Annual
Report
IFRS financial statements
20
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KEY FIGURES
FIVE-YEAR OVERVIEW
Revenues and earnings
2020
2019
2018
2017
2016
EUR k
Revenues
Net rental income
Consolidated profit for the period
FFO1)
Earnings per share (EUR)1)
FFO per share (EUR)1)
1) Excluding minorities.
177,063
154,823
168,489
108,673
0.95
0.61
187,467
162,904
581,221
112,572
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
Balance sheet
Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016
EUR k
Investment property
4,556,181
4,438,597
3,938,864
3,331,858
2,999,099
Total assets
Equity
Liabilities
Net asset value (NAV) per
share (EUR)
Net loan-to-value (Net LTV, %)
5,090,249
5,029,328
4,181,252
3,584,069
3,382,633
3,252,442
3,175,555
2,684,087
1,954,660
1,728,438
1,837,806
1,853,773
1,497,165
1,629,409
1,654,195
18.29
27.0
17.88
27.1
15.13
30.4
12.70
40.0
11.28
40.9
G-REIT figures
Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016
G-REIT equity ratio (%)
Revenues including other income
from investment properties (%)
EPRA figures1)
EPRA earnings per share (EUR)
EPRA cost ratio A (%)2)
EPRA cost ratio B (%)3)
71.1
100
2020
0.61
26.6
22.1
70.9
100
2019
0.61
26.1
21.7
67.2
100
2018
0.62
23.0
19.0
57.1
100
2017
0.68
19.6
16.4
56.7
100
2016
0.57
20.6
16.6
EPRA NRV per share (EUR)
EPRA NTA per share (EUR)
EPRA NDV per share (EUR)
EPRA net initial yield (%)
EPRA ‘topped-up’ net initial
yield (%)
EPRA vacancy rate (%)
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
20.13
18.34
17.95
3.3
3.7
7.6
19.67
17.91
17.61
3.3
3.8
8.1
n/a
15.14
14.96
4.0
4.4
9.7
n/a
12.71
12.45
4.6
5.0
9.4
n/a
11.31
10.81
5.0
5.4
9.2
1) For further information, please refer to EPRA Best Practices Recommendations, www.epra.com.
2) Including vacancy costs.
3) Excluding vacancy costs.
CONTENT
DETAIL INDEX COMBINED MANAGEMENT REPORT ................................................ 2
A.
I.
II.
III.
IV.
V.
VI.
COMBINED MANAGEMENT REPORT ......................................................... 3
ECONOMICS AND STRATEGY ........................................................................... 3
FINANCIAL ANALYSIS .................................................................................. 10
EXPECTED DEVELOPMENTS ........................................................................... 21
REPORT REGARDING ALSTRIA AG .................................................................... 22
RISK AND OPPORTUNITY REPORT .................................................................... 26
SUSTAINABILITY REPORT ............................................................................. 49
VII.
DISCLOSURES REQUIRED BY TAKEOVER LAW ....................................................... 49
VIII. ADDITIONAL GROUP DISCLOSURE .................................................................... 53
DETAIL INDEX CONSOLIDATED FINANCIAL STATEMENTS ....................................... 55
B.
C.
D.
E.
F.
G.
H.
I.
I.
II.
III.
IV.
V.
VI.
I.
II.
I.
II.
CONSOLIDATED FINANCIAL STATEMENTS ................................................ 56
CONSOLIDATED INCOME STATEMENT ............................................................... 56
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................... 57
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................ 58
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................... 60
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY............................................. 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 63
RESPONSIBILITY STATEMENT ............................................................. 142
INDEPENDENT AUDITOR’S REPORT ...................................................... 143
REPORT OF THE SUPERVISORY BOARD ................................................. 153
CORPORATE GOVERNANCE STATEMENT ................................................ 161
REMUNERATION REPORT .................................................................. 181
REIT DISCLOSURES ......................................................................... 192
REIT DECLARATION .................................................................................. 192
REIT MEMORANDUM ................................................................................. 194
FINANCIAL CALENDAR/IMPRINT .......................................................... 196
FINANCIAL CALENDAR ............................................................................... 196
CONTACT/IMPRINT .................................................................................. 196
alstria Annual Report 2020
Combined Management Report
DETAIL INDEX COMBINED MANAGEMENT REPORT
G
A.
COMBINED MANAGEMENT REPORT ......................................................... 3
I.
ECONOMICS AND STRATEGY ........................................................................... 3
1. STRATEGY .................................................................................................. 3
2. CORPORATE MANAGEMENT .............................................................................. 4
3. ECONOMY AND OFFICE MARKETS ....................................................................... 4
4. PORTFOLIO ANALYSIS .................................................................................... 6
II.
FINANCIAL ANALYSIS .................................................................................. 10
1. EARNINGS POSITION ..................................................................................... 10
2. FINANCIAL AND ASSET POSITION ....................................................................... 15
3. OVERALL ASSESSMENT OF THE FINANCIAL YEAR BY THE MANAGEMENT BOARD ................. 20
III.
EXPECTED DEVELOPMENTS ........................................................................... 21
1. EXPECTED ECONOMIC DEVELOPMENT ................................................................. 21
2. DEVELOPMENT OF THE REAL ESTATE MARKET: OUTLOOK FOR 2021 .............................. 21
3. OUTLOOK FOR THE ALSTRIA GROUP .................................................................. 21
IV.
REPORT REGARDING ALSTRIA AG .................................................................... 22
1. EARNINGS POSITION ..................................................................................... 22
2. FINANCIAL AND ASSET POSITION ....................................................................... 24
3. ADDITIONAL DISCLOSURE REGARDING ALSTRIA AG .................................................. 26
V.
RISK AND OPPORTUNITY REPORT .................................................................... 26
1. RISK REPORT.............................................................................................. 26
2. REPORT ON OPPORTUNITIES ........................................................................... 46
VI.
VII.
SUSTAINABILITY REPORT ............................................................................. 49
DISCLOSURES REQUIRED BY TAKEOVER LAW ....................................................... 49
VIII. ADDITIONAL GROUP DISCLOSURE .................................................................... 53
1. REMUNERATION REPORT ................................................................................ 53
2. CORPORATE GOVERNANCE GROUP DECLARATION PURSUANT TO SECTIONS 289F AND
315D HGB (“HANDELSGESETZBUCH”: GERMAN COMMERCIAL CODE) .............................. 54
3. EMPLOYEES ............................................................................................... 54
4. DIVIDEND .................................................................................................. 54
2
alstria Annual Report 2020
Combined Management Report
A. COMBINED MANAGEMENT REPORT
I. ECONOMICS AND STRATEGY
1. STRATEGY
alstria office REIT-AG (alstria) (herein referred to as the “Company”, or “alstria AG”) is a German
stock corporation in the legal form of a Real Estate Investment Trust (REIT) that invests in office real
estate in major German economic centers. The Company has been listed on the Frankfurt Stock
Exchange since 2007 (WKN: A0LD2U). As of December 31, 2020, the alstria group consisted of the
parent company alstria AG and 44 direct and indirect subsidiaries (hereinafter “alstria” or the
“Group”). The parent company makes operational decisions. As of December 31, 2020, alstria’s real
estate portfolio comprised 109 buildings, with a lettable area of 1.4 million m² and a total value of
EUR 4.6 billion. The properties are predominantly located in the major German office markets of
Hamburg, Düsseldorf, Frankfurt, Stuttgart, and Berlin, where alstria is represented by local and
operating offices and which alstria defines as its core market. As a fully integrated and long-term
oriented company, alstria’s 167 employees actively manage the buildings over their entire life cycle.
alstria’s corporate strategy is based on the following principles:
- Access to capital through the stock exchange listing and a comprehensive operational knowledge
based on an integrated business model are fundamental success factors for alstria.
- By concentrating the real estate portfolio on the major German office markets and focusing on
solvent tenants, alstria generates income that forms the basis for the distribution of stable
dividends in the long term.
- Continuous investments in the quality of the real estate portfolio secure and increase rental
income and property values and improve the energy efficiency of the portfolio.
- Depending on the assessment of the market situation, properties are bought or sold. The goal here
is risk-adjusted corporate growth and a continuous improvement in the risk-return situation of the
portfolio.
- Low debt financing and a strong balance sheet are of great importance for the long-term stability
of a real estate company. It is a declared corporate goal to keep the company’s debt level below
35 % over a complete real estate cycle.
alstria Annual Report 2020
3
Combined Management Report
2. CORPORATE MANAGEMENT
alstria proactively controls based on the following key financial performance indicators: revenues and
FFO. Revenues mainly comprise rental income derived from the Company’s leasing activities. FFO is
the funds from operations and is derived from real estate management. It excludes valuation effects
and other adjustments, such as noncash expenses / income, gain on disposal and expected
nonrecurring effects.*
For 2020, alstria’s original revenue and FFO forecasts remained stable. Due to sales of nonstrategic
assets and the related lower revenues, revenues for the 2020 financial year were above
EUR 177 million, which is slightly below the forecast of EUR 179 million. The FFO totaled approx.
EUR 109 million in the reporting year and thus is slightly above the forecast of EUR 108 million.
The Company also monitors the progress of its Net LTV**, G-REIT equity ratio***, net-debt**** / EBITDA,
and cash (cash and cash equivalents). For the internal control of the Company, in each case these are
not classified as the most relevant performance indicators. alstria’s Net LTV was 27.0 % as of
December 31, 2020, compared to 27.1 % at the end of the 2019 financial year. The G-REIT equity ratio
was 71.1 %, compared to 70.9 % in the previous year and the minimum statutory rate of 45 %. The
net-debt / EBITDA was 8.7 as of December 31, 2020, compared to 8.5 as of December 31, 2019.
The management at the level of the Company primarily focuses on the total operating performance.
alstria AG strives stable results with low volatility.
3. ECONOMY AND OFFICE MARKETS
3.1.
Economic development
The overall economic development already showed signs of an economic slowdown in the first quarter
of 2020, but with the harsh lockdown measures in the wake of the COVID-19 pandemic, there was an
outright economic collapse. Due to the global decline in economic output, German exports and
domestic consumption suffered in particular. On the other hand, significantly rising government
spending and unchanged high construction activity had a stabilizing effect. Nevertheless, according
to the German federal government, Germany’s gross domestic product fell by 5 %***** in 2020, the
sharpest decline since German reunification. The unemployment rate rose to 5,9 % (previous year:
5 %)***** due to the economic downturn in 2020. The fact that the increase was not greater is primarily
due to the proven instrument of short-time work. At present, the leading indicators***** point to a
recovery of the economy in 2021, although the further course of the pandemic will also bring strong
uncertainty for the coming months.
* For further details, please refer to page 13f.
** Net-debt / fair value of immovable assets (deducted by interests in joint ventures).
*** Total equity divided by the carrying amount for immovable assets. The minimum requirement according to G-REIT regulations is 45 %.
**** Total debt deducted by cash positions and short-term financial assets.
***** Annual Economic Report 2021 from the Federal Ministry of Economics and Energy.
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alstria Annual Report 2020
Combined Management Report
3.2. Office markets*
3.2.1. Vacancy slightly up, rents stable
The economic development of an economic area has a direct influence on the corresponding office
property market because economic activity, and the resulting increase or decrease in employment,
usually has a direct effect on the demand for office space. The sudden outbreak of the COVID-19
pandemic in Germany brought leasing activity to a standstill for large parts of the year, causing office
take-up to slump by 31.9 % to 2,588,100 m² year-on-year according to the major commercial
brokerage houses ("Big 7" cities: Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich,
and Stuttgart). No sustained recovery was observed here by the end of 2020, as a result of which the
average vacancy rate in the "Big 7" rose to 4.0 % (previous year: 3.5 %) over the course of the year.
Average rents in the "Big 7" cities, on the other hand, were largely stable. Berlin reached the highest
average rent for office space at EUR 28.36/m² (previous year: EUR 26.35/m²), followed by Frankfurt
at EUR 23.07/m² (previous year: EUR 21.00/m²), Munich at EUR 21.46/m² (previous year:
EUR 20.06/m²), Hamburg at EUR 17.40/m² (previous year: EUR 17.50/m²), Stuttgart at EUR 16.50/m²
(previous year: EUR 16.60/m²), Cologne at EUR 15.90/m² (previous year: EUR 15.20/m²), and
Düsseldorf at EUR 15.77/m² (previous year: EUR 16.77/m²).
3.2.2. Declining transaction volumes, prices continue an upward trend
The uncertainty regarding the economic consequences of the COVID-19 pandemic also affected the
transaction markets. While the first quarter of 2020 was still characterized by record-high transaction
volumes in the German office property sector, the rest of the year saw a significant slump, with a
recovery trend toward the end of the year.** Over 2020 as a whole, the transaction volume in the
"Big 7" cities was EUR 26.5 billion (Berlin: EUR 7.1 million, Frankfurt: EUR 5.5 million, Hamburg:
EUR 4.6 million, Munich: EUR 4.2 million, Düsseldorf: EUR 3.0 million, Cologne: EUR 1.1 million,
Stuttgart: EUR 1.0 million) and thus 31.7 % below the corresponding previous year‘s level. Despite the
weak economic environment, prices for office properties in Germany remained at a high level. The
further expansion of the ECB‘s expansive monetary policy in the wake of the COVID-19 pandemic and
the associated search for profitable investment opportunities continued to channel liquidity into the
real estate markets. In 2020, investors focused more than ever on well-located properties with long-
term leases from solvent tenants. Accordingly, prices continued to rise in this segment in particular.
* Sources of real estate market data in this chapter are Colliers International Deutschland GmbH, BNP Paribas Real Estate, CBRE GmbH, and
Jones Lang LaSalle.
** Colliers International Deutschland GmbH, BNP Paribas Real Estate, CBRE GmbH and Jones Lang LaSalle.
alstria Annual Report 2020
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Combined Management Report
4. PORTFOLIO ANALYSIS
4.1.
Key metrics of the portfolio and investment locations
alstria owns, manages, and develops office buildings with a total lettable area of 1.4 million m². At
the end of 2020, 90.4 % of this was office and storage space and 9.6 % other types of use (retail, hotel,
and other). By focusing on the large and liquid German office markets, from the Management Board’s
perspective, alstria benefits from the fundamental strength of the German economy as a whole and
can efficiently manage substantial sub-portfolios from its local offices. Rather than large buildings,
alstria typically prefers smaller properties that are geographically close to each other. alstria’s
management believes that such a portfolio design allows the company to spread the operational risk
over a larger number of buildings and thus reduce the overall risk of the real estate portfolio. The
buildings in the alstria portfolio have an average lettable area of 13,100 m² and an average market
value of EUR 42.0 million.
Key metrics
Number of properties
Market value (EUR bn)1)
Annual contractual rent (EUR m)
Valuation yield (%, annual contractual rent / market value)
Lettable area (m²)
EPRA vacancy rate (%)
WAULT (weighted average unexpired lease term in years)
Average value per m² (EUR)
Average rent/m² (EUR / month)2)
1) Including fair value of owner-occupied properties.
2) Average rent for the office space.
Total portfolio by region
(% of market value)
Hamburg
Düsseldorf
Frankfurt
Stuttgart
Berlin
Others
Dec. 31, 2020
Dec. 31, 2019
109
4.6
199.1
4.4
116
4.5
208.3
4.7
1,427,800
1,509,200
7.6
6.1
3,205
12.93
8.1
6.3
2,966
12.62
Dec. 31, 2020
Dec. 31, 2019
Change (pp)
33
27
20
12
8
0
32
28
19
12
7
2
1
−1
1
0
1
−2
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alstria Annual Report 2020
Combined Management Report
4.2.
Tenants and leases
Public tenants and large national and international companies, in particular, characterize alstria’s
tenant structure. The following table shows the ten largest tenants as of December 31, 2020:
alstria’s main tenants
(% of annual rent)
Daimler AG
City of Hamburg
Bundesanstalt für Immobilienaufgaben
City of Frankfurt
GMG Generalmietgesellschaft
HOCHTIEF Aktiengesellschaft
Commerzbank Aktiengesellschaft
Hamburger Hochbahn AG
Residenz am Dom gem. Betriebsgesellschaft mbH
Württembergische Lebensversicherung AG
Others
Dec. 31, 2020
Dec. 31, 2019
Change (pp)
12
12
5
3
2
2
2
2
1
1
58
11
11
4
2
4
3
2
2
2
1
58
1
1
1
1
−2
−1
0
0
−1
0
0
Due to the COVID-19 pandemic and the uncertainty about further economic development, the letting
market was in a weak state in 2020. Across the sector, the letting volume in the German office markets
was significantly below the corresponding level of the previous year; alstria was not able to escape
this trend. With new leases/renewals of leases with a total area of 119.500 m2, alstria’s letting volume
was also significantly below the level of the previous year. However, it should also be taken into
account that alstria was able to realize a very high letting volume in the previous year with the
conclusion of large-volume and long-term leases, particularly in the development properties, and
correspondingly, less space was available for new letting in 2020.
Letting metrics (m2)
New leases
Renewals of leases
Total
1) Option drawings of existing tenants are included.
2020
62,000
57,5001)
2019
197,600
171,300
119,500
368,900
Change
−135,600
−113,800
−249,400
alstria Annual Report 2020
7
Combined Management Report
The following leases were the main contributors to the new letting volume:
Asset
Bamlerstr. 1-5
Gasstr. 18
Berliner Str. 91−101
City
Essen
Hamburg
Ratingen
Heidenkampsweg 99−101
Hamburg
Maarweg 165
Cologne
Holzhauser Str. 175−177
Berlin
Corneliusstr. 36
Dusseldorf
1) Rounded to one hundred thousand Euros.
2) In % of lease length.
Leased
area
(m²)
Net
rent / m²
(EUR)
Net
rent p.a.
(EUR k)1)
Lease
length
(years)
Rent free
(%)2)
3,100
6,100
9,200
5,000
2,000
1,600
2,500
11.50
15.90
10.20
15.05
11.46
10.36
6.00
500
1,200
1,400
1,000
280
200
160
10.5
10.0
6.9
10.0
15.0
5.0
0.7
5.6
0.0
7.2
3.3
3.3
1.7
0.0
Commercial leases usually have a limited term agreed in the respective lease. The following table
summarizes the share of expiring leases as a share of the total portfolio over the next three years:
Lease expiry profile
(% of annual rent)
2021
2022
2023
Dec. 31, 2020
Dec. 31, 2019
Change (pp)
9.2
11.3
10.3
12.7
11.0
9.8
−3.5
0.3
0.5
4.3.
Capital expenditure into the existing portfolio
In 2020, EUR 145 million was invested in the existing portfolio. The largest part of this amount,
EUR 56 million, was invested in development projects, which significantly improved the quality of the
spaces to achieve higher rents for new leases. The development capex increased significantly in 2020
because alstria currently sees the best return opportunities here. The buildings to be modernized
originate from the investment portfolio and will be transferred back to it after successful completion.
The current development portfolio comprises nine projects with a total lettable area of 176,000 m2.
8
alstria Annual Report 2020
Combined Management Report
Project
Besenbinderhof 41, Hamburg
Carl-Reiss-Platz 1-5, Mannheim
Deutsche Telekom Allee 7, Darmstadt
Deutsche Telekom Allee 9, Darmstadt
Gartenstr. 2, Düsseldorf
Gustav-Nachtigal-Str. 3+5, Wiesbaden
Handwerstr. 4 / Breitwiesenstr. 27, Stuttgart
Rotebühlstr. 98-100, Stuttgart
Solmsstr. 27-37, Frankfurt
Total
4.4.
Transactions
Lettable area
(m²)
5,000
11,800
22,200
60,700
4,800
26,000
5,700
8,900
30,900
176,000
Status
Under construction
Under construction
In planning
In planning
In planning
Under construction
In planning
Under construction
Under construction
Estimated
completion
Q3 2021
Q2 2022
n/a
n/a
n/a
Q3 2022
n/a
Q3 2021
Q3 2021
alstria’s investment decisions are based on both analyses of local markets and individual inspections
of each asset. The latter focuses on the attributes of location, size, and quality (relative to those of
direct competitors’ assets) as well as the long-term potential for value growth. alstria’s strategy is
aimed at both establishing a lucrative portfolio size at the respective locations and retracting from
markets that do not adhere to alstria’s core investment focus (“Big 7” office markets in Germany). In
2020 alstria used the high demand for German office properties to divest weaker assets in the
portfolio. These were mainly located in the periphery of the core markets (non-office markets outside
of the "Big 7" cities). Sales proceeds were primarily used for the financing of modernization measures
in the portfolio. The reallocation of the invested capital should enable to continuously improve the
risk/return profile of the portfolio.
Disposals
Asset
City
Werner-von-Siemens-Platz 1
Hanover
Balgebrückstr. 13
Earl-Baaken-Platz 1
Bremen
Meerbusch
Josef-Wulff-Str. 75
Recklinghausen
D2 Park 5
Kurze Str. 40
Arndtstr. 1
Essener Str. 97
Total Disposals
Ratingen
Filderstadt
Hanover
Hamburg
Disposal
price
(EUR k)
Gain
to book
value
(EUR k)1), 2)
Signing
SPA
Transfer
of benefits and
burdens
16,680
2,900
20,700
32,500
9,400
8,300
33,330
2,700
−700
−800
525
Dec. 13, 2019
Mar. 31, 2020
Dec. 19, 2020
Feb. 29, 2020
Jan. 29, 2020
May 1, 2020
4,800
Jan. 30, 2020
Mar. 12, 2020
180
275
Feb. 12, 2020
Mar. 31, 2020
Sept. 3, 2020
Sept. 30, 2020
3,785
Sept. 17, 2020
Nov. 30, 2020
480
Sept. 17, 2020
Oct. 31, 2020
126,510
8,545
1) Different from the position “Net result from the disposal of investment property” in the income statement. This position only contains contracts
which were signed in 2020 financial year and their transaction costs as well as capitalizations during the year which were booked until the
10time of disposal.
2) Rounded to the nearest five thousand Euros.
alstria Annual Report 2020
9
Combined Management Report
Acquisition price
(EUR k)1)
7,000
30,300
37,300
Signing
SPA
Transfer of
benefits and
burdens
Nov. 12, 2020
Dec. 24, 2020
Dec. 17, 2020
March 1, 20212)
Acquisitions
Asset
City
Corneliusstr. 36
Düsseldorf
Hanauer Landstr.161-173
Frankfurt
Total Acquisitions
1) Excluding transaction costs.
2) Expected.
4.5.
Portfolio valuation
An external valuer (Savills Advisory Services Germany GmbH & Co. KG) valued alstria‘s entire real
estate portfolio at fair market value as of December 31, 2020 in accordance with the requirements
of IAS 40 in connection with IFRS 13. For the entire portfolio, the 2020 valuation resulted in an
appreciation of EUR 61.5 million (after deduction of capex and acquisitions). Based on the determined
market value as of December 31, 2020, there is an average value of EUR 3,200 per m2 and a yield,
based on the ratio of contractual rent to the market value, of 4.4 % in the total portfolio.
II. FINANCIAL ANALYSIS
1. EARNINGS POSITION
EUR k
Revenues
Net rental income
Administrative and personnel expenses
Other operating result
Operating income
Net result from fair value adjustments to investment property
Net result from disposal of investment property
Net operating result
1.1.
Net operating result
2020
177,063
154,823
−27,028
2,486
2019
187,467
162,904
−27,986
955
130,281
135,873
61,522
8,340
454,767
17,350
200,143
607,990
alstria closed the 2020 financial year with a net operating result (before financing costs and taxes) of
EUR 200,143 k, compared to EUR 607,990 k for the previous year.
Compared to the previous year, alstria had a significantly lower result from fair value adjustments to
investment properties.
1.2.
Revenues
In the reporting period, revenues totaled EUR 177,063 k (compared to EUR 187,467 k in 2019). This
corresponds to a decrease of 5.5 % or EUR 10,404 k. The decrease mainly resulted from the disposal
of investment properties as well as lease expiries in 2020.
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alstria Annual Report 2020
Combined Management Report
1.3.
Real estate operating expenses
Real estate operating expenses consist of recoverable and non-recoverable operating costs and
amounted to EUR 60,607 k (compared to EUR 61,601 k in 2019). The expense ratio of non-recoverable
operating costs increased from 13.3 % in 2019 to 13.8 % in 2020. Thus, the Group’s net rental income
decreased by EUR 8,081 k to EUR 154,823 k (compared to EUR 162,904 k in 2019).
1.4.
Administrative and personnel expenses
Administrative expenses decreased by EUR 1,085 k to EUR 8,460 k (compared to EUR 9,545 k in 2019),
which was mainly due to lower legal and consulting fees and travel expenses. Personnel expenses
were EUR 18,568 k for the reporting period and, therefore, EUR 127 k higher than in 2019 (compared
to EUR 18,441 k in 2019). The slight increase was mostly a result of an increase in salaries by EUR 837 k
to EUR 10,539 k due to an increased number of employees (the annual average number of employees
was 166 in 2020 compared to 156 in the previous year). This was mainly compensated — due to the
lower stock price of alstria — by the decrease of the remuneration for virtual shares and stock options
by EUR 895 k to EUR 1,240 k in 2020 (compared to EUR 2,135 k in 2019). Thus, overall personnel
expenses were only slightly higher than in the previous year. Total administrative and personnel
expenditures were approx. 15.3 % of total revenue and 0.6 % of the market value of the portfolio
(compared to 14.9 % and 0.6 % in 2019, respectively).
1.5. Other operating result
alstria’s other operating results amounted to EUR 2,486 k during the reporting period (compared
to EUR 955 k in 2019). A decrease in income of EUR 11,556 k mainly resulted from EUR 11,090 k less
income from the release of accrued liabilities. This primarily concerned the release of accrued
liabilities in real estate transfer tax obligations of EUR 10,483 k. A EUR 13,087 k decrease in expenses
was mainly driven by less expenses for the valuation of limited partner capital (EUR 8,488 k in 2019),
as well as taking into account a potential increase in cash compensation for former minority
shareholders of EUR 5,183 k in 2019.
1.6.
Net result from fair value adjustments to investment property
In the 2020 financial year, the net result from fair value adjustments to investment property was
EUR 61,522 k (compared to EUR 454,767 k in 2019). The total of the increases in value amounted to
EUR 218,686 k (compared to EUR 474,031 k in 2019), while the total of the decrease in value amounted
to EUR 157,164 k (compared to EUR 19,264 k in 2019). Different value developments are recorded on
asset level. While assets in prime locations with long-term leases show valuation gains, assets in
peripheral locations suffer from a decrease in prices due to less demand.
1.7.
Net result from the disposal of investment property
In 2020, alstria was able to achieve a positive result of EUR 8,340 k from the disposal of investment
properties (compared to EUR 17,350 k in 2019). The realized disposal gains mainly resulted from the
sale of the Josef-Wulff-Strasse asset in Recklinghausen and the Arndtstrasse asset in Hanover.
alstria Annual Report 2020
11
Combined Management Report
1.8.
Net financial result
EUR k
Interest expenses, corporate bonds
Interest expenses, other loans
Interest result Schuldschein
Other interest expenses
Financial expenses
Income from financial instruments
Other financial expenses
Net financial result
2020
−27,269
−2,321
−2,190
−228
−32,008
533
−357
−31,832
2019
−21,960
−2,376
−2,577
−8
−26,921
575
−1,114
−27,460
Financial expenses decreased by EUR 5,087 k to EUR 32,008 k due to higher interest expenses for
corporate bonds.
The net financial result for the year increased by EUR 4,372 k to EUR 31,832 k, as compared to the
prior year.
For details on the new loans, refer to the ‘Noncurrent and current financial liabilities’ section starting
on page 16.
1.9.
Share of the result of companies accounted for at equity
In 2020, alstria’s share of the result of companies accounted for at equity was EUR −9 k (compared to
EUR −170 k in 2019).
1.10. Net result from fair value adjustments to financial derivatives
To minimize the impact of interest-rate volatility on profits and losses, alstria uses financial
derivatives to hedge on floating-interest-rate loans. Because the amount of variable-rate bank loans
was reduced in favor of fixed-rate bonds, only one interest-rate cap exists anymore, with the nominal
amount of EUR 44,168 k.
The net result from fair value adjustments on these financial derivatives amounted to EUR 0 k in 2020
(with no change from 2019).
Further details can be found in Section 6.5 of the consolidated financial statements.
1.11. Consolidated profit
The consolidated profit amounted to EUR 168,489 k (compared to EUR 581,221 k in 2019) in the
reporting period; hence, it decreased by EUR 412,732 k. The main driver of this decrease is the
decrease of the net result from fair value adjustments on investment properties by EUR 393,245 k to
EUR 61,522 k. Undiluted earnings per share amounted to EUR 0.95 for the reporting period (compared
to EUR 3.27 in 2019).
REITs are fully exempt from German corporate income tax and trade tax. However, tax obligations
can arise to a minor extent for REIT subsidiaries.
12
alstria Annual Report 2020
Combined Management Report
1.12. Funds from operations (FFO)
The economic lockdown due to the COVID-19 pandemic had only a minor impact on alstria‘s earnings
position in 2020. In line with the legal framework, smaller tenants in particular were exercising their
right to rent deferral. For very small tenants, who were particularly hard hit by the severe lockdown,
alstria declared a temporary rent waiver to enable these tenants to survive economically. Despite
these negative influences, alstria‘s earnings position developed according to plan. Due to the property
sales and a corresponding reduction in rental space, net rental income fell by EUR 8.1 million to
EUR 154.8 million during 2020. Value adjustments on rent receivables amounted to EUR 1,371 k.
FFO after minority interests amounted to EUR 108.7 million, very close to the forecast figure of
EUR 108.0 million. The decrease of EUR 3.9 million compared to the corresponding period of the
previous year is directly related to the reduced rental income but was largely offset by lower real
estate operating expenses and lower financing costs. The FFO margin rose accordingly to 61.4 % in
2020, 140 basis points above the corresponding period of the previous year. Consolidated net income
reached EUR 168.5 million (2019: EUR 581.2 million) and was significantly influenced by the net rental
income as well as the valuation result of the real estate portfolio. The adjustments between the
income figures in the income statement and FFO are shown in the table on page 14. By eliminating
noncash, nonrecurring and nonoperating earnings items, FFO gives a clear picture of the company‘s
operating performance. The most significant adjustments relate to the valuation result (noncash),
the net financial result and the gain on disposal (nonrecurring) as well as the other operating income
and the administrative expenses. The adjustments in the net financial result mainly relate to the
amount of EUR 6,674 k to the interest expense for bond #1, which was due at the beginning of 2021
and was already refinanced by the issue of bond #4 in September 2019, thus no longer serving the
operating business. Furthermore, the interest expense of EUR 5,379 k for bond #5, which was incurred
toward the end of the second quarter of 2020, were adjusted in the net financial result, as the
liquidity inflow is intended for future investments in the portfolio. The adjustments in the operating
income relate to the compensation payments by tenants in the amount of EUR 1,961 k. Moreover,
depreciation and impairment of fixed and intangible assets in the amount of EUR 1,110 k has been
eliminated out of the administrative expenses.
alstria Annual Report 2020
13
Combined Management Report
EUR k1)
Revenues
Revenues from 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 to
investment property
Net result from the disposal of investment
property
Net operating result
Net financial result2)
Share of the result of companies accounted
for at equity
Pretax income
Income tax expenses
Consolidated profit
Minority interests
IFRS P&L
Adjustments
177,063
38,367
−60,607
154,823
−8,460
−18,568
4,629
−2,143
−
−
−
−
1,110
668
−2,240
337
61,522
−61,522
FFO
2020
177,063
38,367
−60,607
154,823
−7,350
−17,900
2,389
−1,806
0
0
FFO
2019
187,467
37,038
−61,601
162,904
−8,439
−15,897
2,541
−1,406
0
0
−8,340
8,340
200,143
−31,832
−69,987
130,156
12,228
−19,604
139,703
−24,129
−9
−
−9
−44
168,302
−57,759
110,543
115,530
187
−187
0
168,489
−57,946
110,543
−
−1,870
−1,870
0
115,530
−2,959
112,571
177,593
0.63
Consolidated profit / FFO (after minorities)3)
168,489
−59,816
108,673
Number of outstanding shares (k)
FFO per share (EUR)
1) Numbers may not sum up due to rounding.
177,793
0.61
2) The operating financial result contains interest expenses for financial liabilities, which are used for the financing of the existing portfolio. The
nonoperating financial result contains interest expenses for financial liabilities, which are not used for the financing of the existing portfolio.
This concerns the interest expenses for already refinanced financial liabilities and financial liabilities, which are intended for future property
investments.
3) FFO is not a measure of operating performance or liquidity under generally accepted accounting principles, in particular IFRS, and it should
not be considered an alternative to the Company’s income or cash flow measures as determined in accordance with IFRS. Furthermore, there
is no standard definition for FFO. Thus, alstria’s FFO values and the measures with similar names presented by other companies may not be
comparable.
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alstria Annual Report 2020
Combined Management Report
2. FINANCIAL AND ASSET POSITION
2.1.
Investment properties
The total value of investment properties as of December 31, 2020 was EUR 4,556,181 k, compared to
EUR 4,438,597 k at the beginning of 2020. This increase in investment property value was mainly due
to investments during the year of EUR 144,928 k, as well as the increase in value of the investment
portfolio following the revaluation (EUR 61,522 k). A opposite effect resulted from the sale of six
assets (EUR 96,650 k).
EUR k
Investment property as of December 31, 2019
Investments
Acquisitions
Acquisition costs
Disposals
Net loss / gain from fair value adjustments to investment property
Investment property as of December 31, 2020
Carrying amount of owner-occupied properties
Interests in joint ventures
Carrying amount of immovable assets
Fair value adjustments of owner-occupied properties
Fair value of immovable assets
2.2.
Cash and cash equivalents
4,438,597
144,928
7,000
784
−96,650
61,522
4,556,181
16,910
1,021
4,574,112
7,894
4,582,006
Cash and cash equivalents increased by EUR 162,741 k, from EUR 298,219 k to EUR 460,960 k, in the
reporting period. A positive cash flow of EUR 103,231 k was generated from operating activities, which
is close to the funds from operations (FFO). Financing activities have shown net cash outflows of
EUR 112,164 k. The cash used for financing activities consists of the dividend payment of EUR 94,125 k
and the cash flows from issuing and repayment of loans and bonds, resulting in net cash outflows of
EUR –13,800 k. Investing activities amounted to cash inflows of EUR 171,674 k.
2.3.
Equity
Equity (EUR k)
Number of outstanding shares (k)
Net asset value per share (EUR)
Equity ratio (%)
G-REIT equity ratio (%)
Dec. 31, 2020
Dec. 31, 2019
Change
3,252,442
177,793
18.29
63.9
71.1
3,175,555
177,593
17.88
63.1
70.9
2.4 %
0.1 %
2.3 %
0.8 pp
0.2 pp
Compared to December 31, 2019, equity increased by EUR 76,887 k as of December 31, 2020. The
period’s profit contributed to a higher equity of EUR 168,489 k. On the other hand, dividend payments
in October decreased the equity by EUR 94,125 k.*
* See also the consolidated statement of changes in equity on page 62.
alstria Annual Report 2020
15
Combined Management Report
2.4.
Limited partnership capital noncontrolling interests
Liabilities due to minority interests represent the limited-partner capital of noncontrolling
shareholders in the alstria office Prime Portfolio GmbH & Co. KG. In line with IFRS requirements, the
share capital owned by minority shareholders in German partnerships is treated as a liability on the
Company’s balance sheet.
2.5.
Noncurrent and current financial liabilities
alstria’s financial management is carried out at the corporate level. Individual loans and corporate
bonds are taken out at the property and the portfolio levels. alstria’s main financial goal is to establish
a sustainable long-term financial structure. Therefore, alstria diversifies its financing sources and
strives for a balanced maturity profile to enable coordinated and constant refinancing (see following
overview of the loan facilities and maturity profile of financial debt on page 17).
On May 6, 2020, a fixed-rate loan share of the Schuldschein was repaid with a notional amount of
EUR 37,000 k.
On June 23, 2020, alstria issued its fifth unsecured, fixed-rate bond with a nominal value of
EUR 350,000 k. The proceeds from the bond will serve for general corporate purposes, acquisition of
real estate, and refinancing of existing debt.
On December 28, 2020, the early in whole redemption of the EUR 500,000 k first unsecured, fixed-
rate bond took place which was issued on November 24, 2015, was due in March 2021 and of which
EUR 326,800 k were then outstanding.
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alstria Annual Report 2020
Combined Management Report
The loan facilities in place as of December 31, 2020, are as follows:
Liabilities
Maturity
Loan #1
Loan #2
Loan #3
Loan #4
Total secured loans
Bond #1
Bond #2
Bond #3
Bond #4
Bond #5
June 28, 2024
Mar. 28, 2024
June 30, 2026
Sept. 29, 2028
Dec. 28, 2020
Apr. 12, 2023
Nov. 15, 2027
Sept. 26, 2025
Jun. 23, 2026
Schuldschein 10y/fixed
May 6, 2026
Schuldschein 7y/fixed
May 6, 2023
Schuldschein 4y/fixed
May 6, 2020
Revolving credit line
Sept. 15, 2022
Total unsecured loans
Total
Net LTV
Principal amount
drawn as of
Dec. 31, 2020
(EUR k)
LTV as of
Dec. 31, 2020
(%)
LTV
covenant
(%)
Principal amount
drawn as of
Dec. 31, 2019
(EUR k)
34,000
45,900
56,000
60,000
195,900
0
325,000
350,000
400,000
350,000
40,000
37,000
0
0
1,502,000
1,697,900
13.5
29.0
26.7
31.9
24.3
−
−
−
−
−
−
−
−
−
−
37.1
27.0
65.0
75.0
65.0
−
−
−
−
−
−
−
−
−
−
−
−
−
34,000
45,900
56,000
60,000
195,900
326,800
325,000
350,000
400,000
−
40,000
37,000
37,000
0
1,515,800
1,711,700
Cash cost of debt
Dec. 31, 2020
Ø cost of
debt
(%)
Nominal amount
(EUR k)
Ø maturity
(years)
Dec. 31, 2019
Ø cost of
debt
(%)
Nominal amount
(EUR k)
Ø maturity
(years)
Bank debt
Bonds
Schuldschein
Total
195,900
1,425,000
77,000
1,697,900
1.0
1.4
2.5
1.4
5.3
4.9
4.0
4.9
195,900
1,401,800
114,000
1,711,700
1.1
1.5
2.2
1.5
6.3
4.7
3.5
4.8
alstria Annual Report 2020
17
Combined Management Report
Maturity profile of financial debt1) as of December 31, 2020 in EUR m
1) Excluding regular amortization.
2.6.
Compliance with and calculation of the Covenants, referring to § 11 of the Terms and
Conditions*
In case of the incurrence of new Financial Indebtedness for purposes other than the refinancing of
existing liabilities, alstria needs to comply with the following covenants:
▪ The ratio of Consolidated Net Financial Indebtedness to Total Assets will not exceed 60 %
▪ The ratio of Secured Consolidated Net Financial Indebtedness to Total Assets will not exceed
45 %
▪ The ratio of Unencumbered Assets to Unsecured Consolidated Net Financial Indebtedness will
be more than 150 %
In the second quarter of 2020, alstria incurred further financial indebtedness in the amount of
EUR 350,000 k primarily to refinance existing secured financial indebtedness in 2020 (for further
information, please refer to the loan overview on page 17).
* The following section refers to the Terms and Conditions of the Fixed Rate Notes, as well as to the Terms and Conditions of the Schuldschein
(for further information, please refer to www.alstria.com). Capitalized terms have the meanings defined in the Terms and Conditions.
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alstria Annual Report 2020
Combined Management Report
EUR k
Consolidated Net Financial Indebtedness as of the reporting date
Net Financial Indebtedness incurred since the reporting date
Sum Consolidated Net Financial Indebtedness
Total Assets as of the reporting date (less cash)
Purchase price of any Real Estate Property acquired or contracted for acquisition
since the reporting date
Proceeds of any Financial Indebtedness incurred since the reporting date that were not
used to acquire Real Estate Property or to reduce Financial Indebtedness
Sum Total Assets
Ratio of the Consolidated Net Financial Indebtedness over Total Assets (max. 60 %)
EUR k
Secured Consolidated Net Financial Indebtedness as of the reporting date
Secured Net Financial Indebtedness incurred since the reporting date
Sum Secured Consolidated Net Financial Indebtedness
Total Assets as of the reporting date (less cash attributable to secured debt)
Purchase price of any Real Estate Property acquired or contracted for acquisition
since the reporting date
Proceeds of any Financial Indebtedness incurred since the reporting date that were not
used to acquire Real Estate Property or to reduce Financial Indebtedness
Sum Total Assets
Ratio of the Secured Consolidated Net Financial Indebtedness over Total Assets (max. 45 %)
EUR k
Value of Unencumbered Real Estate Property
Value of all other assets
Unencumbered Assets as of the reporting date
Net Unencumbered Assets recorded since the reporting date
Sum Unencumbered Assets
Unsecured Consolidated Net Financial Indebtedness as of the reporting date
Net Unsecured Financial Indebtedness incurred since the reporting date
Sum Unsecured Consolidated Net Financial Indebtedness
Ratio of Unencumbered Assets over Unsecured Consolidated Net Financial Indebtedness
(min. 150 %)
Dec. 31, 2020
1,234,714
-
1,234,714
4,629,289
30,300
-
4,659,589
26 %
Dec. 31, 2020
142,518
-
142,518
5,037,042
30,300
-
5,067,342
3 %
Dec. 31, 2020
3,628,866
112,697
3,741,563
30,300
3,771,863
1,092,196
-
1,092,196
345 %
Furthermore, alstria needs to maintain a ratio of the Consolidated Adjusted EBITDA over Net Cash
Interest of no less than 1.80 to 1.00. The ratio should be calculated and published at every reporting
date following the issuance of the bond or the Schuldschein, starting after the fifth reporting date.
alstria Annual Report 2020
19
Combined Management Report
EUR k
Cumulative 2020
Earnings Before Interest and Taxes (EBIT)
Net profit / loss from fair value adjustments to investment property
Net profit / loss from fair value adjustments to financial derivatives
Profit / loss from the disposal of investment property
Other adjustments1)
Fair value and other adjustments in joint venture
Consolidated Adjusted EBITDA
Cash interest and other financing charges
One-off financing charges
Net Cash Interest
Consolidated Coverage Ratio (min. 1.80 to 1.00)
1) Depreciation, amortization, and nonrecurring or exceptional items.
200,134
−61,522
−
−8,340
12,103
0
142,375
−31,850
−
−31,850
4.5
In the 2020 financial year no covenants under the loan agreements and / or the terms and conditions
of the bonds and Schuldschein have been breached. The breach of a covenant would lead to liquidity
outflow.
2.7.
Current liabilities
Current liabilities amounted to EUR 71,555 k (December 31, 2019: EUR 109,431 k) and mainly
consisted of short-term loan obligations of EUR 10,325 k (December 31, 2019: EUR 50,590 k) and of
limited partnership capital noncontrolling interests of EUR 15 k (December 31, 2019: EUR 24 k).
Another EUR 4,780 k of this total was attributable to income tax obligations (December 31, 2019:
EUR 5,793 k) that arose at the level of the consolidated alstria office Prime companies. Moreover,
current liabilities include trade payables (December 31, 2020: EUR 3,943 k; December 31, 2019:
EUR 4,611 k) and other current liabilities (December 31, 2020: EUR 49,948 k; December 31, 2019:
EUR 45,451 k). The other current liabilities include value-added tax liabilities (December 31, 2020:
EUR 3,359 k; December 31, 20219: EUR 1,535 k), as well as received advance rent payments (December
31, 2020: EUR 3,293 k; December 31, 20219: EUR 692 k). Furthermore, the other current financial
liabilities consisted of provisions for outstanding invoices (December 31, 2020: EUR 21,109 k;
December 31, 2019: EUR 22,328 k) and tenants’ deposits
(December 31, 2020: EUR 8,800 k;
December 31, 2019: EUR 7,280 k).
3. OVERALL ASSESSMENT OF THE FINANCIAL YEAR BY THE MANAGEMENT BOARD
Even though the economic restrictions due to the COVID-19 pandemic substantially strain the
economy, alstria‘s earnings position in 2020 developed as planned. The slight loss of revenues due to
the rent waiver in favor of tenants which were particularly affected by the COVID-19 pandemic could
be compensated by operational cost savings. It should be noted regarding the financial and asset
position that again the asset values showed slight gains. The liquidity situation also presented very
comfortable at any time during the 2020 financial year.
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alstria Annual Report 2020
Combined Management Report
III. EXPECTED DEVELOPMENTS
The report on expected developments contains statements related to anticipated future
developments. The Company’s development depends on various factors, some of which are beyond
alstria’s control. Statements about expected developments are based on current assessments and are
thus, by their nature, exposed to risks and uncertainty.
The alstria Group’s actual development may differ positively or negatively from the predicted
development presented in the statements of this report.
