N
O
L
%
0
4
F
I
X
E
D
C
A
4
0
%
F
I
X
S
H
C
O
M
P
E
N
S
A
T
IO
N
COMPONENTS OF
TARGET REMUNERATION
E
D
R
E
M
U
N
E
R
A
T
I
O
N
2
V
A
0 % SHORT-TERM IN C E N T I V E ( S
RIABLE CASH COM P E N S A T
T I)
N
I O
40 % FIXED REMUNERATION
› All cash
BASIC SALARY
20 % SHORT-TERM INCENTIVE (STI)
VARIABLE REMUNERATION
› All cash
PERFORMANCE MEASURE
FFO PER SHARE
Like-for-like budgeted FFO per share,
adjusted by impact of material acquisitions
and disposals / changes in share capital
40 % LONG-TERM INCENTIVE (LTI)
VARIABLE REMUNERATION
Stock awards (holding period of 4 years)
75 % Relative total shareholder return (TSR)
PERFORMANCE MEASURE
Total shareholder return
relative to FTSE EPRA /
NAREIT Developed Europe Index
25 % Absolute total shareholder return (TSR)
Absolute total shareholder return
Share ownership guidelines:
Investment of three times annual fixed remuneration in company shares.
80
alstria Annual Company Report 2019
GLOSSARY
A
C
D
AFFO
The adjusted funds from operations (AFFO) is equal to the
FFO (funds from oper ations) with adjustments made for
capital 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 accountant for
compliance and checked by the Supervisory Board.
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 result of cash received and paid. In accor-
dance with IAS 7, a distinction is made between cash flows
from operating activities and cash flows from investing and
financing activities.
Development capex
Investments related to the substantial modernization / ren-
ovation of a building.
Development portfolio
Part of the real estate portfolio on which modernization / ren-
ovation work took place during the reporting period.
CO2
Carbon dioxide, a gas produced primarily through the com-
bustion of fossil fuels, is believed to be the main cause of
climate change.
Dividend
The share of the distributed net profit of a company to
which a shareholder is entitled in line with the number of
shares he holds.
Asset management
Value-driven management and / or optimization of real
estate investments through letting management, refurbish-
ment, repositioning and tenant management.
Completed developments
Completed developments consist of those properties pre-
viously included in the development programme, which
have been transferred to the investment portfolio from
the development programme during the reporting period.
Average cost of debt
The cost of finance expressed as a percentage of the
weighted average of borrowings during the period.
B
Contractual rent
At a given date, the contractual rent reflects the total annual-
ised rent taking into consideration all signed rental contracts.
Broker fees
Fees paid to an intermediary in connection with the bro-
kerage of rental space or a real estate transaction.
Coverage
Information provided on a listed public company by banks
and financial analysts in the form of studies and research
reports.
E
EPRA
The European Public Real Estate Association is an organi-
zation that represents the interests of the major European
property management companies and supports the devel-
opment and market presence of European public property
companies.
ERV
The estimated market rental value of the total lettable
space in a property, after deducting head and equity rents,
calculated by the Group’s external valuers.
CSR
Corporate social responsibility is a management concept
whereby companies integrate social and environmental
concerns in their business operations and interactions with
their stakeholders.
81
alstria Annual Company Report 2019
F
Fair value (or open market value [OMV])
The estimated amount for which a property should exchange
on the date of valuation between a willing buyer and a
willing seller in an arm’s-length transaction after proper
marketing, wherein the parties had each acted knowledge-
ably, prudently and without compulsion. The fair value
for alstria’s investment properties is reviewed regularly by
external appraisers.
FFO
alstria calculates Funds From Operations as EBT, decreased /
increased by the net gain / loss from fair value adjustment
on investment property, decreased / increased by the net
gain / loss from fair value adjustment on financial derivatives,
increased / reduced by the profit / loss on disposal of invest-
ment property, decreased / increased by the net gain / loss
from fair value adjustments on investment property of joint
ventures, decreased / increased by non-recurring items, plus
non-cash-expenses and less cash taxes paid.
G
G-REIT
Real Estate Investment Trusts are public listed companies,
fully tax-transparent, which solely invest in properties.
I
IFRS
The international financial reporting standards (IFRS) are
adopted by the International Accounting Standards Board
(IASB). The objective is to achieve uniformity and transpar-
ency 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
property is determined according to IAS 40.
Net debt / EBITDA
The Net debt / EBITDA ratio gives an indication as to how
long a company would need to operate at its current level
to pay off all its debt.
