a
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t
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2
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2
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R
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A
2022
ANNUAL
REPORT
IFRS financial statements
KEY FIGURES
FIVE-YEAR OVERVIEW
Revenues and earnings
Revenues (EUR k)
Net rental income (EUR k)
Consolidated profit for the period
(EUR k)
FFO (EUR k)1)
Earnings per share (EUR)1)
FFO per share (EUR)1)
1) Excluding minorities.
2022
182,819
158,946
−74,614
106,562
−0.42
0.60
2021
183,670
163,271
209,678
116,455
1.18
0.65
2020
177,063
154,823
168,489
108,673
0.95
0.61
2019
187,467
162,904
581,221
112,572
3.27
0.63
2018
193,193
169,068
527,414
114,730
3.02
0.65
Balance sheet
Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2018
Investment property (EUR k)
4,606,848
4,775,801
4,556,181
4,438,597
3,938,864
Total assets (EUR k)
Equity (EUR k)
Liabilities (EUR k)
Net asset value (NAV) per
share (EUR)
Net loan-to-value (Net LTV, %)
5,163,774
5,234,372
5,090,249
5,029,328
4,181,252
2,571,400
3,367,083
3,252,442
3,175,555
2,684,087
2,592,374
1,867,290
1,837,806
1,853,773
1,497,165
14.42
43.7
18.91
28.8
18.29
27.0
17.88
27.1
15.13
30.4
G-REIT figures
Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2018
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)
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 (%)
55.3
100
2022
0.63
32.1
27.0
69.1
100
2021
0.55
25.0
21.1
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
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
16.40
14.47
15.69
3.5
3.7
7.2
20.86
18.97
18.82
2.9
3.4
6.9
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
1) For further information, please refer to EPRA Best Practices Recommendations, www.epra.com.
2) Including vacancy costs.
3) Excluding vacancy costs.
alstria Annual Report 2022
CONTENT
DETAIL INDEX COMBINED MANAGEMENT REPORT ................................................ 2
A.
I.
II.
III.
IV.
V.
VI.
COMBINED MANAGEMENT REPORT ......................................................... 3
ECONOMICS AND STRATEGY ........................................................................... 3
FINANCIAL ANALYSIS ................................................................................... 9
EXPECTED DEVELOPMENTS ........................................................................... 21
REPORT REGARDING ALSTRIA AG .................................................................... 22
RISK AND OPPORTUNITY REPORT .................................................................... 29
SUSTAINABILITY REPORT ............................................................................. 56
VII.
DISCLOSURES REQUIRED BY TAKEOVER LAW ....................................................... 57
VIII. ADDITIONAL GROUP DISCLOSURE .................................................................... 60
DETAIL INDEX CONSOLIDATED FINANCIAL STATEMENTS ....................................... 63
B.
C.
D.
E.
F.
G.
H.
I.
I.
II.
III.
IV.
V.
VI.
I.
II.
I.
II.
CONSOLIDATED FINANCIAL STATEMENTS ................................................ 64
CONSOLIDATED INCOME STATEMENT ............................................................... 64
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................... 65
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................ 66
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................... 68
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY............................................. 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 71
RESPONSIBILITY STATEMENT ............................................................. 155
INDEPENDENT AUDITOR’S REPORT ...................................................... 156
REPORT OF THE SUPERVISORY BOARD ................................................. 167
CORPORATE GOVERNANCE STATEMENT ................................................ 175
REMUNERATION REPORT .................................................................. 193
REIT DISCLOSURES ......................................................................... 215
REIT DECLARATION .................................................................................. 215
REIT MEMORANDUM ................................................................................. 217
FINANCIAL CALENDAR/IMPRINT .......................................................... 219
FINANCIAL CALENDAR ............................................................................... 219
CONTACT/IMPRINT .................................................................................. 219
Consolidated Financial Statements
DETAIL INDEX COMBINED MANAGEMENT REPORT
G
A.
COMBINED MANAGEMENT REPORT ......................................................... 3
ECONOMICS AND STRATEGY ........................................................................... 3
I.
1. STRATEGY .................................................................................................. 3
2. CORPORATE MANAGEMENT .............................................................................. 4
3. ECONOMY AND OFFICE MARKETS ....................................................................... 5
4. PORTFOLIO ANALYSIS .................................................................................... 6
II.
FINANCIAL ANALYSIS ................................................................................... 9
1. EARNINGS POSITION ...................................................................................... 9
2. FINANCIAL AND ASSET POSITION ....................................................................... 14
3. THE MANAGEMENT BOARD’S OVERALL ASSESSMENT OF THE FINANCIAL YEAR .................. 21
III.
EXPECTED DEVELOPMENTS ........................................................................... 21
1. EXPECTED ECONOMIC DEVELOPMENT ................................................................. 21
2. DEVELOPMENT OF THE REAL ESTATE MARKET: OUTLOOK FOR 2023 .............................. 21
3. OUTLOOK FOR THE ALSTRIA GROUP .................................................................. 22
IV.