1. EXPECTED ECONOMIC DEVELOPMENT
As a result of the COVID-19 pandemic, Germany’s gross domestic product fell by 5.0 % overall in 2020,
according to the German government. The fact that the decline was not even greater is due not only
to the resilience of the German economy, but also to the very extensive packages of measures
introduced by the German government to support the economy and stabilize incomes. Until now, the
German government, like the economic research institutes, had assumed a significant economic
recovery would occur in 2021. However, the second wave of the pandemic and the renewed lockdown
harbor major uncertainties here, so no reliable forecast of future economic development is possible
at present.*
2. DEVELOPMENT OF THE REAL ESTATE MARKET: OUTLOOK FOR 2021
Uncertainty with regard to economic development is also expected to impact the commercial real
estate market. The leasing market is expected to remain tight in 2021 as companies are reluctant to
sign long-term leases and lease additional space in light of the economic uncertainty. With regard to
transaction markets, however, alstria expects that the real estate market will remain low as a result
of the persistently low interest rates, and that demand for real estate will remain high.
3. OUTLOOK FOR THE ALSTRIA GROUP
Based on the existing leases and the high proportion of creditworthy tenants, alstria expects a stable
business development for 2021 for the alstria Group despite the overall economic uncertainty. Already
signed and possible further property sales in the course of 2021 will lead to a slight decrease in rental
income. This will, however, be compensated by the impact of already concluded new leases. Against
this backdrop, alstria expects stable revenues of around EUR 177 million in 2021 compared to the
previous year. The same applies to FFO, which is again expected to be in the range of EUR 108 million
due to a stable cost structure. Possible acquisitions or disposals as well as changes in other premises
for fiscal 2021 may affect the 2020 forecast in the course of the year.
Because the Company pays out a significant part of its funds from operations as dividends, future
external growth depends largely on the Company’s ability to raise additional equity. Consequently,
* Annual Economic Report 2021 from the Federal Ministry of Economics and Energy.
alstria Annual Report 2020
21
Combined Management Report
further portfolio growth is highly dependent on the development of global equity markets and is
therefore difficult to predict over a longer period of time.
IV. REPORT REGARDING ALSTRIA AG
1. EARNINGS POSITION
The following table shows the key operating figures of the audited income statements for the 2020
and 2019 financial years:
in EUR k
Total operating
performance
Other operating
income
Cost of purchased
services
Personnel expenses
Depreciation
Other operating
expenses
Net financial result
Net result of the
year
2020
% of oper.
perf.
2019
% of oper.
perf.
Change
129,824
100.0
116,964
100.0
12,860
20,308
-24,424
-17,983
-36,954
-31,606
3,283
42,448
15.6
-18.8
-13.9
-28.5
-24.3
2.5
32.7
29,736
-23,678
-18,274
-35,357
-42,147
15,074
42,318
25.4
-20.2
-15.6
-30.2
-36.0
12.9
36.2
-9,428
-746
291
-1,597
10,541
-11,791
130
1.1. Operating performance
The net profit for the 2020 financial year was EUR 42,448 k (compared with EUR 42,318 k in 2019). As
the Company has been exempt from income taxes since its conversion into a REIT structure, no tax
expenses arose in 2020.
The slight increase in the net result was the result of, an increase of total operating performance by
EUR 12,860 k and a decrease of other operating expenses by EUR 10.541 k.These effects were reduced
by a reduction of net financial result by EUR 11,791 k and decrease of other operating income by
EUR 9,428 k
1.2.
Total operating performance
alstria’s total operating performance improved in the 2020 financial year, primarily due to an increase
in let revenues as well as an increase in income from real estate-related services passed on to
subsidiaries. In the reporting period, revenues amounted to EUR 128,243 k. Together with the changes
in inventory amounting to EUR 1.580 k, alstria’s total operating performance amounted to
EUR 129,824 k (versus EUR 116,964 k in the previous year).
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alstria Annual Report 2020
Combined Management Report
1.3. Other operating income
The other operating income decreased by EUR 9,428 k to EUR 20,308 k. The decrease compared to the
previous year essentially results from a reduction of write-ups on financial assets by EUR 18,528 k as
well as write-ups from tangible assets by EUR 3,009 k. While in the previous year a need for a write-
up on the fair value of a subsidiary in the amount of EUR 18,528 k next to an appreciation on tangible
assets by EUR 3,009 k led to income of the same amount, there was no need for a write-up on financial
or tangible assets in the reporting period. Additionally, the income from compensation payments and
other recharges decreased by EUR 1,388 k. In contrast, the increase of disposals of investment property
by EUR 13.035 k to EUR 13.827 k in the reporting period, is due to a larger sales volume.
1.4.
Personnel expenses
Personnel expenses decreased slightly by EUR 291 k compared to the previous year. The decrease
results from lower expenses for share-based remuneration due to a lower share price compared to the
previous year‘s reporting date (EUR +1,224 k). The effect is partially compensated by additional salary
expenses as part of the increase in the average number of employees during the financial year
(EUR -958 k).
1.5.
Depreciation and amortization
Depreciation increased by EUR 1,596 k compared to the previous year to EUR 36,954 k. The effect is
mainly the result of an increase in impairment losses by EUR 170 k and an increase in scheduled
depreciation on property, plant and equipment by EUR 1,426 k.
1.6. Other operating expenses
The other operating expenses decreased compared to the previous year by EUR 10,541 k to
EUR 31,606 k. The property operating costs decreased by EUR 11,197 k compared to the previous year.
This results from a lower volume of new acquisitions, as a result of which the expanses for measures
in the context of new lettings decreased by EUR 5,240 k and the expenses for maintenance by EUR
7,249 k. The legal and consulting costs were reduced by a further EUR 2,359 k. In the previous year,
legal and consulting costs included expenses of EUR 1,948 k regarding an arbitration proceeding. In
contrast, the expenses for impairments on receivables increased by EUR 2,755 k, mainly due to the
devaluation of receivables from a subsidiary.
alstria Annual Report 2020
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Combined Management Report
Financial result
in EUR k
Interest expenses, corporate bonds
Transaction costs
Interest result “Schuldschein” (“senior unsecured debt“)
Interest expenses from bank loans
Interest result from financial derivatives
Other interest expenses
Financial expenses
Income from participating interests
Income from loans to affiliates
Other interests and similar income
Write down on financial assets
Net financial result
2020
-24,142
-2,393
-2,140
-891
-134
-314
-30,014
27,460
5,334
510
-6
3,284
2019
-20,037
-7,470
-2,502
-762
-141
-267
-31,179
38,559
7,255
507
-66
15,076
Change
(%)
20.5
-68.0
-14.5
16.9
-5.0
17.6
-3.7
-28.8
-26.5
0.6
-91.2
-78.2
Compared to the previous period, financial expenses decreased by EUR 1,165 k to EUR 30,014 k.
The decrease is mainly due to a reduction in investment income by EUR 11,099 k, which results from
a lower annual result of a subsidiary. In addition, the interest expenses for bonds rose (EUR +4,105 k)
due to the issuance of a corporate bond in the year under review, which exceeded the value of a
corporate bond repaid in the year under review. Finally, the interest income from loans decreased
due to repayments by EUR 1,921 k.
In contrast, the transaction costs decreased by EUR 5,077 k compared to the previous year. In the
previous year, the transaction costs included expenses for placing the corporate bond with a nominal
value of EUR 400,000 k.
2. FINANCIAL AND ASSET POSITION
On the balance sheet date, alstria owned 70 real estate properties (in 2019: 73). The following table
illustrates alstria’s changes in investment property in 2020:
in EUR m
Land and Buildings on December 31, 2019
Investments
Adjustments
Disposals
Nonscheduled depreciation
Ordinary depreciation
Land and Buildings as of December 31, 2020
1,345.8
12.2
111.7
-48.3
-1.7
-34.7
1,385.0
The land and buildings line item increased by EUR 39.1 m. During the reporting period, a property
was purchased at a price of EUR 7.0 m in total, and an amount of EUR 5.2 m was invested in the
existing portfolio. The disposals concerned the sale of four buildings. Disposal prices of EUR 62.1 m,
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alstria Annual Report 2020
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in total, relating to carrying amounts of EUR 48.3 m in total, resulted in an accounting profit of
EUR 13.8 m.
The following table shows the real estate transactions during the period:
Disposals
Asset
Werner-von-Siemens-Platz 1
City
Hanover
Ratingen
Hanover
Hamburg
D2 Park 5
Arndtstr. 1
Essener Str. 97
Total Disposals
Acquisitions
Asset
Corneliusstr. 36
Total Acquisitions
1) Excluding transaction costs.
City
Düsseldorf
Sales price
(EUR k)
16,680
9,400
33,330
2,700
62,110
Sales price
(EUR k)1)
7,000
7,000
Signing
SPA
Dec. 13, 2019
Transfer of
benefits and
burdens
March 31, 2020
Feb. 12, 2020
March 31, 2020
Sept. 17, 2020
Nov. 30, 2020
Sept. 17, 2020
Oct. 31, 2020
Signing
SPA
Nov. 12, 2020
Transfer of
benefits and
burdens
Dec. 24, 2020
The prepayments and constructions in progress decreased by EUR 66,677 k compared to the previous
year to EUR 33,091 k. In the year under review, modernization projects with an amount of
EUR 111,660 k were reclassified to the item buildings and land after completion. In contrast,
EUR 44,984 k was invested in modernization measures in the reporting year that had not yet been
completed by the reporting date.
Financial assets decreased by EUR 58,619 k to EUR 1,124,533 k compared to the previous year‘s
reporting date. The decrease is primarily based on the repayment of loans to affiliated companies in
the amount of EUR 51,125 thousand. Additionally, the investment in alstria office Prime decreased
by EUR 7,464 k due to a withdrawal.
The Company’s cash position decreased by EUR 24,312 k to EUR 440,519 k. The cash outflows resulted
mainly from the payment of dividends (EUR 94,125 k), investments in fixed assets (EUR 57,369 k) and
the repayment of loans of EUR 363,800 k. In contrast, cash inflows resulted primarily from the issue
of a corporate bond (EUR 350,000 k), income from rents and property-related services (EUR 128,243 k)
and income from the sale of properties (EUR 13,827 k).
Total equity amounted to EUR 1,443,275 k, reflecting an equity ratio of 45.5 %, which is 0.8
percentage point below the prior years ratio of 46.3 %. The decrease in equity by EUR 51,278 k results
from the distribution of the dividends for the 2019 financial year of EUR 94,125 k, reduced by the
annual surplus of EUR 42,448 k and the capital increase in the course of the conversion of convertible
participation rights of EUR 399 k.
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Provisions decreased slightly by EUR 315 k compared with the previous balance sheet date to
EUR 21,176 k as of December 31, 2020. They mainly include accruals due to outstanding balances
(EUR 13,117 k), risks of litigation (EUR 2,849 k), bonuses (EUR 2,323 k), share-based remuneration
(EUR 1,301 k), supervisory board compensation (EUR 525 k), tax consulting (EUR 388 k), audit fees
(EUR 339 k), and miscellaneous provisions (EUR 334 k).
Additionally, liabilities decreased by EUR 5,079 k compared with the prior year. The reduction results
primarily from the repayment of a portion of the Schuldschein Darlehen (a debenture bond) in the
amount of EUR 37,000 k. Furthermore, a corporate bond with a total amount of EUR 326,800 k was
redeemed in the last quarter of the financial year. On the other hand, a corporate bond in the amount
of EUR 350,000 k was issued in the financial year 2020. Finally, the intercompany liabilities increased
by EUR 7,480 k, primarily due to a loss of the deposits of subsidiaries in the cash pool, based on annual
profits.
3. ADDITIONAL DISCLOSURE REGARDING ALSTRIA AG
3.1.
Employees
As of December 31, 2020, alstria AG had 159 employees (December 31, 2019: 159). The annual average
number of employees was 158 (previous year: 149). These figures exclude Management Board
members.
3.2. Outlook for alstria AG
For the fiscal year 2021 the company expects a stable total operating performance.
V. RISK AND OPPORTUNITY REPORT
1. RISK REPORT
1.1.
Risk management
alstria has implemented a Group-wide system for structured risk management and early warning in
accordance with Section 91 para. 2 of the German Stock Corporation Act (AktG).
alstria AG is the parent company of the alstria group. The results of alstria AG are influenced to a
considerable extent by its directly and indirectly held subsidiaries. The business performance of
alstria AG is fundamentally subject to the same risks and opportunities as that of the alstria group is,
and therefore the following explanations for the alstria group also apply to alstria AG.
All risks are recorded, evaluated, and monitored on at least a quarterly basis. The aim of alstria’s risk
management strategy is to minimize — or, where possible, completely avoid — the risks associated
with entrepreneurial activity in order to safeguard the Company against losses and risks to its going
concerns. The Company’s risk identification allows for the early identification of potential new risks
on an ongoing basis. Risk mitigation measures are defined so that alstria can undertake the necessary
steps to circumvent any identified risks (i.e., to insure, diversify, manage, or avoid those risks).
For alstria, risk management involves the targeted securing of existing and future potential for success
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and improvements in the quality of the Company’s planning processes. alstria’s risk-management
system is an integral part of its management and control system. The risk-management system is
integrated into its regular reporting to the Management Board and Supervisory Board, which ensures
that risks are dealt with proactively and efficiently. The risk-management system thereby focuses on
full coverage of the risks. The identification and assessment of opportunities is not part of alstria’s
risk-management system.
1.1.1. Structure of the risk-management system
Risk management is coordinated independently from individual business divisions. The risk manager
prepares a risk report on a quarterly basis and provides it to the Management Board. This report is based
on reports from the risk owners — those who are responsible for particular areas of risk. The risk manager
also informs the Management Board on matters relating to the implementation, operation, and oversight
of the risk and internal control system and assists the Management Board with, for example, reporting
to the Audit Committee of the Supervisory Board.
alstria faces various areas of risk within the context of its business activities. These are divided into the
following four risk categories:
▪ Strategic risks
▪ Operational risks
▪ Compliance risks
▪ Financial risks
Each risk category is assigned to a so-called ‘risk owner’. Inherent to the risk owner’s position in the
Company is that he or she represents the area in which the identified risks could materialize; the risk
owner is also responsible for the assigned risk category:
alstria’s areas of risk and risk categories
Risk category
Strategic risks
Operational risks
Compliance risks
Financial risks
Risk owner
Finance & Controlling
Real Estate Operations
Legal
Finance & Controlling
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The risk report presents the findings observed during risk identification, assessment, evaluation, and
monitoring. At the same time, the comprehensive documentation of this report ensures an orderly
assessment, which the responsible departments and the Supervisory Board conduct.
In addition, the divisions report their respective risks and opportunities to the Management Board in
weekly meetings.
1.1.2. Risk valuation
Risks are assessed according to their likelihood of occurrence and their magnitude of impact.
Accordingly, they are categorized as high, medium or low. The potential damage includes any
potential negative deviation from alstria’s forecasts and objectives with regard to its total
comprehensive income or effects on the overall result of alstria.
Classification according to degree of impact
Expected impact in EUR m
Degree of impact
Between 0.0 and 0.6
Between 0.6 and 1.5
Between 1.5 and 6.0
Between 6.0 and 15.0
Greater than 15.0
Classification according to likelihood
Probability/likelihood of occurrence
1 to 15 %
16 to 35 %
36 to 55 %
56 to 75 %
76 to 99 %
minor
low
moderate
high
critical
Description
very unlikely
unlikely
possible
likely
highly likely
According to this framework, a very unlikely risk is defined as one that will occur only in exceptional
circumstances, and a highly likely risk as one that can be expected to occur within a specified period
of time.
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Based on the likelihood that a specific risk event will occur and the impact it would have on alstria’s
business, financial position, profit, and cash flow, each risk is classified as high, medium or low
according to the following matrix.
Risk classification
Probability
highly likely
likely
possible
unlikely
very unlikely
L
L
L
L
L
l
M
M
L
L
L
H
M
M
L
L
H
H
M
M
L
H
H
H
M
M
Degree of impact
minor
low
moderate
high
critical
L = low risk.
M = medium risk.
H = high risk.
In 2020, the Company’s risk-management system was not exposed to any significant changes from the
previous year.
1.2.
Key characteristics of accounting-related internal controls and risk-management system
Regarding the reporting process, the objective of the control and risk-management system is to make
sure that reporting is consistent and in line with legal requirements, generally accepted accounting
principles, the International Financial Reporting Standards (IFRS), and internal guidelines. Only then
can it provide true and reliable information to the recipients of the annual financial statements. To
this end, alstria has implemented an internal control and risk-management system that combines all
relevant principles, processes, and measures.
The internal control system consists of two areas: control and monitoring. In organizational terms,
the divisions’ treasury, controlling, and accounting divisions are responsible for control.
The monitoring measures consist of elements incorporated into the process as well as independent
external elements. The integrated measures include process-related, system-based technical controls
such as the ‘dual control principle’ (which is applied universally) and software-based checking
mechanisms. In addition, qualified employees with the appropriate expertise and specialized
departments such as controlling, legal, and treasury perform monitoring and control functions as part
of the various processes.
The Management Board and Supervisory Board (in particular, the Audit Committee) are involved in
the monitoring system. These groups perform various checks independent of the Company’s
processes. The internal audit function is transferred to an external auditing firm.
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Accounting acts as the central interlocutor for special technical questions and complex reporting
issues. If required, external experts (auditors, qualified accounting specialists, etc.) are consulted.
In addition, monitoring related to accounting is executed by the Company’s controlling department.
All items and main accounts for the consolidated companies’ income statements and balance sheets,
as well as the consolidated income statements and the consolidated statement of financial position,
are reviewed regularly for accuracy and plausibility. This process is conducted for both the
consolidated financial statements and alstria’s individual financial statement. Accounting-related
data are monitored monthly or quarterly, depending on the frequency of their preparation.
The accounting-related risk-management system forms part of the alstria Group’s risk-management
system. The risk owner responsible for the finance area monitors the risks that are relevant to the
accuracy of accounting-related data. Risks are identified on a quarterly basis and are assessed and
documented by the risk-management committee. Appropriate action is taken to monitor and optimize
accounting-related risks throughout the Group.
1.3.
Description and assessment of risks
According to the four risk categories described, alstria differentiates between strategic risks,
operational risks, compliance risks and financial risks. All material risks inherent to the future
development of the Group’s position and performance (including effects on assets, liabilities, and
cash flows) and reputation are described in this chapter.
The order in which the risks are presented in each of the four categories reflects the currently
estimated relative exposure for alstria associated with these risks and thus provides an indication of
the risks’ current importance to the Group. Additional risks not known to us or that we currently
consider immaterial may also negatively impact alstria’s business objectives and operations. Unless
otherwise stated, the risks described below relate to all Group companies.
The individual risks described relate to the planning period from 2021 to 2023.
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Likelihood
Risk
impact
Risk level
Change since
prior year
Corporate risks
Strategic risks
Market environment risks
Risks in relation to changes
to the legal environment
Risks due to inefficient
organizational structures
Operational risks
Refurbishment projects risks
Shortfalls of rental payment risks
Vacancy risk
Maintenance risk
HR risks
IT risks
Risks relating to property transactions
Compliance risks
Risks resulting from not complying
with G-REIT legislation
Risks arising from fraud or
noncompliance
Litigation risks
Climate related risks
Human rights risks
Financial risks
Valuation risks
Breaches of covenants
Tax risks
Interest rate risks
Liquidity risks
likely
unlikely
unlikely
possible
possible
possible
Possible
possible
possible
unlikely
unlikely
unlikely
unlikely
unlikely
unlikely
unlikely
unlikely
unlikely
unlikely
unlikely
high
moderate
moderate
critical
high
high
high
low
low
moderate
moderate
moderate
moderate
low
low
high
high
high
moderate
moderate
high
high
H
L
L
H
M
M
M
L
L
L
L
L
L
L
L
M
M
M
L
L
L
L
increased
unchanged
unchanged
increased
increased
increased
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
Refinancing on unfavorable terms
Counterparty risks
very unlikely
very unlikely
1.3.1. Impact of COVID-19 issues on alstria‘s risk situation
As a result of the tough lockdown measures in the course of fighting the COVID-19 pandemic, the
German gross domestic product fell by 5 % in 2020, according to the federal government. Due to the
economic downturn, the unemployment rate rose to 6 % (previous year: 5 %). The spread of COVID-19
increased again around the turn of the year 2019/2020, with the number of new infections rising
rapidly in many countries. Current impacts from the pandemic vary considerably between regions and
customer industries. Governments and other local authorities are striving to contain the spread of the
disease by implementing various countermeasures, ranging from recommending social distancing and
new hygiene standards to imposing large-scale lockdowns and restrictions on opening conditions in
certain sectors of the economy. Governments are expected to further restrict or extend economic
restrictions depending on epidemiological trends and political pressure. As a result, the extent and
duration of the individual effects on the letting business are extremely difficult to predict. For
example, if containment measures are tightened or take an unpredictably long time, this might
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significantly impact alstria’s business development in a way that exceeds current expectations and
might go beyond already initiated mitigation measures. Key uncertainties of the COVID-19 crisis are
its duration, including, for example, potential additional waves of infections or mutations of the virus,
and the economic cost of the lockdowns.
Potential consequences include an unsustainable burden of public and private debt that hampers the
post-pandemic recovery, severe disruptions in the financial system and bankruptcies among alstria’s
customers and suppliers. In the long term, a rollback of globalization could reduce the potential for
future growth. Crisis assessment and management measures have been put in place across functions
to carefully monitor and mitigate the various impacts of COVID-19, with an emphasis on the health
and safety of our employees and business continuity.
That the extent of the recession and unemployment did not turn out to be even higher in Germany is
primarily due to the extensive state support payments and the instrument of short-time working. Even
if the leading indicators pointed to a recovery in the economy in 2021, the further course of the
pandemic will also bring with it great uncertainty for the coming months.
With regard to alstria’s risk situation, this uncertainty has negative effects, in particular on the
market environment risks, vacancy risks and rent default risk (see table above). The effects are
discussed in detail below in the description of these risks.
1.3.2. Strategic risks
Strategic risk management addresses the factors that influence the Company’s market environment,
regulatory environment, and strategic corporate organization.
Market environment risks
For the Group, market environment risks are derived from macroeconomic developments and their
impact on respective real estate markets. An economic downturn in the German market could result
in a decreasing number of employees and in lower demand for rental areas in office properties. For
alstria, this would lead to a higher risk of vacant space or to lower rental income.
Due to the high dependency of global markets, especially for the German economy, the development
of the global economy also has an indirect influence on alstria‘s business development, although
alstria’s business activities are limited to the domestic rental market. While the slowdown in global
markets’ growth due to the political instability of certain countries in crisis, the continuing low
interest rates of the European Central Bank, and discussion about certain states’ high debts as well
as the UK’s exit from the EU and the trade policy of the US government have been seen as factors of
uncertainty, the effects of the COVID-19 pandemic have surpassed these risks by far and determined
the categorization of the market environment risks.
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There is considerable uncertainty regarding the global economic outlook. In particular, the renewed
and severe escalation of the COVID-l9 pandemic with a sustained, long, globally synchronized
shutdown would stall the recovery already underway and lead to a new deep recession. Because the
fiscal and monetary policy scope for action appears already largely exhausted, the economic impact
could be much greater than in the fiscal year 2020. There is also great uncertainty about the long-
term consequences of the pandemic for important industries. In addition, beyond COVID-19, the
aforementioned essential trouble spots have not been defused and in some cases even have
intensified.
Additionally, the highly interconnected global economy remains vulnerable to natural disasters or
further pandemics.
After the severe economic downturn in the 2020 financial year, the uncertainties of further economic
development in Germany, the EU and the global economy remain considerable. As a result, the market
environment risks are adjusted and, after a low (L) risk level on the previous year’s reporting date,
now have a high risk level (H).
Risks in relation to changes in the legal environment
Risks related to the Company’s legal environment result from changes to regulations and laws. These
may in turn have an impact on key regulatory requirements and on the corporate constitution of the
alstria companies. These include alstria’s classification as an REIT and other regulations concerning
publicly listed companies. New laws and regulations may result in new regulatory requirements and
thus in higher expenses. Overall, risks regarding the legal environment are, as in the previous year,
classified as low (L).
Risk caused by inefficient organizational structures
Within the scope of the business organization’s strategic direction, there are further risks caused by
inefficient organizational structures and the Company’s dependence on IT systems and structures.
Both the organizational structure and the IT infrastructure support strategic and operational
objectives. The transition from work in an office to digital work in locally decentralized structures
could thus be implemented without friction losses. The risk of strategic corporate organization
therefore remains low (L).
1.3.3. Operational risks
alstria’s operational risk management deals with property-specific risks and general business risks.
These include vacancy risk, tenants’ creditworthiness, and the risk of falling market rents. Personnel-
related risks, such as loss of know-how and competencies due to staff fluctuations, are also monitored
in this risk area. alstria applies various early-warning indicators to monitor these risks. Ongoing
insurance checks, such as rent projections, vacancy analyses, and the control of lease terms and
termination clauses, are designed to help identify potential dangers and risks.
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Refurbishment project risks
alstria realizes a significant number of refurbishment projects. All risks related to these projects are
managed through extensive project control and through a related budget-management process.
Potential risks include those of delayed completion, budget overrun, and deficiencies in construction.
The still strong economy in the construction industry places increasing demands on the on the
procurement and execution of contracts due to the limited availability of craftsmen and construction
companies. Even if these cyclical bottlenecks should ease somewhat in the future against the
backdrop of the COVID-19 pandemic, the volume of construction projects planned for the three
financial years after the reporting period has increased. Due to the increase in project volume, the
basis for the extent of the potential damage has increased. For this reason, the risk resulting from
refurbishment projects is now classified as high (H), while at the end of the previous reporting period
it was still considered to be a moderate (M) risk.
Shortfall of rental payment risks
An operational risk is a potential shortfall of rental payments from one or more major tenants; it
could be realized as a result of an economic downturn or of a particular case. Due to the described
consequences of the COVID-19 pandemic on the economic situation of many market participants, the
risk has increased that tenants of alstria could also experience difficulties in meeting their rental
payment obligations. alstria’s main tenants are predominantly public institutions or companies with
a high rating. Actual defaults were limited during the year following the initial lockdown. Precautions
have been taken by write-downs of receivables. The extent to which the new lockdown and the
ongoing restrictions will affect the future payment behavior of tenants cannot be conclusively
assessed at the moment. As a result, the risk of default on rent payments has increased and is now
classified as a medium risk (M) after it was still considered a low risk (L) on the previous year’s
reporting date.
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Vacancy risk
In the cases of lease terminations, leases that are not extended and existing vacancies, there is a risk
that the rental area will not be re-let as planned, resulting in lower-than-anticipated revenues.
alstria’s budgeting is based on the assumption that rental areas can be re-let within a defined period
following the end of a lease. As a result of the COVID-19 countermeasures, there were the economic
downturns described and also an increased trend towards home office. Both factors are currently
causing many market participants to be very reluctant to demand office and commercial space,
although this does not have a major impact on existing letting agreements. Due to long-cycle
development of the demand for office rental areas, there is usually a time lag between changes in
macroeconomic conditions and their impact on alstria’s letting results. Vacancy risks are to be
expected if tenants move out because they can no longer pay their rents, if the leases of the rental
space are not extended after the lease agreement has expired or if the space can no longer be re-let
after tenants have moved out because the demand due to economic situation or a sustainable trend
towards home office no longer exists to a comparable extent.
On the other hand, tenancies are of a long-term nature, so that rental income does not usually fall
away spontaneously. For some tenants, the uncertainty also leads to maintaining the status quo and,
due to the unclear entrepreneurial perspective, not looking for new rental space but rather extending
the existing lease with alstria. It was thus possible to enable new lettings and lease extensions in the
past financial year. Overall, the volume of lettings was lower than in previous years and due to the
longer planning and decision-making phases regarding the leasing of office space by companies, a
longer lasting lag effect is to be expected. As a result, the vacancy risk has increased, but is still
classified as medium risk (M).
Maintenance risks
To plan for the requirements of maintenance measures, the Company makes assumptions about a
property’s condition and the intended standard. Undetected defects, repair requirements resulting
from external damage, new legal requirements regarding the condition of the building, or incorrect
assessment of maintenance requirements could all result in higher-than-planned maintenance costs.
Due to alstria’s still high maintenance budgets, the maintenance risk is categorized as medium (M),
as it was in the previous year.
HR risks
The skills and motivations of alstria’s employees are decisive factors in the Company’s success. The
risk of losing knowledge results from the fluctuation of staff members and from the inability to recruit
sufficiently qualified experts to fill vacancies in good time. Both cases could result in a shortfall of
suitable experts and key personnel, which could endanger alstria’s competitive advantages and
further growth opportunities in its markets. alstria mitigates these risks through the following
measures: selective, needs-oriented skill development for existing staff members; strengthening of
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Combined Management Report
its image as an attractive employer; university marketing; trainee programs; training of apprentices;
and profit-oriented variable remuneration schemes. Furthermore, employee surveys on employee
motivation, management, and corporate culture are carried out anonymously by independent
external experts. Overall, alstria estimates the described risks to be at a low level (L), which
corresponds to the situation at the end of the previous year.
IT risks
The majority of alstria’s business processes are supported by IT systems. Any fault affecting the
reliability or security of the IT systems could lead to delays or interruptions in operating activities.
alstria protects itself against IT risks through constant examination and enhancement of the
information technology that it deploys. In addition, it has installed modern hardware and software
solutions and safeguards against attacks. In view of attempted hacker attacks, measures to combat
such cyberattacks were implemented. Structural security measures are in place to protect the
computer center. All data are backed up daily in an internal depository and once per week in a
separate data depository. Workstations have access restrictions so that employees are only able to
access the systems that they need for their work. During the transition from office work to
decentralized digital work in home offices, the IT security measures were transferred as far as possible
to distance work. The effectiveness of IT security in the home offices was confirmed in a review by
an external IT consultant. Therefore, overall IT risks are assessed to be unlikely to materialize; as in
the prior year, their possible consequences are considered to be low (L).
Risks relating to property transactions
alstria is exposed to risks related to the acquisition and disposal of real estate properties. Related
risks include the partial or complete failure to detect the risks and liabilities associated with
properties during the due diligence process. In case of the disposal of real estate assets, alstria usually
gives certain warranties to potential purchasers regarding factual and legal matters for the property
in question. The possibility that alstria’s management may not be aware of risks that are covered by
certain elements and warranties given in a sales agreement cannot be fully ruled out. As a result,
there is generally a risk that a prospective purchaser may charge alstria (as the seller) with breach of
warranty.
From a purchasing perspective, alstria is exposed to risks that hidden deficiencies on land and/or
property may not be observed and that unfavorable contractual agreements may be transferred to
the Company, resulting in additional future costs.
In both acquisition and selling proceedings, alstria responds to these risks with thorough technical,
legal, and tax analyses of all relevant property and contractual issues. It does so by employing internal
and external lawyers, tax advisors, architects, construction engineers, and other required experts. As
before, risks relating to transactions of properties are assessed to be of a low (L) to medium (M) level.
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1.3.4. Compliance risks
Risks resulting from not complying with G-REIT legislation
alstria is registered in the commercial register as a German REIT-AG (G-REIT). The German REIT
segment allows alstria to offer an attractive profile to investors and to distinguish itself in the capital
markets as an REIT. The REIT shares are traded on the Frankfurt Stock Exchange. The G-REIT status
does not have any influence on admission to the regulated market (Prime Standard).
Certain requirements have to be met by the Company in order to qualify for and retain its designation
as a G-REIT. The most significant requirements are as follows: A G-REIT must be a stock corporation
listed on an organized market, and its registered office and management must be in Germany. Its
registered share capital must amount to at least EUR 15 million. All shares must be voting shares of
the same class. Free float must be at least 15 %, and no investor may directly hold 10 % or more of the
shares or shares that represent 10 % or more of the voting rights. Furthermore, at least 75 % of assets
must consist of real estate, and at least 75 % of gross income must be generated from real estate. At
least 90 % of annual profits as resulting under German GAAP-accounting must be distributed to
shareholders, and the G-REIT’s equity may not fall below 45 % of the fair value of its real estate assets
as recorded under IFRS.
Due to consistent monitoring of compliance with all described REIT criteria, the risk of noncompliance
is considered to be low (L), as in the previous year.
REIT corporations are exempt from German corporate income tax (KSt) and German trade tax
(GewSt). This tax exemption has been applied to the Company with a retrospective effect since
January 1, 2007.
Capital and investment management activities maintain the Company’s G-REIT status in order to
support its business activities.
According to Section 15 of the REIT Act, alstria’s equity (as reported in its consolidated financial
statements) must not fall short of 45 % of its immovable assets. If the minimum equity ratio is,
however, not satisfied for three consecutive financial years, the German exemption from corporate
income taxes (KSt) and trade taxes (GewSt) ceases at the end of the third financial year.
The G-REIT equity ratio is 71.1 % as of the balance sheet date. Accordingly, alstria complies with the
minimum G-REIT equity ratio requirement according to Section 15 of the G-REIT Act (REITG). alstria
cannot lose its G-REIT status as a result of failing to meet the 45 % threshold within the three-year
forecast period through December 31, 2023.
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Risks resulting from fraud or noncompliance
alstria depends on all employees and management respecting the compliance standards in place.
alstria’s business expects employees and members of management to comply with documented laws,
policies, and procedures. If alstria’s senior management fails to document and reinforce the
Company’s policies and procedures, or if employees commit criminal, unlawful, or unethical acts
(including corruption), such actions could have an adverse material effect on alstria’s business,
financial condition, and results of operations. They would also harm alstria’s reputation in the real
estate market, thereby negatively affecting future business opportunities. The General Data
Protection Regulation (Datenschutzgrundverordnung), which came into force in the financial year
2019, provides significantly higher fines in the event of infringement. The data protection measures
already in place at alstria, as well as newly introduced guidelines and processes, are in line with the
requirements of the General Data Protection Regulation. alstria has implemented a compliance
organization, which deals with adequate and documented compliance rules and regulations and
provides training to all employees concerning compliance-related topics.
In doing so, the Company has established central behavioral principles in the areas of
▪ Anti-corruption,
▪ Avoiding conflicts of interest,
▪ Handling confidential information and insider knowledge, and
▪ Anti-discrimination, equality, and diversity concerns.
The materialization of compliance risks is assessed to be low (L), which is unchanged from the
assessment of the previous year.
Litigation risks
alstria AG or any of its subsidiaries could be involved in pending or foreseeable court or arbitration
proceedings that might have significant impacts on the Group’s business position at any time. Other
risks might arise from legal actions taken to address warranty claims, repayment claims, or any other
claims brought forward in connection with divested properties or development projects implemented
over the last few years.
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Risks associated with the change of legal form of DO Deutsche Office AG into the limited
partnership alstria office Prime Portfolio GmbH & Co. KG in 2016
Some shareholders of former DO Deutsche Office AG who declared an objection during the office’s
general meeting on July 12, 2016 and their intention to exit the limited partnership alstria office
Prime Port-folio GmbH & Co. KG have taken the view that the EUR 4.68 cash compensation offered
to them was set too low. For this reason, these shareholders used the opportunity to have the fairness
of the cash compensation reviewed in a judicial arbitration proceeding and filed the necessary
application to initiate such a proceeding. If the court rules in a final decision that the Company must
improve the cash compensation, such a decision will, in accordance with Section 13 of the German
Arbitration Proceedings Act, be effective for and against all the shareholders of former DO Deutsche
Office AG who are entitled to cash compensation (e. g., all shareholders who declared an objection
during the Annual General Meeting of DO Deutsche Office AG on July 12, 2016). This means that the
additional cash compensation fixed by the court will also be paid to shareholders who have not filed
applications in the arbitration proceeding and/or have already declared their exits from the limited
partnership. As of the date of the transformation notice published with the commercial register of
the local court in Hamburg, the additional cash compensation will have to be made with an annual
interest of five percentage points above the base lending rate effective at that time. This right to an
additional cash compensation of an unlimited amount with interest might result in a financial burden
and hence have an adverse impact on the net assets, financial position, and operations results of the
Group. Prior to the transformation, the Company obtained an expert opinion with the aim of
establishing the enterprise value and adequate cash compensation. Subsequently, the adequate cash
compensation was subject to a mandatory audit by an independent expert, as prescribed by law. In
addition to measures implemented before the litigation to reduce the risk of additional cash
compensation, the Company receives legal support from external advisors in the current proceeding.
In its decision on September 26, 2019, the Hamburg Regional Court set the cash compensation to be
paid to entitled shareholders leaving the company with regard to the legal form change at EUR 5.58
(plus interest at 5 percentage points above the base interest rate). alstria office Prime Portfolio GmbH
& Co. KG as a defendant, as well as several applicants, have filed an appeal against this decision,
which is therefore not yet effective.
The effects of the described lawsuit on the risk of litigation as well as the general risk situation have
been taken into account by the establishment of liabilities.
Apart from this lawsuit, neither alstria AG nor any of its group companies are involved in pending or
foreseeable court or arbitration proceedings that might have a significant impact on the Group’s
business position. This also applies to legal actions addressing warranty claims, repayment claims or
any other remuneration brought forward in connection with divested properties or development
projects implemented over the last few years. The respective group companies have accounted for
appropriate provisions to cover any potential financial charges from further court or arbitration
proceedings.
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Since none of the Group’s companies are currently exposed to any further civil rights proceedings or
other kinds of legal disputes and none are expected to occur, the risk of legal disputes is classified as
low (L), as it was in the previous year.
Climate-related risks
Considering the long-term nature of the real estate business and the immovable nature of the assets,
it is of key importance to take into account the effect of climate change on the prospects. The specific
risks related to climate change that the Company faces are the following:
Physical risks – acute: alstria’s property portfolio is subject to extreme weather events, such as
flooding, storms, and hail, that may weaken building structures and threaten tenants’ safety. Such
phenomena will intensify in the coming years. alstria’s control process includes the following:
▪ Use of risk assessments from insurance companies to determine which buildings need to be
upgraded.
▪
Insurances covering the portfolio from the loss of rent due to fire, storms, hail, or any act of
God with a total insured value at least as high as our assets’ balance sheet value.
Transition risks – regulatory: After the Paris Agreement, new regulations, notably regarding energy
efficiency restrictions, are to be anticipated. These might impose more stringent obligations on the
building sector, resulting in a need for more renovations per year. alstria’s control process includes
the following:
▪ Ongoing environmental monitoring and compliance with applicable laws and standards.
▪ Participation in industry bodies to monitor emerging legislation early on.
Transition risks – market: Climate change has shaped tenants’ behavior in requiring flexible office
space often associated with energy-efficient solutions. Failing to respond to the growing demand for
sustainability services can result in a lack of attractiveness of assets, implying a subsequent decline
in their rental potential. The prevention measures alstria takes are as follows:
▪ Offering additional services to help tenants run their offices efficiently.
▪ Recognizing early the financial requirements to upgrade and modernize buildings.
Similarly to in the previous year, environmental risks are assessed at a low (L) level.
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Risk of noncompliance with human rights
There is a risk that alstria’s activities will trigger activities or have an impact that violates human
rights, for instance, as a result of unworthy working conditions at construction sites or the production
of products or services used in business activities. alstria is fully committed to its responsibility to
respect human rights. Efficient management guidelines and the compliance organization, which is
particularly geared toward legal compliance, anti-discrimination, and diversity, support the goal that
the behavior of alstria’s legal representatives and employees always correspond to high ethical
standards. These standards also apply to the drafting of contracts with contractors or customers,
which should be done with the aim of minimizing the riskof noncompliance with human rights along
the value chain. Throughout the group, we especially respect the UN Guiding Principles on Business
and Human Rights, which are grounded in the recognition that states and companies must to respect
human rights. States are primarily responsible for protecting their citizens’ human rights, and it is
their obligation to translate their international human rights duties into national regulations and laws
that ensure human rights are protected. In situations where national laws do not cover internationally
recognized human rights, or the implementation of such laws is weak the UN Guiding Principles clearly
expect companies to operate according to a higher international standard.
In Germany, the degree to which the government respects and protects human rights is rather high.
As a German real estate company focusing solely on German office properties, alstria operates within
the framework of German law and, accordingly, obeys its human rights rules and regulations. Overall,
the risk of noncompliance with regard to human rights is classified as low (L), as in the previous year.
1.3.5. Financial risks
Due to alstria’s refinancing strategy, its financial risk situation remained stable compared to the
previous year’s reporting period.
Valuation risks
The fair value of the real estate properties owned by the Company reflects their market value as
determined by independent appraisers, which could be subject to change in the future. Generally,
the market value of real estate properties depends on a variety of factors, some of which are
exogenous and may beoutisde alstria’s control. These factors include declining rent levels, decreasing
demand, and increasing vacancy rates. Many qualitative factors are also decisive in the valuation of
a property, including its conditions, expected market rents, and location. The final assessment of the
mandated appraiser is to a certain extent discretionary and may differ from the opinion of another
appraiser. Should the factors considered or assumptions made in valuing a property change to reflect
new developments or for other reasons, subsequent valuations of the respective property may result
in a diminished market value. If such valuations reveal significant decreases in market value compared
to prior valuations, the Company may incur significant revaluation losses with respect to such
properties.
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Factors such as economic changes, interest rate fluctuations, and inflation may adversely affect
properties’ value. To minimize these risks, regional diversification of investment portfolios,
consistent focus on the individual needs of tenants, and detailed market research and analysis (broker
reports) are applied. In addition, the market value of all of alstria’s assets is determined at the end
of each year by independent, internationally recognized experts. The consequences of the COVID-19
pandemic have not yet had negative effects on the current assessment. In summary, the risk of
unexpected devaluations is therefore classified as moderate (M), as in the previous year.
Breaches of covenants
In the process of taking out loans and the issuance of a Schuldschein, alstria agrees to comply with
certain covenants, such as to achieve a minimum income (debt service coverage ratios) from
mortgaged properties or not to exceed a certain level of debt (LTV). In the event of a breach of these
covenants, consequences arise, such as increased credit margins or, in the worst case, an
extraordinary termination of a loan by the lender. The Group’s current LTV ratios, as described above,
give significant leeway to the permitted leverage ratios. Hence, the risk of a breach of covenants is
currently classified as medium (M), as in the previous year.
Tax risks
REITs are completely exempt from corporate income tax and trade tax. As a result, tax risks can only
arise in the case of loss of REIT status or at a subsidiary level. Additionally, the Group as a whole
faces risks from value-added tax, real transfer tax, and property tax. Furthermore, changes in tax
laws or their interpretations may result in higher tax liability for prior tax periods that have not yet
been approved. As a consequence of the takeover of the alstria office Prime Group, companies are
included in the consolidated financial statements that are not subject to the regulations of the REIT
legislation. The restructuring, which was implemented during the 2016 financial year, particularly the
conversion of these companies’ legal forms into limited partnerships, resulted in the taxation of
hidden reserves and hidden liabilities within the acquired companies. Subsequently, the companies
are tax transparent.
Due to the income tax exemption as a REIT and consistent monitoring of tax relevant issues by internal
and external tax experts, the probability of a tax loss is considered limited. Because certain tax-
related issues, such as real estate transactions or valuations of assets and liabilities as well as reentry
into a tax liability status could result in high tax obligations over the three-year risk period, the risk
impact is considered to be significant.
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As a result of the Federal Constitutional Court judgment, the German legislature passed a new
regulation on property tax at the end of 2019. From January 1, 2022, new property tax values will
apply; these will be the new tax base for property taxes beginning January 1, 2025. Basically, the
new model is value-based. At the same time, an amendment to the Basic Law (Grundgesetz) grants
German states the right to deviate from the federal regulation and go their own ways, such as by use
of an area model. In the case of nonresidential properties relevant to alstria — particularly business
properties — the so-called real value method is used in principle. The property value is thereby
determined from the building value, which is calculated based on standard production costs, usable
space, and year of construction, as well as land value, which results from the multiplication of the
land area by the standard land value. It is therefore not necessary to determine standard rents. Even
if the new concept is to be revenue-neutral, an increase in the property tax for alstria’s real estate
cannot be ruled out. Basically, changes in property tax may affect tenants through higher service
charge costs, as the passing on of costs to tenants was not restricted. The Federal Constitutional
Court will allow the application of the current property tax rates until the end of 2024. Therefore,
higher property tax rates are not expected for the next three years.
This results in an overall moderate (M) tax risk level, which is unchanged from the previous year’s
average tax risk.
Interest rate risks
Interest rate risks result from fluctuations in market interest rates, which affect the amount of
interest expenses in the financial year and the market value of derivative financial instruments used
by the Company.
alstria’s hedging policy allows for using a combination of plain vanilla caps and swaps if applicable to
limit the Company’s exposure to interest rate fluctuations. It still provides enough flexibility to allow
for the disposal of real estate assets, avoiding any costs associated with an over-hedged situation.
The interest base for the financial liability (loan) is the EURIBOR, which is adjusted every three
months. The maturity of the derivative financial instruments is linked to the term of maturity of the
loans. Derivative financial instruments relate to interest caps in order to cap the interest at a set
maximum. As of the balance sheet date, the majority of funding consists of long-term fixed-interest
loans and bonds and is therefore not subject to interest rate risk up to its maturity. The floating
interest rate loans are mainly hedged by an interest rate cap. As a result of the refinancing in the
2019 financial year of a bond that would have matured in 2021 through a new bond with a term
extending to 2025, the interest rate risk on the balance sheet date is classified as a low risk (L), as
on the previous year’s reporting date.
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Liquidity risk
One of alstria’s core processes is cash management. The Company manages its future cash position
and monitors its progress daily. A cash forecasting tool is used to prevent liquidity risks. As a basis for
analysis, this liquidity planning tool uses the expected cash flows from business activities and the
maturity of the financial investments.