L
LTV and Net LTV
alstria calculates loan to value (LTV) by dividing the total
loans outstanding to finance investment properties by
the value of all mortgaged investment properties. The
calculation of alstria’s Net LTV also deducts the available
non-restricted cash on the respective balance sheet date,
which is deducted from the gross debt amount.
M
MDAX
Mid Cap Index; it contains, with variable weighting, the
prices of the 50 most important, in terms of market cap-
italization and turnover, German joint stock companies
which are not included in DAX30. In addition to dividend
payments, subscription right proceeds are also included
when calculating the index.
N
NAV (net asset value)
Reflects the economic equity of the Company. It is calcu-
lated from the value of assets less debt.
Net absorption
Reduction of vacant space in a real estate portfolio, which
remains unchanged over two reporting periods.
NNNAV (triple net asset value)
The Company computes NNNAV as total equity as reported
in the IFRS consolidated statement of financial position,
which accounts for the carrying amount and the fair value
of financial instruments and financial liabilities, adjusted
for hidden reserves and hidden losses in immovable assets
and financial liabilities.
O
Office building
Property where at least 75 % of the lettable area is destined
for office use (disregarding potential ground-floor retail).
Opex (Operating expenditure)
Maintenance costs of buildings that are not capitalized
but are immediately recognized in the income statement.
P
Passing rent
Annual gross rental income as per a certain date, excluding
the net effects of straight-lining for lease incentives.
Performance
The term performance describes the percentage appre-
ciation of an investment or a securites portfolio during a
given period.
Pre-let
A lease signed with a tenant prior to completion of a
development.
82
alstria Annual Company Report 2019
Property management
Property management is the management of real estate
assets including the processes, systems and manpower
required to manage the life cycle of a building.
Sustainability
Alignment of an organisation’s products and services with
stakeholder expectations, thereby adding economic, envi-
ronmental and social value.
R
T
Rent concession
Granting of rent-free periods in connection with a lease.
Tenant fit outs
Costs related to the fit out of rental space due to special
tenant requirements.
Roadshows
Corporate presentations to institutional investors.
S
Share
The term ‘share’ describes both the membership rights
(holding in the joint stock company) and the security that
embodies these rights. The holder of a share (shareholder)
is a ‘sharer’ in the assets of the joint stock company. Their
rights are protected by the regulations contained in the
Companies Act.
Share capital
The capital stipulated in a corporation’s articles of associ-
ation. The articles also specify the number of shares into
which the share capital is divided. The Company issues
shares in the amount of its share capital.
Supervisory Board
The Supervisory Board is one of the three executive bod-
ies of a joint stock company: Annual General Meeting,
Management Board and Supervisory Board. The Supervi-
sory Board appoints the Management Board and provides
supervision and advice regarding management of the com-
pany’s business.
Tenant incentives
Any incentive offered to occupiers to enter into a lease.
Typically the incentive will be an initial rent-free period, or
a cash contribution to fit-out or similar costs.
TSR (Total shareholder return)
Dividends and capital growth in the share price, expressed as
a percentage of the share price at the beginning of the year.
Transparency
A principle that allows those affected by administrative
decisions, business transactions or charitable work to know
not only the basic facts and figures but also the mechanisms
and processes. It is the duty of civil servants, managers
and trustees to act visibly, predictably and understandably.
U
UIRR
The Unlevered internal rate of return (UIRR) is a key indi-
cator to assess the attractiveness of an investment. It is the
rate needed to discount the unlevered sum of the future
cash flow to equal the initial investment.
V
Vacant space
Vacant space refers to the sum of all lettable space that at
the end of a calendar year is unoccupied or offered for lease.
W
WAULT
Weighted average unexpired lease term. Remaining lease
length of a rent contract.
X
XETRA
An electronic stock exchange trading system that uses the
open order book and thus increases transparency.
Y
Yield
Key performance indicator, which is determined at a given
date by the contractual rent in relation to the fair value of
the property.
83
alstria Annual Company Report 2019
BUILDING
YOUR
FUTURE
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.
Contact Investor Relations
Ralf Dibbern
+49 (0) 40 / 22 63 41-329
rdibbern@alstria.de
www.alstria.com/en/investors
Design & Layout
Teresa Henkel
Forward-looking statements
This annual report contains forward-looking statements.
These statements represent assessments which we have
made on the basis of the information available to us at the
time. Should the assumptions on which the statements are
based not occur, or if risks should arise the actual results
could differ materially from the results currently expected.
alstria office REIT-AG
Steinstr. 7
20095 Hamburg, Germany
www.alstria.com
www.beehive.work
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