REPORT REGARDING ALSTRIA AG .................................................................... 22
1. SIGNIFICANT TRANSACTIONS ........................................................................... 22
2. EARNINGS POSITION ..................................................................................... 23
3. FINANCIAL AND ASSET POSITION ....................................................................... 26
4. ADDITIONAL DISCLOSURE REGARDING ALSTRIA AG .................................................. 28
V.
RISK AND OPPORTUNITY REPORT .................................................................... 29
1. RISK REPORT.............................................................................................. 29
2. REPORT ON OPPORTUNITIES ........................................................................... 53
VI.
VII.
SUSTAINABILITY REPORT ............................................................................. 56
DISCLOSURES REQUIRED BY TAKEOVER LAW ....................................................... 57
VIII. ADDITIONAL GROUP DISCLOSURE .................................................................... 60
1. CORPORATE GOVERNANCE GROUP DECLARATION PURSUANT TO SECTIONS 289F AND
315D HGB (“HANDELSGESETZBUCH”: GERMAN COMMERCIAL CODE) .............................. 60
2. EMPLOYEES ............................................................................................... 60
3. GROUP AND DEPENDENT-COMPANY REPORT ......................................................... 61
4. DIVIDEND .................................................................................................. 62
alstria Annual Report 2022
2
Consolidated Financial Statements
A. COMBINED MANAGEMENT REPORT
I. ECONOMICS AND STRATEGY
1. STRATEGY
alstria office REIT-AG (herein referred to as the “Company”, “alstria”, 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, 2022, the alstria group consisted of the
parent company alstria and 37 direct and indirect subsidiaries (hereinafter “alstria” or the “Group”).
The parent company makes operational decisions. As of December 31, 2022, alstria’s real estate
portfolio comprised 108 buildings, with a lettable area of 1.4 million m² and a total value of
EUR 4.7 billion. The properties are predominantly located in the major German office markets of
Hamburg, Düsseldorf, Frankfurt, Stuttgart, and Berlin, where local and operating offices represent
alstria, which alstria defines as its core market. As a fully integrated and long-term oriented company,
alstria’s 177 employees actively manage the buildings over their entire life cycle.
The year 2022 was significantly impacted for alstria by the acquisition by Brookfield Corporation,
Toronto/Canada (formerly Brookfield Asset Management Inc, "Brookfield"), through its subsidiary
Alexandrite Lux Holdings S.á r.l., Luxembourg (hereinafter ”Alexandrite” or “acquiring company”).
After the end of the first offer period on January 18, 2022, Brookfield declared the successful
acquisition of alstria office REIT-AG and with the end of the second offer period on February 3, 2022,
the shareholding of the new majority shareholder was 91.6%. In the course of 2022, Brookfield further
increased its shareholding and holds directly and indirectly 95.1% of the shares in alstria office REIT-
AG according to the latest published voting rights notification.
Brookfield has committed to assist the Management Board in the continued implementation of the
Group's business strategy and to further support the Company's growth. In particular, value-enhancing
modernization and repositioning opportunities with potential for sustainable value creation are to be
driven forward on the basis of hands-on asset management in order to future-proof the portfolio and
continue the ongoing decarbonization process. Following the Brookfield transaction and in light of the
new anchor shareholder, the Management Board undertook a review of the company’s capital
structure. In total the company identified EUR 1 bn of capital that could be released through increased
leverage and/or asset sales. The proceeds of the released capital could be used to be either deployed
in additional assets to be acquired or, if no investment opportunity was available to the company,
returned to shareholders. In this context, additional loans with a total volume of EUR 760 million were
raised. The additional capital released by these new loans was subsequently used to finance a return
of capital to the shareholders in the form of a special dividend in the amount of EUR 750 million. This
dividend was approved by an extraordinary general meeting on August 31, 2022 and was subsequently
paid out.
alstria Annual Report 2022
3
Consolidated Financial Statements
alstria’s corporate strategy is based on the following principles:
- Access to capital 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 by focusing on
solvent tenants, alstria generates steady income primarily used for reinvesting in the portfolio.
- Continuous investments in the quality of the real estate portfolio secure and increase rental
income and property values and improve the portfolio’s energy efficiency.
- Depending on the assessment of the market situation, properties are bought or sold. The goal is
risk-adjusted corporate growth and achieving a return in line with the market over the real estate
cycle.
2. CORPORATE MANAGEMENT
alstria proactively controls the Company based on two key financial performance indicators: revenues
and funds from operations (FFO). Revenues mainly comprise rental income derived from the
Company’s leasing activities. The FFO 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.*
The revenue and FFO guidance published by alstria at the beginning of 2022 was fully achieved in the
financial year 2022. Revenues amounted to EUR 183 million (forecast: EUR 183 million) and FFO
reached around EUR 107 million in the reporting year for the Group (forecast: EUR 106 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 Company’s internal control, in each case these are not
classified as the most relevant performance indicators. alstria’s Net LTV was 43.7 % as of
December 31, 2022, compared to 28.8 % at the end of the 2021 financial year. The G-REIT equity ratio
was 55.3 %, compared to 69.1 % in the previous year and the minimum statutory rate amounts to of
45 %. The net-debt / EBITDA was a ratio of 14.5 as of December 31, 2022, compared to a ratio of 9.9
as of December 31, 2021.