Due to refinancing activites in recent years, such as the placement of several corporate bonds with
diversified maturity profiles, the substantial liquidity risk arising from the repayment of all or most
of alstria’s credit commitments in one sum (“balloon repayment”) has been managed successfully.
Because the majority of the loans and bonds will not be due until 2023, the liquidity risk resulting
from repayment obligations is currently low (L), as in the previous year.
Refinancing risks
The Group’s main financial instruments are fixed-interest bonds. In addition, there are mortgage-
backed bank loans and derivative financial instruments. The main purpose of the bonds and bank
loans is to finance alstria’s business activities. Derivative financial instruments consist of an interest
rate cap and have the purpose of hedging against interest risks arising from the Company’s business
activities and financing sources. The main risks arising from the Group’s financial instruments are
cash flow risks, interest rate risks, and liquidity risks. alstria Group’s current Net LTV is 27.0 %, which
is a low value compared to the average LTV of the real estate companies listed in the DAX segment
of Deutsche Börse AG (DAX, MDAX, and SDAX). The Group’s bank loan LTVs on the balance sheet date
are well below the LTVs permitted under the respective loan agreements (see an overview of loan
facilities on page 17). The risk of a covenant breach was thus encountered effectively. The credit
rating agency Standard and Poor’s classified alstria’s creditworthiness as unchanged at BBB
(“Investment Grade") at the end of the reporting period. The refinancing of the majority of alstria’s
bonds and bank loans is not required before the 2023 financial year, when one of four bonds matures.
The other three have varying maturities up to the 2027 financial year, so a diversified maturity profile
exists and the refinancing of all loans in one amount can be avoided (see the maturity profile of the
loans on page 17). As a result, the risk of refinancing on unfavorable terms was classified as low (L),
as it was at the end of the previous year.
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Counterparty risks
alstria hedges a portion of its risk by applying third-party instruments (interest rate derivatives,
property insurance, and others). alstria’s counterparties in these contracts are internationally
recognized institutions that are rated by the leading rating agencies. alstria regularly reviews the
ratings of its counterparties to mitigate any risk of default. The 2007 financial crisis raised doubts
regarding the reliability of rating agencies’ assessments. In response to this concern, alstria uses other
information sources to verify rating agencies’ assessments. The COVID-19 crisis has not yet affected
the creditworthiness of alstria’s major contractual partners. The determination of fiscal policy and
monetary policy to support industries and particularly affected companies, as well as systemically
important institutions such as banks and insurance companies may also contribute to this.
alstria is otherwise exposed to no significant credit risks. Hence, counterparty risk can be classified
as low (L), just as it was last year.
1.4. Overall risk assessment by the Management Board
alstria AG consolidates and aggregates all risks reported by the different business units and functions
adhering to its risk management policy. The most significant challenges have been mentioned first in
each of the four risk categories: strategic, compliance, operational and financial.
Compared to the previous year, alstria’s risk situation was influenced by the COVID-19 pandemic. For
the 2020 financial year, compared to 2019, there were changes were to be noted in alstria’s risk level
matrix for risks categorized as high (H) or medium (M). At the end of the year, high risks accounted
for 10,0 % (December 31, 2019: 0.9 %) of all identified risks, whereas medium risks accounted for
32.7 % (December 31, 2019: 35.5 %). This is based on the described deterioration of the economic
situation and the resulting increase in the likelihood of a decline in demand for new office rental
space and the possibility of payment difficulties and even bankruptcy among alstria’s tenants. Due to
the high proportion of government agencies, public-sector companies, and companies with high credit
ratings, the Management Board assesses the risk situation as manageable. The COVID-19-related risks
did not pose a threat to the company’s existence.
From the Management Board’s point of view, the steady refinancing position, the conservative LTV
and the solid REIT equity ratio are stabilizing factors. The long-term refinancing position minimizes
the risk of higher borrowing costs in the event of rising interest rates or margins. The low LTV ratio
reduces the risk that could arise if the property valuations come under pressure (e. g., as a result of
interest rate hikes).
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Sufficient precautionary measures have been undertaken to counteract identifiable risks.
In addition to assessing the potential impact of the realization of risks on the value of the Group’s
net assets, the potential liquidity requirements for selected key risks are identified for a period of
three years. The assessed amount of liquidity amounted to EUR 45.9 million as of the balance sheet
date, compared to EUR 34.9 million as per December 31, 2019.
In our view, the risks described in our aggregated risk report do not threaten, whether individually or
cumulatively our ability to continue as a going concern, given their likelihood of occurrence and
potential levels of impact.
2. REPORT ON OPPORTUNITIES
2.1. Management of opportunities
alstria’s management aims to identify and assess opportunities as early as possible and to initiate
appropriate measures to take advantage of those opportunities and transform them into business
success.
Growth and earnings opportunities result both from alstria’s existing real estate portfolio and from
its acquisition of properties. Depending on a property’s position in its life cycle, opportunities may
be found in repositioning and development, in strengthening tenant relationships, or in selling the
property.
The Company’s financing activities safeguard the necessary funding to implement these activities.
Here, opportunities are based on ensuring sustainable financing, including equity funding, on
favorable terms.
The evaluation of opportunities is carried out in the context of annual budget planning and on an
ongoing, occasional basis during the year. The process starts with a careful analysis of the market
environment and of market opportunities related to the properties held in the portfolio. This analysis
includes assessing criteria such as tenant needs, property categories, and regulatory changes. Regular
reporting addressing the Management supports the monitoring of growth initiatives within the budget
and planning-approval processes.
The alstria Management Board is regularly updated on the status and progress of the initiatives being
implemented. The real estate operations department receives monthly reports in which the planned
costs and revenues are compared to the actual budget consumption and revenues. In addition,
financial and liquidity planning and forecasts are updated, and changes to the project scope are
clarified.
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2.1.1. Opportunities related to real estate acquisitions
The location of a property is essential for its attractiveness. Opportunities arise when a regional
market is characterized by favorable demographics and real estate dynamics. Together with optimal
property management, location results in opportunities for long-term capital appreciation. alstria’s
acquisition strategy is aimed at identifying properties with the described opportunity structure. Its
investment strategy therefore focuses on acquiring properties and portfolios with higher vacancy
rates, which are thus open to additional growth opportunities through the stabilization of the
properties’ leases. An important task to preserve these opportunities is the possibility of turning
COVID-19 challenges into opportunities, for example by implementing pandemic-proof space
expansions and intelligent area use concepts with the integration of home offices with tenants and
potential tenants. Furthermore, negotiations with tenants to avert acute bottlenecks can not only
include a moratorium on rent payments, but in return an extension of the lease agreement and thus
secure the chance of long-term rental income.
Acquisitions will only be performed if the investment volume offers the prospect of achieving a
sustainable increase in value. In particular, the low LTV debt ratio offers opportunities in the form of
greater flexibility for acquiring real estate.
2.1.2. Opportunities related to tenant relationships
Structured and active property and asset management both ensures the quality of our leasing service
and is the basis for sustainable tenant relationships. Opportunities arise through flexible response to
existing or potential tenants’ needs. The Company has the knowledge and resources to provide
solutions and implement tenants’ requirements, which gives rise to opportunities to generate
sustainable, long-term leases.
2.1.3. Opportunities arising from real estate development
As a long-term-oriented owner of real estate, alstria’s property portfolio also entails aging buildings
that require refurbishment or repositioning. The modernization of properties opens up the
opportunity for value creation by reshaping assets for the next 20 to 30 years and strengthening their
future attractiveness in the market and for tenants. The implementation of development projects is
becoming increasingly important, especially against the background of historically low purchase yields
on real estate.
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2.1.4. Opportunities from sustainable management
The alstria Management Board sees opportunities for a long-term strategy in supporting measures to
comply with and achieve the goals of the International Climate Change Agreement in Paris. This
consists of using a favorable political and regulatory environment, including sustainability, in order
to shape the basis for business activity in a sustainable manner. To this end, projects are actively
initiated and implemented with the aim of reducing the high CO2 emissions generated in the real
estate sector and neutralizing them in the long term. Examples of this are the promotion of reliable,
industry-compatible CO2 reporting or the investigation of CO2-neutral building materials and solutions
in the context of construction and renovation projects.
2.1.5. Opportunities arising from financing
alstria’s financing strategy is focused on the optimal provision of funds to invest in new properties
and development projects. Opportunities arise from the optimization of these financing terms, which
requires implementing long-term and flexible funding at favorable conditions and safeguarding
financial covenants at all times. Significant opportunities also arise out of a low debt ratio (the Net
LTV of bank loans is currently 27.0 %; see the overview of loan facilities on page 17, which represents
a comfortable base for future funding and growth. Funding options include mortgage loans, corporate
bonds, and equity funding. Opportunities arise from the diversification of funding sources and with
regard to the rating obtained.
2.2. Overall summary of the Opportunities Report
alstria’s current financial situation involves a stable financial position at favorable interest rates until
2023. The rating allows for greater flexibility in terms of new funding sources. Concerning revenues,
alstria benefits from long-term rental agreements with an average lease length of approx. 6.1 years
and potential increases in rents due to decreasing vacancy rates. In addition, the Company possesses
a range of properties that offer attractive and value-adding refurbishment opportunities. alstria’s
portfolio is well-balanced and has high-quality properties with tenants with good credit ratings. The
low LTV debt ratio offers a chance for greater flexibility to acquire real estate in the event that
spontaneous opportunities arise.
alstria sees itself - also against the background of the COVID-19 effects - well positioned to
successfully continue its strategy of acquisition, property development, letting and property
management and to recognize and implement its future market opportunities in this regard.
alstria’s core competence is asset management. The asset repositioning and refurbishment that alstria
continues to pursue and implement provide a strong basis for further organic increases in value within
the portfolio.
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VI. SUSTAINABILITY REPORT*
In November 2020, alstria published its annual sustainability report for financial year 2019. The report
provides insights into alstria’s decarbonization strategy and the environmental impact of its
operations. It is prepared in accordance with the GRI Standards and EPRA real estate specific
guidelines and has obtained a third-party limited assurance for all disclosed environmental and social
information.
alstria’s major sustainability accomplishments for financial year 2019 include the following:
-
Setting of science-based targets to reduce corporate and portfolio’s GHG emissions by at least
30 % by 2030 from base year 2018.
- Responding to Task Force on Climate-related Financial Disclosures (TCFD) providing its
stakeholders with greater transparency into how the business deals with climate-related risks
and opportunities.
- Making an initial attempt to account for the embedded carbon emissions from its current
development pipeline.
-
Introducing low-carbon design principles to provide alstria’s developers and service providers
with a framework for low-carbon refurbishment and thus help reducing carbon emissions
across its portfolio.
- Reducing market based operational GHG emissions by 63 % compared to base year 2013,
mainly as an effect of the renewable energy supply of its portfolio and increased engagement
with tenants.
alstria’s sustainability performance was recognized most recently by S&P Global through inclusion in
the DJSI Europe Index. Furthermore, the company’s approach to gender diversity gained it an
additional recognition by the Bloomberg Gender-Equality Index.
For further information on the company’s sustainability engagement and performance on ESG ratings,
please refer to alstria’s Sustainability Report 2019/20.
VII. DISCLOSURES REQUIRED BY TAKEOVER LAW
Disclosures and the explanatory report pursuant to Sections 289a and 315a of the German
Commercial Code (Handelsgesetzbuch, HGB)
1. COMPOSITION OF SUBSCRIBED CAPITAL
On the balance sheet dated December 31, 2020, the share capital of alstria amounted to
EUR 177,792,747.00, divided into 177,792,747 no-par value bearer shares. All shares are fully paid in
* This section is an unaudited statement.
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and have equal rights and obligations. Each share entitles the bearer to one vote at the Annual General
Meeting and is decisive for the shareholder’s share in the profits of the Company. The individual rights
and duties of the shareholders result from the provisions of the German Stock Corporation Act
(Aktiengesetz, AktG), particularly Sections 12, 53a et seq., 118 et seq., and 186.
2. RESTRICTIONS ON VOTING RIGHTS OR THE TRANSFER OF SHARES
The exercise of voting rights and the transfer of shares are based on statutory requirements and
alstria’s Articles of Association; the latter basis does not restrict either of these activities. According
to Sections 71b and 136 of the AktG, for example, the voting rights of the affected shares are excluded
by law. Other restrictions as to voting rights or the transfer of shares do not exist, or, as far as they
arise from agreements between shareholders, are not known to the Management Board.
3. SHAREHOLDINGS EXCEEDING 10 % OF VOTING RIGHTS
On the balance sheet date as of December 31, 2020, alstria was not aware of any shareholders directly
holding more than 10 % of voting rights.
4. SHARES WITH SPECIAL RIGHTS
There are no shares with special rights of control.
5. SYSTEM OF CONTROL FOR ANY EMPLOYEE SHARE SCHEME IN WHICH EMPLOYEES DO NOT
DIRECTLY EXERCISE CONTROL RIGHTS
Employees who hold alstria shares exercise their rights of control as any other shareholders do, in
accordance with the applicable law and the Articles of Association.
6. APPOINTMENT AND DISMISSAL OF MANAGEMENT BOARD AND AMENDMENTS TO THE ARTICLES
OF ASSOCIATION
alstria’s Management Board consists of one or more members who may be appointed or dismissed in
accordance with Sections 84 and 85 of the AktG. The Articles of Association do not contain any special
provisions in this respect. Pursuant to Section 84 of the AktG, members of the Management Board are
appointed by the Supervisory Board for a maximum term of five years. Reappointment or extension
of the term of office is permitted for a maximum of five years in each case.
Amendments to the Articles of Association are made pursuant to Sections 179 and 133 of the AktG.
Pursuant to Section 12, para. 2 of the Articles of Association, the Supervisory Board is also authorized
to make changes and amendments to the Articles of Association that merely affect the wording
without passing a shareholder resolution in at General Meeting. In addition, the Supervisory Board is,
by resolution of the Annual General Meetings on May 16, 2017, and September 29, 2020, authorized
to adapt the wording of the Articles of Association to the utilization of the Company’s authorized and
conditional capitals and after expiration of the applicable authorization periods.
Pursuant
to Section 15, para. 5 of
the Articles of Association,
in conjunction with
Sections 179 paras. 2 and 133 of the AktG, shareholders may make resolutions regarding such
amendments at a general meeting with a simple majority of the votes cast and a simple majority of
50
alstria Annual Report 2020
Combined Management Report
the share capital represented. Insofar as a larger majority is prescribed by law, such a majority shall
be decisive.
The Articles of Association were last amended in the reporting year by a resolution passed by the
Supervisory Board on December 8, 2020: Section 5, paras. 1, 2, and 7 of the Articles of Association
were formally adapted to a capital increase executed from the Company’s Conditional Capital III 2017.
Section 5, para. 6 of the Articles of Association was deleted because Conditional Capital III 2015 had
become obsolete.
7. AUTHORITY OF MANAGEMENT BOARD REGARDING THE ISSUE AND BUYBACK OF SHARES
7.1.
Authorized Capital
On December 31, 2020, there were three authorized capitals (pursuant to Sections 202 et seq. of the
German Stock Corporation Act), which are regulated in Section 5, paras. 3, 4, 4 a, 4 b, and 4 c.
7.1.1. Authorized Capital I 2020
The Articles of Association authorize the Management Board, with the approval of the Supervisory
Board, to increase the share capital on or before September 28, 2025, by issuing new no-par value
bearer shares against contributions in cash and/or in kind one or more times, up to a total amount of
EUR 35,198,684.00. Further details are governed by Section 5, paras. 3, 4, and 4a of the Articles of
Association.
7.1.2. Authorized Capital II 2020
The Articles of Association authorize the Management Board, with the approval of the Supervisory
Board, to increase the share capital on or before July 1, 2021 one or more times by up to a total of
EUR 260,000.00 through the issuance of new no-par value bearer shares against contributions in kind.
Further details are governed by Section 5, para. 4b of the Articles of Association.
7.1.3. Authorized Capital III 2020
The Articles of Association authorize the Management Board, with the approval of the Supervisory
Board, to increase the share capital on or before July 1, 2021 one or more times by up to a total
amount of EUR 60,000.00 through the issuance of new no-par value bearer shares against contributions
in kind. Further details are governed by Section 5, para. 4c of the Articles of Association.
7.2.
Conditional Capital
alstria holds three conditional capitals (pursuant to Sections 192 et seq. of the AktG), which are
regulated in Section 5, paras. 5, 7, and 8 of the Company’s Articles of Association.
7.2.1. Conditional Capital I 2020
The share capital is conditionally increased by up to EUR 16,750,000.00 by issuing up to 16,750,000
no-par value bearer shares. The conditional capital is to be carried out to the extent that the holders
of option or conversion rights or persons obliged to conversion under option or conversion bonds,
profit participation rights or participating bonds which were issued by alstria AG on the basis of the
authorization resolved by the shareholders in the Annual General Meeting on September 29, 2020,
alstria Annual Report 2020
51
Combined Management Report
under item 11 of the agenda exercise their option or conversion rights or, if they are obliged to
conversion or exercise of the option, fulfill their conversion obligation or, as the case may be, their
obligation to exercise the option and that no cash settlement is granted and no own shares are being
used to satisfy such claims. Further details are governed by Section 5, para. 5 of the Articles of
Association.
7.2.2. Conditional Capital III 2017
The share capital is conditionally increased by an amount of up to EUR 800,675.00 by issuing up to
800,675 no-par-value bearer shares. The conditional capital increase shall be used exclusively to grant
shares to the holders of convertible profit participation certificates issued by the Company through
May 15, 2022, in accordance with the authorization of the General Meeting held on May 16, 2017. The
conditional capital increase is only carried out to the extent that issued convertible profit
participation certificates are converted into shares of the Company and no treasury shares are used
to satisfy the certificates. The new shares shall participate in the Company’s profits from the
beginning of the financial year in which they come into existence as a result of converting of
certificates.
7.2.3. Conditional Capital III 2020
Furthermore, the share capital is conditionally increased by an amount of up to EUR 1,000,000.00 by
issuing up to 1,000,000 no-par-value bearer shares. The conditional capital increase shall be used
exclusively to grant shares to the holders of convertible profit participation certificates issued by the
Company on or before September 28, 2025, in accordance with the authorization of the General
Meeting held on September 29, 2020. The conditional capital increase is only carried out to the extent
that issued convertible profit participation certificates are converted into shares of the Company and
no treasury shares are used to satisfy the certificates. The new shares shall participate in the
Company’s profits from the beginning of the financial year in which they come into existence as a
result of conversion of certificates.
7.3.
Purchase of treasury shares
In the General Meeting held on September 29, 2020, the shareholders authorized the Management
Board, subject to the approval of the Supervisory Board, to acquire their own shares of the Company
of up to a total of 10 % of the share capital in place at the time of the authorization’s issuance on or
before September 28, 2025. The acquired shares and other treasury shares in the possession of, or to
be attributed to, alstria (pursuant to Sections 71a et seq. of the AktG) may at no time amount to
more than 10 % of the share capital. Shares may be purchased through a stock exchange, by means of
a public offer to all shareholders, or by making use of financial derivatives (put or call options, or a
combination of both).
52
alstria Annual Report 2020
Combined Management Report
8. SIGNIFICANT AGREEMENTS OF ALSTRIA AG THAT TAKE EFFECT UPON A CHANGE OF CONTROL
FOLLOWING A TAKEOVER BID
Some of alstria AG’s financing agreements contain clauses common to such contracts regarding a
change of control. In particular, the agreements entitle the lenders to request repayment of the loans
or an obligation by alstria to repay the loans in the event that any person, company, or a group of
persons should acquire, directly or indirectly, 50 % of the voting rights or a controlling influence in
alstria. However, for some financing agreements, the repayment obligation is subject to a downgrade
of the Company’s rating, occurring within 120 days of the control change.
The terms and conditions of the fixed-interest bonds issued by the Company in the 2016, 2017, 2019,
and 2020 financial years entitle each bond holder to request the Company to redeem or purchase its
bond for 101 % of the principal amount plus unpaid interest accrued if any person, company, or group
of persons should acquire (directly or indirectly) more than 50 % of the voting rights in alstria and if,
within 120 days of such change of control, the rating for the Company or the bond is downgraded.
The total volume of obligations under those agreements with corresponding change of control clauses
amounted to approx. EUR 1,563 million on the balance sheet date.
9. COMPENSATION AGREEMENTS WITH MANAGEMENT BOARD MEMBERS AND EMPLOYEES IN CASE
OF A TAKEOVER BID
No compensation agreements with Management Board members or employees are in place that will
take effect in case of a takeover bid.
All these takeover provisions comply with statutory requirements or are reasonable and common
practice at comparable, publicly listed companies. They are not intended to hinder potential takeover
bids.
VIII.
ADDITIONAL GROUP DISCLOSURE
1. REMUNERATION REPORT
Management Board members’ compensation comprises fixed and variable components linked to the
Company’s operating performance. In addition to the bonus, members of the Management Board
receive share-based remuneration as a long-term incentive.
Members of the Supervisory Board receive fixed remuneration.
The remuneration report (see pages 181 to 191), which contains details of the principles for the
remuneration of the Management Board and Supervisory Board, forms an integral part of the audited
combined management report.
alstria Annual Report 2020
53
Combined Management Report
2. CORPORATE GOVERNANCE GROUP DECLARATION PURSUANT TO SECTIONS 289F AND
315D HGB (“HANDELSGESETZBUCH”: GERMAN COMMERCIAL CODE)
The complete corporate governance declaration
is published on alstria AG’s website
(www.alstria.com). Thus, it is made permanently accessible to the public.
3. EMPLOYEES
As of December 31, 2020, alstria had 167 employees (compared to 165 on December 31, 2019). The
annual average number of employees was 166 (compared to 156 in the previous year). These figures
exclude Management Board members.
4. DIVIDEND
At the Annual General Meeting, the Managing Board intends, in agreement with the Supervisory Board,
to submit the following proposal to allocate the unappropriated net income of alstria AG for the 2020
financial year:
To distribute a dividend of EUR 0.53 for each share of no par value that is entitled to the dividend for
the 2020 financial year and existed at the date of the Annual Shareholders’ Meeting, with the
remaining amount to be carried forward. Payment of the proposed dividend is contingent upon
approval by alstria shareholders at the Annual General Meeting on May 6, 2021. The proposed dividend
of EUR 0.53 per share for the 2020 financial year represents a total payment of EUR 94.2 million based
on the number of shares entitled to the dividend at the balance sheet date.
Hamburg, February 19, 2021
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
Alexander Dexne
CFO
54
alstria Annual Report 2020
Consolidated Financial Statements
DETAIL INDEX CONSOLIDATED FINANCIAL STATEMENTS
B.
I.
II.
III.
IV.
V.
VI.
CONSOLIDATED FINANCIAL STATEMENTS ................................................ 56
CONSOLIDATED INCOME STATEMENT ............................................................... 56
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................... 57
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................ 58
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................... 60
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY............................................. 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 63
1. BASIS OF PRESENTATION ................................................................................ 63
2. BASIS OF PREPARATION ................................................................................. 63
3. SEASONAL OR ECONOMIC EFFECTS ON BUSINESS .................................................... 89
4. SEGMENT REPORTING ................................................................................... 89
5. NOTES TO THE CONSOLIDATED INCOME STATEMENT ............................................... 90
6. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS ................. 95
7. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND
LIABILITIES .............................................................................................. 105
8. OTHER NOTES .......................................................................................... 112
9. RELATED PARTY RELATIONSHIPS ..................................................................... 114
10. EARNINGS PER SHARE ................................................................................. 114
11. DIVIDENDS PAID AND DIVIDENDS PROPOSED ........................................................ 115
12. EMPLOYEES ............................................................................................. 115
13. SHARE-BASED REMUNERATION ....................................................................... 116
14. FINANCIAL RISK MANAGEMENT ....................................................................... 121
15. SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD ............................. 130
16. UTILIZATION OF EXEMPTING PROVISIONS ........................................................... 130
17. DISCLOSURES PURSUANT TO THE WERTPAPIERHANDELSGESETZ [GERMAN SECURITIES
TRADING ACT] AND EUROPEAN MARKET ABUSE REGULATION [MAR] ............................ 130
18. DECLARATION OF COMPLIANCE PURSUANT TO AKTG SECTION 161 ............................. 138
19. AUDITORS’ FEES ........................................................................................ 139
20. MANAGEMENT BOARD ................................................................................. 139
21. SUPERVISORY BOARD .................................................................................. 139
alstria Annual Report 2020
55
Consolidated Financial Statements
B. CONSOLIDATED FINANCIAL STATEMENTS
I. CONSOLIDATED INCOME STATEMENT
For the period from January 1 to December 31, 2020
EUR k
Revenues
Revenues from 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 to
investment property
Net result from the disposal of investment
property
Net operating result
Net financial result
Share of the result of companies accounted
for at equity
Pretax result
Income tax expenses
Consolidated profit
Attributable to:
Anhang
5.1
5.1
5.2
5.3
5.4
5.5
5.6
6.1
5.7
5.8
2.2.3
5.9
2020
177,063
38,367
-60,607
154,823
-8,460
-18,568
4,629
-2,143
2019
187,467
37,038
−61,601
162,904
−9,545
−18,441
16,185
−15,230
61,522
454,767
8,340
200,143
17,350
607,990
-31,832
−27,460
-9
168,302
187
168,489
−170
580,360
861
581,221
Shareholders of alstria office REIT-AG
168,489
581,221
Earnings per share in EUR
Basic earnings per share
Diluted earnings per share
10
10
0,95
0,95
3,27
3,27
56
alstria Annual Report 2020
Consolidated Financial Statements
II. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from January 1 to December 31, 2020
EUR k
Notes
Consolidated profit for the period
Other comprehensive income for the period
Total comprehensive income for the period
Total comprehensive income attributable to
Shareholders of alstria office REIT-AG
2020
168,489
0
2019
581,221
0
168,489
581,221
168,489
581,221
alstria Annual Report 2020
57
Consolidated Financial Statements
III. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2020
ASSETS
EUR k
Noncurrent assets
Investment property
Equity-accounted investments
Property, plant, and equipment
Intangible assets
Financial assets
Total noncurrent assets
Current assets
Trade receivables
Financial assets
Income tax receivables
Other receivables
Cash and cash equivalents
Assets held for sale
Total current assets
Notes
Dec. 31, 2020
Dec. 31, 2019
6.1
6.2
6.3
6.3
6.4
6.6
6.4
6.6
6.7
6.8
4,556,181
4,438,597
1,021
18,360
55
39,108
1,070
19,055
232
39,108
4,614,725
4,498,062
4,572
0
1,230
8,762
460,960
0
475,524
3,877
199,750
1,231
8,601
298,219
19,588
531,266
Total assets
5,090,249
5,029,328
58
alstria Annual Report 2020
Consolidated Financial Statements
EUR k
Equity
Share capital
Capital surplus
Retained earnings
Revaluation surplus
Total equity
Noncurrent liabilities
Limited partnership capital noncontrolling
interests
Long-term loans and bonds, net of current portion
Other provisions
Other liabilities
Total noncurrent liabilities
Current liabilities
Limited partnership capital noncontrolling
interests
Short-term loans
Trade payables
Profit participation rights
Income tax liabilities
Other provisions
Other current liabilities
Total current liabilities
Total liabilities
Notes
7.1
7.2
7.3
7.4
7.5
7.2
7.3
7.5
5.4; 13.2
7.6
7.4
7.5
EQUITY AND
LIABILITIES
Dec. 31, 2020
Dec. 31, 2019
177,793
1,356,907
1,714,257
3,485
177,593
1,448,709
1,545,768
3,485
3,252,442
3,175,555
68,275
1,685,349
0
12,628
70,504
1,661,080
1,226
11,532
1,766,252
1,744,342
15
10,325
3,943
514
4,780
2,030
49,948
71,555
24
50,590
4,611
457
5,793
2,505
45,451
109,431
1,837,807
1,853,773
Total equity and liabilities
5,090,249
5,029,328
alstria Annual Report 2020
59
Consolidated Financial Statements
IV. CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ending December 31, 2020
EUR k
Notes
2020
2019
1. Cash flows from operating activities
Consolidated profit or loss for the period
Interest income
Interest expense
Result from income taxes
Unrealized valuation movements
Other noncash income (−)/expenses (+)
Gain (−)/loss (+) on disposal of investment properties
Depreciation and impairment of fixed assets (+)
Increase (−)/decrease (+) in trade receivables and other
assets not attributed to investing or financing activities
Increase (+)/decrease (−) in trade payables and other
liabilities not attributed to investing or financing activities
Cash generated from operations
Interest received
Interest paid
Income taxes paid
Net cash generated from operating activities
2. Cash flows from investing activities
Acquisition of investment properties
Proceeds from the sale of 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 disposal of financial assets
168,489
581,221
-533
32,365
-187
−575
28,035
−861
-61,769
−445,940
7,181
-8,340
1,110
663
−17,350
1,106
-2,342
867
-182
−1,093
135,792
146,073
649
814
-32,383
−24,674
-827
−520
103,231
121,693
-153,162
126,510
−164,915
139,777
-1,482
-238
46
-50,000
250,000
−179
−287
7,350
−238,864
36,567
5.8
5.8
5.9
8.3
5.7
6.3
6.4
6.4
Net cash generated from/used in investing activities
171,674
−220,551
60
alstria Annual Report 2020
Consolidated Financial Statements
EUR k
Notes
2020
2019
3. Cash flows from financing activities
Cash received from cash equity contributions
Payments for the acquisition of shares in limited partnerships of
minority interests
Distributions on limited partnerships of minority shareholders
Proceeds from the issuing of corporate bonds
Payments of transaction costs for taking out loans
Payments for the redemption portion of leasing obligations
Payments of dividends
Payments due to the redemption of bonds and borrowings
7.1
7.1
7.3
11
400
-9
-1,949
350,000
-2,204
-477
-94,125
-363,800
0
−73
−1,947
393,596
−698
−443
−92,257
−34,000
Net cash used in/generated from financing activities
-112,164
264,178
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
162,741
298,219
165,320
132,899
thereof restricted: EUR 0 k; previous year: EUR 0 k
6.7
460,960
298,219
alstria Annual Report 2020
61
Consolidated Financial Statements
V. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from January 1 to December 31, 2020
EUR k
Notes
Share
capital
Capital
surplus
Retained
earnings
Revaluation
surplus
Total
equity
As of Dec. 31, 2019
177,593
1,448,709
1,545,768
3,485
3,175,555
Changes in the
financial year 2020
Consolidated profit
Other comprehensive
income
Total comprehensive
income
Payments of dividends
Share-based
remuneration
Conversion of convertible
participation rights
As of Dec. 31, 2020
11
5.4;
13.2
13.2
7.1
0
0
0
0
0
0
0
0
-94,125
2,123
200
200
168,489
0
168,489
0
0
0
0
0
0
0
0
0
168,489
0
168,489
-94,125
2,123
400
177,793
1,356,907
1,714,257
3,485
3,252,442
For the period from January 1 to December 31, 2019
EUR k
Notes
Share
capital
Capital
surplus
Retained
earnings
Revaluation
surplus
Total
equity
As of Dec. 31, 2018
177,416
1,538,632
964,554
3,485
2,684,087
First-time adoption from
IFRS 16
2.1
0
0
−7
0
−7
As of Jan. 1, 2019
177,416
1,538,632
964,547
3,485
2,684,080
Changes in the
financial year 2019
Consolidated profit
Other comprehensive
income
Total comprehensive
income
Payments of dividends
Share-based
remuneration
Conversion of convertible
participation rights
As of Dec. 31, 2019
11
5.4;
13.2
13.2
7.1
0
0
0
0
0
177
0
0
0
−92,257
2,157
177
581,221
0
581,221
0
0
0
0
0
0
0
0
0
581,221
0
581,221
−92,257
2,157
354
177,593
1,448,709
1,545,768
3,485
3,175,555
62
alstria Annual Report 2020
Consolidated Financial Statements
VI. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
alstria office REIT-AG (the Company) is a listed real estate property corporation under the scope of
the G-REIT Act. The main objectives of the Company and its subsidiaries (the Group or alstria) are the
acquisition, management, operation, and sale of owned real estate property and the holding of
participations in enterprises that acquire, manage, operate, and sell owned property.
alstria prepared its consolidated financial statements in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the European Union and with the additional requirements set
forth in Section 315e para. 1 of the German Commercial Code (HGB). The Management Board authorized
for issue the consolidated financial statements on February 19, 2021.
alstria office REIT-AG’s registered office and address is Steinstrasse 7, 20095 Hamburg, Germany. The
Company is entered in the commercial register at the local court of Hamburg under HRB No. 99204.
alstria prepares and reports its consolidated financial statements in Euro (EUR), the Group’s
functional currency. Due to rounding, the numbers presented may not add up precisely to the totals
provided.
The financial year ends on December 31 of each calendar year. The consolidated financial statements
presented in this report were prepared for the period from January 1 to December 31, 2020.
2. BASIS OF PREPARATION
Apart from investment property (land and buildings) and certain financial instruments that are
measured at fair values at the end of each reporting period, as explained in the accounting policies
below, the consolidated financial statements have been prepared based on historical cost.
The preparation of financial statements in conformity with the IFRSs requires the use of certain
critical accounting estimates and for management to exercise its judgement when applying the
Group’s accounting policies. Areas involving a higher degree of judgement or complexity, or items
wherein assumptions and estimates have a significant impact on the consolidated financial
statements, are disclosed in Note 2.3.
The consolidated income statement is prepared using the total cost method. Single items are
summarized in the consolidated statement of financial position and the income statement. They are
commented on in the Notes to the financial statements.
Assets and liabilities are classified as noncurrent and current, respectively. Current items are defined
as items that are due in less than 1 year and vice versa for noncurrent items.
alstria Annual Report 2020
63
Consolidated Financial Statements
2.1.
Changes in accounting policies and mandatory disclosures
Effects of new and amended IFRSs
The Company adopted the following new amendments to existing standards for the first time for the
financial year beginning January 1, 2020:
EU
Endorsement
Apr. 21, 2020
Jan. 15, 2020
Oct. 9, 2020
Dec. 10, 2019
Dec. 06, 2019
Standard/
interpretation
Amendments to
IFRS 3
Amendments to
IFRS 9, IAS 39, and
IFRS 7
Amendment to
IFRS 16
Amendments to
IAS 1 and IAS 8
Amendments to
IFRS Framework
Content
Business combinations: Definition of a
business
Interest Rate Benchmark Reform, requiring
additional disclosures in IFRS 7 around
uncertainty arising from the interest rate
benchmark reform
Leases: COVID-19 – Related Rent
Concessions
Definition of “material”
Applicable for
FY beginning
on/after
Jan. 1, 2020
Effects
None
Jan. 1, 2020
None
June 1, 2020
None
Jan. 1, 2020
None
Jan. 1, 2020
None
The changes to standards and to the framework concept did not have any material effects on the
Group's net assets, financial position, and results of operations.
New and amended IFRSs and interpretations to existing standards that are not yet effective and
that the Group has not adopted early
EU
Endorsement
Not yet
endorsed
Not yet
endorsed
Dec. 15, 2020
Standard/
interpretation
IFRS 17
Amendments to
IFRS 3
Amendments to
IFRS 4
January 13,
2021
Amendments to
IFRS 9, IAS 39, IFRS
7, and IFRS 16
Content
New standard “Insurance contracts”
Business Combinations: Update of an
outdated reference in IFRS 3 without
significantly changing its requirements.
The effective date of IFRS 17, which will
replace IFRS 4, is now Jan. 1, 2023; the
fixed expiry date for the temporary
exemption in IFRS 4 from applying IFRS 9
has been deferred to Jan. 1, 2023
Interest Rate Benchmark Reform – Phase 2
Applicable for
FY beginning
on/after
Jan. 1, 2023
Effects
None
Jan. 1, 2022
None
Jan. 1, 2021
None
Jan. 1, 2022
None
Not yet
endorsed
Not yet
endorsed
Not yet
endorsed
Not yet
endorsed
Not yet
endorsed
Annual Improvement 2018-2020
Jan. 1, 2023
None
Amendments to
IAS 1
Amendments to
IFRS 10 and IAS 28
Amendments to
IAS 16
Amendments to
IAS 37
Presentation of Financial Statements:
Classification of Liabilities as Current or
Noncurrent
Selling or depositing assets in associates or
joint ventures
Property, plant, and equipment
Provisions, Contingent Liabilities, and
Contingent Assets
Jan. 1, 2022
None
tbd
None
Jan.1, 2022
None
Jan.1, 2022
None
64
alstria Annual Report 2020
Consolidated Financial Statements
No significant impact on financial reporting is expected from the other new standards and
amendments to the existing standards listed above.
The Group did not adopt any new or amended standards or interpretations early in the 2020 financial
year.
2.2.
Basis of consolidation
2.2.1. Subsidiaries
The consolidated financial statements incorporate the financial statements of alstria office REIT-AG
and entities controlled by the Company and its subsidiaries. Control is achieved when the Company
▪ exercises authority over the investee;
▪
▪
is exposed or has rights to variable returns from its involvement with the investee; and
can use its authority to affect the amount of its returns.
The Company reassesses whether it controls an investee if facts and circumstances indicate changes
to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, the income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of
profit or loss and other comprehensive income from the date when the Company gains control until
the date when the Company ceases to control the subsidiary.
The profit or loss and each component of the other comprehensive income are attributed to the
Company’s owners and noncontrolling interests. The total comprehensive income of the subsidiaries
is attributed to the Company’s owners and noncontrolling interests, even if this results in the
noncontrolling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to align their
accounting policies with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions
between members of the Group are eliminated in full upon consolidation.
alstria Annual Report 2020
65
Consolidated Financial Statements
Changes in the Group’s ownership interests in existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the
Group’s interests and noncontrolling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the noncontrolling
interests are adjusted and the fair value of the consideration paid or received is recognized directly
in equity and attributed to the owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is
calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any
retained interest, and
(ii) the previous carrying amount of the assets (including any goodwill) and liabilities of the
subsidiary and any noncontrolling interests.
All amounts previously recognized in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary
(i.e., reclassified to profit or
loss or transferred to another category of equity, as
specified/permitted by applicable IFRSs).
Business combinations
Acquisitions of businesses within the meaning of IFRS 3 are accounted for using the acquisition
method. The consideration transferred in a business combination is measured at fair value, which is
calculated as the sum of the acquisition-date fair values of the assets transferred by the Group,
liabilities incurred by the Group to the former owners of the acquiree, and the equity interests issued
by the Group in exchange for control of the acquiree. Acquisition-related costs are generally
recognized in profit or loss as incurred.
At the acquisition date, the identifiable acquired assets and the assumed liabilities are recognized
at their fair value.
66
alstria Annual Report 2020
Consolidated Financial Statements
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
noncontrolling interests in the acquiree, and the fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable
assets acquired and the liabilities assumed. After reassessment, if the net of the acquisition-date
amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any noncontrolling interests in the acquiree and fair value
of the acquirer’s previously held interest in the acquiree fit and the excess is recognized immediately
in profit or loss as a bargain purchase gain.
Noncontrolling interests that are present ownership interests and entitle their holders to a
proportionate share of the entity’s net assets in the event of liquidation may be initially measured
either at fair value or at the noncontrolling interests’ proportionate share of the recognized amounts
of the acquiree’s identifiable net assets and reported under liabilities. The choice of measurement
is made on a transaction-by-transaction basis. Other types of noncontrolling interests are measured
at fair value or, when applicable, on the basis specified in another IFRS.
When a business combination is achieved in stages, the Group’s previously held equity interest in
the acquiree is remeasured to its acquisition-date fair value, and the resulting gain or loss, if any,
is recognized in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date that have previously
been recognized in other comprehensive incomes are reclassified as profit or loss, where such
treatment would be appropriate if that interest were disposed of.
Significant companies wherein alstria office REIT-AG is directly or indirectly able to significantly
influence financial and operating decisions (associates), or directly or indirectly share control (joint
ventures), are accounted for using the equity method.
The acquisition of real estate property companies that do not represent a business in the sense of
IFRS 3 is shown as a direct purchase of real estate (asset deal). The acquisition costs of the property
company are assigned to the individually identifiable assets and liabilities on the basis of their fair
values. In this case, there is no goodwill.
2.2.2. Fully consolidated subsidiaries
The Group of consolidated companies, including alstria office REIT-AG, comprised 48 companies in
the financial year (2019: 51). As of the balance sheet date, 45 companies (prior-year balance sheet
date: 48 companies) existed. In addition, two joint ventures and one noncontrolling interest have
been accounted for using the equity method.
alstria Annual Report 2020
67
Consolidated Financial Statements
In the consolidated financial statements of alstria office REIT-AG, the following companies are
included (statement according to Section 313 para. 2 and Section 315 (e) HGB):
No. Company
Headquarters
1 alstria office REIT-AG
2 alstria Bamlerstraße GP GmbH
3 alstria Englische Planke GP GmbH
4 alstria Gänsemarkt Drehbahn GP GmbH
5 alstria Halberstädter Straße GP GmbH
6 alstria Ludwig-Erhard-Straße GP GmbH
7 alstria Mannheim/Wiesbaden GP GmbH
8 alstria office Bamlerstraße GmbH & Co. KG1)
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
9 alstria office Englische Planke GmbH & Co. KG1)
Hamburg
alstria office Gänsemarkt Drehbahn
GmbH & Co. KG1)
10
Hamburg
11 alstria office Insterburger Straße GmbH & Co. KG1)
Hamburg
alstria office Mannheim/Wiesbaden
GmbH & Co. KG1)
12
13 alstria office Steinstraße 5 GmbH & Co. KG1)
14 alstria Portfolio 1 GP GmbH
15 alstria Portfolio 3 GP GmbH
16 alstria Prime Portfolio 2 GP GmbH
17 alstria Prime Portfolio GP GmbH
18 alstria solutions GmbH
19 alstria Steinstraße 5 GP GmbH
20 beehive GmbH & Co. KG1)
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
21 alstria office Prime Portfolio GmbH & Co. KG1)
Hamburg
22 alstria office PP Holding I GmbH & Co. KG1)
23 alstria office Kampstraße GmbH & Co. KG1)
Hamburg
Hamburg
24 alstria office Berliner Straße GmbH & Co. KG1)
Hamburg
25 alstria office Hanns-Klemm-Straße GmbH & Co. KG1)
Hamburg
26 alstria office Maarweg GmbH & Co. KG1)
Hamburg
27 alstria office Heerdter Lohweg GmbH & Co. KG1)
Hamburg
28 alstria office Solmsstraße GmbH & Co. KG1)
29 alstria office PP Holding II GmbH & Co. KG1)
Hamburg
Hamburg
30 alstria office Wilhelminenstraße GmbH & Co. KG1)
Hamburg
31 alstria office Hauptstraße GmbH & Co. KG1)
Hamburg
32 alstria office Mergenthaler Allee GmbH & Co. KG1)
Hamburg
33 alstria office Am Hauptbahnhof GmbH & Co. KG1)
Hamburg
34 alstria office Kastor GmbH & Co. KG1)
Hamburg
35 alstria office Heidenkampsweg GmbH & Co. KG1)
Hamburg
36 alstria office Stiftsplatz GmbH & Co. KG1), 2)
Hamburg
37 alstria office An den Dominikanern GmbH & Co. KG1)
Hamburg
Held
by
no.
Equity
interest (%)
Parent
company
Business activity
Asset management;
holding
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
General Partner
General Partner
General Partner
General Partner
General Partner
General Partner
Own property
Own property
Own property
Own property
Own property
Own property
General Partner
General Partner
General Partner
General Partner
Service company
General Partner
Service company
Intermediate holding
21
Intermediate holding
22
22
22
22
22
22
Own property
Own property
Own property
Own property
Own property
Own property
21
Intermediate holding
29
29
29
29
29
29
29
29
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
68
alstria Annual Report 2020
Consolidated Financial Statements
alstria office Carl-Schurz-Straße
GmbH & Co. KG1)
38
Hamburg
39 alstria office Pempelfurtstraße GmbH & Co. KG1)
Hamburg
alstria office Josef-Wulff-Straße
GmbH & Co. KG1), 2)
40
41 alstria office Frauenstraße GmbH & Co. KG1)
alstria office Olof-Palme-Straße
GmbH & Co. KG1)
42
43 alstria office Region Nord GmbH & Co. KG1)
44 alstria office Region Süd GmbH & Co. KG1)
45 alstria office Region Mitte GmbH & Co. KG1)
46 Balgebrückstraße GmbH & Co. KG1), 3)
47 alstria office PP Holding III GmbH & Co. KG1)
48 alstria office Vaihinger Straße GmbH & Co. KG1)
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
94.0
29
29
29
29
29
29
29
29
29
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
21
Intermediate holding
47
Own property
1) The Company has made use of the exemption from the obligation to prepare annual financial statements in accordance with the provisions
applicable to corporations in accordance with Section 264b HGB.
2) Terminated as a result of a step-up merger in financial year 2020.
3) Disposal in financial year 2020.
Alongside alstria office REIT-AG, the consolidation comprised companies in which the Company
directly or indirectly held the majority of voting rights. The consolidated group at the balance sheet
date consisted of the Company, 20 domestic subsidiaries, and 25 domestic second-tier subsidiaries.
Three subsidiaries were terminated as a result of a step-up merger.