The management at the level of the Company primarily focuses on the total operating performance.
alstria AG strives for stable results with low volatility.
* For further details, please refer to page 12f.
** 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.
alstria Annual Report 2022
4
Consolidated Financial Statements
3. ECONOMY AND OFFICE MARKETS
3.1.
Economic development
Economic development in Germany in 2022 was characterized in particular by the effects of the
Russian attack in Ukraine. The German economy's heavy dependence on Russian energy led at times
to sharp price increases, particularly for natural gas and electricity, in view of the de facto cutoff of
Russian energy supplies in the course of the year. Western economic sanctions against Russia, in
addition to the sharp rise in energy prices, placed a further burden on economic performance. Driven
by energy prices and disrupted supply chains, Germany experienced a significant rise in inflation,
forcing the ECB to make a drastic turnaround on interest rates. The hopes prevailing at the beginning
of the year for an economic recovery following the fade-out of the COVID-19 pandemic were thus
completely dashed by the Russian attack on Ukraine.
3.2. Office markets*
3.2.1. Vacancy rate, office lettings and rents
The weak economic performance and the business uncertainty of many companies had a direct impact
on demand for office space. The war in Ukraine slowed leasing activity throughout the year. The
vacancy rate rose to 5.1% over the course of the year (previous year: 4.7%), while both prime and
average rents again increased slightly (except for Berlin). Overall, office lettings increased by 9.0%
year-on-year to 3,500,000 m² ("Big 7" cities: Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne,
Munich and Stuttgart) according to the major commercial brokerage houses. Berlin reached the
highest average rent for office space at EUR 27.80/m² (previous year: EUR 30.50/m²), followed by
Munich at EUR 24.40/m² (previous year: EUR 23.68/m²), Frankfurt at EUR 23.60/m² (previous year:
EUR 22.04/m²), Hamburg at EUR 21.50/m² (previous year: EUR 18.06/m²), Düsseldorf at
EUR 19.00/m² (previous year: EUR 16.57/m²), Cologne at EUR 17.30/m² (previous year:
EUR 16.42/m²), and Stuttgart at EUR 18.10/m² (previous year: EUR 16.10/m²).
3.2.2. Transactions
In 2022 the transaction volume in the "Big 7" cities was EUR 17.2 billion (Berlin: EUR 4.4 billion,
Hamburg: EUR 3.4 billion, Frankfurt am Main: EUR 3.3 billion, Munich: EUR 2.6 billion, Düsseldorf:
EUR 1.8 billion, Stuttgart: EUR 1.0 billion, Cologne: EUR 0.7 billion). The reason for the 28% decline
compared with the corresponding figure for the previous year was the rapid and drastic interest rate
increases in the course of the year. The transaction volume in 2022 represents the lowest overall
annual figure since 2014 and is therefore around 10% below the 10-year average.
Due to the significant change in financing conditions, there was a very strong reluctance to invest,
especially in large-volume investments.
* Sources of real estate market data in this chapter are Colliers International Deutschland GmbH, BNP Paribas Real Estate, CBRE GmbH, and
Jones Lang LaSalle, German Property Partners & Savills.
alstria Annual Report 2022
5
Consolidated Financial Statements
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 2022, 90.0 % of this was office and storage space and 10.0 % included other types of use
(retail, hotel, and other). By focusing on the large and liquid German office markets, the management
board believes that alstria can secure its competitive position by efficiently managing substantial sub-
portfolios even in economically difficult times. Rather than large buildings, alstria typically prefers
smaller, geographically close properties. 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 12,900 m² and an average market value of EUR 43.1 million.
Key metrics
Number of properties
Market value (EUR bn)1)
Annual contractual rent (EUR m)
Valuation yield (%, 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)3)
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
Dec. 31, 2022
Dec. 31, 2021
108
4.7
199.7
4.3
112
4.9
204.6
4.2
1.398.000
1,434,000
7.2
5.5
3.329
14.06
6.9
5.7
3,398
13.33
Dec. 31, 2022
Dec. 31, 2021
Change (pp)
35
25
22
9
9
34
25
21
11
9
1
0
1
−2
0
alstria Annual Report 2022
6
Consolidated Financial Statements
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, 2022:
alstria’s main tenants
(% of annual rent)
City of Hamburg
Mercedes-Benz AG
Bundesanstalt für Immobilienaufgaben
City of Frankfurt am Main
GMG Generalmietgesellschaft
HOCHTIEF Aktiengesellschaft
Commerzbank Aktiengesellschaft
Deutsche Post Immobilien
Hamburger Hochbahn AG
City of Berlin
Dec. 31, 2022
Dec. 31, 2021
Change (pp)
13
6
5
3
3
2
2
2
2
1
12
11
5
3
2
2
2
1
2
1
1
−5
0
0
1
0
0
1
0
0
Letting metrics (m2)
New leases
Renewals of leases1)
Total
1) Option drawings of existing tenants are included.