The reporting date for the consolidated financial statements is the same as the reporting date for the
Company and consolidated subsidiaries.
There were no further changes to the consolidated group in the 2020 financial year in comparison to
the consolidated financial statements as of December 31, 2019. All of the Group’s companies are
property management, holding, or general partner companies.
2.2.3. Interests in joint ventures and noncontrolling interests
As of the balance sheet date, the Group held investments in a joint venture and an associated
company. As of the previous year's reporting date, there were investments in two joint ventures. The
companies are or were accounted for using the equity method. The carrying value of EUR 1,020 k
relates to the associated company with EUR 915 k and the joint venture with EUR 105 k.
alstria Annual Report 2020
69
Consolidated Financial Statements
Details of the Group’s joint ventures at the end of the reporting period are as follows:
in %
Name of joint venture
Kaisergalerie General Partner GmbH
i.L
Terminated in financial year 2020
Principal
activity
n/a
Place of incorporation
and business
Hamburg, Germany
Proportion of ownership, interest,
and voting rights held by the Group
Dec. 31, 2019
Dec. 31, 2020
49.0
-
Alstria IV. Hamburgische
Grundbesitz GmbH & Co. KG
Alte Post General Partner GmbH i.L n/a
Hold and manage
real estate
Hamburg, Germany
Oststeinbek, Germany
-
-
49.0
49,0
The following table provides the aggregated information for joint ventures whose individual carrying
amounts are not material:
EUR k
The Group’s share of profit (loss) from continuing operations
The Group’s share of total comprehensive income
2020
−9
−9
2019
−145
−145
EUR k
Dec. 31, 2020
Dec. 31, 2019
Aggregate carrying amount of the Group’s interests in these joint ventures
105
155
There were no unrecognized shares of joint venture’s losses or any significant restrictions as to the
ability of joint ventures to transfer cash funds to the Group.
Furthermore, alstria holds a noncontrolling interest in an affiliate amounting to EUR 915 k. The
Company was acquired in the 2016 financial year and is considered immaterial. Its business is the
investment in innovative real estate technology concepts. The Company recorded a result of EUR 0 k
in the reporting period.
2.3.
Key judgments and estimates
To a certain degree, estimates, assessments, and assumptions must be made in the course of
preparing the Group’s consolidated financial statements. These can affect the reported amounts and
recognition of assets and liabilities, contingent assets and liabilities on the balance sheet date, and
the amounts of income and expenses reported for the overall period. The major items that such
estimates, assessments, and assumptions affect are described hereafter. Actual amounts may differ
from the estimates. Changes in the estimates, assessments, and assumptions can have a material
impact on the consolidated financial statements.
2.3.1. Judgements
Management has made the following discretionary decisions in line with the Group’s accounting
policies. Apart from decisions involving estimations, it has the most significant effect on the amounts
recognized in the financial statements:
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Consolidated Financial Statements
Operating lease commitments—the Group as lessor
The Group has entered into commercial property leases in its investment-property portfolio. Based
on an evaluation of the terms and conditions of the arrangements, the Group has determined that all
significant risks and rewards of ownership of these properties remain with the Group. As a result, the
contracts are treated and accounted for as operating leases.
Equity-settled share-based payment transactions
As part of its remuneration, the Management Board was granted share-based payments (see Note
13.1). While the virtual shares issued in business year 2017 were cash-settled share-based payments,
in the 2018 financial year, share-based payments were for the first time equity settled.
All conditions of the share-based payment conditions were settled in advance by the parties involved.
The predominant value-determining parameters are objectively observable market parameters, such
as the share price performance of the alstria share or the performance of a benchmark index. At the
end of the term, the number of equity instruments to be granted can be adjusted by the Supervisory
Board of the Company in a narrow band (so-called discretionary factor). This leads to the question of
whether the grant date is in the current financial year or only at the time when the Supervisory Board
determines the discretionary factor. In the first case, the virtual shares are measured at fair value at
their issue. The amount of the valuation is to be recognized pro rata in equity over the term until
conversion. If the grant date falls to the end of the term, the value of the virtual shares must be
revalued at each reporting date and recognized as a liability.
The terms of the agreement on which the equity instruments were granted were already fixed when
the virtual shares were issued during the reporting period. The main value drivers are observable
market parameters. Therefore, the issue date of the virtual shares is considered the date of granting
the share-based payment with the result that the virtual shares were valued at the issue date and
recognized pro rata as personnel expenses and in the equity of the Group. The Supervisory Board’s
option to exercise a discretionary factor does not exclude this judgement, since it is not a change in
the terms of the contract. Furthermore, based on previous practices, a reduction in the number of
equity instruments is not to be assumed.
2.3.2. Estimates and assumptions
Significant key sources of estimation uncertainty and key assumptions concerning the future as of the
balance sheet date relate to the following balance sheet items. They present a significant risk, possibly
resulting in necessary material adjustments to the carrying amounts of assets and liabilities within the
next financial year. Applying estimates is particularly necessary to
▪ determine the fair value of investment property (see Note 6.1);
▪ determine the amortized cost of limited partnership capital of noncontrolling interests
(see Note 7.2);
▪ determine the fair value of other provisions (see Notes 7.4) and
▪ determine the fair value of virtual shares granted to management (see Note 13.1)
alstria Annual Report 2020
71
Consolidated Financial Statements
At the end of the reporting period, the above-stated assets, liabilities, and equity instruments, which
are particularly exposed to estimation uncertainties, had the following impact on the consolidated
statement of financial position:
EUR k
Dec. 31, 2020
Dec. 31, 2019
Investment property and properties held for sale, without prepayments made
4,556,725
4,458,185
Limited partnership capital of noncontrolling interests
Other provisions
thereof virtual shares
68,290
2,031
70,527
3,731
1,301
2,941
2.4.
Summary of significant accounting policies
The following accounting and valuation methods have been used to prepare the consolidated financial
statements of alstria office REIT-AG.
2.4.1. Fair value measurement
The Group measures financial instruments, such as derivatives, and nonfinancial assets, such as
investment property, at their fair value at each reporting date.
The fair value of an asset or liability is determined based on the assumptions that market participants
would use in pricing the asset or liability, regardless of whether that price is directly observable or
estimated by applying another valuation technique. In estimating fair value, it is assumed that the
transaction during which the disposal of the asset or the transfer of the liability occurs takes place
either
▪
▪
in the principal market for the asset or liability, or
in the most advantageous market for the asset or liability if no principal market exists.
The Group must have access to the principal market or the most advantageous market.
Fair value for measurement and/or disclosure purposes in these consolidated financial statements is
determined on such a basis. Hereby excluded are the following:
▪
▪
share-based payment transactions that are within the scope of IFRS 2 “Share-based
payments”;
leasing transactions that are within the scope of IFRS 16 “Leases”; and
▪ measurements that have some similarities to fair value but are not fair value, such as net
realizable value in IAS 2 “Inventories” or value in IAS 36 “Impairment of assets.”
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Consolidated Financial Statements
Market prices are not always available to determine the fair value. It must often be determined based
on various valuation parameters. In addition, for financial-reporting purposes, fair value
measurements are categorized as Level 1, 2, or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the inputs to the fair value measurement
in its entirety, which are described as follows:
▪
▪
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly.
▪
Level 3 inputs are unobservable inputs for the asset or liability.
Level 3 inputs require more extensive disclosures.
2.4.2. Investment property
Investment properties are properties held to earn rental income and/or for capital appreciation
(including property under construction for such purposes). They are not used in production or for
administrative purposes. This includes properties that are in production and are intended to serve the
aforementioned purposes. Investment properties are measured initially at cost at the time of purchase
or construction, including transaction costs. In accordance with IAS 40.17, costs incurred subsequently
for dismantling, replacement of parts, or maintenance of property are also included, insofar as these
contribute to an increase in the fair value of the property.
Costs of debt, which can be directly allocated to the acquisition or production of investment property,
are capitalized in the year in which they arise.
For subsequent measurement, the Company uses the fair value model according to IFRS 13.61 et seq.,
which reflects an income-capitalization approach combined with market conditions at the end of the
reporting period.
In the context of the fair value hierarchy described above, only inputs from Levels 2 and 3 are
applicable for property. The majority is categorized as Level 3. Inputs used in the valuation approach
that the Group has adopted for all of its properties include rental revenues, adjusted yield figures
(e.g., property-based capitalization rates), and vacancy periods. These inputs are not observable in
markets and are considered significant. Therefore, the fair value measurement used by the Group for
valuation of all investment properties is generally categorized as Level 3. Information about the
significant unobservable inputs used and their sensitivities to the fair values of the Group’s investment
property is presented in Note 6.1.
alstria Annual Report 2020
73
Consolidated Financial Statements
Gains and losses arising from changes in the fair value of investment properties are included in the
profit or loss in the period when they arise.
An investment property derecognized upon disposal, or when the investment property is permanently
withdrawn from use, and future economic benefits are expected from the disposal. Any gain or loss
arising from derecognition of the property (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the
property is derecognized.
Investment properties are transferred to property, plant, and equipment when there is a change in
use evidenced by the commencement of owner occupation. The properties’ deemed cost for
subsequent accounting corresponds to the fair value at the date of reclassification.
When the use of a property changes from owner-occupied to investment property, the property is
remeasured to fair value and reclassified accordingly. Any gain arising from this remeasurement is
recognized in profit or loss to the extent that it reverses a previous impairment loss on the specific
property, with any remaining gain recognized in OCI and presented in the revaluation reserve.
Any loss is recognized in profit or loss. However, to the extent that an amount is included in the
revaluation surplus for that property, the loss is recognized in other comprehensive income and
reduces the revaluation surplus within equity.
Leases of land and buildings in which the Group acts as a lessee and which it sublet are also classified
as financial investments and subsequently measured at fair value. The investment properties are
shown with the addition of the leasing liabilities.
2.4.3. Valuation process for investment properties
The fair value hierarchy gives no information about the applied valuation techniques.
The basis for deriving fair value, as defined by IFRS 13.61, should, if possible, be based on valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, thereby maximizing the use of relevant observable inputs and minimizing the use
of unobservable inputs. The analysis above showed there was no sufficient number of official
comparable transactions to derive any market values. Therefore, fair value was determined based on
an income approach in accordance with IFRS 13.61.
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Consolidated Financial Statements
In estimating the fair value of the properties, their current use of the property is the highest and best
option. No fundamental change to the valuation method has occurred during the year.
As in the previous year, external real estate experts conducted the valuation of investment property
at fair value on December 31, 2020, using the “hardcore-and-top-slice” method, according to
internationally accepted valuation methods in accordance with IFRS. An accredited, external, and
independent expert performed the fair value measurement (Savills Advisory Services Germany GmbH
& Co. KG, Frankfurt am Main, Germany).
Description of the hardcore-and-top-slice method
According to the hardcore-and-top-slice method, rental income is horizontally segmented. The
hardcore portion represents the prevailing contractual rent. The top slice represents the difference
between market and contractual rent. This method fulfills the requirements of the Red Book, a set
of international valuation standards, set forth by the Royal Institution of Chartered Surveyors. In
addition, the method used by the independent experts is also appropriate and suitable for determining
market values in accordance with the provisions of the International Valuation Standards (IVS, or the
White Book).
To determine the fair values, the hardcore-and-top-slice method takes into account the following
points:
▪
the contractual rent for the remaining term of the lease (in the case of open-ended leases, a
residual term of 1 year to half of the previous rental period is assumed);
▪ a vacancy period of between 0 and 30 months following the expiry of the lease;
▪
▪
▪
the necessary maintenance costs to relet the properties;
relets at market rents (accounting for the difference between market and contractual rent);
capitalization rates reflecting the individual risk of the property and market activity
(comparable transactions);
▪ management costs between 1 and 4 % of the market rent;
▪ nonallocable costs of ongoing maintenance between EUR 3.00/m² and EUR 11.00/m²
depending on the property standard; and
▪
the net selling price as comparable.
alstria Annual Report 2020
75
Consolidated Financial Statements
If the future development of these properties differs from the estimate, large-scale losses resulting
from the change in the fair value may be incurred. This can have a negative impact on future earnings.
The effects of the most significant input parameters on the valuation of the Group’s investment
properties are shown in Note 6.1.
The valuation method described also applies to investment properties in which development projects
are realized.
Gains or losses arising from changes in the fair values of investment properties are disclosed in the
income statement under the item “Net gain/loss from fair value adjustments on investment property”
in the year in which they arise.
Investment properties are derecognized when they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its
disposal. Any gains or losses on the retirement or disposal of an investment property are recognized
in the income statement in the year of retirement or disposal.
2.4.4. Assets held for sale
Noncurrent assets intended for disposal under an asset deal are reported separately as being held for
sale in the consolidated financial statements if the formally required resolution of the Board — and,
when above a certain level of transaction volume, the Supervisory Board — for the sale of a property
is met until the end of the reporting period. If the disposal is to take the form of a share deal,
noncurrent assets and other assets and liabilities held for sale are reported separately on the
consolidated balance sheet.
Assets held for sale are measured at fair value on the date of reclassification and each subsequent
reporting date. Gains or losses from measuring individual assets held for sale and disposal groups are
reported under gain or loss on the disposal of investment property until they have been sold.
2.4.5. Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess whether a contract conveys the right to control
the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
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alstria Annual Report 2020
Consolidated Financial Statements
Further information on leases can be found in sections 5.3 Administrative expenses, 5.8 Financial and
valuation results, 6.1 Investment property, 6.3 Intangible assets and property, plant and equipment
and 7.5 Trade payables and other obligations.
(i) As a lessee
At commencement or on modification of a contract that contains a lease component, the
contractually agreed fee is to be allocated on the basis of its relative stand-alone prices. However,
for the leases of property, the Group has elected not to separate non-lease components and account
for the lease and non-lease components as a single lease component.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred, and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, minus any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects
that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is determined on the same basis as those of property
and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date and is discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group
uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and the type of
asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
▪
▪
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index
or rate as of the commencement date;
▪ amounts expected to be payable under a residual value guarantee; and
▪
the exercise price under a purchase option that the Group is reasonably certain to exercise,
lease payments in an optional renewal period if the Group is reasonably certain to exercise
an extension option, and penalties for early termination of a lease unless the Group is
reasonably certain that it will not terminate early.
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The lease liability is measured at amortized cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is
a change in the Group’s estimate of the amount expected to be payable under a residual value
guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension, or
termination option, or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or it is recorded in profit or loss if the carrying amount of the right-
of-use asset has been reduced to zero. The Group presents right-of-use assets that do not meet the
definition of investment property in “property, plant, and equipment” and lease liabilities in “loans
and borrowings” in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value
assets and short-term leases, including IT equipment. The Group recognizes the lease payments
associated with these leases as an expense in a straight-line basis over the lease term.
(ii) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance
lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether
the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying
asset. If this is the case, the lease is a finance lease; if not, it is an operating lease. As part of this
assessment, the Group considers certain indicators such as whether the lease is for the major part of
the asset’s economic life. The Group has classified the sublease contracts on the basis of the right of
use and not the underlying asset, and it has come to the conclusion that the leases are operating
leases in accordance with IFRS 16.
Lease payments from operating leases are recognized by the Group on a straight-line basis as income
in sales over the term of the lease.
In addition, alstria office REIT-AG is also a lessee to a small extent in the context of operating leases.
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2.4.6. The Group recognizes lease payments received under operating leases as income on a
straight-line basis over the lease term as revenues. Revenue and expense recognition
Revenues and other operating expenses are generally only recognized when the entity satisfies a
performance obligation by transferring a promised good or service to a customer. An asset is
transferred when the customer obtains control of the asset.
This is usually the case when services are rendered or goods or products have been delivered and the
risk has thus been transferred.
Revenue is measured at the fair value of the consideration received, excluding discounts, rebates,
and other sales taxes or duties. Revenues are recorded, excluding VAT. In addition, the following
specific recognition criteria must be met before revenues are recognized.
Rental income from operating leases on investment properties is, according to IFRS 16, recognized
on a straight-line basis over the terms of the relevant lease, regardless of the payment date. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount
of the leased asset.
Revenues from service charge income are, according to IFRS 15, realized over the period of
performance, which essentially corresponds to the time at which service charge expenses are
recorded. With regard to the service charge costs of letting, alstria has a principal position. In this
respect, the operating costs charged to the tenants must be shown as sales. The costs incurred relating
to the provision of services in this context are presented as real estate operating expenses.
Proceeds from the sale of investment properties are recognized when the risks and opportunities
associated with ownership of the property have passed to the buyer (transfer of ownership, benefits,
and burdens of the property).
Operating expenses are recognized at the time of the service or when they are incurred.
Interest expenses and interest income are recognized using the effective interest method.
2.4.7. Income taxes
Income tax expense is recognized in profit or loss, except when it relates to items recognized in other
comprehensive income or directly in equity, in which case, current taxes are also recognized in other
comprehensive income or directly in equity, respectively.
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As a REIT-AG parent company, alstria office REIT-AG is exempt from corporation and trade taxes.
Current tax assets and liabilities for the current and prior periods are shown as the amount expected
to be recovered from or paid to the tax authorities. To take effect, the determination of the amount
is based on the tax rates and laws applicable on the reporting date or soon after.
2.4.8. Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to the shareholders of the
parent company by the weighted-average number of shares outstanding during the financial year.
Diluted earnings per share are calculated based on the assumption that all potentially dilutive
securities and share-based payments are converted or exercised.
2.4.9. Impairments of assets according to IAS 36
Assets are tested for impairment when triggering events or changes in circumstances indicate that
the carrying amount may no longer be recoverable. The consequences of the COVID-19 pandemic gave
no indication that the carrying amounts of the assets for which IAS 36 is to be applied could no longer
be achieved.
An impairment loss is recorded at an amount equivalent to the excess of the carrying amount over
the recoverable amount. If the reasons for an impairment loss cease to apply, the impairment loss is
reversed as appropriate, but not above the maximum value that would have resulted if normal
amortization had been charged.
2.4.10. Property, plant, and equipment
Property, plant, and equipment are stated at cost less accumulated depreciation and impairment
losses. They include owner-occupied real estate, right-of-use assets according to IFRS 16, and
operating and office equipment. Such costs include the cost of replacing part of the property, plant,
and equipment at the time the cost is incurred, if the recognition criteria are met. All other repair
and maintenance costs are recognized in profit or loss as incurred.
The depreciation of operating and office equipment is calculated on a straight-line basis over the
estimated useful life of the asset (3 to 13 years). The useful life of owner-occupied property is
estimated at 33 to 50 years. While the building is depreciated on a scheduled basis, the land is not
subject to depreciation.
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2.4.11. Intangible assets
The Group amortizes intangible assets with finite useful lives on a straight-line basis over their
respective estimated useful lives. Estimated useful lives for patents, licenses, and other similar rights
generally range from 3 to 10 years. Currently, the Company does not have intangible assets with
indefinite useful lives.
2.4.12. Financial instruments
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognized when they are originated. All
other financial assets and liabilities are initially recognized when the Group becomes a party to the
contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial
liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are
directly attributable to its acquisition or issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at:
▪
▪
▪
amortized cost;
FVOCI — debt investment;
FVOCI — equity investment;
▪ or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes
its business model for managing financial assets, in which case all affected financial assets are
reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not
designated at FVTPL:
▪
it is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
▪
its contractual terms give rise to specified dates for cash flows that are solely payments of
principal and interest on the principal amount outstanding.
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A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated at FVTPL:
▪
it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and
▪
its contractual terms provide an increase of specified dates for cash flows that are solely
payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably
elect to present subsequent changes in the investment’s fair value in OCI. This election is made on
an investment-by-investment basis.
All financial assets not classified as measured at amortized cost are measured at FVTPL. This includes
all derivative financial assets (see Note 6.5.). On initial recognition, the Group may irrevocably
designate a financial asset that otherwise meets the requirements to be measured at amortized cost
or at FVOCI at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would
otherwise arise.
Financial assets – Business model assessment
With respect to financial assets, the Group pursues a business model with the objective of holding
assets in order to collect the contractual cash flows.
Financial assets – Assessment of whether contractual cash flows are solely payments of principal
and interest
In assessing whether contractual cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument. This includes assessing whether the financial asset
contains a contractual term that could change the timing or amount of contractual cash flows such
that it would not meet this condition.
A prepayment feature is consistent with the exclusive payments of principal and interest criterion if
the prepayment amount substantially represents unpaid amounts of principal and interest on the
outstanding principal amount, which may include reasonable additional compensation for early
termination of the contract.
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Financial assets – Subsequent measurement and gains and losses
Financial assets at
These assets are subsequently measured at fair value. Net gains and losses, including any interest or
FVTPL
dividend income, are recognized in profit or loss.
These assets are subsequently measured at amortized cost using the effective interest method. The
Financial assets at
amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses,
amortized cost
and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in
profit or loss.
Financial liabilities – Classification, subsequent measurement, and gains and losses
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is
classified as being at FVTPL if it is categorized as held-for-trading, it is a derivative, or it is designated
as such on initial recognition.
Financial liabilities at FVTPL are measured at fair value; net gains and losses, including any interest
expense, are recognized in profit or loss.
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method. Interest expenses and foreign exchange gains and losses are recognized in profit or loss. Any
gain or loss on derecognition is also recognized in profit or loss. All financial liabilities are currently
classified at amortized cost.
Derecognition
Financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or when it transfers the rights to receive the contractual cash flows in a
transaction in which all significant risks and rewards of ownership of the financial asset are transferred
or in which the Group neither transfers nor retains all significant risks and rewards of ownership and
does not retain control of the financial asset.
Financial liabilities
The Group derecognizes a financial liability when its contractual obligations are discharged, are
cancelled, or expire. The Group also derecognizes a financial liability when its terms are significantly
modified and the cash flows of the modified liability are substantially different, in which case a new
financial liability based on the modified terms is recognized at fair value.
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Upon derecognition of a financial liability, the difference between the carrying amount extinguished
and the consideration paid (including any noncash assets transferred or liabilities assumed) is
recognized in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to set off
the amounts and intends either to settle them on a net basis or to realize the asset and settle the
liability simultaneously.
Derivative financial instruments and hedge accounting
Derivative financial instruments and hedge accounting
Derivative financial instruments, such as interest rate swap contracts, are measured at fair value and
classified as being held for trading unless they are designated as hedging instruments, for which hedge
accounting is applied. At the end of the reporting period and on the same date in the previous year,
the Group used derivative financial instruments in the form of interest cap hedging relationships, the
market values of which were of a negligible magnitude, because the guaranteed interest rate cap is
far above the underlying yield curve. Due to the large gap between the yield curve and the secured
interest rate cap, there were no valuation effects, and they are no longer expected in the future (see
Section 6.5).
Cash flow hedges
The effective portion of changes in the fair value of derivative instruments designated as cash flow
hedges is recognized in the line item other comprehensive income, and any ineffective portion is
recognized immediately in net income. Amounts accumulated in equity are reclassified to net income
during the same periods in which the hedged item affects net income.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold,
expires, is terminated, or is exercised, then hedge accounting is discontinued prospectively. When
hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the
hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a
nonfinancial item, it is included in the nonfinancial item’s cost on its initial recognition or, for other
cash flow hedges, it is reclassified to profit or loss in the same period or periods in which hedged
expected future cash flows affect profit or loss.
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If the hedged future cash flows are no longer expected to occur, the amounts that have been
accumulated in the hedging reserve and the cost of the hedging reserve are immediately reclassified
to profit or loss.
Other hedges
The Group uses neither any financial derivatives that qualify for the hedging of the fair value of
recognized assets or liabilities or a firm commitment (fair value hedges) nor such financial derivatives
that qualify for the hedging of a net investment in a foreign operation (net-investment hedge).
Cash and cash equivalents
The Company considers all highly liquid investments with less than three months’ maturity from the
date of acquisition to be cash equivalents.
For the purposes of the consolidated cash flow statement, cash and cash equivalents include those
defined above, other short-term, highly liquid investments with original maturities of three months
or less, and bank overdrafts.
2.4.13. Impairment
Nonderivative financial assets
Financial instruments and contract assets
The Group recognizes loss allowances for expected credit losses (ECLs) on financial assets measured
at amortized cost.
The Group generally measures loss allowances at an amount equal to the 12-month ECLs if the default
risk (for example, the credit default risk) has not increased significantly since the initial recognition.
Loss allowances for trade receivables are measured at an amount equal to lifetime ECLs unless they
are trade receivables from alstria’s main tenant.
Value adjustments on trade receivables are always based on the amount of the ECL over the term.
The Group applies the simplified approach in accordance with IFRS 9.5.5.15. When determining
whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating ECLs, the Group considers reasonable and supportable information that is relevant
and available without undue cost or effort. This includes both quantitative and qualitative information
and analysis, based on the Group’s historical experience and informed credit assessment as well as
forward-looking information. The effects of the COVID-19 pandemic were taken into account and led
to a higher risk of failure (see section 6.6).
The Group assumes that the credit risk of a financial asset other than trade receivables measured at
an amount equal to lifetime ECLs will have significantly increased if it is more than 30 days past due.
For trade receivables, the number of days past due could be significantly higher due to the fact that
service charge invoices are regularly under investigation on the tenants’ side, causing a delay in
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Consolidated Financial Statements
acceptance by alstria until consent has been met. The same applies for rental receivables not paid
by the tenants in case of other disputes relating to the tenancy.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit
obligations to the Group in full, without recourse by the Group to actions such as realizing security
(if any is held). This usually does not apply to rental receivables for which the usual security deposit
of two months’ net rent is included in the assessment of whether a rental claim is deemed canceled.
The Group considers a financial asset to have low credit risk when its credit risk rating is equivalent
to the globally understood definition of “investment grade.” The Group considers this to be Baa3 or
higher per Moody’s Corporation, New York, USA or BBB- or higher per Standard & Poor’s Corporation,
New York, USA.
Lifetime ECLs are ECLs that result from all possible default events over the expected life of a financial
instrument.
12-month ECLs for financial assets are the portion of ECLs that result from default events that are
possible within the 12 months after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e., the difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the Group expects to receive).
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Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortized cost and
debt securities at FVOCI are credit-impaired. A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated future cash flows of the financial asset have
occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
▪ significant financial problems of the borrower or issuer;
▪ a breach of contract, such as a default; or
▪ probability that the borrower will enter bankruptcy or other financial restructuring.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying
amount of the assets.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in whole or in part. For tenants, the Group makes
assessments individually with respect to the timing and amount of write-off based on whether there
is a reasonable expectation of recovery. The Group expects no significant recovery from the amount
written off. However, financial assets that are written off could still be subject to enforcement
activities.
2.4.14. Noncontrolling interests of limited partners
In addition to alstria office REIT-AG, other limited partners are minority shareholders in the subsidiary
alstria office Prime Portfolio GmbH & Co. KG (“alstria office Prime”), which is included in the
consolidated financial statements. From the Group’s point of view, the equity of these limited
partners is to be reported as debt capital in accordance with IFRS. They are shown in the consolidated
balance sheet under the item “limited partnerships of noncontrolling interests.” The limited partner
contributions are shown at amortized cost in accordance with the articles of association.
2.4.15. Provisions
Provisions are recognized when a present obligation to third parties exists as a result of a past event,
a future outflow of resources is probable, and a reliable estimate of that outflow can be made.
Provisions are measured, taking all risks into account at the best estimate of future cash outflows
required to meet the obligation. If they are not current, they are discounted. Provisions are not offset
with reimbursements.
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A debt resulting from termination of employment (severance) is recognized when the Group may not
withdraw the offer of such services or if the Group recorded costs related to restructuring earlier.
2.4.16. Share-based payments
Share-based payments comprise cash-settled liability awards and equity-settled equity awards.
The fair value of equity awards is generally determined using a modified Black-Scholes option-pricing
model at the grant date. It measures the total personnel expense, which is to be recognized in profit
or loss for the service period and which, in turn, increases equity (paid-in capital) by the same
amount. Equity-settled awards are granted to the Group’s employees in the form of convertible profit
participation certificates, the fair value of which is estimated at the respective grant dates by
applying a binary barrier-option model based on the Black-Scholes model; assumptions include an
automatic conversion once the barrier is reached. The model took the terms and conditions upon
which the instruments were granted into account. This valuation required the Company to make
estimates concerning these parameters, which are therefore subject to uncertainty. Furthermore,
share-based compensation plans with compensation through equity instruments were issued to the
Company’s Management Board for the first time in the 2018 financial year (so called „long term
Incentive plan 2018“ or „LTIP 2018“). The fair value of these stock awards at the grant date was
calculated using a 100,000-path Monte Carlo simulation based on the terms of the LTIP 2018.
Cash-settled liability awards are related to the virtual shares granted to the Management Board until
the 2017 financial year. The virtual shares are measured at each balance sheet date and are accounted
for as provisions. The proportional expense incurred in the period comprises the addition to and
reversal of the provision between two reporting dates and the dividend paid during the respective
period. This valuation requires the Company to make estimates about certain parameters, and hence,
they are subject to uncertainty. The fair value of the virtual shares granted is allocated to the vesting
period subject to the terms of the underlying share-based incentive plan. The resulting personnel
expenses incurred an addition to provisions of EUR 75 k (December 31, 2019: EUR 1,867 k) and a
provision of EUR 1,301 k, as reported
in the consolidated financial statements as of
December 31, 2020 (December 31, 2019: EUR 2,941 k).
Further details on the share-based payment schemes are given in Note 13 and the remuneration
report.
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3. SEASONAL OR ECONOMIC EFFECTS ON BUSINESS
The business activities of alstria office REIT-AG (primarily the generation of revenues from investment
properties) are not generally affected by seasonality. However, the sale of one or more large
properties can have a significant impact on revenues and operating expenses.
Experience shows that the real estate market tends to fluctuate as a result of factors such as changes
in consumers’ net income, GDP, interest rates, consumer confidence, demographics, and other factors
inherent to the market. Changes in interest rates might lead to a modified valuation of the investment
property and derivatives.
4. SEGMENT REPORTING
IFRS 8 requires a management approach, under which information on segments is presented to the
Management Board on the same basis used for internal-reporting purposes.
The services offered by alstria office REIT-AG focus exclusively on letting activities to commercial-
property tenants in Germany. In accordance with IFRS 8, a single reporting segment is identified that
comprises all of the Group’s operations.
The manner of reporting for this segment is consistent with the internal reporting provided to the
chief operating decision maker, who is responsible for allocating resources to the operating segments
of an entity and assessing their performance. The Group’s chief operating decision maker is the
Management Board.
A larger number of tenants generate revenues. Total revenues amount to EUR 215,430 k (2019:
EUR 224,505 k), of which EUR 29,020 k (2019: EUR 29,376 k) and EUR 25,966 k (2019: EUR 25,164 k)
are related to leases to the Group’s two largest customers. No other single customer has contributed
10 % or more to the consolidated revenues in the 2019 or 2020 financial years.
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5. NOTES TO THE CONSOLIDATED INCOME STATEMENT
5.1.
Revenues
EUR k
Revenues from investment properties
Revenues from service charge income
Revenues
2020
177,063
38,367
215,430
2019
187,467
37,038
224,505
Revenues from investment properties mainly comprised rental income. The rental income includes
effects totaling EUR 4,058 k (2019: EUR 3,162 k), which are attributable to rent-free periods. Due to
the granting of rent relief in connection with the COVID-19 pandemic, rental income in the amount
of EUR 753 k was waived. The reduced rental income was spread over the remaining term of the
respective rental agreement. In addition, revenues from investment properties include income from
asset management services in relation to the leased real estate properties in the amount of
EUR 2,617 k (2019: EUR 2,470 k).
Rental income from property leases contains variable rental income amounting to EUR 6,686 k
(2019: EUR 8,476 k). These are rental agreements in which the rental payments are linked to the
operating results of the tenants.
5.2.
Real estate operating expenses
EUR k
Operating costs that can be charged to tenants
Maintenance and refurbishment
Vacancy costs
Ongoing repairs
Legal and advisory fees
Electricity costs
Insurance expenses
Property management
Rent expenses
Other expenses
Total
2020
36,173
8,429
7,803
5,598
842
252
190
177
86
1,057
60,607
2019
36,683
8,476
8,077
5,095
1,133
260
40
184
337
1,316
61,601
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Consolidated Financial Statements
5.3.
Administrative expenses
EUR k
Legal and consulting fees
Depreciation
IT maintenance
Communication and marketing
Audit fee (audit and audit-related services)
Supervisory Board compensation
Leasing payments and rents
Insurance expenses
Office area costs
Recruitment
Travel expenses
Office equipment
Contributions
Training & workshops
Other
Total
2020
2,563
1,110
705
653
584
525
484
302
296
218
183
172
160
148
357
8,460
2019
3,222
856
606
729
518
525
143
233
272
349
532
227
100
230
1,003
9,545
The lease payments and rents in the 2020 financial year amounting to EUR 484 k are related to short-
term and low-value leases.
5.4.
Personnel expenses
EUR k
Salaries and wages
Social insurance contribution
Bonuses
Expenses for share-based compensation
thereof relating to virtual shares
thereof relating to the convertible profit participation certificates
Amounts for Management Board retirement provisions and disability
Other
Total
2020
10,539
1,873
2,402
3,132
1,240
1,892
2,135
1,898
162
460
18,568
2019
9,701
1,708
2,410
4,033
148
441
18,441
The increase in salaries and wages is based on a higher average number of employees. The decrease
in expenses from share-based payments had the opposite effect, so that overall personnel expenses
were only slightly higher than in the previous year.
Convertible profit participation rights granted to employees grant the right not only to a conversion
when the conditions apply but also to an annual payment equivalent to the dividend amount paid out
per share.
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Consolidated Financial Statements
The employer’s contribution to statutory pension insurance, included in wages and salaries, amounts
to EUR 897 k for the 2020 financial year.
On average, the Group employed 166 employees in 2020 (2019: 156).
5.5. Other operating income
EUR k
Compensation payments and other recharges
Revaluation of the limited partnership capital noncontrolling interests
Reversal of allowance on financial assets
Property management services
Income from the reversal of accrued liabilities
Collection of security deposits
Payments on provisions on doubtful debts
Other
Total
2020
3,365
279
250
107
99
75
0
454
4,629
2019
3,280
0
0
77
11,189
204
106
1,329
16,185
Compensation payments and other charges result from early termination of leases and refurbishment
activities conducted by alstria. The latter refers to refurbishments the tenants had originally
committed to carry out themselves upon conclusion of the leasing contracts. The income from the
release of accrued liabilities in the financial year 2019 amounted to EUR 10,483 k in real estate
transfer tax obligations, which were released as the obligation ceased to exist.
5.6. Other operating expenses
EUR k
Impairment on trade receivables
Final settlement of sales based rents from previous years
Legal and advisory fees
Revaluation of the limited partnership capital noncontrolling interests
Allocation to provisions for the compensation of former minority shareholders
IFRS 9 impairment on financial assets
Settlement agreements
Other operating expenses
Total
2020
1,371
459
39
0
0
0
0
274
2,143
2019
850
0
122
8,488
5,183
250
191
146
15,230
Impairment to receivables is mainly related to tenants subject to insolvency or eviction proceedings.
This item also includes valuation allowances related to disputed invoicing of ancillary costs. The
increase in value adjustments is related to higher defaults on rental claims as a result of the COVID-
19 pandemic.
In the previous year, a potential increase in cash compensation for former minority shareholders was
taken into account. This compensation is related to former shareholders of the former DO Deutsche
Office AG, which was taken over in the 2015 financial year (see Section 7.5).
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Consolidated Financial Statements
5.7.
Net results of the disposal of investment property
EUR k
Proceeds from the disposal of investment property - transferred to buyer
Carrying amount of investment property disposed of - transferred to buyer
Costs in relation to the sale of investment properties - transferred to buyer
Gain on disposal of investment property - transferred to buyer
Agreed selling price of held-for-sale investment properties
Carrying amount of investment property at the time of reclassification to
held-for-sale
Costs in relation to the sale of investment properties - held for sale
Valuation result of held-for-sale investment properties
Gain on disposal of investment property
2020
126,510
-116,687
-1,483
8,340
0
0
0
0
8,340
2019
147,915
−128,422
−152
19,341
19,462
−21,426
−27
−1,991
17,350
In the 2020 financial year, no properties were sold below their book value. In the 2019 financial year,
the sale of properties that were sold below their book value resulted in a loss of EUR 1,991 k.
5.8.
Net financial result
The financial result breaks down as follows:
EUR k
Income from financial instruments
Interest expenses, corporate bonds
Interest result ”Schuldschein”
Interest expenses, other loans
Other interest expenses
Financial expenses
Commitment fees
Financial expenses lease liability IFRS 16
Agency fees
Other
Other financial expenses
2020
533
−27,269
−2,321
−2,190
−228
2019
575
−21,960
−2,376
−2,577
−8
−32,008
−26,921
−254
−95
0
−8
−357
−367
−94
−11
−642
−1,114
Net financial result
−31,832
−27,460
alstria Annual Report 2020
93
Consolidated Financial Statements
The total interest expenses calculated by applying the effective interest method for financial
liabilities (i.e., not recognized at fair value through profit or loss) amounted to EUR 3,261 k (interest
expenses, 2019: EUR 2,173 k).
In neither of the two former financial years did the Group hold any financial assets available for sale.
Therefore, the net result from the disposal of financial assets available for sale amounted, as in the
previous year, to EUR 0.
There was no net gain or loss from the change in the fair values of derivative financial instruments,
either in the 2020 financial year or the previous year.
Further details and explanations on derivatives are presented in Note 6.5.
5.9.
Income tax expenses
On January 1, 2007, alstria office REIT-AG obtained G-REIT status. At that time, it was subject to final
taxation and has been effectively tax exempt with regard to corporate and trade tax since then.
Minor tax-payment obligations may arise at Group level for affiliates serving as a general partner of
a partnership or for REIT Service Companies.
With the acquisition of the alstria office Prime Portfolio GmbH & Co. KG, however, companies were
included in the consolidated financial circle that are not subject to the REIT exemption. This resulted
in expenses for income taxation at the level of the alstria office Prime Portfolio GmbH & Co. KG
subgroup.
Income tax expense comprises essentially current tax expenses from previous years. A deferred tax
result is no longer expected due to the de facto tax exemption of the Group.
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Consolidated Financial Statements
6. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS
6.1.
Investment property
This item, comprising investment properties held by the Company, breaks down as follows:
Fair values in EUR k
As of January 1
Property acquisition
Capital expenditure
Disposals
Transfers to held for sale
Net result from the adjustment of the fair value of investment property
Effect from the first-time adoption of IFRS 16
As of December 31
2020
2019
4,438,597
3,938,864
7,784
144,928
−96,650
0
61,522
0
47,891
116,268
−103,814
−20,586
454,767
5,207
4,556,181
4,438,597
Eight properties were sold in the 2020 financial year, two of which were included in assets held for
sale at the end of the previous period.
Property transaction
Contract signed until 2019,
transferred in 2020
Contract signed and
transferred in 2020
Contract signed in 2020,
transferred 2021
Total
Acquisition
Disposal
Number of
properties
Transaction amount
in EUR k
Number of
properties
Transaction amount
in EUR k
0
1
1
2
0
7,000
30,300
37,300
2
6
0
8
19,580
106,930
0
126,510
Capital expenditure (EUR 144,928 k) comprises subsequent acquisition and production costs relating
to property acquisitions and refurbishment projects.
The investment property includes rights-of-use assets from leases, which are shown in the amount of
the leasing liabilities of EUR 5,042 k.
alstria Annual Report 2020
95
Consolidated Financial Statements
Borrowing costs that would have had to be capitalized as construction costs were not incurred during
the reporting period (2019: EUR 0).
The alstria office REIT-AG applied the fair value model pursuant to IAS 40.33 et seq. for subsequent
measurement of investment property. External appraisals were obtained for measurement. For a
detailed description of the valuation of assets, please see Note 2.4.
The item “net result from fair value adjustments on investment property” on the income statement
in the amount of EUR 156,892 k is attributable to a change in unrealized losses.
Furthermore, the net result from fair value adjustments on investment property includes devaluations
in the amount of EUR 272 k that relate to properties sold in the reporting period. The total of the
increases in value amounted to EUR 218,686 k.
As in the previous year, all real estate held as investment property measured at fair value is classified
as Level 3 in the fair value hierarchy.
The Group has considered the nature, characteristics, and risks of its properties, as well as the level
of the fair value hierarchy within which the fair value measurements are categorized, in determining
the appropriate classes of investment property.
The following factors help determine the appropriate classes:
a) The real estate segment: Within all investment portfolios, the majority of the lettable area
is dedicated to offices. Therefore, all investment properties belong to one asset class: offices.
b) The geographical location of all properties is Germany.
c) The level of fair value hierarchy for all investment properties is Level 3.
d) There are large differences between the contractual lease terms. This also affects the
weighted average unexpired lease term (WAULT) for each investment property. A distinction
is made between objects with a short, medium, and long WAULT.
As a result, three appropriate classes of investment properties emerged:
▪ Germany – Office – Level 3 – short WAULT (0–5 years);
▪ Germany – Office – Level 3 – medium WAULT (> 5–10 years); and
▪ Germany – Office – Level 3 – long WAULT (> 10 years).
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Consolidated Financial Statements
Quantitative information about fair value measurements using unobservable inputs (alstria
portfolio) (Level 3)
EUR k, unless stated otherwise
Portfolio
Fair value on
Dec. 31, 2020
German offices
4,556,181
Number of properties:
Valuation
technique
Hardcore
and top slice
109
0 ≤ WAULT ≤ 5 Years
German offices
2,233,511
Number of properties:
Hardcore
and top slice
62
5 < WAULT ≤ 10 Years
German offices
2,034,220
Number of properties:
Hardcore
and top slice
Unobservable
inputs
Estimated rental value
(EUR/m²/mo.)
Adjusted yield
Void period of office
leases expiring within
the next 5 years
[months]
Estimated rental value
(EUR/m²/mo.)
Adjusted yield
Void period of office
leases expiring within
the next 5 years
[months]
Estimated rental value
(EUR/m²/mo.)
Adjusted yield
Void period of office
leases expiring within
the next 5 years
[months]
Range
Min. Max.
Weighted
average
7.0
23.8
2.7 %
8.7 %
14.2
4.3 %
0.0
32.0
14.8
7.0
23.8
2.9 %
8.7 %
14.4
4.6 %
0.0
32.0
14.8
8.2
23.7
2.9 %
6.0 %
13.9
4.2 %
0.0
30.0
15.0
10.7
19.3
2.7 %
3.2 %
14.0
2.8 %
6.0
9.0
6.8
42
WAULT > 10 Years
German offices
Number of properties:
5
288,450
Hardcore
and top slice
Estimated rental value
(EUR/m²/mo.)
Adjusted yield
Void period of office
leases expiring within the
next 5 years [months]
Sensitivity of measurement to variance of significant unobservable input
A decrease in the estimated rental income decreases the fair value.
An increase in the vacancy period decreases the fair value.
An increase in the adjusted yield decreases the fair value.
A decrease in the estimated rental income leads to an increase in the adjusted yield; an increase in
the estimated rental income leads to a decrease in the adjusted yield.
A decrease in the vacancy period increases the adjusted yield; an increase in the vacancy period
decreases the adjusted yield.
alstria Annual Report 2020
97
Consolidated Financial Statements
In the following, the influence of changes in the capitalization rates (adjusted return) on the market
values is indicated. As of December 31, 2020, the valuation report contains an indication that the
market disruption in view of the COVID-19-pandemic resulted in a reduction in the transaction values
and liquidity of the markets. This note implies that there are currently significantly greater
uncertainties than would be the case under normal market conditions. Against the background of the
increased uncertainty due to the COVID-19 pandemic, the intervals have been extended this year.
Fair value of investment properties (EUR m)
Capitalization rate
Dec. 31, 2020
Dec. 31, 2019
−0.50 %
−0.25 %
0.00 %
0.25 %
0.50 %
5,353
4,924
4,556
4,236
3,954
n/a
4,771
4,439
4,147
n/a
Operating lease commitments – Group as lessor
The Group has entered into commercial property leases on its investment property portfolio, which
consists of the Group’s offices and commercial real estate. These noncancelable leases have
remaining maturity of between 1 and 21 years. Most leases include an indexation clause allowing
rental charges to be raised annually according to prevailing market conditions.
Future minimum rental charges receivable as agreed in noncancelable operating leases are as follows:
EUR k
Within 1 year
After 1 year but not longer than 5 years
Longer than 5 years
Total
Dec. 31, 2020
Dec. 31, 2019
196,220
562,729
452,403
198,622
599,105
517,792
1,211,352
1,315,519
Disclosures concerning expenses/income as recorded in the income statement pursuant to
IAS 40.75 (f) include the following:
▪ EUR 215,430 k (2019: EUR 224,505 k) in revenues from investment properties, of which
EUR 331 k is related to subleases of rights-of-use assets;
▪ EUR 52,804 k (2019: EUR 53,524 k) in operating expenses (including repairs and maintenance)
directly allocable to investment properties from which rental income was generated during
the period under review; and
▪ EUR 7,803 k (2019: EUR 8,077 k) in operating expenses (including repairs and maintenance)
arising from investment properties that did not generate rental income during the period
under review.
Investment properties, held-for-sale properties, and own used properties amounting to EUR 807,100 k
(December 31, 2019: EUR 754,700 k) served as collateral for bank loans.