2022
43,700
63,600
107,300
2021
51,700
103,600
155,300
Change
−8,000
−40,000
−48,000
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)
2023
2024
2025
Dec. 31, 2022
Dec. 31, 2021
Change (pp)
6.4
10.6
13.7
10.7
8.0
12.0
−4.3
2.6
1.7
4.3.
Capital expenditure into the existing portfolio
In 2022, EUR 113 million was invested in the existing portfolio. The largest part of this amount,
EUR 87 million, was invested in development projects, which significantly improved the quality of the
spaces to achieve higher rents for new leases. The development capex remained on a high level in
2022, because alstria still sees the best return opportunities here. The current development portfolio
comprises 21 projects with a total lettable area of 377,100 m2.
alstria Annual Report 2022
7
Consolidated Financial Statements
Project
Besenbinderhof 41, Hamburg
Epplestr. 225, Stuttgart
Carl-Reiss-Platz 1, Mannheim
Carl-Reiss-Platz 2,3,4, Mannheim
Augustaanlage 60, Mannheim
Friedrich-Scholl-Platz 1, Karlsruhe
Gustav-Nachtigal-Str. 3, Wiesbaden
Gustav-Nachtigal-Str. 4, Wiesbaden
Gustav-Nachtigal-Str. 5, Wiesbaden
Gasstr. 18, Hamburg
Deutsche Telekom Allee 7, Darmstadt
Friedrich-List-Str. 20, Essen
Uhlandstr. 85, Berlin
Adlerstr. 63, Düsseldorf
Handwerkstr. 4/Breitwiesenstr. 27, Stuttgart
Deutsche Telekom Allee 9, Darmstadt
Gartenstr. 2, Düsseldorf
Corneliusstr. 36, Düsseldorf
Maxstr. 3a, Berlin
Hanauer Landstr. 161-173, Frankfurt
Platz der Einheit 1, Frankfurt
Total
1) Planned lettable area.
4.4.
Transactions
Lettable area
(m²)
5,500
108,900
8,500
5,3001)
4,400
26,800
18,400
800
7,600
26,800
22,200
9,200
9,400
2,900
6,400
60,700
5,100
3,100
4,200
10,500
30,400
377,100
Status
Estimated completion
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
Under construction
In planning
In planning
In planning
In planning
In planning
In planning
Q2 2023
n/a
Q1 2023
Q1 2024
Q1 2023
Q4 2024
Q1 2023
Q1 2024
Q1 2023
Q2 2023
Q2 2023
Q4 2023
Q2 2024
Q1 2024
Q4 2023
n/a
n/a
n/a
n/a
n/a
n/a
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 to
operate what it considers to be a lucrative portfolio size in the respective locations (concentration
on "Big 7" office markets in Germany), but also sell mature or non-core assets to optimize its capital
allocation. In this context, three assets for a total consideration of EUR 116 million were sold in the
course of the year. Two properties with a total price of EUR 72 million were already sold in fiscal year
2021, and the transfer took place in the first quarter of 2022. The sales proceeds were mainly used
to finance the development measures in the existing real estate portfolio.
alstria Annual Report 2022
8
Consolidated Financial Statements
Disposals
Asset
Heidenkampsweg 44-46
Vaihinger Str. 131
Kanzlerstr. 8
Rotebühlstr. 98-100
Amsinckstr. 34
Total Disposals
City
Hamburg
Stuttgart
Düsseldorf
Stuttgart
Hamburg
Disposal
price
(EUR k)
9,100
63,000
24,970
64,500
26,550
Gain
to book
value
(EUR k)1), 2)
Signing
SPA
Transfer
of benefits and
burdens
1,070
Dec. 9, 2021
March 31, 2022
15,730
Dec. 23, 2021
March 31, 2022
−15
Feb. 16, 2022
April 30, 2022
2,255
Sept. 21, 2022
Nov. 30, 2022
575
Dec. 12, 2022 March 31, 20233)
188,120
19,615
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 2021 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.
3) 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, 2022 in accordance with the requirements
of IAS 40 in connection with IFRS 13. For the entire portfolio, the 2022 valuation resulted in a
depreciation of EUR 173.8 million; previous year: appreciation of EUR 94.8 million (after deduction
of capex and transactions). Based on the determined market value as of December 31, 2022, there is
an average value of EUR 3,314 per m2 and, based on the ratio of contractual rent to the market value,
a yield of 4.3 % 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
2022
182,819
158,946
−37,435
13,219
134,730
−173,794
2,896
2021
183,670
163,271
−28,094
−8,684
126,493
94,827
15,134
−36,168
236,454
alstria closed the 2022 financial year with a net operating result (before financing costs and taxes) of
EUR −36,168 k, compared to EUR 236,454 k for the previous year.
alstria Annual Report 2022
9
Consolidated Financial Statements
The main reason for the significant deterioration in net operating profit is the negative net result
from the fair value adjustments of investment property.
1.2.