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alstria Annual Report 2020
Consolidated Financial Statements
6.2.
Equity-accounted investment
As of the balance sheet date, alstria held shares in an investment with a book value of EUR 915 k and
shares in a joint venture with a book value of EUR 105 k. Further details on the investments accounted
for using the equity method can be found in section 2.2.3 of these notes.
At the end of the reporting period 2019, two companies in which alstria office REIT-AG holds a 49.0 %
share were treated as joint ventures and accounted for using the equity method. The carrying amount
of the joint ventures amounted to EUR 155 k. One of the two companies was liquidated in the 2020
financial year, the other company was merged with its general partner.
6.3.
Intangible assets and property, plant, and equipment
The intangible assets consist of software licenses and licenses to other rights with carrying amounts
of EUR 37 k and EUR 18 k, respectively. The useful life of the intangible assets is estimated to be
between 1 and 10 years.
The alstria office REIT-AG occupies areas for its own use in four of its office buildings in Hamburg,
Berlin, Düsseldorf, and Frankfurt. Therefore, the owner-occupied areas of the properties are
categorized as “Property, plant, and equipment” according to IAS 16, and amortized according to
plan.
The following table shows the development of property, plant, and equipment.
EUR k
Acquisition and production cost
As of January 1, 2020
Additions
Disposals
As of December 31, 2020
Accumulated amortization,
depreciation, and write-downs
As of January 1, 2020
Additions
Disposals
As of December 31, 2020
Net book values as of
December 31, 2020
Plant
Furniture and
fixtures
Owner-occupied
property
IFRS 16
right-of-use
assets
Total 2020
1,266
0
0
1,266
1,215
12
0
1,227
3,348
172
-682
2,838
2,097
272
-665
1,704
17,929
15
0
17,944
713
321
0
1,034
39
1,134
16,910
787
20
0
807
250
280
0
530
277
23,330
207
-682
22,855
4,275
885
-665
4,495
18,360
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99
Consolidated Financial Statements
EUR k
Acquisition and production cost
Plant
Furniture and
fixtures
Owner-occupied
property
IFRS 16
right-of-use
assets
Total 2019
As of January 1, 2019
1,266
3,155
17,977
Additions
Disposals
0
0
193
0
0
−48
As of December 31, 2019
1,266
3,348
17,929
Accumulated amortization,
depreciation, and write-downs
As of January 1, 2019
Additions
As of December 31, 2019
Net book values as of
December 31, 2019
1,202
13
1,215
1,832
265
2,097
392
321
713
51
1,251
17,216
537
19,055
0
787
0
787
0
250
250
22,398
980
−48
23,330
3,426
849
4,275
As in the previous year, two of these properties were pledged with a mortgage to secure loans from
the Group.
6.4.
Financial assets
EUR k
Dec. 31, 2019
Repayments
Investment in
financial assets
Noncurrent financial assets
Current financial assets
39,108
199,750
0
0
-50,000
250,000
Valuation
Dec. 31, 2020
0
250
39,108
0
The financial assets of EUR 39,108 k (December 31, 2019: EUR 39,108 k) are related to long-term
deposits in the amount of EUR 38,864 k and a term up to the end of the 2032 financial year. A further
amount of EUR 244 k is attributable to a below -3 % share in a stock corporation on which alstria cannot
exert any significant influence.
Current financial assets are bank deposits with a term of between 90 and 365 days.
There were no value adjustments for financial assets as of the balance sheet date.
100
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Consolidated Financial Statements
6.5.
Derivative financial instruments
The following derivative financial instruments were in place at the end of the reporting period:
Product
Cap
Financial derivatives –
cash flow hedges
Total
Strike p.a.
(%)
Maturity date
Notional
(EUR k)
Dec. 31, 2020
Fair value
(EUR k)
3.000
Apr. 30, 2021
44,168
44,168
44,168
0
0
0
Notional
(EUR k)
45,090
45,090
45,090
Dec. 31, 2019
Fair value
(EUR k)
0
0
0
Derivative financial instruments that are not designated for a cash flow hedge relationship were not
held on the balance sheet date or during the year. The notional amount of the financial derivatives
qualifying for cash flow hedging, effective at the end of the reporting period, was EUR 44,168 k
(December 31, 2019: EUR 45,090 k).
Because the value of the derivatives on the balance sheet date, the previous balance sheet date, and
during the financial year was EUR 0, there was no impact from the change in value of derivative
financial instruments in the 2020 financial year.
The ineffective portion to be recognized in profit or loss that arises from cash flow hedges amounted
to a fair value loss of EUR 0 (2019: EUR 0 k). A net result from fair value adjustments to financial
derivatives is therefore no longer shown in the income statement.
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101
Consolidated Financial Statements
6.6.
Receivables and other assets
Due to the specific nature of the business, the Group considers receivables with a remaining term of
up to 1 year to be current. The following table presents an overview of the Group’s receivables:
EUR k
Trade receivables
Rent receivables
Other receivables
Cash in transit
Maintenance reserves
Receivables against employees
Creditors with debit balance
Security deposits and other deposits granted
Receivables and other assets
Financial assets
Deductible capital gains taxes
VAT receivables
Prepayments made
Non financial assets
Other receivables
Dec. 31, 2020
Dec. 31, 2019
4,572
3,887
314
268
222
174
36
128
1,142
4,578
2,677
365
7,620
8,762
206
295
206
205
47
37
993
4,578
2,378
652
7,608
8,601
The deductible capital gains taxes are related to the taxation on hidden reserves in the course of the
change of legal form in subsidiaries in the 2016 financial year. Affected are companies of the Prime
Portfolio subgroup, which, following the takeover of the former DO Deutsche Office Group, changed
from the legal form of a limited liability company to the legal form of a limited partnership.
All receivables are due within 1 year from the balance sheet date. The fair value of all receivables is
equal to their carrying amount.
The expected credit losses are calculated in two ways. For alstria’s key tenants, default probabilities
observed on the market made available by Bisnode Deutschland GmbH, Darmstadt, Germany, are
used. For its receivables from the remaining (non-key) tenants, alstria uses an impairment matrix.
The receivables of these other tenants are valued based on historical probabilities of default. Future
developments or macroeconomic indicators are monitored, and adjustments are made if necessary.
Based on various regulations applied by the state to mitigate the medical risks of the COVID-19
pandemic, the expectation of a cooling business climate was considered in the valuation of assets.
The clustering of receivables was refined in accordance with the internal monitoring of the effects of
the pandemic. In addition, adjustments were made for the calculation of the expected credit loss
according to IFRS 9 for trade receivables, which should cover the possible effects of the pandemic on
the respective customers. As a result, the risk provision for tenants who are not classified as key
tenants (other tenants) increased by EUR 381 k.
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alstria Annual Report 2020
Consolidated Financial Statements
On this basis, alstria estimates the following default rates:
EUR k
Default rate
0-30 days overdue
31-90 days
overdue
91-180 days
overdue
More than 180 days
overdue
9.63 %
16.20 %
31.77 %
100.00 %
Trade receivables from tenants of alstria are valued as follows:
EUR k
Gross amount
Provision made for
default of receivables
over the entire term
Provision made for
default of receivables
over 12 months
Net amount
0-30 days overdue
31-90 days overdue
91-180 days overdue
More than 180 days overdue
Total other tenants
Key tenants
Total
1,685
789
526
1,256
4,256
2,052
6,308
-162
-128
-167
-1,256
-1,713
−
−1,713
The allowance for trade receivables developed as follows:
EUR k
As of January 1
Additions
Net revaluation of allowances
As of December 31
−
−
−
−
−
−23
−23
2020
436
1,371
-71
1,736
1,523
661
359
0
2,543
2,029
4,572
2019
134
850
−548
436
Receivables from rental agreements and property disposals, as well as insurance receivables and
derivative financial instruments, have been assigned to the lenders (Note 7.3) to secure the Group’s
mortgage-backed loans.
alstria Annual Report 2020
103
Consolidated Financial Statements
6.7.
Cash and cash equivalents
EUR k
Bank balances
Dec. 31, 2020
Dec. 31, 2019
460,960
298,219
Current accounts held with banks attract variable interest rates for on-call balances. As of the
reporting date, no cash amounts were subject to restrictions. Due to the very low credit default
probabilities of the banks for the daily available bank balances, there was no impairment of cash and
cash equivalents. The credit rating was based on observable market parameters.
In addition, cash and cash equivalents include EUR 8,800 k in rent deposits received from tenants
(December 31, 2019: EUR 7,280 k). These tenant deposits, recognized under cash and cash
equivalents, are offset by an item included under Other Liabilities.
6.8.
Assets held for sale
At the end of the reporting period, alstria did not have any properties held for sale.
The previous year’s assets held for sale comprised two properties. Benefits and burdens for both
properties were transferred in the first quarter of the financial year 2020. The sale of properties
resulted in disposal revenues of EUR 19,575 k.
The valuation of assets held for sale is generally based on the contract prices and, therefore, included
within Level 1 of the fair value hierarchy.
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Consolidated Financial Statements
7. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY
AND LIABILITIES
7.1.
Equity
For detailed information on equity, please refer to the consolidated statement of changes in
consolidated equity.
Share capital
EUR k
Dec. 31, 2020
Dec. 31, 2019
Ordinary shares of EUR 1 each
177,793
177,593
The conversion of profit participation rights (Note 13.2) in the third quarter of 2020 resulted in the
issuance of 199,325 new shares by making use of the conditionally increased capital provided for such
purposes. The share capital of alstria office REIT-AG increased by EUR 199,325.00 as compared with
December 31, 2019, and as of December 31, 2020, it is represented by 177,792,747 no-par value
bearer shares.
The following table shows the reconciliation of the number of shares outstanding:
Number of shares
2020
2019
Shares outstanding on January 1
177,593,422
177,416,497
Conversion of convertible participation rights
199,325
176,925
As of December 31
177,792,747
177,593,422
The majority of the Company’s shares are in free float.
Capital reserve
The capital reserve changed as follows during the financial year:
EUR k
As of January 1
Payment of dividends
Share-based remuneration
Conversion of convertible participation rights
2020
1,448,709
−94,125
2,124
199
2019
1,538,632
−92,257
2,157
177
As of December 31
1,356,907
1,448,709
The share premium resulting from the conversion of 199,325 profit-participation rights resulted in an
increase in capital reserves of EUR 199 k.
Revaluation surplus
Following the relocation of the headquarters within Hamburg in the first quarter of the financial year
2018, the office space that had previously been used as owner-occupied property again became
investment property and was remeasured at fair value. The fair value revaluation resulted in an
alstria Annual Report 2020
105
Consolidated Financial Statements
increase in the carrying amount of the property in the amount of EUR 3,485 k. The increase in value
was recognized in other comprehensive income and allocated to the revaluation surplus.
Treasury shares
As of December 31, 2020, the Company held no treasury shares.
By resolution of the Annual General Meeting held on September 29, 2020, the Company’s
authorization to acquire treasury shares was renewed. The resolution authorized alstria office REIT-
AG to acquire up to 10 % of the capital stock until September 28, 2025. There is no intention to make
use of this authorization at present.
Retained earnings
Retained earnings as of December 31, 2020, totaled EUR 1,714,257 k (December 31, 2019: profit
carried forward of EUR 1,545,768 k). At the dividend’s due date, alstria office REIT-AG’s stand-alone
positive retained earnings were not high enough for the payment of the dividend according to German
GAAP (HGB). Therefore, the amount of the dividend payouts was released from the available capital
reserve in 2020.
Authorized capital
By resolution of the Annual General Meeting on September 29, 2020, the Company’s Authorized
Capital 2019 in the amount of EUR 35,483 k was renewed through the Authorized Capital I 2020 and
supplemented by the Authorized Capital II 2020 and Authorized Capital III 2020.
The Authorized Capital I 2020 authorizes the Management Board, with the Supervisory Board’s
approval, to increase the Company’s share capital by September 28, 2025, by up to a total of
EUR 35,199 k. The Authorized Capital II 2020 authorizes the Management Board, with the Supervisory
Board’s approval, to increase the Company’s share capital by July 1, 2021, by up to a total of
EUR 260 k to issue shares to the members of the Management Board against contribution in kind. The
Authorized Capital III 2020 authorizes the Management Board, with the Supervisory Board’s approval,
to increase the Company’s share capital by July 1, 2021, by up to a total of EUR 60 k to issue shares
to the members of the Supervisory Board against contribution in kind.
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Consolidated Financial Statements
Conditional capital
The Company’s share capital has been conditionally increased to grant convertible profit participation
rights to the employees of the Company and its subsidiaries and to issue bearer convertible or option
bonds, profit participation rights, or participating bonds. As of December 31, 2020, the conditional
capital amounted to EUR 18,551 k. This was divided into Conditional Capital I 2020 (EUR 16,750 k),
Conditional Capital III 2017 (EUR 801 k), and Conditional Capital III 2020 (EUR 1,000 k).
In the year under review, Conditional Capital III 2017 was used in the amount of EUR 199 k.
7.2.
Noncontrolling interests of limited partners
In the 2017 financial year, alstria office REIT-AG acquired 2,128,048 limited partner shares. A further
3,593,463 limited partner shares were redeemed against cash compensation by alstria office Prime.
In the financial years 2018 to 2020, a further 47,781 limited partner shares were acquired.
In the reporting period, the change in value of the existing limited partnership shares of noncontrolling
interests resulted in a gain of EUR 279 k (2019: expenses of EUR 8,488 k). The fair value of the limited
partnerships of noncontrolling interests reported as of the balance sheet date amounted to
EUR 68,290 k, whereby EUR 68,275 k are to be classified as long term and EUR 15 k as short term.
7.3.
Financial liabilities
EUR k
Loans
Corporate bonds
Mortgage loans
Schuldschein
Total
EUR k
Loans
Corporate bonds
Mortgage loans
Schuldschein
Total
Noncurrent
Current
Total
Loan Accrued interest
Total current
Dec. 31, 2020
1,412,849
195,635
76,865
1,685,349
0
0
0
0
8,964
94
1,267
8,964
94
1,267
1,421,813
195,729
78,132
10,325
10,325
1,695,674
Noncurrent
Current
Total
Loan Accrued interest
Total current
Dec. 31, 2019
1,388,701
195,551
76,828
1,661,080
0
0
37,000
37,000
11,871
84
1,635
13,590
11,871
1,400,572
84
38,635
50,590
195,635
115,463
1,711,670
The table presents the long-term loans and the net of the current portion as stated under noncurrent
liabilities. Furthermore, it shows the current amount due within 1 year, recorded as an item in short-
term loans in current liabilities.
alstria Annual Report 2020
107
Consolidated Financial Statements
As of December 31, 2020, the total repayable amount of the corporate bonds, the bank loans, the
Schuldscheindarlehen, and the convertible bond drawn by alstria (as of the prior year’s balance sheet
date) was EUR 1,697,900 k (December 31, 2019: EUR 1,674,700 k). The carrying amount of
EUR 1,695,674 k (EUR 1,685,349 k, noncurrent, and EUR 10,325 k, current) considers interest
liabilities and accrued transaction costs. Financial liabilities with a maturity of up to 1 year are
recognized as current loans.
The following table shows the changes in financial liabilities:
EUR k
Long-term loans and bonds,
net of current portion
Short-term loans
Total
December
31, 2019
Payments
of the
period
Reclassification
noncurrent/
current
Changes in
fair value
December
31, 2020
1,661,080
350,000
50,590
-363,800
-326,800
326,800
1,0691)
-3,2662)
1,685,349
10,325
1,711,670
-13,800
0
-2,197
1,695,674
1) Changes in deferred loan costs (effective interest).
2) Changes in the accrued interest.
The cash changes in borrowings shown in the column “Payments of the period” include, in addition
to the cash inflows and outflows from loans and corporate bonds, the payments of transaction costs
for taking out loans.
Corporate bonds
To finance its debt financing, the group predominantly uses corporate bonds. The following table
contains a summary of the corporate bonds in existence in the financial year:
Corporate
Bond
Issu-
ance
Maturity
Notional in
EUR k
Coupon
in %
Utilization as
of
31.12.2020
in EUR k
Book
Value as
of
31.12.20
20 in
EUR k
Fair Value as of
31.12.2020
(hierarchy level
1) in EUR k
Accrued
interests as
of
31.12.2020
in EUR k
Corporate
Bond I
Corporate
Bond II
Corporate
Bond III
Corporate
Bond IV
Corporate
Bond V
IV 2015 24.03.2021
500,000
2.250
0
n/a
n/a
II 2016 12.04.2023
500,000
2.125
325,000
323,522
337,301
4,995
IV 2017 15.11.2027
350,000
1.500
350,000
346,940
363,090
III 2019 26.09.2025
400,000
0.500
400,000
394,390
400,760
676
532
II 2020 23.06.2026
350,000
1.500
350,000
347,997
367,448
2,762
Corporate bond I was redeemed on December 28, 2020, before the end of the regular term.
108
alstria Annual Report 2020
Consolidated Financial Statements
Mortgage loans
These are property-related bank loans, most of them with variable interest rates. The loans are
secured by mortgages and other collateral customary for bank loans.
Schuldschein
As of May 6, 2016, alstria issued a Schuldschein (a debenture bond) with a nominal value of
EUR 150,000 k. The Schuldschein has an average coupon of 2.07 % p.a. payable according to end-of-
year convention and a staggered term of between 4 and 10 years (see table on page 123). In the
meantime, loan shares in the amount of EUR 73,000 k were repaid before the end of their term, so
that the Schuldschein had a notional value of EUR 77,000 k at the end of the reporting period. The
fair value (hierarchy Level 2) amounted to EUR 87,547 k as of the balance sheet date.
Further details regarding the loan liabilities
The current portion of the loans refers to scheduled repayments and accrued interest on the loans.
As of the balance sheet date, EUR 10,325 k have been accrued for interest payment liabilities, which
will be payable in the course of the next 12 months (December 31, 2019: EUR 13,603 k).
The variable interest for the loans is payable on a quarterly basis, whereby the standard margin and
borrowing costs for the market are added to the respective EURIBOR rate.
Due to the variable interest rate of the main part of the mortgage loans, there are no significant
differences between the carrying amounts and the fair value of these loans, with the exception of
transaction costs.
A total of EUR 37,100 k (December 31, 2019: EUR 37,100 k) in financial liabilities from mortgage loans
is related to a fixed interest rate loan. At the end of the reporting period, the loan had a fair value
of EUR 41,034 k (December 31, 2019: EUR 41,840 k). The fair value estimation is based on the
discounted cash flows using quoted prices for loans with equivalent risk and maturity as a discount
rate (Level 2 in fair value hierarchy).
As of December 31, 2020, the loans and the convertible bond were reduced by accrued transaction
costs of EUR 12,551 k (December 31, 2019: EUR 13,620 k).
The average debt maturity slightly increased from 4.8 years as of December 31, 2019, to 4.9 years as
of December 31, 2020. The Group’s average interest rate decreased from 1.5 % to 1.4 % from balance
sheet date to balance sheet date.
The carrying amounts of the loans are all reported in euros. With the exception of the fixed rate loan,
the corporate bonds, the Schuldschein, and the convertible bond described above, the fair values of
the Group’s financial liabilities approximate their carrying values at the end of the reporting period.
This does not apply to their accrued transaction costs.
alstria Annual Report 2020
109
Consolidated Financial Statements
As of December 31, 2020, a loan facility of EUR 100,000 k was in place.
The liabilities exposed to an interest rate risk are due as follows:
EUR k
Up to 1 year
More than 1 year
Total
The following loans are secured by land charges:
EUR k
Financial liabilities secured by land charges
thereof on investment property
thereof on own used property
7.4. Other provisions
Dec. 31, 2020
Dec. 31, 2019
0
158,800
158,800
0
158,800
158,800
Dec. 31, 2020
Dec. 31, 2019
195,900
189,801
6,099
201,900
195,976
5,924
EUR k
Other provisions
Provision virtual
share liabilities
Other
Total
Due
Due
up to
1 year
in more
than 1 year
Total
Dec. 31, 2020
up to
1 year
in more
than 1 year
Total
Dec. 31, 2019
1,301
729
2,030
0
0
0
1,301
729
2,030
1,715
790
2,505
1,226
0
1,226
2,941
790
3,731
The development of other provisions is shown in the following overview:
EUR k
Dec. 31, 2019 Consumption Resolution Additions
Dec. 31, 2020
Development of other provisions
Provision virtual share liabilities
Other
Total
2,941
790
3,731
-1,715
-61
-1,776
0
0
0
75
0
75
1,301
729
2,030
As of the balance sheet date, EUR 1,301 k (December 31, 2019: EUR 2,941 k) was recognized as a
provision for awarding the Long- and in the previous year still Short-Term Incentive Plan (Note 13.1).
Other provisions are related to litigation expenses.
110
alstria Annual Report 2020
Consolidated Financial Statements
7.5.
Trade payables and other liabilities
EUR k
Due
up to
1 year
in more
than 1 year
Total
Dec. 31, 2020
Trade payables
3,943
0
3,943
Due
up to
1 year
4,611
in more
than 1 year
Total
Dec. 31, 2019
0
4,611
21,109
0
21,109
22,328
0
22,328
Other current liabilities
Accruals for outstanding
invoices
Rent and security deposits
received
Cash compensation
IFRS 16 lease liabilities
Salary obligations
Customers with credit balances
Accruals for tax consulting
Supervisory Board compensation
Auditing costs
Vacation provisions
Miscellaneous liabilities
8,800
6,052
405
2,335
2,142
800
525
380
296
222
7,856
0
4,772
0
0
0
0
0
0
0
Financial liabilities
43,066
12,628
Value-added tax liabilities
3,359
Advance rent payments
received
Income tax and social security
contributions
Non financial liabilities
3,293
230
6,882
0
0
0
0
Total other liabilities
49,948
12,628
16,656
6,052
5,177
2,335
2,142
800
525
380
296
222
55,694
3,359
3,293
230
6,882
62,576
7,280
5,836
475
2,350
2,362
738
525
396
322
407
6,372
0
5,160
0
0
0
0
0
0
43,019
11,532
1,535
692
205
2,432
0
0
0
0
45,451
11,532
13,652
5,836
5,635
2,350
2,362
738
525
396
322
407
54,551
1,535
692
205
2,432
56,983
The disclosed carrying amounts approximate their fair values.
In its decision of September 26, 2019, the Regional Court of Hamburg set the cash compensation to
be paid to entitled shareholders of the former DO Deutsche Office AG, which was leaving the company
with regard to the change of the legal form, at an amount of EUR 5.58 plus interest. This led to a
resurgence of the liability from the cash value settlement, in terms of the outstanding settlement
obligation including interests according to the court decision, in the amount of EUR 6,052 k. An appeal
against this decision has been filed; therefore, the decision is not yet effective.
The IFRS 16 lease liability relates to the contractually agreed rental terms, including the expected
extension options. Future cash outflows that the lessee might face due to extension options that were
not considered in the measurement of the lease liability amount to EUR 8,992 k.
alstria Annual Report 2020
111
Consolidated Financial Statements
7.6.
Income tax liabilities
The recognition of income tax liabilities as of December 31, 2020, is described in Note 5.9 regarding
income tax expenses. Obligations from income taxes arise almost exclusively at the level of the alstria
office’s Prime companies acquired through the business combination on October 27, 2015.
The tax liabilities mainly resulted from taxes arising out of the realization of hidden reserves as a
result of the inclusion of the companies into the tax-exempt REIT structure. As a result, no further
deferred tax liabilities had to be formed since the 2016 financial year.
8. OTHER NOTES
8.1.
Compensation of the Management Board and Supervisory Board
Management Board The following total remuneration was granted to the members of the
Management Board, according to IAS 24.17:
EUR k
Short-term benefits
Share-based remuneration
Postemployment benefits
Total
2020
1,275
800
161
2,236
2019
1,282
800
160
2,242
On the reporting date, liabilities for the compensation of the Management Board members amounted
to EUR 433 k (2019: EUR 450 k).
As of December 31, 2020, members of the Management Board were issued 263,158 virtual shares
(December 31, 2019: 271,471 virtual shares) from the cash-settled share-based management
remuneration plan implemented in 2010 and the equity-settled management remuneration plan in
place since 2018 (see Note 13.1).
Supervisory Board Pursuant to the Articles of Association, Supervisory Board members’ fixed annual
payments amounted to EUR 525 k (2019: EUR 525 k).
Further information on the disclosures from HGB Section 314, para. 1, no. 6a (German Commercial
Code) and IAS 24.17 is provided in the remuneration report (see on pages 181 to 191).
8.2. Other financial commitments and contingencies
Other financial obligations from refurbishment projects and ongoing maintenance amounted to
EUR 78,605 k (2019: EUR 61,469 k). The increase results from a higher level of existing development
projects at the end of the reporting period than in the previous year.
112
alstria Annual Report 2020
Consolidated Financial Statements
As of December 31, 2020, rental agreements for the car parking spaces and administrative premises
were subject to a minimum lease term. Future financial obligations of EUR 6,827 k arose from other
leasing agreements. Of these, EUR 752 k in obligations has a residual maturity of up to 1 year;
EUR 1,555 k in obligations has a remaining maturity of 1 to 5 years; and the remaining EUR 4,520 k
has more than 5 years.
8.3.
Consolidated cash flow statement
The cash flow statement shows how the Group’s cash and cash equivalents have changed over the
financial year as a result of cash received and paid. In accordance with IAS 7, cash flows are
distinguished from operating activities and from investing and financing activities.
Cash flows from investing and financing activities are calculated based on payments, whereas cash
flows from operating activities are indirectly derived based on the consolidated profit for the year.
The net cash generated from operating activities for the 2020 financial year amounted to
EUR 103,321 k, which is below the level of previous year’s operating cash flow (EUR 121,693 k). The
decline results on one hand from lower revenue received and on the other hand from higher interest
payments due to the early interest payment for a corporate bond. The net cash generated from
operating activities includes other noncash income and expenses totaling EUR 7,422 k. These
essentially relate to allocation to provisions and other liabilities. Cash outflows for leases amounted
to EUR 869 k for the financial year.
The cash flow from investing activities is affected by the inflow of cash and cash equivalents from
property disposals amounting to EUR 126,472 k and the repayment of financial assets amounting to
EUR 250,000 k, while investments in financial assets resulted in cash outflows in the amount of
EUR 50,000 k, and investments in the investment property portfolio resulted in cash outflows of
EUR 153,124 k.
The cash flows from financing activities includes cash inflows from the placement of a corporate bond
in the amount of EUR 350,000 k. Cash outflows resulted from the repayment of loans and a corporate
bond in the amount of EUR 363,800 k and the dividend distribution in the amount of EUR 94,125 k.
Cash and cash equivalents reported in the cash flow statement relate to all liquidity items disclosed
on the balance sheet (e.g., cash in hand and bank balances).
alstria Annual Report 2020
113
Consolidated Financial Statements
9. RELATED PARTY RELATIONSHIPS
9.1.
Preliminary remarks
The related parties are the Management Board, the members of the Supervisory Board, the managing
directors of the subsidiaries and second-tier subsidiaries, and their close relatives. The related parties
also include entities with a controlling influence over the Group and entities with joint control or
significant influence over alstria office REIT-AG.
A majority of alstria office REIT-AG’s shares are free-floating shares. No person or entity has a
controlling influence over the Company. The ultimate parent company of the Group is alstria office
REIT-AG.
The joint ventures over which alstria office REIT-AG has joint control are also considered related
parties.
In the view of alstria office REIT-AG’s management, all transactions with related parties entered into
during financial year 2020 were undertaken in terms of arm’s-length transactions or under conditions
favoring alstria office REIT-AG.
9.2.
Remuneration of key management personnel
For a detailed description of the remuneration of key management personnel, please refer to Note 8.1
and the remuneration report (see on pages 181 to 191).
9.3.
Related party transactions
At the end of the reporting period, the Group recorded no receivables from or liabilities to joint
ventures. Furthermore, as in the previous year, alstria received EUR 5 k from the joint ventures as
compensation for services connected to real estate.
No further transactions with related parties were carried out during the reporting period.
10. EARNINGS PER SHARE
Basic earnings per share are calculated as the quotient of the profit attributable to the shareholders
and the weighted average number of shares outstanding during the financial year — except for the
average number of treasury shares held by the Company itself.
Diluted earnings per share are calculated by dividing the profit attributable to the parent company’s
ordinary owners by the weighted average number of ordinary shares outstanding during the year —
except for the treasury shares held by the Company itself — plus the weighted average of shares that
would be issued as a result of the dilutive potential ordinary shares’ conversion.
114
alstria Annual Report 2020
Consolidated Financial Statements
The following table reflects the income and share data used in the earnings per share computations:
Earnings per share
Profit attributable to the shareholders (EUR k)
Average number of shares outstanding (thousands)
Basic earnings per share (EUR)
2020
168,489
177,644
0.95
2019
581,221
177,524
3.27
The granted stock options and the convertible profit participation rights did not result in dilution
effects during the period under review.
alstria office REIT-AG is authorized to issue up to EUR 18,551 k in shares as conditional capital. These
contingently issuable shares could dilute basic earnings per share in the future, but they were not
included in the calculation of diluted earnings per share because they are nondilutive for the
presented period.
11. DIVIDENDS PAID AND DIVIDENDS PROPOSED
EUR k
Dividends on ordinary shares1) not recognized as a liability as of December 31
Dividend per share
1) Refers to all shares except treasury shares on the dividend payment date
2020
94,125
0.53
2019
92,257
0.52
At the Annual General Meeting held on September 29, 2020, alstria office REIT-AG resolved to
distribute dividends totaling EUR 94,125 k (EUR 0.53 per outstanding share). The dividends were
distributed on October 2, 2020. By comparison, the dividends paid out in 2019 totaled EUR 92,257 k
(EUR 0.52 per outstanding share).
At the Annual General Meeting, the Management Board intends, in agreement with the Supervisory
Board, to submit the following proposal to allocate the unappropriated net income of alstria office
REIT-AG for the 2020 financial year:
Distribution of a dividend of EUR 0.53 for each share of no par value entitled to the dividend for the
2020 financial year as of the date of the Annual General Meeting. Payment of the proposed dividend
is contingent upon approval by alstria shareholders at the Annual General Meeting on May 6, 2021.
This proposed dividend of EUR 0.53 per share for the 2020 financial year represents a total payment
of around EUR 94.2 million based on the number of shares entitled to dividend at the balance sheet
date.
12. EMPLOYEES
From January 1 to December 31, 2020, the Company had an average of 166 employees (January 1 to
December 31, 2019: 156 employees on average). The average was calculated based on the total
number of employees at the end of each quarter. On December 31, 2020, 167 people were employed
at alstria, excluding the Management Board members (December 31, 2019: 165 employees).
alstria Annual Report 2020
115
Consolidated Financial Statements
Employees
Average 2020 December 31, 2020 Average 2019 December 31, 2019
Real estate management and development
Finance and legal
Other occupations
Total
96
37
33
166
95
40
32
167
87
37
32
156
95
38
32
165
13. SHARE-BASED REMUNERATION
13.1. Share-based remuneration (virtual shares and stock awards) for Management Board
members
The virtual shares issued to the Management Board relate to share-based remuneration. In
January 2017, the Supervisory Board of the Company adopted an amendment to the remuneration
system for members of the Management Board, which has remained unchanged since 2010 and which
came into effect on January 1, 2018. As the term of the granted virtual shares is 4 years, virtual
shares will be issued under the compensation system valid from 2010 and those issued under the
criteria of the new compensation system effective January 1, 2018. The latter are referred to as Stock
Awards. In the following, therefore, the cornerstones of the virtual shares under the Remuneration
System 2010 and the Stock Awards under the new Remuneration System 2018 are explained.
13.1.1. Virtual share-based remuneration 2010 to 2017
On March 2, 2010, the Company’s Supervisory Board established a new share-based remuneration
system to provide success-based remuneration for members of the Management Board. This system is
made up of a long-term component, the Long-Term Incentive Plan 2010 (LTIP 2010), and a short-
term component, the Short-Term Incentive Plan 2010 (STIP 2010). These plans offer cash-settled
and share-based payment transactions, respectively.
Under the LTIP 2010, alstria office REIT-AG grants virtual shares, which entitle the recipient to a
conversion into cash payments after 4 years.
The amount of the conversion payment is based on the number of virtual shares multiplied by the
average stock market price of alstria’s shares on the Frankfurt Stock Exchange during the 60 trading
days prior to the relevant maturity date. An amount equal to the sum of the dividend per share that
the Company paid to its shareholders between the grant date and the maturity date is added as well.
The payment cannot be higher than 250 % of the average stock market price of alstria’s shares on the
Frankfurt Stock Exchange in the 60 trading days prior to the relevant grant date multiplied by a
specified discretionary factor.
The discretionary factor is a multiplier that can vary between 0.8 and 1.2; it is subject to each
participant’s individual performance during the holding period.
The assessment of target achievement equally depends on the absolute return of alstria’s share price
(absolute total shareholder return) and on the relative performance of alstria’s shares in relation to
the EPRA/NA-REIT Index Europe Ex UK (relative total shareholder return).
116
alstria Annual Report 2020
Consolidated Financial Statements
Since the payment per vested virtual share depends on the average quoted price of alstria’s shares
for 60 trading days, the quoted average prior to the end of the reporting period essentially represents
the fair value of each virtual share.
The virtual shares resulting from the STI 2010 remuneration are subject to a minimum vesting period
of two years. Virtual STI 2010 shares are converted into a cash amount after the expiration of the
vesting period. This cash amount is calculated based on the number of virtual shares multiplied by
the share price of one alstria share at that time, which is in turn calculated based on a reference
period.
13.1.2. Stock award-based remuneration starting in 2018
Unlike the STIP 2010, no virtual shares or stock awards are issued under the STIP 2018.
The structure of the long-term share-based compensation system was retained in principle. The key
difference is that LTIP 2010 was a cash-settled share-based remuneration system, while the LTIP 2018
provides equity-settled share-based compensation. Apart from that, only simplifications and
adjustments were made. As part of the LTIP 2018, alstria office REIT-AG grants stock awards, which
entitle the holder to receive shares in the Company after 4 years, instead of a cash payment, as in
the LTIP 2010.
The number of shares to be issued to a Management Board member at the term’s end is calculated as
the number of stock awards achieved, multiplied by the average price of alstria shares on the
Frankfurt Stock Exchange during the last 60 trading days prior to the respective conversion date, plus
an amount equal to the total dividend paid by the Company to its shareholders per alstria share during
the respective term of a stock award. However, in no case can this be more than 250 % of the average
price of alstria shares on the Frankfurt Stock Exchange during the last 60 days before the grant date.
The number of shares to be issued to a Management Board member is multiplied by a specified
discretionary factor.
The discretionary factor is a multiplier that can vary between 0.7 and 1.3, considering each
participant’s individual performance component during the waiting period.
The basis for determining the performance targets, as in the LTIP 2010, is the absolute and relative
total shareholder returns. However, the relative total shareholder return will be weighted more
heavily, at 75 % (previously 50 %). The comparative index for the relative total shareholder return is
the FTSE EPRA/NAREIT Developed Europe Index (previously the EPRA/NAREIT Europe Ex-UK Index) for
alignment with real estate industry standards.
The fair value of the stock awards at the grant date was estimated using a 100,000-path Monte Carlo
simulation based on the terms of the LTIP 2018.
alstria Annual Report 2020
117
Consolidated Financial Statements
The following table lists the model specifications used to determine the fair value:
Grant date
March 7, 2018 March 4, 2019 March 2, 2020
Expected term of the option (in years)
Risk-free interest rate (%)
Share volatility (%)
Volatility of the FTSE EPRA/NAREIT Developed Europe Index (%)
Correlation between share price and benchmark index (%)
Expected dividend yield of the share (%)
Share price on grant (in EUR)
Index value when granted
Reference share price (in EUR)
4.00
0.11
18.77
16.46
65.19
4.03
12.06
4.00
−0.39
18.11
16.09
66.21
3.88
13.40
4.00
−0.84
15.95
13.58
56.57
3.11
16.74
2,085.51
2,166.92
2,333.61
12.69
12.83
17.40
Reference price of the FTSE EPRA/NAREIT Developed Europe Index
2,176.16
2,112.40
2,502.27
Estimated fair value of one option on the grant date (in EUR)
8.61
10.22
12.48
Comparison of the key terms of the variable remuneration systems 2010 and 2018
STI
(Short-Term
Incentive)
LTI
(Long-Term
Incentive)
Until 2017
FFO as target value
Threshold for the performance target:
50 %
Discretionary factor to reflect individual
performance: 0.8−1.2
75 % cash payout / 25 % payout in virtual
shares
Virtual shares with term of 4 years, then
payout in cash
Performance subject to absolute TSR
(50 %) and relative TSR (EPRA/NAREIT
Europe Ex-UK Index) (50 %)
Discretionary factor to reflect individual
performance: 0.8−1.2
▪
▪
▪
▪
▪
▪
▪
From 2018
▪
▪
▪
▪
▪
▪
▪
FFO per share as target value
Threshold for the performance target:
70 %
Discretionary factor to reflect individual
performance: 0.7−1.3
100 % cash payout
Stock awards with term of min. 4 years,
payout in Company shares
Performance subject to absolute TSR
(25 %) and relative TSR (FTSE EPRA/
NAREIT Developed Europe Index) (75 %)
Discretionary factor to reflect individual
performance: 0.7−1.3
118
alstria Annual Report 2020
Consolidated Financial Statements
The table below summarizes the number of virtual shares and (from 2018 onward) stock awards
granted under the existing STIP and LTIP that remained outstanding as of December 31, 2020:
Start of deferral
period
Reference share
price in EUR
End of deferral
period
Olivier Elamine
Number of virtual
shares/stock
options from
2018
Alexander Dexne
Number of virtual
shares/stock
options from 2018
LTI 2017
LTI 2018
LTI 2019
LTI 2020
2017
2018
2019
2020
11.52
12.69
12.83
17.40
2021
2022
2023
2024
38,194
34,673
34,295
25,287
31,250
28,361
28,059
20,690
The development of the virtual shares through December 31, 2020, is shown in the following table:
Number of virtual shares and stock
awards
2020
2019
As of January 1
Stock Awards (2017: virtual shares)
granted in the reporting period
LTI
263,158
45,977
Converted into cash in the reporting period
−68,318
As of December 31
240,817
STI
8,313
0
−8,313
0
LTI
273,730
62,354
−72,926
263,158
STI
17,662
0
−9,349
8,313
The 8,313 virtual shares converted into cash under the STIP 2010 resulted in payments to the
Management Board amounting to EUR 151 k within the 2020 financial year. The conversion amount
was the weighted average price of the first 20 trading days in the 2020 calendar year plus the dividend
paid during the vesting period. This amounted to EUR 18.16, of which EUR 17.12 was related to the
share price and EUR 1.04 was related to the dividend paid.
Under the LTIP 2010, 68,318 virtual shares were converted, resulting in a EUR 2,315 k payout.
In 2020, the LTIP and the STIP generated remuneration expenses amounting to EUR 1,241 k (2019:
EUR 2,134 k) and provisions amounting to EUR 1,301 k (2019: EUR 2,941 k). The Group recognizes the
liabilities arising from the vested virtual shares under other provisions.
13.2. Convertible profit participation rights program
On September 5, 2007, the Company’s Supervisory Board resolved the issuance of convertible profit
participation certificates (“certificates”) to employees of the Company and of companies in which
alstria office REIT-AG directly or indirectly holds a majority interest. Members of alstria office REIT-
AG’s Management Board are not considered employees of the Company in terms of this convertible
profit participation rights program. The Supervisory Board passed a resolution to specify the details
of the convertible profit participation rights program in accordance with an authorization granted at
the General Meeting of shareholders on March 15, 2007. The convertible profit participation rights
program was renewed by the Supervisory Board with minor modifications in 2012 in accordance with
an authorization granted at the General Meeting of shareholders on April 24, 2012.
alstria Annual Report 2020
119
Consolidated Financial Statements
The main terms of the program can be summarized as follows:
The nominal amount of each certificate is EUR 1.00, which is payable upon issuance. A maximum of
1,000,000 certificates with a total nominal value of up to EUR 1,000,000.00 can be issued as part of
the Conditional Capital III 2017 created by resolution of the Annual General Meeting. By the end of
the reporting period, certificates were granted corresponding to EUR 732,925 of conditional capital
III 2017. In 2020, the Annual General Meeting approved the implementation of additional Conditional
Capital III 2020 with an aggregate nominal value of up to EUR 1,000,000 for the conversion of
1,000,000 certificates. At the end of the reporting period, certificates related to this Conditional
Capital III 2020 had still not been granted.
The certificates are issued as nontransferable rights and are not sellable, pledgeable, or otherwise
chargeable.
The maximum term of each certificate is 5 years.
During its term, each certificate entitles the holder to a disbursement corresponding to the amount
of the dividend per share that the Company paid for a full financial year. For certificates held by a
beneficiary for less than a full financial year, the profit share is reduced pro rata temporis.
Each certificate shall be converted into one no-par value bearer share in the Company on the second,
third, fourth, or fifth anniversary of the issue date if the Company’s then-current stock exchange
share price has exceeded the share price on the issue date by 5 % or more on at least seven non-
subsequent trading days (market condition). For 240,250 certificates issued on May 23, 2019, and
273,975 certificates issued on September 30, 2020, this market condition was fulfilled until the end
of the 2020 financial year.
Upon conversion of a certificate, the beneficiary shall pay an additional conversion price to the
Company for each certificate to be converted. This conversion price shall be the aggregate
proportionate amount of the Company’s share capital to which the certificate entitles the holder;
this amount shall be payable in addition to the offer price.
The fair values of the inherent options for conversion were estimated on the respective grant dates
using a binary barrier option model based on the Black-Scholes model. The conversion will
automatically be affected once the barrier has been reached. The model considers the terms and
conditions upon which the instruments were granted.
120
alstria Annual Report 2020
Consolidated Financial Statements
The following share-based payment agreements under the employee profit participation program
existed during this year:
Number of certificates
Grant date of tranche
January 1, 2020
Expired due to termination of employment
Converted
Granted
December 31, 2020
April 27, 2018
May 23, 2019
Sept 30, 2020
204,825
-5,500
-199,325
0
0
252,375
-12,125
0
0
240,250
0
0
0
273,975
273,975
Total
457,200
-17,625
-199,325
273,975
514,225
For the conversion of 199,325 of the 2018 convertible profit participation rights certificates, the
relevant XETRA share price on the conversion date was EUR 11.56 per share.
Total expenses relating to convertible profit participation rights amounted to EUR 1,892 k in 2020
(see Note 5.4).
The following table lists the inputs used to determine the fair value of the options for conversion:
Grant date of tranche
Dividend yield (%)
Risk-free interest rate (%)
Expected volatility (%)
Expected life of option (years)
Exercise share price (EUR)
Labor turnover rate (%)
Stock price as of valuation date (EUR)
Estimated fair value of one option for conversion
on the grant date
April 27, 2018
May 23, 2019
Sept 30, 2020
4.20
−0.56
16.22
2.00
2.00
7.20
12.39
8.52
3.77
−0.69
15.01
2.00
2.00
5.50
13.80
9.50
4.47
−0.82
20.20
2.00
2.00
6.00
11.86
8.57
The expected volatility was based on the average historical volatility of alstria and comparable listed
companies for the certificates granted until 2017. From the 2018 financial year onward, the implied
volatility of alstria shares was used.
14. FINANCIAL RISK MANAGEMENT
14.1. Managing financial risk factors
The Group’s activities expose it to a variety of financial risks related to interest rates, credit, and
liquidity. The Group’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimize potential adverse effects on the Group’s financial performance. To
this end, sources of funding are diversified and a balanced maturity profile is planned, enabling a
coordinated and continuous refinancing process. The financial instruments mainly used by the Group
are corporate bonds. Bank loans, Schuldscheins (promissory note loans), and derivative financial
instruments in the form of an interest rate cap to hedge the floating rate –interest. Meanwhile, bank
loans are used only to a lesser extent, as the corporate bond instrument is favored, due to the fixed
interest rate and direct access to the capital market. The main purpose of the debt funding is to
alstria Annual Report 2020
121
Consolidated Financial Statements
finance alstria’s business activities. In addition, the Group also owns various financial assets, such as
loans granted and short-term deposits, which arise directly from business activities.
The Group uses derivative financial instruments to hedge floating rate loans. The treasury function
(group treasury) within the finance and controlling department manages financial risks. The group
treasury identifies, evaluates, and hedges financial risks in close cooperation with the CFO. The
Management Board provides written principles for overall risk management and policies that cover
specific areas, such as interest rate risk and credit risk, making use of both derivative and
nonderivative financial instruments, as well as excess liquidity investment.
Derivative financial instruments comprise interest caps. The purpose of these derivative financial
instruments is to hedge against the interest risks arising from the Group’s business activities and
funding.
The main risks arising from the Group’s financial instruments are related to cash flow, interest rates,
and liquidity. The Group is exposed mainly to credit risks, due to derivative financial instruments
being held as assets and due to its bank balances. The carrying amount of the financial assets is the
amount that best presents the maximum credit risk. The Management Board decides on strategies
and processes to manage specific risk types, as defined in the following paragraphs.
Risks that can arise from an economic slowdown are seen mainly in the potential default of payment
by tenants. For the increase in economic risks as a result of the COVID-19 pandemic, precautions have
been taken, in the form of increased value adjustments. Given that all of the Company’s main tenants
are public institutions or are highly rated, the risk of such defaults is currently still limited.
The loan agreements of alstria Group allow for the loan-to-value (LTV) ratios outlined by the following
table. As represented in the overview, the Group managed to keep its LTV below the LTV of the loan
at the relevant date — in some cases, significantly so. The risk of a breach of covenant is effectively
countered.
122
alstria Annual Report 2020
Consolidated Financial Statements
The following table presents the single-LTV ratios and covenants for the Group’s loans as of the end
of the reporting period:
Liabilities
Maturity
Loan #1
Loan #2
Loan #3
Loan #4
Total secured loans
Bond #1
Bond #2
Bond #3
Bond #4
Bond #5
June 28, 2024
Mar. 28, 2024
June 30, 2026
Sept. 29, 2028
Dec. 28, 2020
Apr. 12, 2023
Nov. 15, 2027
Sept. 26, 2025
Jun- 23, 2026
Schuldschein 10y / fixed May 6, 2026
Schuldschein 7y / fixed
May 6, 2023
Schuldschein 4y / fixed
May 6, 2020
Revolving credit line
Sept. 15, 2022
Total unsecured loans
Total
Net LTV
Principal amount
drawn as of
Dec. 31, 2020
(EUR k)
LTV as of
Dec. 31, 2020
(%)
LTV
covenant
(%)
Principal amount
drawn as of
Dec. 31, 2019
(EUR k)
34,000
45,900
56,000
60,000
195,900
0
325,000
350,000
400,000
350,000
40,000
37,000
0
0
1,502,000
1,697,900
13.5
29.0
26.7
31.9
24.3
−
−
−
−
−
−
−
−
−
−
37.1
27.0
65.0
75.0
65.0
−
−
−
−
−
−
−
−
−
−
−
−
−
34,000
45,900
56,000
60,000
195,900
326,800
325,000
350,000
400,000
−
40,000
37,000
37,000
0
1,515,800
1,711,700
Apart from the risks mentioned above, the Group is not exposed to any commodity or currency risks.
14.1.1. Interest rate risk
The following tables display the carrying amount of the Group’s financial instruments that are exposed
to interest rate risk by maturity:
EUR k
< 1 year
1–2 years
2–3 years
3–4 years
> 4 years
Total
Financial year ending
Dec. 31, 2020
Variable interest
Mortgage bank loans
Total
0
0
0
0
0
0
42,800
116,000
158,800
0
116,000
158,800
EUR k
< 1 year
1–2 years
2–3 years
3–4 years
> 4 years
Total
Financial year ending
Dec. 31, 2019
Variable interest
Mortgage bank loans
Total
0
0
0
0
0
0
0
0
158,800
158,800
158,800
158,800
alstria Annual Report 2020
123
Consolidated Financial Statements
Given its noncurrent financial liabilities with variable interest rates, alstria is exposed to risks from
fluctuations in market interest rates. The interest base for these financial liabilities (loans) is the
three-month EURIBOR rate, which is adjusted every three months. A number of derivative financial
instruments were acquired to secure the expenses. The derivatives’ terms to maturity generally
correspond to the terms of the loans. The derivative financial instruments are related to interest caps;
that is, the interest is capped at a predetermined maximum. If the maximum interest rate is exceeded,
then the difference between the actual interest rate and the cap rate is paid out.
The derivative financial instruments of alstria office REIT-AG as of December 31, 2020 are presented
on page 101.
These interest rate caps are also used to hedge the obligation underlying the loans.
The following table shows the sensitivity of the Company’s loans to consolidated profit or loss and
equity, due to a reasonably possible change in interest rates (due to the effect on the floating-interest
loans). All of the variables remain constant; the effects from the derivative financial instruments
were not factored into this calculation.
Interest expenses per annum
EUR k
+ 100 bps
− 50 bps
2020
1,588
−189
2019
1,588
−726
The fair market value of derivative financial instruments is also subject to interest rate risks. A change
in the interest rate would give rise to the following changes in respective fair market values:
Impacts on equity
Financial derivatives qualifying for cash flow hedge accounting
EUR k
+ 100 bps
− 50 bps
2020
0
0
2019
398
0
Due to the brief remaining term of the only remaining derivative financial instrument, the sensitivities
did not result in any changes in value as of December 31, 2020.
Impacts on income statements and on equity
Financial derivatives not qualifying for cash flow hedge accounting
At the end of the reporting period and at the end of the comparative period, alstria held no derivative
financial instruments outside of a cash flow hedge relationship. Information on the potential effects of
changes in interest rates is therefore not reported.
124
alstria Annual Report 2020
Consolidated Financial Statements
14.1.2. Credit risk
Credit risks are managed at the group level, except for those relating to accounts receivable balances.
The department responsible for managing the operating business property oversees and analyzes credit
risks in relation to each reletting activity before the standard payment and lease terms and conditions
are offered. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits
with banks and financial institutions, and credit exposures to customers (including outstanding
receivables and other compensatory commitments). Only banks and financial institutions are accepted
as counterparties—and only if they are independently rated parties with a minimum rating of
“investment grade.” If the tenants are independently rated, then their ratings are applied. If there is
no independent rating, the tenant’s credit quality is assessed; its financial position, past experience,
and other factors are taken into account. Credit limits are generally not provided to tenants. Lease
receivables from tenants are settled in bank transfers, which are usually due at the beginning of each
payment term. Tenants must pay a deposit or provide other warranties prior to the start of a lease
term.
14.1.3. Liquidity risk
The Company continually monitors the Group-wide risk of potential liquidity bottlenecks with a liquidity
planning tool. The tool uses the expected cash flows from business activities and the maturity of the
financial liabilities as a basis for analysis. The Group’s long-term refinancing strategy ensures that these
medium- and long-term liquidity requirements are met. Such forecasting considers the Group’s debt-
financing plans, covenant compliance, compliance with internal balance sheet targets, and, if
applicable, external regulatory or legal requirements (e. g., G-REIT equity ratio).
At the end of the reporting period, the nominal financial liabilities had the following maturities in line
with their contractual maturity (based on the three-month EURIBOR) as of December 31, 2020.
alstria Annual Report 2020
125
Consolidated Financial Statements
The following chart shows the related future undiscounted cash flows of financial liabilities:
EUR k
< 1 year 1–2 years 2–3 years 3–4 years 4–5 years >5 years
Total
Financial year ending Dec. 31, 2020
Corporate bond
Loans
Interest
Schuldschein
Trade payables
Other liabilities
0
0
325,000
0
400,000
700,000 1,425,000
2,322
13,310
4,850
80,627
0
116,000
217,109
23,412
23,399
23,335
14,565
13,856
17,863
116,430
0
3,943
0
0
37,000
0
0
0
0
0
40,000
77,000
0
3,943
49,948
1,853
1,785
1,792
1,745
5,454
62,576
79,625
38,562 391,970
96,984 415,601 879,317 1,902,059
EUR k
< 1 year 1–2 years 2–3 years 3–4 years 4–5 years >5 years
Total
Financial year ending Dec. 31, 2019
Corporate bond
Loans
Interest
Schuldschein
Trade payables
Other liabilities
0
0
326,800
0
0
0
325,000
0
750,000 1,401,800
0
79,900
116,000
195,900
26,109
25,586
18,406
18,629
9,929
22,523
121,182
37,000
4,611
0
0
0
0
37,000
0
0
0
40,000
114,000
0
4,611
44,759
1,666
1,554
1,487
1,494
5,330
56,290
112,479 354,052
19,960 382,116
91,323 933,853 1,893,783
Details on the loans, borrowings, and bonds can be found in Note 7.3. The loans’ maturity profile is
shown in section 2.5 of the Combined Management Report. To secure the bank loans, receivables from
rental and property purchase agreements, as well as from insurance and derivative financial
instruments, were assigned to the lenders. Liens were granted on bank accounts, and charges were
registered on the land. Obligations arising from floating-interest bank loans were fully secured. Land
charges for real estate properties with a carrying amount of EUR 787,716 k (December 31, 2019:
EUR 754,373 k) were provided as collateral.
14.2. Capital management
Capital management activities are aimed at maintaining the Company’s classification as a REIT to
support its business activities and maximize shareholder value.
The Group actively manages its capital structure and makes adjustments in response to changes in
economic conditions. To maintain or adjust its capital structure, the Group can make a capital
repayment to its shareholders or issue new shares. No changes were made to the aims, guidelines,
and processes as of either December 31, 2019 and December 31, 2020.
126
alstria Annual Report 2020
Consolidated Financial Statements
The Company monitors its capital structure using the LTV indicator, as well as the relevant
performance indicators, for its classification as a REIT. The REIT equity ratio, which is the ratio of
equity to immovable assets, is the most important of these indicators. According to the Group’s
strategy, the REIT equity ratio is aimed at exceeding the REIT equity ratio of 45 %, within the relevant
terms provided by REIT law. G-REIT status is unaffected, as long as the G-REIT ratio is not below 45 %
at the end of the financial year for 3 consecutive financial years.
The following ratios are also used to manage capital:
Ratios according to G-REIT law
%
Equity ratio according to G-REIT law
Immovable assets
Revenues gained from immovable assets
Income gained from disposal of immovable assets
1) Within five years, based on the average property value during this period.
14.3. Determination of fair value
2020
71.11
89.86
100.00
23.59
2019
G-REIT covenant
70.94
89.01
100.00
26.06
> 45
> 75
> 75
< 501)
The following table shows the carrying amount and fair value of all financial instruments disclosed in
the consolidated financial statements:
Carrying
amount
Nonfinancial
assets
Financial assets
Assets as per balance
sheet (EUR k) as of
Dec. 31, 2020
Financial assets
Total long-term
Trade receivables
Tax receivables
Receivables and other
assets
Cash and cash
equivalents
Total short-term
Total
At amortized
costs
Fair value
through p/l
39,108
39,108
4,572
1,230
0
0
0
1,230
38,864
38,864
4,572
0
8,762
7,620
1,142
460,960
475,524
514,632
0
8,850
8,850
460,960
466,674
505,538
Total
39,108
39,108
4,572
0
Fair
value
39,108
39,108
4,572
0
1,142
1,142
460,960
460,960
466,674
466,674
244
244
0
0
0
0
0
244
505,782
505,782
alstria Annual Report 2020
127
Consolidated Financial Statements
Carrying
amount
Nonfinancial
liabilities
Financial liabilities
Liabilities as per
balance sheet (EUR k)
as of Dec. 31, 2020
Ltd. equity of
noncontrolling interests
Long-term loans
Other liabilities
Total long-term
Ltd. equity of
noncontrolling interests
Short-term loans
Trade payables
Tax liabilities
Other liabilities
Total short-term
68,275
1,685,349
12,628
1,766,252
15
10,325
3,943
4,780
49,948
69,011
Total
1,835,263
At amortized
costs
68,275
1,685,349
12,628
Total
68,275
1,685,349
12,628
Fair
value
68,275
1,753,754
12,628
1,766,252
1,766,252
1,834,657
15
10,325
3,943
0
43,067
57,350
15
10,325
3,943
0
43,067
57,350
15
10,325
3,943
0
43,067
57,349
1,823,602
1,823,602
1,892,007
0
0
0
0
0
0
0
4,780
6,882
11,662
11,662
Carrying
amount
Nonfinancial
assets
Financial assets
At amortized
costs
Fair value
through p/l
Assets as per
balance sheet (EUR k)
as of Dec. 31, 2019
Financial assets
Total long-term
Trade receivables
Financial assets
Tax receivables
Receivables and other
assets
Cash and cash
equivalents
Total short-term
Total
39,108
39,108
3,877
199,750
0
0
0
0
1,231
1,231
8,601
7,609
298,218
511,677
550,785
0
8,840
8,840
38,864
38,864
3,877
199,750
0
993
298,218
502,838
541,702
Total
39,108
39,108
3,877
Fair
value
39,108
39,108
3,877
199,750
199,750
0
993
0
993
298,218
298,218
502,838
502,838
244
244
0
0
0
0
0
0
244
541,945
541,945
128
alstria Annual Report 2020
Consolidated Financial Statements
Carrying
amount
Nonfinancial
liabilities
Financial liabilities
Liabilities as per
balance sheet (EUR k)
as of Dec. 31, 2019
Ltd. equity of
noncontrolling interests
Long-term loans
Other liabilities
70,504
1,661,080
11,532
Total long-term
1,743,116
Ltd. equity of
noncontrolling interests
Short-term loans
Trade payables
Tax liabilities
Other liabilities
Total short-term
Total
24
50,590
4,611
5,793
45,451
106,469
1,849,585
At amortized
costs
Total
Fair
value
70,504
70,504
70,504
1,661,080
1,661,080
1,753,307
11,532
11,532
11,532
1,743,116
1,743,116
1,835,343
24
50,590
4,611
0
43,019
98,244
24
50,590
4,611
0
43,019
98,244
24
50,590
4,611
0
43,019
98,244
1,841,360
1,841,360
1,933,587
0
0
0
0
0
0
0
5,793
2,432
8,225
8,225
The fair value of financial instruments that are not traded in an active market (i.e., over-the-counter
derivatives) is determined using valuation techniques, which maximize the use of observable market
data, where it is available, and rely as little as possible on entity-specific estimates. If all significant
inputs required to ascertain the fair value of an instrument are observable, then the instrument is
included in level 2.
An independent expert determined the fair value of the derivative financial instruments by
discounting the expected future cash flows at prevailing market interest rates. Future cash flows were
estimated at the end of the reporting period, based on forward interest rates from observable yield
curves and on contractually agreed interest rates. These rates are discounted to reflect the credit
risk of the various counterparties.
All of the Group’s financial instruments, which are measured at fair value on the balance sheet, are
valued by applying the level 2 valuation measurement approach.
alstria Annual Report 2020
129
Consolidated Financial Statements
15. SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
There were no significant events after the balance sheet date.
16. UTILIZATION OF EXEMPTING PROVISIONS
Certain subsidiaries that have been included in the consolidated financial statements of alstria office
REIT-AG have claimed an exemption from the obligation to prepare annual financial statements in
accordance with the provisions applicable to corporations, in accordance with Section 264b HGB. An
overview of the companies that made use of the exemption can be found in the table on pages 68 to
69.
17. DISCLOSURES PURSUANT TO THE WERTPAPIERHANDELSGESETZ [GERMAN SECURITIES
TRADING ACT] AND EUROPEAN MARKET ABUSE REGULATION [MAR]
17.1. Ad hoc announcements
The following table summarizes the announcements pursuant to Art. 17 MAR, as published by the
Company during the reporting period:
Date
Jan 13, 2020
Mar 30, 2020
Topic
Portfolio value increases to approx. EUR 4.4 billion as per December 31, 2019
alstria business update on the coronavirus situation
•
Tenants announce intention to not pay their rent in a monthly rent volume of approx.
EUR 1 million
EUR 121 million of free liquidity after debt repayment and committed capex
•
• Withdrawal of current dividend proposal
June 16, 2020 alstria issues a corporate bond with a nominal value of EUR 350 million
Aug 10, 2020
Dividend proposal of EUR 0.52 (plus EUR 0.01 “green dividend”) for the financial year 2019
Nov 3, 2020
Early redemption of alstria’s 2015 Fixed Rate Notes (ISIN: XS 1323052180) on December 24, 2020
Jan 13, 2021
Portfolio value increases by approx. EUR 150 million to approx. EUR 4.6 billion as per December 31, 2020
130
alstria Annual Report 2020
Consolidated Financial Statements
17.2. Directors’ dealings
The following transactions regarding the shares of the Company (ISIN DE000A0LD2U1) have been
reported to the Company during the reporting period pursuant to Art. 19 MAR:
Function
CEO
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 2, 2020:
Average weighted share price: EUR 17.20; aggregated volume: EUR 34,400.00
Transaction
Buy
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
CEO
CEO
CEO
Buy
Buy
Buy
Function
CEO
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 12, 2020:
Average weighted share price: EUR 14.75; aggregated volume: EUR 22,125.00
Transaction
Buy
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
CEO
CEO
Buy
Buy
Function
CEO
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 13, 2020:
Average weighted share price: EUR 14.3055; aggregated volume: EUR 14,305.50
Transaction
Buy
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
CEO
CEO
Buy
Buy
Function
CEO
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 16, 2020:
Average weighted share price: EUR 12.95; aggregated volume: EUR 19,425.00
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Transaction
Buy
CEO
CEO
CEO
Buy
Buy
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 17, 2020:
Average weighted share price: EUR 12.30; aggregated volume: EUR 6,150.00
Transaction
Buy
Function
CEO
Place
Outside a
trading venue
Price per
share
in
EUR
17.20
17.20
17.20
17.20
Price per
share
in
EUR
14.75
14.75
14.75
Transaction date
Mar 2, 2020,
UTC + 1
Mar 2, 2020,
UTC + 1
Mar 2, 2020,
UTC + 1
Mar 2, 2020,
UTC + 1
Transaction date
Mar 12, 2020,
UTC + 1
Mar 12, 2020,
UTC + 1
Mar 12, 2020,
UTC + 1
Volume
in EUR
6,020.00
4,988.00
6,020.00
17,372.00
Volume
in EUR
6,637.50
6,637.50
8,850.00
Price per
share
in
EUR
14.31
14.31
14.30
Volume
in EUR
1,431.00
6,439.50
6,435.00
Transaction date
Mar 13, 2020,
UTC + 1
Mar 13, 2020,
UTC + 1
Mar 13, 2020,
UTC + 1
Price per
share
in
EUR
12.90
12.90
13.00
13.00
Volume
in EUR
7,288.50
2,386.50
3,900.00
5,850.00
Transaction date
Mar 16, 2020,
UTC + 1
Mar 16, 2020,
UTC + 1
Mar 16, 2020,
UTC + 1
Mar 16, 2020,
UTC + 1
Price per
in
share
EUR
12.30
Volume
in EUR
6,150.00
Transaction date
Mar 17, 2020,
UTC + 1
alstria Annual Report 2020
131
Consolidated Financial Statements
Buy
Place
XETRA
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Aggregated information for the transactions by Dr. Conradi on March 17, 2020:
Average weighted share price: EUR 12.2318; aggregated volume: EUR 183,477.22
Function
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
XETRA
XETRA
XETRA
XETRA
XETRA
XETRA
XETRA
Buy
Buy
Buy
Buy
Buy
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 18, 2020:
Average weighted share price: EUR 10.75; aggregated volume: EUR 10,750.00
Transaction
Buy
Function
CEO
Place
Outside a
trading venue
Outside a
trading venue
CEO
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on March 19, 2020:
Average weighted share price: EUR 10.00; aggregated volume: EUR 4,000.00
Transaction
Buy
Function
CEO
Place
Outside a
trading venue
Name of person
subject to the
disclosure
requirement
Richard
Mully
Aggregated information for the transactions by Mr. Mully on March 19, 2020:
Average weighted share price: EUR 9.997928; aggregated volume: EUR 49,989.64
Function
Member of the
Supervisory Board
Transaction
Buy
Place
XETRA
Name of person
subject to the
disclosure
requirement
Stefanie
Frensch
Aggregated information for the transaction by Ms. Frensch on March 31, 2020:
Average weighted share price: EUR 13.23; aggregated volume: EUR 6,337.17
Function
Member of the
Supervisory Board
Transaction
Buy
Place
XETRA
Name of person
subject to the
disclosure
requirement
Benoît
Hérault
Aggregated information for the transactions by Mr. Hérault on March 31, 2020:
Average weighted share price: EUR 13.00; aggregated volume: EUR 13,000.00
Function
Member of the
Supervisory Board
Transaction
Buy
Place
Frankfurt
Price
per
share in
EUR
12.24
12.23
12.22
12.21
12.20
12.19
12.18
12.25
Transaction date
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Mar 17, 2020;
UTC + 2
Volume
in EUR
25,259.08
47,545.78
25,381.40
22,800.44
18,042.20
25,636.17
13,588.64
5,223.51
Price per
in
share
EUR
10.75
Volume
in EUR
4,300.00
10.75
6,450.00
Transaction date
Mar 18, 2020,
UTC + 1
Mar 18, 2020,
UTC + 1
Price per
in
share
EUR
10.00
Volume
in EUR
4,000.00
Transaction date
Mar 19, 2020,
UTC + 1
Price per
share
in
EUR
9.997928
Volume
in EUR
49,989.64
Transaction date
Mar 19, 2020,
UTC + 0
Price per
share
in
EUR
13.23
Volume
in EUR
6,337.17
Transaction date
Mar 31, 2020;
UTC + 2
Price per
share
in
EUR
13.00
Volume
in EUR
13,000.00
Transaction date
Mar 31, 2020;
UTC + 2
132
alstria Annual Report 2020
Consolidated Financial Statements
Name of person
subject to the
disclosure
requirement
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Dr. Johannes
Conradi
Aggregated information for the transactions by Dr. Conradi on September 30, 2020:
Average weighted share price: EUR 11.57528; aggregated volume: EUR 115,752.80
Function
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Transaction
Buy
Place
XETRA
XETRA
XETRA
XETRA
Buy
Buy
Buy
Price
per
share in
EUR
11.59
11.57
11.56
11.58
Volume
in EUR
5,111.19
31,343.13
14,172.56
65,125.92
Transaction date
Sep 30, 2020;
UTC + 2
Sep 30, 2020;
UTC + 2
Sep 30, 2020;
UTC + 2
Sep 30, 2020;
UTC + 2 ;
Price per
share
in
EUR
11.70
Volume
in EUR
5,054.40
Buy
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
Place
requirement
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Lang & Schwarz
Olivier
Exchange
Elamine
Aggregated information for the transactions by Mr. Elamine on November 9, 2020:
Average weighted share price: EUR 12.1325; aggregated volume: EUR 41,929.92
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Transaction date
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
Nov 9, 2020,
UTC + 1
11.76
11.77
11.75
12.66
12.66
12.38
12.38
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 10, 2020:
Average weighted share price: EUR 12.7218; aggregated volume: EUR 33,140.23
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Price per
share
in
EUR
12.78
12.89
12.75
12.60
12.50
12.86
Transaction date
Nov 10, 2020,
UTC + 1
Nov 10, 2020,
UTC + 1
Nov 10, 2020,
UTC + 1
Nov 10, 2020,
UTC + 1
Nov 10, 2020,
UTC + 1
Nov 10, 2020,
UTC + 1
5,080.32
5,084.64
5,076.00
5,469.12
5,469.12
5,348.16
5,348.16
Volume
in EUR
4,996.98
5,039.99
6,375.00
6,300.00
5,400.00
5,028.26
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Function
CEO
Transaction
Buy
CEO
CEO
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Transaction date
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Price per
share
in
EUR
13.71
Volume
in EUR
5,045.28
13.69
14.02
13.99
13.98
13.92
13.93
13.85
5,037.92
5,103.28
5,148.32
5,144.64
5,122.56
5,126.24
6,925.00
alstria Annual Report 2020
133
Consolidated Financial Statements
Buy
CEO
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 16, 2020:
Average weighted share price: EUR 13.8543; aggregated volume: EUR 59,684.28
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
Buy
Buy
Buy
Buy
CEO
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 17, 2020:
Average weighted share price: EUR 13.6033; aggregated volume: EUR 60,561.86
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Function
CEO
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 18, 2020:
Average weighted share price: EUR 13.7226; aggregated volume: EUR 10,017.50
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Transaction
Buy
CEO
CEO
Buy
Buy
Buy
Buy
CEO
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 18, 2020:
Average weighted share price: EUR 13.7345; aggregated volume: EUR 81,417.97
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
Nov 16, 2020,
UTC + 1
13.84
13.80
13.69
5,093.12
6,900.00
5,037.92
Price per
share
in
EUR
13.69
Volume
in EUR
6,845.00
13.69
13.64
13.60
13.60
13.52
13.54
13.53
13.57
13.60
Price per
share
in
EUR
13.75
13.70
13.75
Price per
share
in
EUR
13.75
13.74
13.75
13.71
13.71
13.70
13.70
13.71
13.76
13.78
6,845.00
6,820.00
6,800.00
6,800.00
4,907.76
6,770.00
4,911.39
4,925.91
4,936.80
Volume
in EUR
2,750.00
5,480.00
1,787.50
Volume
in EUR
5,046.25
5,042.58
5,046.25
5,031.57
5,031.57
4,973.10
20,550.00
4,976.73
5,049.92
20,670.00
Transaction date
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Nov 17, 2020,
UTC + 1
Transaction date
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Transaction date
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
Nov 18, 2020,
UTC + 1
134
alstria Annual Report 2020
Consolidated Financial Statements
Name of person
subject to the
disclosure
requirement
Alexander
Dexne
Alexander
Dexne
Aggregated information for the transactions by Mr. Dexne on November 18, 2019:
Average weighted share price: EUR 13.70; aggregated volume: EUR 178,100.00
Transaction
Buy
Function
CFO
Place
XETRA
XETRA
CFO
Buy
Buy
Buy
Buy
CEO
CEO
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 19, 2020:
Average weighted share price: EUR 13.6726; aggregated volume: EUR 65,601.18
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
CEO
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 19, 2020:
Average weighted share price: EUR 13.61; aggregated volume: EUR 40,830.00
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
CEO
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Price per
share
in
EUR
13.70
Volume
in EUR
6,576.00
13.70
171,524.00
Transaction date
Nov 18, 2020;
UTC + 1
Nov 18, 2020;
UTC + 1
Price per
share
in
EUR
13.78
13.60
13.62
13.64
13.60
13.62
13.58
13.58
13.63
13.56
13.51
Transaction date
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Volume
in EUR
27,560.00
2,720.00
4,984.92
6,820.00
4,977.60
2,724.00
2,716.00
2,716.00
2,726.00
2,712.00
4,944.66
Price per
share
in
EUR
13.68
Volume
in EUR
6,156.00
13.60
13.68
13.68
13.60
13.60
13.55
13.55
13.55
13.55
6,120.00
1,368.00
6,156.00
1,360.00
6,120.00
420.05
6,097.50
934.95
6,097.50
Transaction date
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Nov 19, 2020,
UTC + 1
Name of person
subject to the
disclosure
requirement
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Function
CFO
Transaction
Buy
CFO
CFO
Buy
Buy
Place
XETRA
XETRA
XETRA
Price per
share
in
EUR
13.60
13.65
13.64
Volume
in EUR
18,536.80
17,130.75
83,613.20
Transaction date
Nov 19, 2020;
UTC + 1
Nov 19, 2020;
UTC + 1
Nov 19, 2020;
UTC + 1
alstria Annual Report 2020
135
Consolidated Financial Statements
Buy
Buy
CFO
CFO
XETRA
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Aggregated information for the transactions by Mr. Dexne on November 19, 2020:
Average weighted share price: EUR 13.6385; aggregated volume: EUR 272,770.48
XETRA
XETRA
XETRA
XETRA
CFO
CFO
CFO
Buy
Buy
Buy
Buy
CFO
CFO
Place
Function
Transaction
Name of person
subject to the
disclosure
requirement
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Alexander
Dexne
Aggregated information for the transactions by Mr. Dexne on November 20, 2020:
Average weighted share price: EUR 13.5599; aggregated volume: EUR 94,919.11
XETRA
XETRA
XETRA
XETRA
XETRA
XETRA
CFO
CFO
CFO
CFO
Buy
Buy
Buy
Buy
Buy
Buy
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 20, 2020:
Average weighted share price: EUR 13.5129; aggregated volume: EUR 46,403.33
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 20, 2020:
Average weighted share price: EUR 13.4845; aggregated volume: EUR 19,552.50
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Nov 19, 2020;
UTC + 1
Nov 19, 2020;
UTC + 1
Nov 19, 2020;
UTC + 1
Nov 19, 2020;
UTC + 1
Nov 19, 2020;
UTC + 1
13.61
13.62
13.63
13.66
13.67
4,151.05
16,126.08
75,442.05
35,802.86
21,967.69
Price
per
share in
EUR
13.55
Volume
in EUR
12,547.30
13.52
1,608.88
13.56
19,065.36
13.53
4,167.24
13.57
48,485.61
13.54
9,044.72
Transaction date
Nov 20, 2020;
UTC + 1
Nov 20, 2020;
UTC + 1
Nov 20, 2020;
UTC + 1
Nov 20, 2020;
UTC + 1
Nov 20, 2020;
UTC + 1
Nov 20, 2020;
UTC + 1
Price
per
share in
EUR
13.49
13.45
13.50
13.54
13.50
13.50
13.55
13.58
Price
per
share in
EUR
13.50
13.50
13.50
13.50
13.45
Transaction date
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Transaction date
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Nov 20, 2020,
UTC + 1
Volume
in EUR
4,950.83
6,725.00
6,750.00
2,708.00
4,954.50
6,750.00
6,775.00
6,790.00
Volume
in EUR
6,075.00
675.00
6,075.00
675.00
6,052.50
136
alstria Annual Report 2020
Consolidated Financial Statements
Buy
Buy
Buy
Buy
CEO
CEO
CEO
CEO
CEO
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 23, 2020:
Average weighted share price: EUR 13.6539; aggregated volume: EUR 58,643.50
Place
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
Lang & Schwarz
Exchange
CEO
CEO
CEO
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Function
CEO
Transaction
Buy
Name of person
subject to the
disclosure
requirement
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Olivier
Elamine
Aggregated information for the transactions by Mr. Elamine on November 23, 2020:
Average weighted share price: EUR 13.60; aggregated volume: EUR 16,320.00
Place
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
Outside a
trading venue
CEO
CEO
CEO
CEO
Buy
Buy
Buy
Buy
Price
per
share in
EUR
13.76
13.70
13.65
13.60
13.66
13.65
13.66
13.66
13.65
13.65
13.67
13.61
13.60
Price
per
share in
EUR
13.60
13.60
13.60
13.60
13.60
Transaction date
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Transaction date
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Nov 23, 2020,
UTC + 1
Volume
in EUR
2,752.00
4,110.00
4,777.50
4,080.00
2,732.00
6,825.00
2,732.00
2,732.00
6,825.00
13,650.00
2,734.00
2,722.00
1,972.00
Volume
in EUR
1,360.00
4,760.00
6,120.00
680.00
3,400.00
alstria Annual Report 2020
137
Consolidated Financial Statements
17.3. Voting right notifications
Below is information according to Section 160 para. 1 No. 8 German Stock Corporation Act (AktG):
The following table shows shareholdings in the Company that were in place on the balance sheet date
of 2020, were communicated to us pursuant to Section 33 para. 1 WpHG, and have been published
pursuant to Section 40 para. 1 WpHG . Moreover, the table contains such notifications on no longer
existing shareholdings published during the reporting period. Moreover, shareholdings were in place
until the date of the preparation of the financial statements were considered and communicated to
us pursuant to Section 33 para. 1 WpHG, and have been published pursuant to Section 40 para. 1
WpHG. The Company did not receive any notifications pursuant to Section 20 para. 1 and 4 AktG or
pursuant to Section 33 para. 2 WpHG during the reporting period.
1
2
No. Shareholders, registered office
BNP PARIBAS ASSET MANAGEMENT
France S.A.S., Paris, France
BNP PARIBAS ASSET MANAGEMENT
Holding S.A., Paris, France
Stichting Pensioenfonds ABP,
Heerlen, The Netherlands
DWS Investment GmbH, Frankfurt
am Main, Germany
Ministry of Finance on behalf of the
State of Norway, Oslo, Norway
4
3
5
6
7
8
SAS Rue la Boétie, Paris, France
Schroders plc, London, United
Kingdom
Government of Singapore, acting by
and through the Ministry of
Finance, Singapore, Singapore
BlackRock, Inc., Wilmington,
Delaware, USA
Voting rights
(new) (%)1)
Amount
of shares
Date
of change
Attribution of
voting rights
Contains 3 % or
more of voting
rights from
3.01
5,346,585
Dec 10, 2019 Yes
0.002)
0
Feb 4, 2020 No
2.7073
4,807,907
June 2, 2020 Yes
2.71
4,814,466
July 7, 2020 Yes
3.063)
5,441,147
July 13, 2020 Yes
5.08
9,024,181
Sep 10, 2020 Yes
3.134)
5,561,574
Dec 9, 2020
Yes
2.97
5,283,742
Jan 14, 2021 Yes
-
-
-
-
-
Predica Prevoyance
Dialogue du Crédit
Agricole (3.41 %)
-
-
12,408,125
9
1) Percentage as per date of change. Current percentage in voting rights can deviate, e. g., due to changes in the share capital of the issuer.
2) The notification of voting rights contains the information that BNP PARIBAS ASSET MANAGEMENT France S.A. still holds 3.96 % of voting rights
Feb 5, 2021
Yes
-
6.985)
on February 4, 2020.
3) Contains 0.19 % financial instruments pursuant to Sec. 38 para. 1 No. 1 WpHG (corresponds to 337,871 voting rights).
4) Contains 0.08 % financial instruments pursuant to Sec. 38 para. 1 No. 1 and No. 2 WpHG (corresponds to 140,628 voting rights).
5) Contains 0.18 % financial instruments pursuant to Sec. 38 para. 1 No. 1 and No. 2 WpHG (corresponds to 315,861 voting rights).
18. DECLARATION OF COMPLIANCE PURSUANT TO AKTG SECTION 161
The Management Board and the Supervisory Board have submitted the declaration of compliance
required by AktG Section 161 with respect to the recommendations of the German Corporate
Governance Code as developed by a government commission. It is permanently available to the public
on alstria office REIT-AG’s website (www.alstria.com) and is included in the Group’s declaration of
corporate management according to HGB Section 315d.
138
alstria Annual Report 2020
Consolidated Financial Statements
19. AUDITORS’ FEES
On September 2, 2020, the General Meeting elected KPMG Wirtschaftsprüfungsgesellschaft (Ludwig-
Erhard-Strasse 11-17, Hamburg) auditor of the separate and consolidated financial statements for the
2020 financial year. The fees totaled EUR 584 k in 2020. They were structured as follows:
Auditors’ fees in EUR k
Audit services
thereof from previous year
Other confirmation services
Tax advisory services
Other services
Total
-16
2020
494
87
0
3
584
18
2019
485
81
0
60
626
The non-audit services essentially relate to the issuance of a comfort letter, the review of the
sustainability report, and consultancy services in relation to an extrajudicial proceeding.
René Drotleff is the professionally qualified auditor in charge of the financial statements for alstria
office REIT-AG and the Group. He first assumed this position in fiscal year 2018.
20. MANAGEMENT BOARD
During the financial year, the Company’s members of the Management Board were:
Olivier Elamine
Hamburg, Germany
COIMA RES S.p.A. SIIQ
Urban Campus Group SAS
CEO of the Company
Non-Executive Director
Member of the Advisory Board
Alexander Dexne
Hamburg, Germany
CFO of the Company
The remuneration report (page 181 to 191) details the principles used to define the remuneration of
the Management Board and Supervisory Board.
21. SUPERVISORY BOARD
Pursuant to the Company’s Articles of Association (Section 9), the Supervisory Board consists of six
members who are elected at the General Meeting of the shareholders.
alstria Annual Report 2020
139
Consolidated Financial Statements
During the 2020 financial year, the members of the Supervisory Board and their membership in
supervisory boards of German companies or comparable German or foreign controlling committees of
commercial enterprises were as follows:
Dr. Johannes Conradi
Chairman
Hamburg, Germany
Since May 18, 2020
Richard Mully
Vice-Chairman
Elbphilharmonie und Laeiszhalle
Betriebsgesellschaft mbH
Flughafen Hamburg GmbH
HamburgMusik gGmbH
Cobham (Surrey),
United Kingdom
Great Portland Estates plc, UK
Dr. Bernhard Düttmann
Meerbusch, Germany
Stefanie Frensch
Berlin, Germany
Benoît Hérault
Uzès, France
Shaftesbury Fund Management,
Luxemburg
Batipart Immo Long Terme,
Louxemburg (Batipart Group)
Marianne Voigt
Berlin, Germany
BDO AG Wirtschaftsprüfungs-
gesellschaft
Lawyer and Partner, Freshfields
Bruckhaus Deringer PartGmbB
Member of the Advisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Director, Starr Street Limited
Non-Executive Chairman
CEO CECONOMY AG (Retail
Media Group)/
Executive Consultant
Management Board member,
Familienstiftung Becker & Kries
CEO Elaia Investement Spain, SOCIMI,
S.A. (Batipart Group), Spain
(Since February 1, 2020)
Independent Director
Independent Director
Managing Director,
bettermarks GmbH
Member of the Supervisory Board
140
alstria Annual Report 2020
Consolidated Financial Statements
Hamburg, February 19, 2021
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
Alexander Dexne
CFO
alstria Annual Report 2020
141
Responsibility Statement
C. RESPONSIBILITY STATEMENT
To the best of our knowledge, we confirm that, in accordance with the applicable reporting principles,
the Consolidated Financial Statements for 2020 give a true and fair view of the Group’s assets,
liabilities, financial position and profit or loss, and that the Group Management Report 2020, which
has been combined with the Management Report for alstria office REIT-AG, includes a fair review of
the business’s development and performance and the Group’s position, together with a description
of the principal opportunities and risks associated with the Group’s expected development.
Hamburg, February 19, 2021
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
Alexander Dexne
CFO
142
alstria Annual Report 2020
Independent Auditor‘s Report
D. INDEPENDENT AUDITOR’S REPORT
To alstria office REIT-AG, Hamburg
I. REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND OF THE
COMBINED MANAGEMENT REPORT
1. OPINIONS
We have audited the consolidated financial statements of alstria office REIT-AG, Hamburg, and its
subsidiar-ies (the Group), which comprise the consolidated statement of financial position as of
December 31, 2020, and the consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of
cash flows for the financial year from January 1 to December 31, 2020, and notes to the consolidated
financial statements, includ-ing a summary of significant accounting policies. In addition, we have
audited the combined manage-ment report of alstria office REIT-AG for the financial year from
January 1 to December 31, 2020. In accordance with German legal requirements, we have not audited
the content of those components of the combined management report specified in the “Other
Information” section of our auditor’s report.
The combined management report contains cross-references that are marked as unchecked and not
provided for by law. We have not audited the content of these cross-references and the information
to which the cross-references refer in accordance with the German legal regulations.
In our opinion, on the basis of the knowledge obtained in the audit,
▪ the accompanying consolidated financial statements comply, in all material respects, with the
IFRSs as adopted by the EU, and the additional requirements of German commercial law
pursuant to Section 315e (1) HGB [Handelsgesetzbuch: German Commercial Code] and, in
compliance with these requirements, give a true and fair view of the assets, liabilities, and
financial position of the Group as of December 31, 2020, and of its financial performance for
the financial year from January 1 to December 31, 2020, and
▪ the accompanying combined management report as a whole provides an appropriate view of
the Group’s position. In all material respects, this combined management report is consistent
with the consolidated financial statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future development. Our opinion on the
combined management report does not cover the content of those components of the combined
management report specified in the "Other Information" section of the auditor’s report. The
combined management report contains cross-references that are marked as unchecked and not
provided for by law. We have not audited the content of these cross-references and the
information to which the cross-references refer in accordance with the German legal
alstria Annual Report 2020
143
Independent Auditor‘s Report
regulations.
Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any reservations
relating to the legal compliance of the consolidated financial statements and of the combined
management report.
2. BASIS FOR THE OPINIONS
We conducted our audit of the consolidated financial statements and of the combined manage¬ment
report in accordance with Section 317 HGB and the EU Audit Regulation No 537/2014 (referred to
subsequently as “EU Audit Regulation”) and in compliance with German Generally Accepted Standards
for Financial Statement Audits promulgated by the Institut der Wirt¬schaftsprüfer [Institute of Public
Audi-tors in Germany] (IDW). Our responsibilities under those requirements and principles are further
described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
and of the Combined Management Report” section of our auditor’s report. We are independent of the
group entities in accordance with the requirements of European law and German commercial and
professional law, and we have fulfilled our other German professional responsibilities in accordance
with these requirements. In addition, in accordance with Article 10 (2)(f) of the EU Audit Regulation,
we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit
Regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinions on the consolidated financial statements and on the combined management
report.
3. KEY AUDIT MATTERS IN THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements for the financial year from January 1 to
December 31, 2020. These matters were addressed in the context of our audit of the consolidated
financial state-ments as a whole, and in forming our opinion thereon, we do not provide a separate
opinion on these matters.
Valuation of investment property
For information on the valuation of investment property, please see the comments in the notes to the
consolidated financial statements concerning valuation (‘accounting policies’ section) and the notes
to the consolidated statement of financial position (‘investment property’ section).
THE FINANCIAL STATEMENT RISK
In the consolidated statement of financial position of alstria office REIT-AG as of December 31, 2020,
the total value of investment properties amounted to EUR 4,556 million. The investment property is
meas-ured at fair value according to IAS 40 in connection with IFRS 13. For 2020, a net gain of
EUR 62 million resulting from the fair value adjustment was recognized in the consolidated income
statement.
144
alstria Annual Report 2020
Independent Auditor‘s Report
The measurement of investment property at market value is carried out using a capitalized earnings
valuation model (“hardcore and top slice”). The valuation date was December 31, 2020.
The fair values were determined by the accredited, external and independent valuation appraiser
Savills Advisory Services Germany GmbH & Co. KG, Frankfurt am Main.
Besides information on actual data provided by the company, including for example the floor space
available for leasing, vacancies, planned maintenance and modernization measures and current rents,
numerous assumptions relevant to valuation are included in the determination of the property’s fair
value, which are subject to considerable estimation uncertainties and judgments. Even minor changes
in the assumptions relevant to measurement may have a material effect on the resulting fair value.
The key valuation assumptions used to measure the investment are market rents and the
capitalization rates.
There is a risk for the financial statements that, due to inaccurate or incomplete data provided by
alstria office, the measurement of the investment property by the external expert is not appropriate.
Estima-tion uncertainties and the incorrect exercise of judgment in relation to the relevant
measurement parameters can also lead to inaccurate measurement results.
In addition, there is the risk for the financial statements that the disclosures on property held for
investment required in the notes pursuant to IAS 40 and IFRS 13 are incomplete and inadequate.
OUR AUDIT APPROACH
Our audit procedures particularly include assessing the appropriateness of the valuation method, the
accuracy and completeness of the actual data as well as the appropriateness of the assumptions and
parameters. We involved our appraisal specialists to carry out our substantive audit procedures.
In inquiries with the Management Board, representatives of the company’s departments (particularly
controlling and group financial accounting and reporting) and the external expert engaged by the
company, we sought to gain an understanding of the appropriateness of the measurement method
applied, the measurement process and the independent expert´s activities. We then sought to satisfy
ourselves of the appropriate design and implementation and the operating effectiveness of the
controls used to ensure the correct and complete recording of actual date and its proper provision to
the independent expert.
As part of our substantive audit procedures, we assessed whether the data provided to the external
expert was complete and correct and, thus, if it allowed the expert an appropriate basis for making
an assessment. For this purpose, among other things, we reconciled the company's current tenant
lists with the underlying contracts for randomly selected rental spaces.
alstria Annual Report 2020
145
Independent Auditor‘s Report
We further verified the qualifications and objectivity of the external appraiser engaged by the
company to assess the investment property and evaluated the valuation logic applied in their expert
appraisal in terms of compliance with IAS 40 in conjunction with IFRS 13.
We assessed the appropriateness of the selected assumptions for measurement using a risk-based
selection of real estate. In particular, we assessed the assumptions made to determine the current
and future real estate-specific market rents, operating and maintenance costs and capitalization rates
and reviewed these assumptions for appropriateness, taking into account the type and location of the
real estate.
We evaluated the development of general assumptions underlying the valuations in course of time.
We compared the average multiples arising from the fair values and assumed market rents per location
in the light of the characteristics of the individual asset and location with multiples derived from
reports issued by real estate associations, expert committees, transaction databases and renowned
real estate experts.
In addition, we have determined an indicative range of appropriate property values of the risk-based
selection of real estate and compared them with the values determined by the external appraiser.
We also assessed the completeness and adequacy of disclosures on investment property required in
the notes to the consolidated financial statements pursuant to IAS 40 and IFRS 13.
OUR OBSERVATIONS
The data used to assess the valuation of investment property is appropriate. The assumptions used
for valuation are appropriate.
The disclosures on investment property in the notes to the consolidated financial statements pursuant
to IAS 40 and IFRS 13 are complete and appropriate.
4. OTHER INFORMATION
Management and the Supervisory Board are responsible for the other information. The other
information comprises
▪
▪
the corporate governance statement, which is referred to in the combined management
report
information extraneous to management reports and marked as unaudited
146
alstria Annual Report 2020
Independent Auditor‘s Report
The other information also includes the remaining parts of the annual report.
The other information does not include the consolidated financial statements, the combined
management report information audited for content and our auditor’s report thereon.
Our opinions on the consolidated financial statements and on the combined management report do
not cover the other information, and consequently we do not express an opinion or any other form of
assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to
consider whether the other information
▪
is materially inconsistent with the consolidated financial statements, with the combined
management report information audited for content or our knowledge obtained in the audit,
or
▪ otherwise appears to be materially misstated.