Revenues
In the reporting period, revenues totaled EUR 182,819 k (compared to EUR 183,670 k in 2021). This
corresponds to a decrease of 0.5 % or EUR 851 k. The decline is primarily the result of the scheduled
expiry of rental agreements and transaction-related changes in revenue. The lower rental income was
partially offset by an increase in revenue from new leases, indexation, and proceeds from leases of
the properties acquired in fiscal 2021.
1.3.
Real estate operating expenses
Real estate operating expenses consist of recoverable and non-recoverable operating costs, and they
amounted to EUR 62,043 k (compared to EUR 59,307 k in 2021). The expense ratio of non-recoverable
operating costs increased from 11.2 % in 2021 to 13.4 % in 2022. This development was due to higher
maintenance and vacancy costs compared with the previous year. Thus, the Group’s net rental income
decreased by EUR 4,325 k to EUR 158,946 k (compared to EUR 163,271 k in 2021).
1.4.
Administrative and personnel expenses
Administrative expenses increased year-on-year by EUR 2,116 k (compared to EUR 8,325 k in 2021),
mainly due to the increase in external advisory needs in light of the changes implemented following
the transaction with Brookfield. Personnel expenses were EUR 26,994 k for the reporting period and,
therefore, EUR 7,225 k higher than in the previous year (2021: EUR 19,769 k). The reason for the
increase in the reporting period is mainly a rise in the value of the share-based compensation following
the take-over offer (virtual shares and stock options increased by EUR 1,557 k to EUR 2,544 k (2021:
EUR 987 k)) and a change in the compensation scheme related to the takeover by Brookfield. The
company also incurred EUR k 1,079 of redundancy expenses linked to the transaction. The total of
administrative and personnel expenses thus corresponds to around 20.5% of revenues and 0.8% of the
fair value of the portfolio (2021: 15.3% and 0.6%).
1.5. Other operating result
alstria’s other operating results amounted to EUR 13,219 k during the reporting period (compared
to EUR −8,684 k in 2021). An increase in income of EUR 10,289 k mainly resulted from EUR 6,854 k
higher income from compensation payments and other charges passed on to tenants and a redemption
grant for energy-related refurbishment measures from KfW. Other operating expenses are EUR 11,614
k lower than in the 2021 financial year. In the previous year, the figure was negatively impacted by
EUR 9,147 k higher expenses for legal and consulting fees mainly as a result of the voluntary public
takeover offer.
alstria Annual Report 2022
10
Consolidated Financial Statements
1.6.
Net result from fair value adjustments to investment property
In the 2022 financial year, the net result from fair value adjustments to investment property was
EUR −173,794 k (compared to EUR 94,827 k in 2021). The total of the increases in value amounted to
EUR 34,233 k (compared to EUR 233,320 k in 2021), while the total of the decrease in value amounted
to EUR 208,027 k (compared to EUR 138,493 k in 2021). Different value developments are recorded
on the asset level. In response to the rise in interest rates, properties with low rental yields in
particular recorded higher devaluations.
1.7.
Net result from the disposal of investment property
In 2022, alstria achieved a positive result of EUR 2,896 k from the disposal of investment properties
(compared to EUR 15,134 k in 2021). The realized disposal gains mainly resulted from the sale of the
Rotebühlstr. 98-100 asset in Stuttgart.
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
2022
−21,916
−8,351
−1,968
−858
−33,093
4,062
−8,025
−37,056
2021
−21,954
−2,142
−1,977
−815
−26,888
1,323
−455
−26,019
Financial expenses increased by EUR 6,205 k to EUR 33,093 k mainly due to the take up of further
loans in the course of 2022. For details on the new loans, refer to the ‘Noncurrent and current
financial liabilities’ section starting on page 15.
1.9.
Share of the result of companies accounted for at equity
In 2022, alstria’s share of the result of companies accounted for at equity was EUR −782 k (compared
to EUR −108 k in 2021).
1.10. Consolidated profit
The consolidated net result for the financial year 2022 amounted to EUR −74,614 k (2021:
EUR 209,677 k) and was therefore EUR 284,291 k lower than in the previous year. The main driver of
this development is the result from the fair value measurement of investment property, which
amounted to EUR −173,794 k in the financial year, compared with a positive figure of EUR 94,827 k in
the previous year. Undiluted earnings per share amounted to EUR −0.42 for the reporting period
(compared to EUR 1.18 in 2021).
alstria Annual Report 2022
11
Consolidated Financial Statements
REITs are fully exempt from German corporate income tax and trade tax. However, tax obligations
can arise to a minor extent for REIT subsidiaries.
1.11. Funds from operations (FFO)
The revenue and earnings position of alstria developed as planned. Due to the scheduled expiration
of leases and transaction-related changes in revenue, rental income in 2022 decreased by 0.5 % to
EUR 182,819 k (prior year: EUR 183,670 k). The decline in rental income was partially offset by
revenues from new leases, indexation, and revenues from leases for the properties acquired in fiscal
year 2021.
FFO after minority interests amounted to EUR 106.6 million (previous year: EUR 116.5 million), in line
with the guidance of EUR 106.0 million. In addition to slightly lower net rental income, the lower FFO
was due in particular to higher financing and personnel costs, which were only partly offset by higher
other operating income. The FFO margin reduced accordingly to 58.3 % in 2022 (63,4% FY21)
Reconciliation of consolidated net income to FFO is based on eliminating non-cash income items,
those that are not expected to recur annually, non-periodic items and items that do not serve the
operating business. The adjustments between the income figures in the income statement and FFO
are shown in the table on the next page. The most significant adjustments (> EUR 1,000 k) in the
current reporting period related to non-cash or one-off personnel expenses (EUR 4,967 k), non-
recurring other operating income (EUR –1,866 k), non-cash and non-recurring other operating
expenses (EUR 2,649 k) and expenses not attributable to the operating business in the financial result
(EUR 7,302 k). The main adjustments here are related primarily to the costs associated with the
bridge facility and a market flex premium. The adjustments in the operating expenses relate to the
valuation of the limited partner capital. In addition, there were non-recurring proceeds from disposals
(EUR –2,896 k) and a non-cash valuation result (EUR 173,794 k), which were adjusted accordingly in
the calculation of operating profit.
alstria Annual Report 2022
12
Consolidated Financial Statements
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
Net result from the valuation of derivative
financial instruments
Pretax income
Income tax expenses
Consolidated profit
Minority interests
IFRS P&L
Adjustments
182,819
38,170
−62,043
158,946
−10,441
−26,994
16,219
−3,000
-
-
-
-
964
4,967
−1,866
2,649
−173,794
−173,794
2,896
−2,896
−36,168
177,612
−37,056
7,302
FFO
2022
182,819
38,170
−62,043
FFO
2021
183,670
38,908
−59,307
158,946
163,271
−9,477
−22,027
14,353
−351
0
0
−7,382
−17,698
3,559
−665
0
0
141,444
−29,754
141,085
−22,306
−783
−499
-
499
−782
−108
0
0
−74,505
185,413
110,908
118,671
−109
109
0
0
−74,614
185,522
110,908
118,671
-
−4,346
−4,346
−2,216
Consolidated profit / FFO (after minorities)3)
74,614
181,176
106,562
116,455
Number of outstanding shares (k)
FFO per share (EUR)
1) Numbers may not sum up due to rounding.
178,291
0.60
178,033
0.65
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 intende d 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. Further more, 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.
alstria Annual Report 2022
13
Consolidated Financial Statements
2. FINANCIAL AND ASSET POSITION
2.1.
Investment properties
The total value of investment properties as of December 31, 2022 was EUR 4,606,848 k, compared to
EUR 4,775,801 k at the beginning of 2022. The decrease is mainly attributable to the decline in the
value of investment property and the sale of three properties. One of the properties was reported
under the balance sheet item "Properties held for sale" as of December 31, 2022. A partially offsetting
effect resulted from the investments in the existing portfolio during the year, which had a positive
impact on the value of the real estate.
EUR k
Investment property as of December 31, 2021
Investments
Acquisitions
Acquisition costs
Capitalization of right of use IFRS 16
Disposals
Transfer to assets held for sale
Transfer to property, plant, and equipment (owner-occupied properties)
Transfer from property, plant, and equipment (owner-occupied properties)
Net loss / gain from fair value adjustments to investment property
Investment property as of December 31, 2022
Carrying amount of owner-occupied properties
Carrying amount of the forest
Fair value of assets held for sale
Interests in joint ventures
Carrying amount of immovable assets
2.2.
Cash and cash equivalents
4,775,801
113,147
0
0
504
−83,910
−24,900
0
0
−173,794
4,606,848
16,293
2,683
26,550
101
4,652,475
Cash and cash equivalents increased by EUR 51,289 k from EUR 313,684 k to EUR 364,973 k in the
reporting period. A positive cash flow of EUR 87,079 k was generated from operating activities.
Financing activities showed net cash outflows of EUR 80,740 k. In addition to additional borrowings
of EUR 760,000 k, which were used to pay a special dividend of EUR 749,519 k, there was a repayment
of loans of EUR 69,483 k. In addition, a regular dividend of EUR 7,121 k was distributed. Investing
activities resulted in cash inflows of EUR 44,950 k, mainly due to the sale of real estate, which more
than compensated for the investments in investment property.
alstria Annual Report 2022
14
Consolidated Financial Statements
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, 2022
Dec. 31, 2021
2,571,400
178,291
14.42
49.8
55.3
3,367,083
178,033
18.91
64.3
69.1
Change
−23.6 %
0.1 %
−23.7 %
−14.5 pp
−13.8 pp
Compared to December 31, 2021, equity decreased by EUR 795,683 k as of December 31, 2022, mainly
due to the payment of the special dividend of EUR 749,519 k and the net loss for the year of
EUR 74,614 k resulting from the negative valuation result. In contrast, a hedging valuation reserve of
EUR 32,663 k had a positive effect on the equity position as of December 31, 2022.