5. RESPONSIBILITIES OF MANAGEMENT AND THE SUPERVISORY BOARD FOR THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE GROUP MANAGEMENT REPORT
Management is responsible for the preparation of the consolidated financial statements that comply,
in all material respects, with IFRSs as adopted by the EU and the additional requirements of German
commercial law pursuant to Section 315e (1) HGB and that the consolidated financial statements, in
compliance with these requirements, give a true and fair view of the assets, liabilities, financial
position, and financial performance of the Group. In addition, management is responsible for such
internal control as they have determined necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are responsible for financial reporting
based on the going concern basis of accounting unless there is an intention to liquidate the Group or
to cease opera-tions, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of the combined management report
that, as a whole, provides an appropriate view of the Group’s position and is, in all material respects,
consistent with the consolidated financial statements, complies with German legal requirements, and
appropriately presents the opportunities and risks of future development. In addition, management
is responsible for such arrangements and measures (systems) as they have considered necessary to
enable the preparation of a combined management report that is in accordance with the applicable
German legal requirements, and to be able to provide sufficient appropriate evidence for the asser-
tions in the combined management report.
The supervisory board is responsible for overseeing the Group’s financial reporting process for the
preparation of the consolidated financial statements and of the combined management report.
alstria Annual Report 2020
147
Independent Auditor‘s Report
6. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND OF THE COMBINED MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
whether the combined management report as a whole provides an appropriate view of the Group’s
position and, in all material respects, is consistent with the consolidated financial statements and
the knowledge obtained in the audit, complies with the German legal requirements and appropriately
presents the opportunities and risks of future development, as well as to issue an auditor’s report
that includes our opinions on the consolidated financial statements and on the combined management
report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German
General-ly Accepted Standards for Financial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements and this combined management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
▪
identify and assess the risks of material misstatement of the consolidated financial statements
and of the combined management report, whether due to fraud or error, design and perform
audit proce-dures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to pro-vide a basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omis-sions, misrepresentations, or the override of
internal controls.
▪ obtain an understanding of internal control relevant to the audit of the consolidated financial
statements and of arrangements and measures (systems) relevant to the audit of the
combined management report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of these
systems.
▪ evaluate the appropriateness of accounting policies used by management and the
reasonableness of estimates made by management and related disclosures.
148
alstria Annual Report 2020
Independent Auditor‘s Report
▪
conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in the auditor’s report to the related disclosures in the
consoli¬dated financial statements and in the combined management report or, if such
disclosures are inadequate, to modify our respective opinions. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the Group to cease to be able to continue as a going concern.
▪ evaluate the overall presentation, structure and content of the consolidated financial
state¬ments, including the disclosures, and whether the consolidated financial statements
present the underlying transactions and events in a manner that the consolidated financial
statements give a true and fair view of the assets, liabilities, financial position and financial
performance of the Group in compliance with IFRSs as adopted by the EU and the additional
requirements of German commercial law pursuant to Section 315e (1) HGB.
▪ obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express opinions on the consolidated
financial statements and on the combined management report. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for
our opinions.
▪ evaluate the consistency of the combined management report with the consolidated financial
statements, its conformity with [German] law, and the view of the Group’s position it
provides.
▪ perform audit procedures on the prospective information presented by management in the
combined management report. On the basis of sufficient appropriate audit evidence we
evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information
from these assumptions. We do not express a separate opinion on the prospective
infor¬mation and on the assumptions used as a basis. There is a substantial unavoidable risk
that future events will differ materially from the prospective information.
alstria Annual Report 2020
149
Independent Auditor‘s Report
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the
relevant independence requirements, and communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, the related
safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter.
II. OTHER LEGAL AND REGULATORY REQUIREMENTS
Report on the Audit of the Electronic Renderings of the Consolidated Financial Statements and
the Combined Management Report prepared for Disclosure Purposes in accordance with Section
317 (3b) HGB
We have performed an audit in accordance with Section 317 (3b) HGB to obtain reasonable assurance
about whether the renderings of the consolidated financial statements and the combined
management report (hereinafter the “ESEF documents”) contained in the file that can be downloaded
by the issuer from the electronic client portal with access protection, “alstriaofficereitag-2020-12-
31.zip” (SHA256 hash value: fe04c718691c46d8ca7c267263078 a2d37ba51bf05835e97f23060d0
a2181a51) and prepared for disclosure purposes comply in all mate-rial respects with the
requirements of Section 328 (1) HGB for the electronic reporting format (“ESEF format”). In
accordance with German legal requirements, this audit only extends to the conversion of the
information contained in the consolidated financial statements and the combined management report
into the ESEF format and therefore relates neither to the information contained in these repro-
ductions nor any other information contained in the above-mentioned file.
In our opinion, the renderings of the consolidated financial statements and the combined management
report contained in the above-mentioned file and prepared for disclosure purposes comply in all
material respects with the requirements of Section 328 (1) HGB for the electronic reporting format.
We do not express an audit opinion on the information contained in these reproductions and on the
other information contained in the above-mentioned file beyond this audit opinion and our audit
opinion on the accompanying consolidated financial statements and the accompanying combined
management report for the financial year from January 1, 2020 to December 31, 2020 contained in
the “Report on the Audit of the Consolidated Financial Statements and the Combined Management
Report” above.
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We conducted our audit of the renderings of the consolidated financial statements and the combined
management report contained in the above-mentioned file in accordance with Section 317 (3b) HGB
and the draft of the IDW Auditing Standard: Audit of the electronic renderings of financial statements
and management reports prepared for disclosure purposes in accordance with Section 317 (3b) HGB
(IDW AuS 410 Draft) [if beneficial to the understanding of the report on international level: and the
International Standard on Assurance Engagements 3000 (Revised)]. Our responsibility thereafter is
further described below. Our audit firm applies the IDW Standard on Quality Control 1: Requirements
for quality control in audit firms (IDW Qualitätssicherungsstandard 1: Anforderungen an die Quali-
tätssicherung in der Wirtschaftsprüferpraxis – IDW QS 1).
The company’s management is responsible for the preparation of the ESEF documents including the
electronic renderings of the consolidated financial statements and the combined management report
in accordance with Section 328 (1) sentence 4 item 1 HGB and for the markup of the consolidated
finan-cial statements in accordance with Section 328 (1) sentence 4 item 2 HGB.
In addition, the company’s management is responsible for the internal controls they consider
necessary to enable the preparation of ESEF documents that are free from material non-compliance
with the requirements of Section 328 (1) HGB for the electronic reporting format, whether due to
fraud or error.
The company’s management is also responsible for the submission of the ESEF documents together
with the auditor’s report and the attached audited consolidated financial statements and audited
combined management report and other documents to be disclosed to the operator of the German
Federal Gazette [Bundesanzeiger].
The supervisory board is responsible for overseeing the preparation of the ESEF documents as part of
the financial reporting process.
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from
material non-compliance with the requirements of Section 328 (1) HGB, whether due to fraud or
error. We exercise professional judgement and maintain professional scepticism throughout the audit.
We also
▪
Identify and assess the risks of material non-compliance with the requirements of Section 328
(1) HGB, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our audit opinion.
▪ Obtain an understanding of internal control relevant to the audit of the ESEF documents in
order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of ex-pressing an audit opinion on the effectiveness of these controls.
▪ Evaluate the technical validity of the ESEF documents, i.e. whether the file containing the
ESEF documents meets the requirements of Commission Delegated Regulation (EU) 2019/815
on the technical specification for this electronic file.
alstria Annual Report 2020
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Independent Auditor‘s Report
▪ Evaluate whether the ESEF documents provide a content-equivalent XHTML rendering of the
audit-ed consolidated financial statements and the audited combined management report.
▪ Evaluate whether the markup of ESEF documents with Inline XBRL technology (iXBRL) enables
an adequate and complete machine-readable XBRL copy of the XHTML rendering.
Further Information pursuant to Article 10 of the EU Audit Regulation
We were elected as group auditor at the annual general meeting held on September 29, 2020. We
were engaged by the supervisory board on September 29, 2020. We have been the group auditor of
alstria office REIT-AG without interruption since the financial year 2018.
We declare that the opinions expressed in this auditor’s report are consistent with the additional
report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit
report).
III. GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT
The German Public Auditor responsible for the engagement is René Drotleff.
Hamburg, February 19, 2021
KPMG AG
Wirtschaftsprüfungsgesellschaft
[Original German version signed by:]
Schmidt
Wirtschaftsprüfer
[German Public Auditor]
Drotleff
Wirtschaftsprüfer
[German Public Auditor]
152
alstria Annual Report 2020
Report of the Supervisory Board
E. REPORT OF THE SUPERVISORY BOARD
Dear shareholders,
In this report, we explain the Supervisory Board’s monitoring of and consultation with the Management
Board, the key issues discussed by the full Supervisory Board and its committees and the audit of the
annual and consolidated financial statements for the reviewed year.
I. FOCUS OF THE DISCUSSION
The main topics discussed by the Supervisory Board and its committees in the 2020 financial year
were business and financial situations and the Company’s strategy, each in the light of the COVID-19-
pandemic, the corporate bond issue, and major real estate transactions, as well as the adjustment of
the Management Board’s remuneration system to a new legal framework.
II. MONITORING AND ADVISING THE COMPANY’S MANAGEMENT
In the 2020 reporting year, we performed the duties incumbent on us under the law and under the
articles of association, we advised the Company’s Management Board, and we monitored its
management. Based on the Management Board's reports, we thoroughly discussed business
development as well as decisions and events of importance to the group. The Supervisory Board was
intensively involved in the Company’s fundamental decisions. The Management and Supervisory Boards
discussed in detail all measures that required approval. To the extent provided by law, by the articles
of association, or by the rules of procedure, the Supervisory Board voted based on thorough
examination and consultation.
At Supervisory Board and committee meetings, the Management Board regularly informed the
Supervisory Board, in a timely and comprehensive manner, about the Company’s business
development, financial situation, planning, important business transactions, risk situations, risk
management and compliance. The Supervisory Board also met regularly without the Management
Board.
The Management Board informed the Supervisory Board between meetings about the development of
the of the real estate portfolio, rental activities and important events, generally by means of monthly
reports. The chairmen of the Supervisory and Management Boards held informative and advisory
meetings fortnightly.
alstria Annual Report 2020
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Report of the Supervisory Board
III. BOARD MEMBERS
The members of the Supervisory Board did not change in the 2020 financial year. At the Annual
General Meeting on September 29, 2020, the Chairman of the Supervisory Board and the Chairman of
the Audit Committee were reelected to the Supervisory Board, each for a three-year term. The
Supervisory Board confirmed both in their positions after their reelection, and the committees’
compositions remained unchanged.
In the year under review, the Supervisory Board and its committees comprised the following members:
Supervisory Board member
Dr. Johannes Conradi (chair)
Richard Mully (deputy chair)
Dr. Bernhard Düttmann
Stefanie Frensch
Benoît Herault
Marianne Voigt
Audit
Committee
Nomination &
Remuneration
Committee
Finance &
Investment
Committee
−
−
Member
−
Member
Chair
Chair
−
−
Member
Member
−
−
Chair
Member
Member
−
−
ESG
Committee
Chair
Member
−
−
−
Member
The Supervisory Board reviewed the implementation status of the profile for the Supervisory Board
with concrete objectives regarding the composition of the board, including the competencies
represented on the board and its diversity, as presented in the Company’s Corporate Governance
Statement on pages 161 to 180 of the annual report. As of December 31, 2020, the composition of the
Supervisory Board meets these objectives, and the profile for the Supervisory Board is complete.
Structured appointment procedures for the Supervisory Board, the regular 3-year terms of office and
the annual Supervisory Board elections, are described in the Corporate Governance Statement. The
Company has set up an onboarding process and supports new Supervisory Board members’
inauguration by familiarizing them with the people involved, the rules and the regulations of the
Company and the Supervisory Board’s working methods. In addition, the Company supports
Supervisory Board members’ training measures with regular internal training courses. In connection
with the December meeting, the Management and Supervisory Boards held a joint training session
where they conducted a change-of-perspective exercise looking at the Company’s economic situation,
strategy and governance from the perspective of a possible activist investor. No conflicts of interest
occurred in the past financial year for members of the Supervisory or Management Boards.
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Report of the Supervisory Board
IV. MEETINGS OF THE SUPERVISORY BOARD
The full Supervisory Board held four ordinary and three extraordinary meetings in the 2020 financial
year. Based on detailed documents, we also made five decisions via circular resolution. In the 2021
financial year, one additional meeting of the full Supervisory Board and one circular resolution have
taken place before this report’s completion. Since March 2020, all meetings of the Supervisory Board
and its committees have been held via video conference.
At the regular Supervisory Board meetings, the Company’s situation, development, course of
business and market situation were discussed with the Management Board, and the Company's
financial results (the interim quarterly and half-year financial reports and the annual and
consolidated financial statements) were discussed. Committee chairs reported on the committees’
work.
In February 2020, the Supervisory Board, via written circulation, introduced rules of procedures for
the ESG Committee, decided on the profiles for the Supervisory and Management Boards and on the
Corporate Governance Statement which is submitted jointly with the Management Board.
At our meeting in February 2020, the Supervisory Board addressed the annual and consolidated
financial statements as of December 31, 2019, and the management reports and discussed these
reports with the auditor. The Supervisory Board approved the annual financial statements for alstria
office REIT-AG and its consolidated financial statements as of December 31, 2019, and agreed with
the Management Board's proposal to appropriate the annual net profit for the 2019 financial year.
The Supervisory Board passed a resolution on its report to the Annual General Meeting for the 2019
financial year, dealt with the agenda items and proposed resolutions for the Annual General Meeting.
The Supervisory Board also discussed the variable remuneration for the Management Board’s
members. We deliberated on the results of the long-term variable remuneration element for financial
year 2016 and on the short-term variable remuneration for financial year 2019 — in each case
considering individual performance — and on the parameters of the long-term variable remuneration
of the Management Board’s members for financial year 2020. The deliberations were each done after
a vertical remuneration comparison and in the light of the recommendation from its Nomination and
Remuneration Committee. Finally, the Supervisory Board discussed the composition and succession of
the Management Board.
In a March 2020 extraordinary meeting to address the impact of the COVID-19-pandemic on the
Company, the Supervisory Board also discussed possible consequences for dividend payments as well
as the remuneration of the Management Board and the Supervisory Board. Further, the Supervisory
Board dealt with major real estate transactions. In April 2020, the Supervisory Board decided via
written circular resolution on determining the individual multipliers for long-term variable
remuneration elements for the Management Board for financial year 2016 (LTI 2016/2020). Against
the background of insecurities caused by the COVID-19-pandemic regarding the liquidity situation of
the Company, the Supervisory Board decided that LTI 2016/2020 should be paid out in Company
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155
Report of the Supervisory Board
shares, if possible, and that these shares should have a holding period of 1 year. Correspondingly, the
Supervisory Board offered to receive remuneration for the financial year 2020 also in Company shares
and to hold these shares for one year. In the ordinary April 2020 meeting, the Supervisory Board and
the Management Board deliberated on the market situation and real estate transactions.
In June, the Supervisory Board approved issuance of a corporate bond with a term of approximately
six years and a total nominal value of up to EUR 350 m, though a written circular resolution. In
extraordinary meetings in June and August, the Management Board and Supervisory Board again
deliberated on the impact of the COVID-19-pandemic on the Company. The Supervisory Board agreed
to convene the Annual General Meeting as a virtual meeting, without the physical presence of the
shareholders, and agreed on the proposals to be presented as resolutions to the Annual General
Meeting, including the dividend proposal. Using the written circular resolution procedure, the
Supervisory Board dealt with preparations for the upcoming elections to the Supervisory Board.
At the ordinary meeting in September, the Management and Supervisory Boards discussed the
Company's strategy. They discussed the situation regarding the Company's largest properties and
related development projects. The Supervisory Board discussed the possibility of utilizing the capital
market, the positive results from the review of its composition and effectiveness of work, as well as
the Company’s employee participation program. In the light of the current economic situation, the
Supervisory Board agreed to execute the resolutions from spring in the most efficient and cost-saving
way possible and thus to pay the LTI 2016/2020 to the Management Board members and the
Supervisory Board remuneration for the financial year 2020 in cash, with the stipulation that the
payments be invested in Company shares.
The December meeting concerned corporate and budget planning for the 2021 financial year. The
Supervisory Board also discussed with the Management Board the current market environment, the
planned real estate transactions and the Company’s IT strategy and issued the annual declaration of
compliance with the recommendations of the German Corporate Governance Code. Furthermore, the
Supervisory Board deliberated on succession planning for the Company’s Management Board and
Supervisory Board and the adjustment of the Management Board’s remuneration system to meet new
regulatory provisions. Via a written circular resolution, the Supervisory Board made editorial
amendments to the Company's articles of association to reflect a capital increase from conditional
capital in December 2020: A total of 199,325 new shares were issued to Company employees under
the Company's employee participation plan.
In February 2021, the Supervisory Board passed a resolution via written circulation procedure on the
corporate governance statement and on the updated profiles and rules of procedure for the
Management and Supervisory Boards. At the balance sheet meeting in February 2021, the Supervisory
Board dealt with the annual and consolidated financial statements as of December 31, 2020, and with
the Management Board's proposal for appropriating profits. We passed a resolution on the report to
the Annual General Meeting for the 2020 financial year, discussed the format and the agenda for the
156
alstria Annual Report 2020
Report of the Supervisory Board
Annual General Meeting of the Company with the Management Board, and dealt with the variable
remuneration for the Management Board’s members.
Attendance of Supervisory Board members at meetings
Supervisory Board member attendance at meetings of the Supervisory Board in plenary session
averaged 100 % in the 2020 financial year.
Attendance at meetings*
Participation in %
Full Supervisory Board
Dr Johannes Conradi (Chair)
Richard Mully (Deputy Chair)
Dr Bernhard Düttmann
Stefanie Frensch
Benoît Herault
Marianne Voigt
Audit Committee
Marianne Voigt (Chair)
Dr Bernhard Düttmann
Benoît Herault
Nomination and Remuneration Committee
Dr Johannes Conradi (Chair)
Stefanie Frensch
Benoît Hérault
Finance and Investment Committee
Richard Mully (Chair)
Dr Bernhard Düttmann
Stefanie Frensch
ESG Committee
Dr Johannes Conradi (Chair)
Richard Mully
Marianne Voigt
regular
meetings
4/4
4/4
4/4
4/4
4/4
4/4
extraordinary
meetings
3/3
3/3
3/3
3/3
3/3
3/3
6/6
6/6
6/6
5/5
5/5
5/5
4/4
4/4
4/4
1/1
1/1
1/1
* Participation in a meeting can also be via telephone or video conference.
total
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
alstria Annual Report 2020
157
Report of the Supervisory Board
V. COMMITTEES OF THE SUPERVISORY BOARD
The six-member Supervisory Board established four standing committees to support its work, each
with at least three members. The committees prepared some of the Supervisory Board’s resolution
via resolution recommendations; in some cases, decision-making powers were delegated to the
committees to the extent permitted by law. In the 2020 financial year, the Supervisory Board’s
committees primarily dealt with the following topics:
1. AUDIT COMMITTEE
The Audit Committee held six meetings in the 2020 financial year, each attended by the Chief
Financial Officer. At the beginning of the reporting year, the Audit Committee thoroughly dealt with
property valuation as of December 31, 2019, and with the key audit matters selected by the auditors
for the audit of the financial statements from the 2019 financial year. In February 2020, the Audit
Committee discussed the annual financial statements and consolidated financial statements as of
December 31, 2019, and the management reports as part of the audit of the financial statements.
They discussed the documents with the auditors, conducted a preliminary review of the annual and
consolidated financial statements and of the Management Board's proposal for the appropriation of
profits and submitted corresponding resolution proposals to the full Supervisory Board. The Audit
Committee dealt with the auditor's report in accordance with Section 1 (4) of the REIT Act and
handled the non-auditing services provided by the auditors in the 2019 financial year. In the summer,
the Audit Committee dealt with the valuation of properties as of June 30, 2020 and with the half-year
financial report issued June 30, 2020. The Audit Committee also discussed these with the auditor and
the Management Board prior to publication. The Company’s risk situation was discussed regularly.
Other topics included the audit of the auditor’s independence, the appointment of KPMG AG
Wirtschaftsprüfungsgesellschaft, Hamburg, as auditor and discussions of accounting, the accounting
process, the risk management system, the material risks identified, the effectiveness of the internal
control and audit system and the compliance system. The Audit Committee also discussed the internal
audit’s results for the 2020 financial year and the audit’s quality, and it approved certain non-auditing
services provided by the auditors for the 2021 financial year.
2. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee met five times during the 2020 financial year. The
Nomination and Remuneration Committee dealt with the remuneration of the Management Board and,
in particular, discussed the amount of variable remuneration for the Management Board’s members,
taking into account their individual performance in each case. They also submitted corresponding
resolution proposals to the full Supervisory Board. The Nomination and Remuneration Committee also
assessed the implementation status of the share ownership obligation for members of the Management
and Supervisory Boards. They also reviewed the Management Board’s composition and continued the
development of a structured process for long-term succession planning. Against the background of
regulatory changes regarding Management Board remuneration, the updated recommendations from
158
alstria Annual Report 2020
Report of the Supervisory Board
the German Corporate Governance Code and the expectations from investors, the Nomination and
Remuneration Committee devised corresponding adjustments to the Management Board’s
remuneration system and prepared a proposal to the Annual General Meeting in 2021 for approval of
the updated Management Board remuneration system. The Nomination and Remuneration Committee
also reviewed the composition and succession planning for the Supervisory Board based on results
from the review of the Supervisory Board’s composition and effectiveness of work in the context of
the expiration of two members’ terms of office in the 2021 financial year.
3. FINANCE AND INVESTMENT COMMITTEE
The Finance and Investment Committee held four meetings in the 2020 financial year. During meetings
with the Management Board, the committee discussed the financing strategy of alstria office REIT-AG
and debated real estate transactions. The Finance and Investment Committee prepared a resolution
recommendation for the Supervisory Board regarding a corporate bond. The committee also approved
real estate transactions carried out in the 2020 financial year.
4. ESG COMMITTEE
The ESG Committee held one meeting in fiscal year 2020. With the Management Board, the Committee
discussed corporate social responsibility issues and deliberated the alstria office REIT-AG reporting
on sustainability.
VI. AUDIT OF THE ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS
KPMG AG Wirtschaftsprüfungsgesellschaft, Hamburg, audited the annual financial statements of
alstria office REIT-AG prepared by the Management Board as well as the consolidated financial
statements and the consolidated management report for the fiscal year from January 1 to
December 31, 2020 and issued an unqualified audit opinion.
The annual financial statements, the consolidated financial statements and the consolidated
management report for alstria office REIT-AG and the grouo, the Management Board’s proposal for
the appropriation of the net profit, as well as the auditor's reports, were made available to all
Supervisory Board members
immediately after their preparation. The Supervisory Board
comprehensively reviewed documents prepared by the Management Board in the Audit Committee
and in the plenary session. At the Audit Committee meeting, the auditor reported on his audit’s scope,
focal points and main results (including the audit of the internal control and risk management system).
The auditor addressed the particularly important audit issues (key audit matters) and the audit
procedures and was available to answer questions. The Audit Committee prepared the audit by the
Supervisory Board and dealt in particular with the key audit matters described in the auditor's report,
including the audit procedures performed. The full Supervisory Board examined the annual financial
statements and consolidated financial statements prepared by the Management Board, along with the
consolidated management reports and discussed the results of the audit with the auditor. No
objections were raised following the final result of the Supervisory Board's examination. The
alstria Annual Report 2020
159
Report of the Supervisory Board
Supervisory Board approved the annual financial statements and the consolidated financial
statements. The annual financial statements are thus deemed adopted. The Supervisory Board
concurred with the Management Board's proposal for appropriating the net profit.
The Supervisory Board thanks the Management Board and all employees for their extra-ordinary
performance, which made it possible for alstria — despite the impacts of the COVID-19-pandemic —
to look back on a successful financial year 2020.
Hamburg, February 2021
For the Supervisory Board
Dr Johannes Conradi
Chairman of the Supervisory Board
160
alstria Annual Report 2020
Corporate Governance Statement
F. CORPORATE GOVERNANCE STATEMENT
This declaration, pursuant to Section 289f and 315d of the German Commercial Code
(Handelsgesetzbuch, HGB), describes the working methods of the Management Board and
Supervisory Board as well as the composition and working methods of the Supervisory Board
committees, the diversity concepts for the Management Board and Supervisory Board composition,
the provisions to promote women’s participation in management positions in accordance with
Section 76 para. 4 and Section 111 para. 5 of the German Stock Corporation Act (Aktiengesetz, AktG),
the declaration of compliance in accordance with Section 161 AktG and relevant information on
corporate governance practices. The declaration also includes the report on the corporate governance
of the Company and forms part of the combined management report of alstria office REIT-AG (alstria)
and the Group.
I. MANAGEMENT BOARD AND SUPERVISORY BOARD
The German stock corporation is legally required to have a dual management system, which provides
a strict personnel and functional separation between the Management Board as the management body
and the Supervisory Board as the monitoring and advising body. Within this dual management system,
the Management Board and Supervisory Board cooperate closely and faithfully in the Company’s
interest.
1. MANAGEMENT BOARD
As of December 31, 2020, the Management Board of alstria office REIT-AG consists of two members:
Member
Olivier Elamine
Alexander Dexne
Chief Executive Officer
Chief Financial Officer
Term of office
(in years)
14
13
Appointed until
31.12.2022
31.12.2022
The Management Board is responsible for managing the Company in the Company’s interests. In
particular, the Management Board determines the corporate objectives and develops the Company’s
fundamental strategic orientation, agrees on these with the Supervisory Board and ensures their
implementation. Furthermore, the Management Board ensures an appropriate internal control and
risk management system as well as the observation of legal provisions and internal guidelines and
works towards their observance in the group (Compliance).
The Management Board members are jointly responsible for the management of the Company.
Fundamental matters or financially significant material matters stipulated by law, by the Articles of
Association or by the rules of procedure for the Management Board, are decided by the Management
Board as a whole. The Management Board’s resolutions are passed by a simple majority, whereby a
unanimous vote shall generally be sought. Certain resolutions on the Company’s significant business
transactions are also subject to approval by the Supervisory Board. The Management Board reports
alstria Annual Report 2020
161
Corporate Governance Statement
regularly to the Supervisory Board. At least once a year, the Management Board reports on the
intended business policy and on other fundamental issues of corporate planning for the Company and
the Group. The Management Board reports regularly (at least quarterly) on the state of business,
particularly on sales revenues and income, material indicators and the net assets development,
financial position and operation results. The work of the Management Board, the transactions
requiring supervisory board approval, the allocation of responsibilities between the individual
Management Board members and the reporting and information obligations to the Supervisory Board
are detailed in the rules of procedure for the Management Board.
The Management Board’s members are committed to the Company’s interest and do not pursue
personal interests in their decisions or take advantage of business opportunities to which the Company
is entitled. They must immediately disclose any conflicts of interest to the chairman of the Supervisory
Board. In particular, members of the Management Board shall not directly compete with the Company
through private real estate investments; real estate transactions between the Company and members
of the Management Board are forbidden. Major business transactions between the Company on the
one hand and the Management Board’s members, related parties, companies or associations within
the meaning of Section 111a AktG on the other hand, require the Supervisory Board’s approval. All
such transactions must be concluded under customary commercial conditions. The Management
Board’s members require the Supervisory Board’s approval to conduct secondary activities,
particularly memberships in supervisory boards of companies not affiliated with the Group. The
members of alstria’s Management Board had no conflicts of interest in the reporting year. There were
no agreements on such transactions between the Company and members of the Management Board
and related parties in the reporting period. With the approval of the Supervisory Board, the CEO sits
on the boards of companies outside the Group. A list of the memberships of the Management Board
members in supervisory boards of listed companies or companies with comparable requirements
pursuant to Section 285 No. 10 HGB can be found on page 139 of the Company’s annual report.
The compensation of the members of the Management Board is presented in the Compensation Report
on pages 181 to 191 of this Annual Report.
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Corporate Governance Statement
2. PROFILE FOR THE MANAGEMENT BOARD AND LONG-TERM SUCCESSION PLANNING
The Supervisory Board appoints and dismisses the members of the Management Board and, with the
support of its Nomination and Remuneration Committee and the Management Board, ensures long-
term succession planning. The Supervisory Board strives for a Management Board composition that
ensures that all the knowledge, skills and experience necessary to best manage the Company are
available on the Management Board. Therefore, with due consideration of alstria’s specific situation,
the Supervisory Board established this profile of skills and expertise and diversity concept with targets
for the composition of the Management Board (Profile for the Management Board), pursuant to
Section 289 f HGB, Section 76 para. 3 AktG and to the German Corporate Governance Code.
The Company’s Articles of Association provide that the Management Board shall consist of one or more
members. The Supervisory Board decides on the exact number of Management Board members, the
Management Board’s individual staffing and the Management Board’s chairman. Potentially suitable
candidates for each Management Board position are generally identified once per calendar year with
the help of external personnel consultants. Search profiles for each Management Board position are
used as a basis, in which the professional and personal requirements of the candidates for the
respective position are described. The search profiles are drawn up by the Supervisory Board as part
of a due analysis of the current and future challenges of the Company. The search profiles also take
into account the Profile for the Management Board. On this basis a shortlist of available candidates is
drawn up with whom structured discussions can be held without delay if necessary. Internal
candidates for Management Board succession are identified by the Supervisory Board, which gets to
know particularly qualified employees, both professionally and personally, in the course of its
meetings.
The initial appointment of Management Board members shall be for a maximum of three years;
reappointment of Management Board members shall also generally be for a maximum of three years.
Acting members of the Management Board will only be reappointed one year before the end of their
term of office, and their current appointment will be terminated at the same time if there are special
circumstances.
2.1.
Requirements for all management board members
All Management Board members shall have the personal qualification for being a member on the
Company’s Management Board and shall each meet the legal as well as the following requirements:
▪
▪
▪
▪
▪
▪
▪
▪
a managerial mindset,
integrity,
a capacity for interaction and teamwork,
leadership skills and persuasive power,
communication skills,
an ability to balance risk appetite and risk avoidance,
relevant education and sufficient professional experience and
an age of up to 65 years, as a general rule.
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Corporate Governance Statement
2.2.
Requirements for the entire Management Board
Viewed as a whole, the members of the Management Board shall have all knowledge, skills and
experience needed. In particular, at all times at least one Management Board member shall have due
/ be duly:
▪ expertise regarding real estate management (ideally in the management of office properties,
▪
▪
acquired in a comparable company);
knowledge of the German real estate market;
skills
in the sectors real estate transactions, asset management/letting, project
development, real estate valuation and all other relevant business divisions;
▪ experience in defining, setting and executing corporate strategy and an ability to implement
profound change and ensure good communication;
▪
familiarity with the requirements concerning corporate governance and
investor
communication, gained within a listed company (ideally with a comparable market
capitalization);
▪ experience in leadership and corporate management (ideally acquired in a comparable
company) and
▪ experience in corporate finance and capital markets (ideally acquired in a comparable
company).
The composition of the Management Board shall also reflect internationality in terms of diverse
cultural backgrounds and international experience of the Management Board members.
2.3.
Diversity
▪ The members of the Management Board shall complement one another in terms of their
backgrounds, professional experience and expertise in order to let the leadership benefit from
diverse sources of experience, skills and points of view on corporate challenges.
▪
In the recruitment process, the candidates are treated neutrally in terms of sex and age and
will be assessed according to their qualifications.
2.4.
Status of implementation
The Profile for the Management Board is currently fully implemented.
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Corporate Governance Statement
3. SUPERVISORY BOARD
The alstria office REIT-AG Supervisory Board is generally elected by the Annual General Meeting. It is
composed exclusively of shareholder representatives. As of December 31, 2020, the Supervisory Board
comprised the following six members:
Supervisory Board member
Committee memberships
Term of
office
(in years)
Appointed
until1)
Audit
committee
Nomination &
Remuneration
committee
Finance &
Investment
committee
ESG
committee
Dr. Johannes Conradi (Chair)
Richard Mully (Vice Chair)
Dr. Bernhard Düttmann
Stefanie Frensch
Benoît Hérault
Marianne Voigt
14
14
4
5
9
9
2023
2022
2021
2021
2022
2023
−
−
Member
−
−
−
Member
Member
Member
Chair
−
Chair
Member
Member
Member
−
−
−
−
−
Member
Chair
−
Chair
1) Until the close of the Annual General Meeting in the respective financial year.
The Supervisory Board advises the Management Board on the management of the Company and
monitors how it conducts business. The Management Board involves the Supervisory Board in decisions
of fundamental importance to the Company. To this end, the rules of procedure for the
Management Board stipulate that its approval is required, for example, for the acquisition or disposal
of real estate property, for the conclusion of new financing agreements with a consideration or volume
of more than EUR 30 million, or for modernization measures not included in the budget approved by
the Supervisory Board that exceed a total annual amount of EUR 2 million. Furthermore, transactions
with related parties pursuant to Section 111 b para.1 AktG require the approval of the Supervisory
Board.
The Supervisory Board elects a Chairman and a Deputy Chairman from among its members. The
Chairman of the Supervisory Board coordinates the Supervisory Board’s work, chairs its meetings and
attends to its affairs externally. The Chairman maintains regular contact with the Management Board
and discusses strategy, planning, business development, the risk situation, risk management and
corporate compliance with its members. The Management Board immediately informs the Chairman of
important events that are of material significance for assessing the situation as well as for development
and management. If necessary, the Chairman then informs the Supervisory Board and, when
appropriate, convenes a Supervisory Board meeting. The Chairman and Deputy Chairman of the
Supervisory Board also regularly hold discussions with investors on Supervisory Board-specific topics.
Supervisory Board resolutions are adopted through a majority of votes by the Supervisory Board
members as specified in the Articles of Association, unless otherwise required by law. Resolutions are
generally passed at ordinary or extraordinary meetings. Supervisory Board members may attend
Supervisory Board meetings in person or via telephone, videoconference or similar audiovisual means.
The Supervisory Board also meets regularly without the Management Board. Supervisory Board
resolutions may also be adopted outside of meetings by means of written, telephonic or electronic
communication if the Chairman permits it for an individual case.
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Corporate Governance Statement
The Supervisory Board regularly reviews, whether internally or with the assistance of external
consultants, how effectively the Supervisory Board as a whole and its committees perform their duties.
During the 2020 financial year, very positive results were achieved through an effectiveness assessment
conducted by means of online questionnaires, which were discussed by the Supervisory Board.
All Supervisory Board members are committed to the Company’s interests and do not pursue personal
interests in their decisions or take advantage of business opportunities to which the Company is
entitled. Conflicts of interest must be disclosed to the Chairman of the Supervisory Board without
delay. In the case of resolutions for which a conflict of interest exists, the Supervisory Board member
concerned abstains from voting. Members of the Supervisory Board shall not directly compete with the
Company through private real estate investments; real estate transactions between the Company and
members of the Supervisory Board are forbidden. Significant transactions between the Company on
the one hand and members of the Supervisory Board, related parties, companies or associations within
the meaning of Section 111a AktG on the other hand require the approval of the Supervisory Board. In
the reporting year, there were no conflicts of interest involving members of alstria's Supervisory Board.
There were no agreements on such transactions between the Company on the one hand and members
of the Supervisory Board and related parties on the other in the reporting period.
Supervisory Board members ensure that they have sufficient time to perform their duties. The members
of the Supervisory Board observe the overboarding rules as defined in the Profile for the Supervisory
Board (see below). alstria’s website contains the member’s curricula vitae and an overview of their
main activities in addition to their Supervisory Board mandate. A list of the memberships of the
Supervisory Board members on supervisory boards or similar supervisory bodies of non-Group companies
in accordance with Section 285 no. 10 of the HGB can also be found in the annual report on page 140.
The compensation of the members of the Supervisory Board is presented in the compensation report
on page 190 to 191 of this Annual Report.
4. SUPERVISORY BOARD COMMITTEES
To manage its tasks efficiently, the Supervisory Board has formed four standing committees from
among its members: an Audit Committee, a Finance and Investment Committee, a Nomination and
Remuneration Committee and a purely advisory and preparatory ESG Committee (previously:
Corporate Social Responsibility Committee). Each committee has its own rules of procedure, which
further regulate the committee’s affairs, tasks and decision-making powers, where appropriate. The
rules of procedure for the Supervisory Board can be viewed on the Company’s website.
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4.1.
Audit Committee
The Audit Committee deals with the Company’s accounting and accounting process, risk management,
internal control and audit system and compliance. In addition, the Audit Committee deals with the
audit of the financial statements, in particular the selection, independence and qualification of the
auditors and the additional services provided by the auditors, the issuing of the corresponding audit
engagement, the determination of focal points of the audit, the fee agreement and the assessment
of the audit’s quality.
4.2.
Finance and Investment Committee
The Finance and Investment Committee discusses the Company’s financing strategy and grants
Supervisory Board approval for the conclusion of financing agreements and for the acquisition or
disposal of real estate properties or other assets, provided that the underlying financing volume or
the consideration for the transaction exceeds EUR 30 million and does not exceed EUR 100 million.
Financing agreements and transactions that exceed this amount must be submitted to the full
Supervisory Board for approval. The Finance and Investment Committee also grants Supervisory Board
approval for the conclusion or early termination of lease agreements with third parties as well as for
contracts with Supervisory Board members, in accordance with Section 114 of the AktG.
4.3.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee deals with the preparation of the resolutions of the
full Supervisory Board on the appointment and dismissal of Management Board members (including
the preparation of the Profile for the Management Board), on the Management Board’s compensation
system and the total compensation of individual Management Board members, on the target figures
for the proportion of women on the Management Board and Supervisory Board, and on the rules of
procedure for the Management Board. The Nomination and Remuneration Committee deals with
ongoing succession planning for the Management Board and decides on the conclusion, amendment,
extension and termination of Management Board employment contracts, on the content of contracts
(with the exception of compensation), and on the approval of certain other activities of Management
Board members. Finally, the Nomination and Remuneration Committee prepares the Supervisory
Board’s resolution on election proposals to the Annual General Meeting for suitable Supervisory Board
members (including the Profile for the Supervisory Board) and on determining the compensation for
the Supervisory Board, and it deals with any insider information that falls within the Supervisory
Board’s remit.
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4.4.
ESG Committee
The ESG Committee deals with environment social governance issues such as environmental policies
and CO2 targets, energy management policies, the potential impact of climate change, corporate
social responsibility legislation, corporate social responsibility ratings and the Company’s
sustainability reports.
The Supervisory Board reports on its activities and its committees’ work during the 2020 financial
year in its report to the Annual General Meeting on pages 153 to 160 of the annual report.
5. PROFILE FOR THE SUPERVISORY BOARD
alstria office REIT-AG’s Supervisory Board shall ensure proper consultation with and control of the
Management Board. Therefore, Supervisory Board members shall have the knowledge, skills and
experience necessary to properly fulfill their duties and complement one another. For this reason,
the Supervisory Board has established this profile of skills and expertise and diversity concept with
targets for the composition of the Supervisory Board (“Profile for the Supervisory Board”) according
to Sec. 289 f of the German Commercial Code and the German Corporate Governance Code. Thereby,
the Supervisory Board has especially considered alstria’s specific situation and shareholder structure.
5.1.
General profile of qualification
▪ Managerial or operational experience
▪ Availability and willingness to dedicate sufficient time
▪ Discretion and integrity
▪ Capacity for interaction and teamwork
▪
Leadership skills and persuasive power
▪ Willingness to engage in regular and independent advanced training
▪ Age of up to 70 years, as a rule;
▪ Maximum duration of board membership of 20 years, as a rule;
▪ No board membership, no advisory function excluding independence with and no personal
relationship to a significant competitor of the Company.
5.2. Overboarding
Including their membership on alstria’s Supervisory Board, our Supervisory Board members shall, as a
rule, not permanently have more than five board mandates at listed companies with registered seats
in Germany and abroad. For the purposes of calculating this limit, a Supervisory Board mandate or a
comparable function in non-listed companies is counted as one mandate, with a supervisory board
chair being counted as two; management board mandates at listed companies are counted as three
and should not be held by the Chairman of our Supervisory Board.
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5.3. Qualification and diversity
▪ The members of the Supervisory Board shall complement one another in terms of background,
professional experience and skills in order to provide the Supervisory Board with the most
diverse sources of experience and skills possible.
▪ Viewed as a whole, the members must be familiar with the real estate sector. At least two
members shall have due expertise in the office real estate market.
▪ At least two members shall have strong international backgrounds. At least two members shall
have strong German backgrounds.
▪ At least one member shall have experience as a management board member (ideally as the
chief executive officer of a listed company) and be familiar with stakeholder management.
▪ The Chairman of the Audit Committee shall have gained special expertise and experience
either in accounting, the application of accounting principles and internal control systems or
in the auditing of annual statements (e.g., as the chief financial officer of a comparable
company or as the principal of an audit firm).
5.4.
Independence
A Supervisory Board member is independent from the Company and its management as long as it has
no personal or business relationships with the Company or its Management Board, which could cause
a substantial and not merely temporary conflict of interest.
A Supervisory Board member is independent from a controlling shareholder if the Supervisory Board
member or a close relative is neither a controlling shareholder, nor a member of the executive
governing body of the controlling shareholder and does not have a business or personal relationship
with the controlling shareholder that may cause a substantial and not merely temporary conflict of
interest.
The Supervisory Board has determined the following requirements for the independence of its
members from the Company and its management. The Supervisory Board regularly reviews at its
reasonable discretion, whether its members are independent in its assessment. Thereby, the
Supervisory Board particularly considers if a Supervisory Board member or one of their close relatives
▪ was a member of the Management Board in a Group company in the three years before its
appointment (for Supervisory Board members themselves, a five-year period shall apply);
▪ has, or had within the 3 years up to his appointment, a material business relationship with
the Group or a member of the Management Board (e.g., as a tenant, lender or advisor), either
directly or as a shareholder, director or senior employee of a non-group entity that has such
a relationship with the Group (acceptance of payment in excess of EUR 50,000 p.a. is
considered as material);
▪
is a close relative of one of the members of the Management Board of the Company;
▪ has been a member of the Supervisory Board for more than 12 years;
▪
is affiliated with a not-for-profit entity that receives significant contributions from the
Company; or
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Corporate Governance Statement
▪ was a partner or employee of the Company’s outside auditor during the past three years (only
applicable to Supervisory Board members themselves).
Should the Supervisory Board come to the conclusion that a Supervisory Board member is independent
even though there are opposing criteria, the Supervisory Board will give reasons for this assessment
in the corporate governance statement. A membership of more than 12 years in the Supervisory Board
does not exclude independence as long as there are no further criteria for a missing independence.
Independence in the plenum and committees:
The Supervisory Board has determined the following requirements for the independence regarding
the composition of the plenum and the committees:
▪ At least four members of the Supervisory Board shall be independent from the Company and
its Management Board.
▪
Should the Company have a controlling shareholder, at least three members of the
Supervisory Board shall be independent from the controlling shareholder.
▪ No more than two Supervisory Board members shall be former members of the
Management Board.
▪ The Chairman of the Supervisory Board shall be independent from the Company and its
Management Board as well as from a controlling shareholder. The Chairman of the audit
committee shall not chair the Supervisory Board.
▪ The Chairman as well as the majority of the members of the Audit Committee shall be
independent from the Company and its Management Board and from a controlling
shareholder.
▪ The Chairman as well as the majority of the members of the Nomination and Remuneration
Committee shall be independent from the Company and its Management Board.
5.5.
Succession planning and annual elections to the Supervisory Board
alstria appoints Supervisory Board members using a structured process. The Supervisory Board submits
nominations to the Annual General Meeting for each vacant Supervisory Board position. The
Supervisory Board’s Nomination and Remuneration Committee then prepares these recommendations
for an election.
The Supervisory Board chooses the candidates whom it recommends to the Annual General Meeting
for an election as follows: Annually, the Supervisory Board assesses the effectiveness of its work –
every three years this is done by an external advisor – and checks the composition of the Supervisory
Board and whether the targets laid down in the Profile for the Supervisory Board are being met. The
Supervisory Board also checks whether the targets need to be adjusted in light of alstria’s situation
and circumstances, which might have evolved. Given such results, the Supervisory Board assesses in
the first place whether it would be appropriate to recommend to the Annual General Meeting to
reappoint the Supervisory Board member whose term of office will end with the next Annual General
Meeting. Otherwise, the Supervisory Board will search for external candidates for the vacant position
with the help of an external advisor and thereby strives to fulfil the Profile for the Supervisory Board.
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In its election proposals to the Annual General Meeting, the Supervisory Board discloses the personal
and business relationships of every candidate with the Company, the Management and
Supervisory Boards and any shareholders with a material interest in the Company. The election
proposals go along with a curriculum vitae, providing information on each candidate’s relevant
knowledge, skills and professional experience and an overview of the candidate’s material activities
in addition to the Supervisory Board mandate. The curricula vitae of all Supervisory Board members
are updated annually and published on the Company’s website.
The Supervisory Board agreed on recommending at the Annual General Meeting to elect Supervisory
Board members for a term of three years only - rather than for five years as permitted by law. Two
members of the Supervisory Board will have equal terms of office. As a result, the Annual General
Meeting of shareholders elects two members of the Supervisory Board each year and thus has the
opportunity to shape the composition of the Supervisory Board every year. In this way, the legitimacy
of the shareholder representatives on the Supervisory Board is annually renewed. The Annual General
Meeting of shareholders elects each member of the Supervisory Board individually. Where an
application is made for the appointment of a Supervisory Board member by a court, the term of that
member will be limited until the next Annual General Meeting.