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 that minority shareholders in German partnerships owned 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 the
following overview of the loan facilities and maturity profile of financial debt on the page after next).
In 2022, alstria signed new loans with a volume of EUR 607,000 k and increased existing loans by a
total of EUR 153,000 k. Bank loans with a total volume of EUR 69,483 k were repaid in the reporting
period.
alstria Annual Report 2022
15
Consolidated Financial Statements
The loan facilities in place as of December 31, 2022 are in the following table.
Liabilities
Maturity
Loan #12)
Loan #23)
Loan #3
Loan #44)
Loan #55)
Loan #66)
Loan #7
Loan #8
Total secured loans
Bond #2
Bond #3
Bond #4
Bond #5
June 28, 2024
Mar. 28, 2024
June 30, 2026
Sept. 29, 2028
Sept. 30, 2024
Dec. 30, 2022
Sept. 30 2027
Aug. 29, 2024
Apr. 12, 2023
Nov. 15, 2027
Sept. 26, 2025
Jun. 23, 2026
Schuldschein 10y/fixed
May 6, 2026
Schuldschein 7y/fixed
May 6, 2023
Revolving credit line7)
Apr. 29, 2025
Bridge credit facility8)
Apr. 29, 2025
Total unsecured loans
Total
Net LTV
Principal amount
drawn as of
Dec. 31, 2022
(EUR k)
LTV1) as of
Dec. 31, 2022
(%)
LTV
covenant
(%)
Principal amount
drawn as of
Dec. 31, 2021
(EUR k)
150,000
0
47,063
97,000
0
0
500,000
107,000
901,063
325,000
350,000
400,000
350,000
40,000
37,000
0
0
1,502,000
2,403,063
58.8
-
31.1
50.2
-
-
61.2
55.3
55.2
-
-
-
-
-
-
-
−
51.5
43.7
70.0
n/a
65.0
65.0
n/a
n/a
75.0
n/a
–
-
-
-
-
-
-
-
-
-
34,000
45,900
56,000
60,000
13,338
5,550
-
-
214,788
325,000
350,000
400,000
350,000
40,000
37,000
0
0
1,502,000
1,716,788
1) Calculation based on the market values of the properties serving as collateral in relation to the loan amount drawn down.
2) The loan was upgraded by EUR 116 million to EUR 150 million on October 28, 2022.
3) Loan agreement terminated, refinancing occurred on April 14, 2022.
4) The loan was upgraded by EUR 37 million to EUR 97 million on September 5, 2022.
5) Loan agreement terminated, refinancing occurred on July 19, 2022.
6) Loan agreement terminated, refinancing occurred on October 7, 2022.
7) Agreement of a revolving credit line of EUR 200 million on April 29, 2022.
8) Termination of the undrawn bridge financing facility of EUR 1,535 million as of May 31, 2022.
Cash cost of debt
Dec. 31, 2022
Dec. 31, 2021
Nominal amount
(EUR k)
Ø cost of
debt
(%)
Ø
maturity
(years)
Nominal amount
(EUR k)
Ø cost of
debt
(%)
Ø
maturity
(years)
901,063
1,425,000
77,000
2,403,063
3.2
1.4
2.5
2.1
3.9
2.9
2.0
3.2
214,788
1,425,000
77,000
1,716,788
0.9
1.4
2.5
1.4
4.1
3.9
3.0
3.9
Bank debt
Bonds
Schuldschein
Total
alstria Annual Report 2022
16
Consolidated Financial Statements
Maturity profile of financial debt in EUR m
362,0
257,0
400,0
437,1
850,0
97,0
2023
2024
2025
2026
2027
2028
2.6.
Financial derivatives
In connection with the raising of additional loans, alstria purchased derivative financial instruments.
As of December 31, 2022, their holdings were as follows:
Product
Swap
Swap
Swap
Total
Strike
p.a.
(%)
Start of
Hedging
Maturity
date Counterpart
Notional Fair value
Notional Fair
value
31.12.2022
31.12.2021
1,7500 30.09.2022 30.09.2027 Societe
Generale
1,9240 30.09.2022 30.09.2028 UniCredit Bank
AG
1,9240 30.09.2022 30.09.2028 UniCredit Bank
AG
(EUR k)
(EUR k)
(TEUR)
(TEUR)
500.000
29.812
60.000
3.606
22.450
1.349
582.450
34.767
0
0
0
0
0
0
0
0
The derivative financial instruments held by alstria are exclusively interest rate swaps. All derivative
financial instruments had a positive value as of the balance sheet date, so that the Group reported
only derivative financial assets. As of December 31, 2022, 86.7% of the financial liabilities are thus
hedged or have a fixed interest coupon.
alstria Annual Report 2022
17
Consolidated Financial Statements
2.7.
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 reporting period, alstria signed new secured mortgage loans in the total amount of
EUR 607,000 k and increased existing loans by a total of EUR 153,000 k. This served to finance the
special dividend. In contrast, secured loans totaling EUR 69,483 k were repaid during the reporting
period.