5.6.
Status of implementation
In line with the appointment procedure described above, the Supervisory Board members Dr. Johannes
Conradi and Marianne Voigt were proposed for reelection at the Annual General Meeting of alstria
office REIT-AG in September 2020 and elected to the Supervisory Board for a further term of three
years. All the objectives set out in the Profile for the Supervisory Board have currently been
implemented, and the Profile is being fully completed by the full Supervisory Board in terms of the
set general requirements, overboarding rules, qualification and diversity, independence and conflicts
of interest.
The Supervisory Board considers the members Dr. Johannes Conradi and Richard Mully to be
independent despite their fourteen years of membership on the Supervisory Board of the Company.
They are particularly very familiar with the Company’s affairs, which enables them to use their
expertise for the benefit of the Company. The Supervisory Board also does not see any other criteria
that stand against independence. Neither of the two members has a significant business relationship
with the Company or any of its subsidiaries. Likewise, there are no family or other personal
relationships. The occasional advice given to the Company by the law firm Freshfields Bruckhaus
Deringer PartG mbB, of which Dr. Johannes Conradi is a partner, does not conflict with the
independence of Dr. Johannes Conradi, as the advice given in each case concerns nonessential matters
of the Company. Accordingly, the remuneration paid to Freshfields Bruckhaus Deringer PartG mbB in
the last three financial years was in total less than EUR 10 k. Furthermore, these mandates are
exclusively handled by other lawyers and not by Dr. Johannes Conradi. The Supervisory Board
therefore continues to regard both longstanding members as independent of the Company and the
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Corporate Governance Statement
Management Board, especially since both members have declared that they will not be available for
a further term of office after their terms expire (Richard Mully in 2022 and Johannes Conradi in 2023).
The following table illustrates the achievement of the independence target in the Supervisory Board
as of December 31, 2020:
Member1)
Term
of office
exceeding
12
years
Former
member of
alstria’s
Management
Board
Substantial
business
relationship
with alstria2)
Close relative
of a member
of alstria’s
Management
Board
Independent3)
Dr. Johannes Conradi (Chair)
Richard Mully (Vice Chair)
Dr. Bernhard Düttmann
Stefanie Frensch
Benoît Hérault
Marianne Voigt
yes
yes
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
no
yes
yes
yes
yes
yes
yes
1) With the exception of the term of office, the information relates in each case to the Supervisory Board member and his/her close relatives.
2) Currently or in the three years up to appointment; directly or as a shareholder or in a responsible function of a company outside the Group.
3) Of the Company, the Management Board and a controlling shareholder (in the opinion of the Supervisory Board).
The following table illustrates the achievement of targets in the area of overboarding as of
December 31, 2020. A Supervisory Board member should not permanently have more than five board
mandates (including the membership on alstria’s Supervisory Board). Supervisory Board mandates at
non-group listed companies in Germany and abroad and, due to size, internationality and complexity,
comparable functions at non-listed companies are considered, with a supervisory board chair counting
as two mandates; management board mandates at non-group listed companies in Germany and abroad
are couting as three mandates:
Overboarded
no
no
no
no
no
no
Member
Management board mandates
Supervisory board mandates
Dr Johannes Conradi
(Chair)
Richard Mully (Vice Chair)
2
3
alstria office REIT-AG
(chairman)
alstria office REIT-AG (member)
Dr Bernhard Düttmann
3
CECONOMY AG (CEO)
Great Portland Estates plc, UK
(non-executive chairman)
1 alstria office REIT-AG (member)
Total count of
mandates
2/5
3/5
4/5
Stefanie Frensch
1 alstria office REIT-AG (member)
1/5
Benoît Hérault
3
Elaia Investment Spain
SOCIMI, S.A.
(CEO) (Batipart Group)
1 alstria office REIT-AG (member)
4/5
Marianne Voigt
1 alstria office REIT-AG (member)
1/5
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Corporate Governance Statement
The following table illustrates the knowledge and experience of the single members of the Supervisory
Board relevant to their work on the Supervisory Board as of December 31, 2020:
Member
Nationa-
lity
Industry
background
Real estate
sector
Office
real estate
Inter-
national
back-
ground
German
back-
ground
Financial
expert
Experience
as
management
board
member
Dr. Johannes Conradi (Chair)
German
Law
Richard Mully (Vice Chair)
British
Finance
Dr. Bernhard Düttmann
Stefanie Frensch
Benoît Hérault
Marianne Voigt
German
German
French
German
Consumer
Chemistry
Consulting
Management
Law
Finance
Controlling/
Finance, IT,
Management
1) As CEO of a non-group, listed company.
II. WOMEN IN LEADING POSITIONS
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X1)
X
X1)
X
X
X
X
X
Employees and their development within the Company are of central importance for society to
achieve sustainable success. When filling management positions
in the Company, the
Management Board strives for a high level of diversity among employees and a high proportion of
female managers. The Management Board determined a target figure of at least 30 % for the
proportion of women in the first management level below the Management Board (Head of
Departments) in accordance with Section 76 para. 4 AktG. This target figure has been achieved with
36,4 % as of December 31, 2020 and will apply until December 31, 2021. Due to the lack of an
additional management level with decision-making competence and budget responsibility, there was
no need to determine a target figure for women’s participation at the second management level.
The Supervisory Board set a target figure of at least 30 % for the proportion of women on the
Supervisory Board. This target was reached at 33.3 % as of December 31, 2020 and will apply until
December 31, 2024. The target for the proportion of women on the Management Board was previously
0 % in view of the terms of office of the two Management Board members, which run until December
31, 2022. In December 2020, the Supervisory Board resolved to raise the target for the proportion of
women on the Management Board to at least 30 %. This target was not reached as of
December 31, 2020 and will apply until December 31, 2024.
III. GERMAN CORPORATE GOVERNANCE CODE
The recommendations and suggestions of the Government Commission, as appointed by the
German Federal Ministry of Justice, contain internationally and nationally accepted standards of good
and responsible corporate governance. Our declarations of compliance with the recommendations of
the German Corporate Governance Code pursuant to Section 161 AktG are published on the Company’s
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Corporate Governance Statement
website (www.alstria.com). alstria complied and complies with the recommendations of the
German Corporate Governance Code with the few exceptions stated in the declaration of compliance.
These exceptions and the reasons for the Company’s nonconformity are set out in the declaration of
compliance, as last issued by the Management Board and the Supervisory Board on December 3, 2020:
Declaration of compliance, dated December 3, 2020
“I.
alstria office REIT-AG (“Company”) has - apart from the exceptions stated below - complied
with the recommendations of the ‘Government Commission German Corporate Governance
Code’ in the version as amended on December 16, 2019 since they entered into force on
March 20, 2020 (“GCGC 2020”) with the following exceptions. The Company intends to
comply with the recommendations of the GCGC 2020 in future, with the exceptions stated
below:
Publication of rules of procedure for the Supervisory Board, D.1 GCGC 2020
The rules of procedure for the Supervisory Board of alstria office REIT-AG are currently
being revised and adapted to the current regulatory framework. After completion of the
revision, the rules of procedure for the Supervisory Board will be published on the Company
website.
Remuneration of the Management Board
Compared to the previous version, Section G.I. of the GCGC 2020 contains new
recommendations on the remuneration of the Management Board. The Company’s
Management Board remuneration system, which was approved by the Annual General Meeting
of alstria office REIT-AG on May 16, 2017, complies largely, but not fully with these new
recommendations. Currently, the Management Board compensation system is being revised
and adapted to the new regulatory requirements. The requirements of the GCGC 2020 are
also being considered. The adjusted remuneration system for the Management Board is to be
presented to the Annual General Meeting of the Company in financial year 2021 for approval.
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Determination of a maximum compensation, G.1 GCGC 2020
Although the remuneration system for the Management Board specifies the maximum amounts
for the remuneration, this does not yet include fringe benefits for Company cars, insurance
and pension benefits. As part of the revision of the remuneration system for the Management
Board, a maximum remuneration is to be determined which includes any and all fringe
benefits.
Change of performance targets for elements of variable remuneration, G.8 GCGC 2020
The short-term incentive remuneration element of the Management Board is mainly based on
the achievement of a funds from operations per share (“FFO per share”) target. In the event
that the achieved FFO per share in a financial year is impacted by real estate acquisitions and
disposals, the Supervisory Board adjusts the FFO per share target accordingly. In doing so, the
Supervisory Board ensures the Management Board is not incentivized to enter into acquisitions
by means of achieving personal short-term benefits. The impact of any real estate transaction
on the management remuneration is solely linked to multi-year remuneration elements,
therefore aligning the interest of the Management Board with those of the Company and its
shareholders. Furthermore, the FFO per share target is being adjusted to changes in the
Company’s share capital carried out in the relevant financial year.
Possibility to retain or reclaim variable compensation, G.11 GCGC
The current remuneration system for the Management Board provides for a possibility for the
Supervisory Board to reduce variable remuneration components by 30 %; it does, however,
not provide for a possibility to entirely retain or reclaim variable remuneration components.
As part of the current revision of the Management Board compensation system, the
introduction of such possibilities is being examined and considered.
II.
Since the prior declaration of compliance, dated December 5, 2019, until the GCGC 2020
entered into force on March 20, 2020 the Company has - apart from the exceptions stated
below - complied with the recommendations of the ‘Government Commission German
Corporate Governance Code’ in the version as amended on February 7, 2017 (“GCGC 2017”)
with the following exceptions:
Deductible for D&O insurance for the Supervisory Board, Section 3.8 GCGC 2017
The D&O insurance for the alstria office REIT-AG Supervisory Board does not comprise a
deductible. The Supervisory Board believes its members will carry out their duties
responsibly irrespective of any such deductible.
Change of performance targets for elements of variable remuneration, Section 4.2.3
GCGC 2017
The short-term incentive remuneration element of the Management Board is mainly based on
the achievement of an FFO per share target. In the event that the achieved FFO per share in
a financial year is impacted by real estate acquisitions and disposals, the Supervisory Board
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Corporate Governance Statement
adjusts the FFO per share target accordingly. In doing so, the Supervisory Board ensures the
Management Board is not incentivized to enter into acquisitions by means of achieving
personal short-term benefits. The impact of any real estate transaction on the management
remuneration is solely linked to multi-year remuneration elements, therefore aligning the
interest of the Management Board with those of the Company and its shareholders.
Furthermore, the FFO per share target is being adjusted to changes in the Company’s share
capital carried out in the relevant financial year.
Determination of a level of benefits for the private pension plan, Section 4.2.3 GCGC 2017
As the Company has opted for a defined contribution model for the private pension plan of
the Management Board members for reasons of transparency and risk management, the
Supervisory Board has not fixed a level of benefits for the private pension plan of the
Management Board members. The Supervisory Board believes it is in the best interest of the
Company to have a defined contribution model rather than a defined benefit model, as the
defined contribution does not create any unforeseen future liability for the Company.
Discussion of the financial reports by the Supervisory Board or its Audit Committee and
the Management Board prior to their publication, Section 7.1.2 GCGC 2017
The quarterly interim statements are made available to the Supervisory Board prior to their
publication and are discussed with the Supervisory Board in detail soon after publication. In
the event of considerable differences to the budget or business plan as approved by the
Supervisory Board, the Supervisory Board is given the opportunity to discuss the figures with
the Management Board before they are published. Half-year financial reports are discussed
with the Audit Committee of the Supervisory Board prior to publication. The Management
Board and Supervisory Board consider this approach appropriate and adequate.”
IV. CORPORATE MANAGEMENT PRACTICES
To achieve a value-oriented and trust-building corporate management, alstria applies management
practices that go beyond the legal requirements.
1. CORPORATE GOVERNANCE
In managing the Company, the Management Board and Supervisory Board of alstria are aware of their
responsibility towards the shareholders, employees, tenants and business partners of alstria. Good
corporate governance strengthens the trust of our stakeholders and is therefore the basis for our
decision-making and control processes. It stands for a responsible, value and long-term success-driven
governance and control of the Company, a targeted and efficient cooperation between the
Management Board and the Supervisory Board, respect for the interests of our shareholders and
employees, transparency and responsibility in all entrepreneurial decisions as well as an appropriate
risk management.
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Corporate Governance Statement
alstria has implemented large parts of the recommendations and suggestions of the German Corporate
Governance Code and thus goes beyond the legal requirements. At least once a year and whenever
necessary, a corporate governance officer in the Company reports to the Management Board and the
Supervisory Board any changes to the German Corporate Governance Code. alstria thus ensures that
these principles are observed throughout the Company.
2.
INTEGRITY AND COMPLIANCE
Behavior with integrity is one of alstria’s most important principles. The trust of shareholders, tenants,
employees and business partners depends crucially on the conduct of each individual. The Company’s
Management Board has therefore implemented a compliance management system geared towards the
risk situation of the Company, to ensure compliance with legal requirements and internal guidelines,
and it also sets standards for fair treatment of business partners, competitors and employees.
A code of conduct for employees sets our principles of conduct, provides guidance in conflict
situations (e.g., a conflict of interest) and thus serves as a model and orientation for correct behavior
for all employees of the company. The code of conduct is published on the alstria website. The
Compliance Officer is responsible for communicating these values to the employees by in-house
training for all employees and by answering questions on the code of conduct’s implementation of
the as well as internal guidelines. Compliance with the code of conduct is monitored by colleagues,
superiors and the Compliance Officer, as well as by regular reviews by an auditor. Employees are
given the opportunity to report violations within the Company via various reporting channels. alstria
has also set up a telephone hotline at a law firm where employees can anonymously report violations
of the code of conduct or the Company’s internal guidelines. In addition, the Management Board
regularly discusses the Company’s compliance with the Audit Committee of the Supervisory Board.
Violations of the code of conduct will not be tolerated and will be fully investigated and sanctioned.
These may include disciplinary measures up to and including termination of employment, the assertion
of a claim for damages and criminal charges.
Integrity is also an essential condition for building trusting partnerships and cooperation with our
business partners. For this reason, alstria has introduced a code of conduct for its service providers,
craftsmen, suppliers and business partners, which describes fundamental legal and ethical
requirements. This code of conduct for service providers is published on the website of alstria and
defines the Company’s expectations of integrity and compliant behavior of its business partners.
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Corporate Governance Statement
3. COMMUNICATION AND TRANSPARENCY
Transparent corporate governance and good communication with the shareholders and the public help
to strengthen the confidence of investors and the public in alstria’s work.
3.1.
Relationship to the shareholders
alstria respects the rights of its shareholders and guarantees to the best of its ability to exercise these
rights within the legal and statutory framework. These rights include, in particular, the free
acquisition and free sale of shares, participation in the Annual General Meeting, adequate satisfaction
of the need for information and adequately distributed voting rights per share (one share - one vote).
Shareholders have the option of exercising their voting rights at the Annual General Meeting in person
or through a proxy of their choice or a company-appointed proxy that is bound by instructions. The
invitation to the Annual General Meeting explains how instructions for exercising voting rights can be
issued. The documents convening the Annual General Meeting can also be sent electronically at the
request of the shareholder. The convening notice and the documents to be made available for
inspection in accordance with the statutory provisions will be published on alstria’s website together
with the agenda and the additional documents pursuant to Section 124a AktG. The Annual General
Meeting of alstria office REIT-AG is usually chaired by the Chairman of the Supervisory Board, who
aims to hold the Annual General Meeting within a time window of no more than four to six hours.
Following the Annual General Meeting, the voting results will be announced on alstria’s website.
3.2.
Communication with the public
When sharing information with persons outside the Company, the Management Board follows the
principles of transparency, promptitude, comprehensibility and equal treatment of shareholders.
alstria informs its shareholders and the interested public about the Company’s situation, significant
business events, and changes in the business outlook and risk situation in particular through financial
reports, analyst and press conferences, press and ad-hoc announcements and the Annual General
Meeting. The alstria website provides comprehensive information about the Company, its shares and
other financial instruments and the share price development, as well as notifications of directors’
dealings in accordance with Article 19 of the Market Abuse Regulation (Regulation (EC) No. 596/2014
of the European Parliament and the Council) (Directors’ Dealings). Furthermore, alstria publishes a
financial calendar in its financial reports and on its website, listing all dates of importance to
shareholders. The notices and information are additionally published in English.
178
alstria Annual Report 2020
Corporate Governance Statement
3.3.
Financial reporting
alstria regularly informs shareholders and third parties during each financial year by means of the
consolidated and half-year financial statements, as well as quarterly interim statements. The
accounting of the alstria Group is based on International Financial Reporting Standards (IFRS) as
applied in the European Union. For corporate law purposes (calculation of dividends, creditor
protection), financial statements for alstria office REIT-AG are prepared in accordance with the
national commercial law (HGB).
The Annual General Meeting appoints an independent auditor for alstria office REIT-AG and the Group
as well as for the audit review of the interim financial reports. Following the election by the
Annual General Meeting, the Audit Committee of the Supervisory Board awards the mandate for the
audit of the financial statements and agrees on the fee with the auditor. It is agreed with the auditors
that the auditors will inform the Audit Committee without delay of all findings and events of significance
for their duties which come to their attention during the performance of the audit. In the event that
the auditor, during the performance of the audit, discovers facts that indicate that the declaration of
compliance with the German Corporate Governance Code issued by the Management Board and
Supervisory Board in accordance with Section 161 AktG is incorrect, an obligation to provide information
and disclosure in the audit report is agreed upon.
The auditor participates in the deliberations of the Audit Committee and the full Supervisory Board to
discuss the financial statements of alstria office REIT-AG and the consolidated financial statements of
the Group. The auditor also participates in the meeting of the Audit Committee to discuss the half-year
financial report. In the meetings, the auditor presents the main results of the respective audit. KPMG
AG Wirtschaftsprüfungsgesellschaft, Hamburg, was appointed to audit the annual financial statements
of alstria office REIT-AG and of the Group for the 2020 financial year and for further interim financial
reports until the next ordinary general meeting in 2021. Since the 2018 financial year, René Drotleff has
been the auditor directly responsible for auditing the financial statements of alstria office REIT-AG and
the Group.
alstria Annual Report 2020
179
Corporate Governance Statement
4. SUSTAINABILITY
alstria’s sustainability approach is based on a three-pillar model and considers the effects of business
activities in the areas of economy, ecology and social issues. As a commercial organization, alstria’s
main objective is to increase the value of the Company on a sustainable basis. It strives to generate
the best possible return on its capital in the long-term. alstria’s sustainability approach is not
exclusively focused on the environment, as the economic and social impacts of its activities are also
taken into account. The Company weighs the risk–benefit of all three areas before making any
decisions and adapts its actions to what it feels is the most viable course of action in each case. The
result of this approach is that alstria might not always make decisions that maximize its short-term
profit, but strives to follow the path that will produce the best long-term prospects for the Company.
alstria’s sustainability approach and performance in the three sustainability areas, as well as its future
goals, are described in detail in the Company’s annual sustainability report, which is available on
alstria’s website.
February 2021
The Management Board
The Supervisory Board
180
alstria Annual Report 2020
Remuneration Report
G. REMUNERATION REPORT
The remuneration report of alstria office REIT-AG explains the main elements of the compensation of
the Company’s Management Board and Supervisory Board members. It describes the amount and
structure of the remuneration. The remuneration report contains the information required by the
relevant statutory provisions. The remuneration report is an integral part of the audited combined
management report for alstria office REIT-AG as of December 31, 2020.
I. REMUNERATION OF MANAGEMENT BOARD MEMBERS
The remuneration system for Management Board members is decided by the Supervisory Board and
reviewed regularly. The Supervisory Board is supported in this by the Nomination and Remuneration
Committee formed from among its members. The Supervisory Board last adjusted the remuneration
system with changes effective January 1, 2018. An external, independent compensation expert assisted
in this adjustment process. The Annual General Meeting of alstria office REIT-AG on May 16, 2017,
approved the current Management Board remuneration system.
The Supervisory Board is currently adjusting the remuneration system for the Management Board
members to comply with new legal requirements, recommendations of the German Corporate
Governance Code and investors’ expectations. The updated remuneration system will be submitted for
approval to the Annual General Meeting of alstria office REIT-AG in financial year 2021.
The remuneration system is designed to motivate the members of the Management Board to create
sustainable, long-term value and to allow them to participate in the economic and financial success of
the Company according to their tasks and performance, taking into account the comparative
environment. In doing so, the board members’ interests should be reconciled with the interests of the
shareholders to the greatest extent possible.
The Supervisory Board set the amount of the total remuneration of Management Board members, taking
particular account of a horizontal comparison with the remuneration of the Management Board
members of other MDAX companies and comparable real estate companies. In addition, the Supervisory
Board conducts annual assessments of the results of a vertical comparison of Management Board
remuneration with the total remuneration of the senior management and all employees of the Company
and of the development over time. When determining the variable remuneration components, the
Supervisory Board sets target amounts and performance targets; the respective maximum amounts of
each variable remuneration element are calculated based on the maximum amounts for target
achievement or payment defined in the respective Management Board service agreements.
alstria Annual Report 2020
181
The following abbreviations are used in this remuneration report:
Remuneration Report
Glossary
FFO
LTI
STI
TSR
Funds From Operations
Long-term incentive
Short-term incentive
Total shareholder return
1. REMUNERATION IN THE 2020 FINANCIAL YEAR
The total target remuneration for the members of the Management Board in the last financial year
amounted to EUR 2,236 k. The total amount of cash payments made Management Board members in
the last financial year (including multi-year remuneration elements) was EUR 4,043 k. An external,
independent remuneration expert verified the accuracy of the calculation of the payment amounts for
the variable remuneration elements.
1.1.
Benefits granted
In addition to fixed compensation, board members received variable remuneration components in the
2020 financial year, the target values of which are listed in the table below. Hypothetical minimum
and maximum amounts for later payment of the variable remuneration components are also listed:
Olivier Elamine
CEO
Alexander Dexne
CFO
in EUR k
(min.)
(max.)
(min.)
(max.)
2019
2020
2020
2020
2019
2020
2020
2020
Total amount of
fixed compensation and
ancillary benefits
Fixed compensation1)
Ancillary benefits2)
Total amount of one-year
variable compensation
STI 2019
STI 2020
Total amount of multi-year
variable compensation
LTI 2019/2023
LTI 2020/2024
Total amount of fixed and
variable compensation
Service costs5)
Total
456
440
16
231
231
456
440
16
231
−
−
231
440
440
440
−
−
440
456
440
16
0
−
0
0
−
0
456
440
16
347
−
3473)
1,100
−
380
360
20
189
189
−
360
360
379
360
19
189
−
189
360
−
1.1004)
−
360
379
360
19
0
−
0
0
−
0
379
360
19
284
−
2843)
900
−
9004)
1,127
1,127
102
99
1,229
1,226
456
99
555
1,903
99
929
84
928
82
2,002
1,013
1,010
379
82
461
1,563
82
1,645
1) Annual fixed salary according to the employment contract.
2) Benefits for company cars.
3) Maximum achievable payout for the STI: target value STI x 1.5.
4) Maximum achievable payout for the LTI after a 4-year holding period: LTI target value x 2.5. Payout in alstria shares foreseen.
5) Insurance and pension benefits.
182
alstria Annual Report 2020
1.2.
Benefits paid out
Remuneration Report
This table shows the amounts paid to the members of the Management Board in the 2020 financial year
as part of the variable remuneration components:
Olivier Elamine
Alexander Dexne
CEO
CFO
2019
2020
2019
2020
456
440
16
249
249
−
818
70
−
748
−
1,523
102
456
440
16
308
−
308
1,357
−
83
−
1,274
2,121
99
380
360
20
204
204
−
670
58
−
612
−
1,254
84
379
360
19
252
-
252
1,110
−
68
−
1,042
1,741
82
1,625
2,220
1,338
1,823
in EUR k
Total amount of fixed compensation and ancillary benefits
Fixed compensation1)
Ancillary benefits2)
Total amount of one-year variable compensation
STI 2018
STI 2019
Total amount of multi-year variable compensation
STI 2016 (deferral)3)
STI 2017 (deferral)3)
LTI 2015/20194)
LTI 2016/20204)
Total amount of fixed and variable compensation
Service costs5)
Total
1) Annual base salary according to service contracts.
2) Benefits for company cars.
3) Payout amount for 25 % of the STI after 3 years.
4) Payout amount for LTI after holding period of 4 years.
5) Insurance and pension benefits.
Variable remuneration paid to both Management Board members in the 2019 and 2020 financial years
was based on the following achievement of performance targets:
Variable element
Performance target
Target achievement
STI 2018
STI 2019
FFO per share
FFO per share
LTI 2015/2019
Absolute TSR
Relative TSR
LTI 2016/2020
Absolute TSR
Relative TSR
108 %
103 %
119 %
134 %
150 %
150 %
No services were granted or rendered by third parties to individual members of the Management Board
in the 2020 financial year for activities related to their service as members of the Management Board.
alstria Annual Report 2020
183
1.3.
CEO Pay Ratio
Remuneration Report
The ratio between the total amount of fixed and variable compensation granted to the CEO in relation
to the median fixed and variable compensation granted to all alstria employees in financial year 2020,
excluding insurance and pension benefits from both, (CEO Pay Ratio) was 18:1*.
2. REMUNERATION SYSTEM
The remuneration system for the Management Board, as applicable since financial year 2018, is
predominantly performance-related and is designed to promote sustainable corporate development.
The structure of total target remuneration is similar for the CEO and the CFO.
Simplified and summarizing representation of the information given in the text.
Remuneration for each Management Board member consists of a fixed basic remuneration, short-term
and long-term variable remuneration elements and ancillary benefits (benefits in kind). The majority
of the remuneration is made up of variable remuneration components, which in turn mainly have a
multi-year, future-oriented basis for assessment. In addition, share ownership guidelines apply, which
govern how much of their remuneration each member of the board must invest in shares of the
Company.
The appropriate amount of remuneration for each Management Board member is based on that
member’s personal performance, the economic situation and the success, future prospects and
* The method for calculating the CEO pay ratio changed compared to financial year 2019 and is now in line with the calculation method used for
the sustainability report.
184
alstria Annual Report 2020
Remuneration Report
sustainable development of the Company, as well as the appropriateness of the remuneration within
the comparative environment relative to the applicable remuneration structure in the Company.
In the event of termination of the employment relationship, Management Board members have agreed
to a six-month post-contractual non-competition clause, which alstria may waive at its discretion. As
remuneration, the members receive a severance payment equivalent to their fixed salary for the
duration of the post-contractual non-competition period. In the event of premature termination of the
Management Board service agreement by mutual consent, members of the Management Board receive
their compensation claims for the remaining term of their service agreement; the amount is limited to
a maximum of two annual salaries. The same applies in the event of a termination of the Management
Board appointment by the Company for which the Management Board member is not responsible, e.g.
within six months after a change of control. Payments made by the Company in the event of termination
of employment by death comprise the fixed remuneration for the month of death and the following
three months. In this case, variable remuneration is paid pro rata temporis up to and including the
month of death.
alstria Annual Report 2020
185
2.1. Overview of Management Board compensation elements
Remuneration Report
Annual base salary paid out on a monthly basis
Amounts to approx. 40 % of the total target compensation
Fixed compensation
STI
LTI
n
o
i
t
a
s
n
e
p
m
o
c
e
l
b
a
i
r
a
V
▪
▪
Type
Share
Performance period
Target
Payout
Type
Share
Performance period
Target
Payout
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
Short-term variable remuneration
Amounts to approx. 20 % of the total target compensation
1 year
FFO per share as performance target (corridor for
performance target achievement 70 % to 130 %)
Multiplier for individual performance: 0.7−1.3
Payout 0 % - 150 % of target amount in cash
Long-term variable remuneration
Stock awards
Amounts to approx. 40 % of the total target compensation
At least 4 years
Performance subject to absolute TSR (25 %) and relative TSR
(FTSE EPRA/ NAREIT Developed Europe Index) (75 %)
Multiplier for individual performance: 0.7−1.3
0 % - 250 % of target amount in shares (or cash, if no shares
available)
Share ownership
guidelines
Ancillary benefits
▪
▪
▪
▪
▪
▪
Obligation to acquire shares of the Company
Volume: 3 times fixed annual remuneration
Holding period until end of office
Insurance premiums
Private use of company car
Monthly cash amount for pension benefits
2.2.
Variable remuneration elements
2.2.1. Short-Term Incentive Plan
Members of the Management Board receive short-term variable remuneration elements (STI) each
financial year, with target values measured in euros. The budgeted funds from operations per share
(FFO per share) value serves as the performance target. The amount of the STI depends on the degree
of target achievement, i.e. the ratio of the FFO per share actually achieved during the financial year
to the budgeted FFO per share. For a payout to occur, at least 70 % of the performance target value
must be achieved (Threshold Value). A maximum of 130 % of the performance target value can be
achieved (Cap).
186
alstria Annual Report 2020
Remuneration Report
Simplified and summarizing representation of the information given in the text.
The payout value achieved is adjusted, i.e. multiplied by a multiplier between 0.7 and 1.3, at the
discretion of the Supervisory Board This enables the Supervisory Board to take into account the
personal performance of the Management Board member in addition to the achievement of targets.
Criteria for this can include the individual performance of the Management Board member in the
relevant financial year as well as his tasks and responsibilities within the alstria group. Overall, the
STI is limited to 150 % of the respective target value (Cap) and is paid out in full in cash.
Functionality of the STI Plan1:
1) Simplified and summarizing representation of the information given in the text.
alstria Annual Report 2020
187
Remuneration Report
2.2.2. Long-Term Incentive Plan
Each financial year, members of the Management Board may be granted long-term variable
remuneration element (LTI), with a target value in euros to be determined by the Supervisory Board.
LTI is weighted substantially higher than STI. Long-term variable remuneration exceeds short-term
variable remuneration. The Long-Term Incentive Plan provides for stock awards, which are converted
into shares of the Company after a minimum four-year holding period. Performance targets are 25 %
absolute and 75 % relative TSR. The FTSE EPRA/NAREIT Developed Europe Index is used as a
benchmark for relative TSR. The individual performance of the Management Board member is
accounted for using a multiplier between 0.7 and 1.3. Thereby, non-financial performance criteria
are also taken into account.
The number of stock awards to be granted is based on a target value defined at the discretion of the
Supervisory Board and measured in euros divided by the arithmetic mean of the alstria share price
(commercially rounded to two decimal places) during the 60 trading days prior to the grant date.
Board members must hold the stock awards granted for a period of at least four years from the grant
date. After this holding period, the number of stock awards held is adjusted depending on the
performance of alstria's share during the holding period. The performance targets are set by the
Supervisory Board as follows: 25 % of the absolute TSR, which is derived from the weighted average
cost of capital (WACC), and 75 % of the relative TSR, which is measured based on the TSR relative to
the FTSE EPRA/NAREIT Developed Europe reference index.
Simplified and summarizing representation of the information given in the text.
Furthermore, as with STI, the individual performance of the Management Board member during the
holding period is accounted for by means of a multiplier, which can from 0.7 to 1.3 and is determined
at the discretion of the Supervisory Board. Criteria may include the individual performance of the
Management Board member during the holding period and his tasks and responsibilities within the
alstria group. This enables factors beyond the achievement of the set performance targets to be
taken into account. Stock awards achieved after the adjustment (taking performance into account)
are multiplied by the multiplier to determine the number of alstria shares to be delivered. In
addition, dividends accumulated during the holding period for the alstria shares are taken into
account: the sum of the dividends accrued during the holding period is divided by the arithmetic
mean of the alstria share price (commercially rounded to two decimal places) during the 60 trading
days prior to the payment date. Stock awards determined in this way are converted into alstria shares
188
alstria Annual Report 2020
Remuneration Report
at a ratio of 1:1, which the Management Board member then receives. In addition, the Long-Term
Incentive Plan also has a cap (250 % of the target value measured in euros).
If the Company is unable to deliver the shares, payment will be made in cash, calculated from the
number of shares to be delivered multiplied by the arithmetic mean of the alstria share price,
commercially rounded to two decimal places, during the 60 trading days prior to the payment date.
Functionality of the LTI Plan:
Simplified and summarizing representation of the information given in the text.
2.3.
Share Ownership Guidelines
Members of the Management Board have undertaken to build a stock portfolio equivalent to three
years' fixed annual salaries over a period of five years starting in the 2018 financial year, which they
will hold until they leave office. As an interim target, Management Board members agreed to have
invested 2/3 of their full obligation within three years. The Share Ownership Guidelines are binding
for the members of the Management Board as long as they are being granted stock awards according
to the Company’s Long-Term Incentive Plan with a target value at least equal to their fixed
remuneration on an annual basis. The Share Ownership Guidelines aim, in particular, to align the
interests of the board members with those of the shareholders and thus promote sustainable
entrepreneurial action. At the end of the reporting period, all Management Board members had
fulfilled their obligation to purchase shares.
Investment
obligation
in EUR1)
Relevant
share price
in EUR2)
Obligation until
Dec. 31, 2022
in shares
Obligation until
Dec. 31, 2020
in shares
Ownership on
Dec. 31, 2020
in shares
Ownership on
Dec. 31, 2020
in EUR3)
1,320,000
1,080,000
12.49
12.49
105,685
86,469
70,457
57,646
129,699
1,919,545
82,453
1,220,304
Olivier
Elamine
Alexander
Dexne
1) Three times gross annual remuneration.
2) Average share price prior to January 1, 2018 (start of term of office).
3) Based on XETRA final share price of EUR 14.80 on December 30, 2020.
alstria Annual Report 2020
189
2.4.
Ancillary benefits
Remuneration Report
Members of the Management Board also receive benefits in kind; these mainly consist of insurance
premiums and the private use of company cars. As a remuneration component, these ancillary
benefits are taxable. In principle, all Management Board members are equally entitled to them,
while the amount of use varies depending on their personal situations. In addition, the Company
grants the members of the Management Board monthly cash payments for pension purposes. These
pension benefits amount to approximately 20 % of the members’ annual fixed salaries. For reasons
of transparency and risk management, the Company has chosen a defined model for contribution to
the members’ private pension plans. There are no unforeseen future liabilities for the Company for
pension claims.
II. REMUNERATION OF SUPERVISORY BOARD MEMBERS
The remuneration system for the members of the Supervisory Board is approved by the Annual
General Meeting. The Annual General Meeting last adjusted the remuneration system with changes
effective January 1, 2018.
1. REMUNERATION IN THE 2020 FINANCIAL YEAR
Total remuneration for the supervisory board members in 2020 amounted to EUR 525 k.
in EUR k
Supervisory Board
member
Dr Johannes Conradi
(Chair)
Richard Mully (Vice-
Chair)
−
−
−
−
Dr Bernhard Düttmann
Member
Stefanie Frensch
−
Member
Benoît Hérault
Member
Member
Marianne Voigt
Chair
−
Total
Audit
Committee
Nomination &
Remuneration
Committee
Finance &
Investment
Committee
ESG
Committee
Remuneration
for 2019
Remuneration
for 2020
Chair
−
Chair
165.00
165.00
Chair
Member
Member
Member
−
−
−
−
−
Member
92.92
64.60
65.00
67.52
70.00
90.00
67.50
65.00
67.50
70.00
525.04
525.00
190
alstria Annual Report 2020
2. REMUNERATION SYSTEM
Remuneration Report
Members of the Supervisory Board each receive an annual fixed remuneration of EUR 50 k. The chair
of the Supervisory Board receives an additional annual amount of EUR 100 k; the vice-chair receives
an additional amount of EUR 25 k.
Membership in the Audit Committee entitles a member to an additional remuneration of EUR 10 k,
while the chair of the Audit Committee receives EUR 20 k per year. Membership in the Nomination
and Remuneration Committee or Finance and Investment Committee entitle a member to an additional
annual remuneration of EUR 7.5 k. The chairpersons of these committees are compensated another
EUR 7.5 k per year. Membership in the Corporate Social Responsibility Committee and in temporary
committees does not entitle a member to additional remuneration. Members who sit on the Supervisory
Board for only part of a year receive pro rata temporis remuneration.
Simplified and summarizing representation of the information given in the text.
Self-commitment to acquire shares
The members of the Supervisory Board have agreed upon and entered into a binding commitment to
acquire shares of alstria office REIT-AG for an amount corresponding to the adjusted fixed annual
remuneration for their activity as members, chair, or vice-chair of the Supervisory Board (without
committees and before taxes) and declared that they will hold them for the duration of their
membership in the Company’s Supervisory Board (Self-Commitment). The Self-Commitment must be
fulfilled within four years, beginning January 1, 2018. At the end of the reporting period, all Supervisory
Board members had fulfilled their obligation to purchase shares.
By means of this Self-Commitment, the members of the Supervisory Board intend to adhere to the
guiding principles of the Share Ownership Guidelines introduced for the members of the Management
Board and to declare their sustained commitment to the Company.
Dr Johannes Conradi
Richard Mully
Dr Bernhard Düttmann
Stefanie Frensch
Benoît Hérault
Marianne Voigt
Investment commitment until
December 31, 2021
in EUR
Commitment
fulfilled
Share ownership on
December 31, 2020
in shares
150,000
75,000
50,000
50,000
50,000
50,000
yes
yes
yes
yes
yes
yes
50,000
15,000
5,350
5,370
6,500
5,600
alstria Annual Report 2020
191
REIT Disclosures
H. REIT DISCLOSURES
I. REIT DECLARATION
Statement of the management board
In relation to the financial statements according to Section 264 of the German Commercial Code
(Handelsgesetzbuch, HGB) and the IFRS consolidated financial statements according to Section 315e
HGB as per December 31, 2020, the Management Board issues the following declaration regarding
compliance with the requirements of Sections 11 to 15 of the REIT Act (German Real Estate Investment
Trust Act) and regarding how the composition of income subject to and not subject to income tax is
calculated for the purposes of Section 19 paragraph 3 REIT Act, in conjunction with Section 19a
REIT Act:
1. As per balance sheet date, to our knowledge, 76.30 % of alstria’s shares were free float according
to Section 11 paragraph 1 REIT Act. This was communicated in writing to the German Federal
Financial Supervisory Authority (BaFin) on January 15, 2021.
2. In accordance with Section 11 Paragraph 4 REIT Act, as per balance sheet date, no shareholder
directly owned 10 % or more of our shares or shares of such an amount that he or she held 10 %
or more of the voting rights.
3. In relation to the sum of the assets pursuant to the consolidated statements less the distribution
obligation and the reserves pursuant to Section 12 paragraph 2 REIT Act
a) As per the balance sheet date, the immovable assets amounted to EUR 4,574,112 k, which
equals 89.86 % of the assets; therefore, at least 75 % of the assets are immovable assets.
b) The assets belonging to the property of REIT service companies as per balance sheet date which
were included in the consolidated statements amount to a maximum of 20 %, namely
EUR 1,382 k and therefore 0.03 %.
4. In relation to the sum of the entire sales revenue plus the other earnings from immovable assets
pursuant to the IFRS consolidated financial statements (Section 12 paragraph 3 and 4 REIT Act)
a) For the financial year 2020, the entire sales revenues plus other earnings from immovable assets
amounted to EUR 285.3 million. This equals 100 % of total revenues plus other earnings from
immovable assets;
b) The sum of the sales revenue plus the other earnings from immovable assets of the REIT service
companies amounted to EUR 104 k in the financial year 2020. This equals 0.04 % of the Group’s
total revenue plus other earnings from immovable assets.
192
alstria Annual Report 2020
REIT Disclosures
5. In financial year 2020, a dividend payment of EUR 94,125 k for the prior financial year was
distributed to the shareholders. Financial year 2019 resulted in a net gain amounting to
EUR 42,318 k, according to commercial law, pursuant to Section 275 HGB.
6. alstria office REIT-AG’s dividend is not derived from already taxed parts of the annual profit.
7. Since 2016, the Group has realised 23.59 % of the average portfolio of its immovable assets and
therefore did not trade with real estate, according to Section 14 REIT Act.
8. On the balance sheet date, the Group’s equity was EUR 3,252.4 million, as shown in the IFRS
Consolidated Financial Statements. This equals 71.11 % of the value of the immovable assets shown
in the consolidated financial statements, in accordance with Section 12 paragraph 1 REIT Act
(Section 15 REIT Act).
Hamburg, February 19, 2021
alstria office REIT-AG
Olivier Elamine
CEO
Alexander Dexne
CFO
alstria Annual Report 2020
193
REIT Disclosures
II. REIT MEMORANDUM
Auditor’s memorandum according Section 1 (4) REIT Act
To auditor of the annual financial statements and the consolidated financial statements of alstria
office REIT-AG, Hamburg, for the financial year from January 1 to December 31, 2020, we have
audited the information given in the attached declaration of the management board members for the
compliance with the requirements of section 11 to 15 of the REIT Act and the composition of the
proceeds concerning the pretaxation of proceeds according to section 19 (3) and section 19a REIT Act
as of December 31, 2020 (hereinafter referred to as “REIT declaration”). The information given in the
REIT declaration is in the responsibility of the management board of the Company. Our responsibility
is to express an opinion on the information given based on our audit.
We conducted our audit considering the audit guidance promulgated by the Institut der
Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW): Particularities concerning the audit
of a REIT stock corporation according to section 1 (4) REIT Act, a pre-REIT stock corporation according
to section 2 clause 3 REIT Act and the audit according to section 21 (3) clause 3 REIT Act (IDW PH
9.950.2). Therefore, we have planned and performed our audit to make a judgment with reasonable
assurance if the free float ratio and the maximum stock ownership per shareholder according to
section 11 (1) and (4) REIT Act agrees with the announcements due to section 11 (5) REIT Act as of
December 31, 2020 and if the provided information concerning the requirements of sections 12 to 15
REIT Act and the composition of the proceeds concerning the pretaxation of proceeds according to
section 19a REIT Act is appropriate. It was not part of our engagement to fully assess the company’s
tax assessments or position. Within our audit procedures we compared the information concerning
the free float ratio and the maximum stock ownership per shareholder according to section 11 (1) and
(4) REIT Act provided within the REIT declaration with the announcements due to section 11 (5) REIT
Act as of December 31, 2020 and agreed the provided information concerning the requirements of
sections 12 to 15 REIT Act with the information disclosed in the annual financial statements and the
consolidated financial statements of the Company. Furthermore, we tested the adjustments made to
the valuation of immovable assets held as investment for their compliance with section 12 (1) REIT
Act. We believe that our audit provides a reasonable basis for our opinion.
In our opinion based on the findings of our audit, the information given in the REIT declaration
concerning the free float ratio and the maximum stock ownership per shareholder due to section 11
(1) and (4) REIT Act agrees with the announcements made according to section 11 (5) REIT Act as of
December 31, 2020 and the information provided concerning the compliance with sections 12 to 15
REIT Act and the composition of the proceeds concerning the pretaxation of proceeds according to
section 19a REIT Act are appropriate. This memorandum is solely provided for submission to the tax
authorities of the city of Hamburg within the tax declaration according to section 21 (2) REIT Act and
is not to be used for other purposes.
194
alstria Annual Report 2020
REIT Disclosures
The order in whose fulfillment we provided abovenamed services for alstria office REIT-AG was based
on the General Engagement Terms for Certified Public Accountants and Auditing Companies dated
January 1, 2017 (Appendix 3). By acknowledging and using the information contained in this memo,
each recipient confirms that he/she has taken note of the regulations made therein (including the
liability regulation under no. 9 of the General Engagement Terms) and acknowledges their validity in
relation to us.
Hamburg, February 19, 2021
KPMG AG
Wirtschaftsprüfungsgesellschaft
[Original German version signed by:]
Schmidt
Wirtschaftsprüfer
[German Public Auditor]
Drotleff
Wirtschaftsprüfer
[German Public Auditor]
alstria Annual Report 2020
195
Financial Calender/Imprint
I. FINANCIAL CALENDAR/IMPRINT
I. FINANCIAL CALENDAR
Events 2021
May 4
May 6
August 10
November 4
Publication of Q1
Interim report
Annual General Meeting
Publication of Q2
Half-year interim report
Publication of Q3
Interim report
Publication of sustainability report
II. CONTACT/IMPRINT
alstria office REIT-AG is a member of DIRK (Deutscher Investor Relations Verband, the German Investor Relations
Association).
Other reports issued by alstria office REIT-AG are posted on the Company’s website.
Forward-looking statements
This annual report contains forward-looking statements. These statements represent 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.
Note
This report is published in German (original version) and English (non-binding translation).
Contact Investor Relations
Julius Stinauer MRICS
Phone +49 (0) 40 22 63 41−344
Fax
+49 (0) 40 22 63 41−229
E-Mail
jstinauer@alstria.de
196
alstria Annual Report 2020
Building
Your
Future
alstria office REIT-AG
www.alstria.com
info@alstria.de
Steinstr. 7
20095 Hamburg, Germany
+ 49 (0)40 / 22 63 41 - 300
Elisabethstr. 11
40217 Düsseldorf, Germany
+ 49 (0)211 / 30 12 16 - 600
Danneckerstr. 37
70182 Stuttgart, Germany
+ 49 (0)711 / 33 50 01 - 50
Platz der Einheit 1
60327 Frankfurt / Main, Germany
+ 49 (0)69 / 15 32 56 - 740
Rankestr. 17
10789 Berlin, Germany
+ 49 (0)30 / 89 67 795 - 00
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