* 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.
alstria Annual Report 2022
18
Consolidated Financial Statements
EUR k
December 31, 2022
Consolidated Net Financial Indebtedness as of the reporting date
Net Financial Indebtedness incurred since the reporting date
Sum Consolidated Net Financial Indebtedness (I)
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
Total (II)
Ratio of the Consolidated Net Financial Indebtedness over Total Assets (max. 60 %) (I/II)
2,033,459
-
2,033,459
4,798,801
-
-
4,798,801
42 %
EUR k
December 31, 2022
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 (I)
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
Total (II)
Ratio of the Secured Consolidated Net Financial Indebtedness over Total Assets
(max. 45 %) (I/II)
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 %)
757,160
-
757,160
5,027,876
-
-
5,027,876
15 %
December 31, 2022
2,989,375
314,761
3,304,136
−26,550
3,277,586
1,276,299
-
1,276,299
257 %
alstria Annual Report 2022
19
Consolidated Financial Statements
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.
EUR k
Cumulative 2022
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.
−37,449
173,794
499
−2,896
6,716
-
140,664
−39,247
14,255
−24,992
5.63
In the 2022 financial year no covenants under the loan agreements and / or the terms and conditions
of the bonds and Schuldschein had been breached. The breach of a covenant would lead to liquidity
outflow.
2.8.
Current liabilities
Current
liabilities
amounted
as
of
December
31,
2022
to
EUR 429,960 k
(December 31, 2021: EUR 82,932 k) and mainly consisted of short-term
loan obligations of
EUR 372,142 k (December 31, 2020: EUR 19,594 k) and of limited partnership capital noncontrolling
interests of EUR 21 k (December 31, 2021: EUR 15 k). Another EUR 2,188 k of this total was
attributable to income tax obligations (December 31, 2021: EUR 4,525 k) that arose at the level of the
consolidated alstria office Prime companies. Moreover, current liabilities include trade payables
(December 31, 2022: EUR 3,581 k; December 31, 2021: EUR 3,487 k). Other current
liabilities
(December 31, 2022: EUR 51,224 k; December 31, 2021: EUR 52,331 k) mainly include provisions for
outstanding invoices (December 31, 2022: EUR 28,490 k; December 31, 2021: EUR 28,488 k) and
tenants’ deposits (December 31, 2022: EUR 8,043 k; December 31, 2021: EUR 8,858 k). Furthermore
the other current liabilities include value-added tax liabilities (December 31, 2022: EUR 2,072 k;
December 31, 2021: EUR 1,728 k) and tenants’ deposits (December 31, 2022: EUR 1,820 k; December
31, 2021: EUR 3,259 k).
alstria Annual Report 2022
20
Consolidated Financial Statements
3. THE MANAGEMENT BOARD’S OVERALL ASSESSMENT OF THE FINANCIAL YEAR
Although the consequences of the Russian war of aggression on Ukraine had a significant impact on the
German economy, alstria's results of operations developed according to plan in the financial year 2022.
Revenues and earnings reflected the high quality of the real estate portfolio and the efficient corporate
structure. The financial position and net assets were impacted by a slight depreciation of the real
estate portfolio, reflecting in particular the environment of increased interest rates and a resulting
pressure on commercial real estate prices. The liquidity situation proved to be comfortable at all times
during the course of the 2022 financial year.
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, are exposed to risks and uncertainty.
The alstria Group’s actual development may differ positively or negatively from the predicted
development presented in this report’s statement.
1. EXPECTED ECONOMIC DEVELOPMENT
The German government's very optimistic forecasts for GDP growth at the beginning of 2022 had to
be revised downward in the course of the year. The economic consequences of the Russian war of
aggression on Ukraine, which are reflected in particular in weak economic growth coupled with
persistently high inflation, are preventing a sustained economic recovery even after the COVID-19
crisis has subsided. For the current year, the German government accordingly expects a slight
contraction in overall economic output in Germany.
2. DEVELOPMENT OF THE REAL ESTATE MARKET: OUTLOOK FOR 2023
It is to be expected that the ongoing slowdown in economic development will also impact on the
commercial real estate market. The letting market is likely to remain at the same level than in 2022.
The transaction market on the other hand is expected to remain challenging as the increase in the
interest rate environment is creating substantial uncertainty and volatility in the pricing of assets.
alstria Annual Report 2022
21
Consolidated Financial Statements
3. OUTLOOK FOR THE ALSTRIA GROUP
Based on the existing leases and the high proportion of tenants with strong credit ratings, alstria
expects an increase in revenues to around EUR 190 million in 2023 despite the expected subdued
macroeconomic development. By contrast, FFO is expected to decrease to EUR 79* million. This
development in particular reflects the impact of higher financing costs as a result of the rise in
interest rates and a simultaneous increase in the level of debt.
IV. REPORT REGARDING ALSTRIA AG
1. SIGNIFICANT TRANSACTIONS
1.1.
Step-Up merger
At the beginning of the year, six subsidiaries, which held nine properties, were merged into alstria by
a step-up merger. As part of this transaction, alstria acquired assets with a book value of EUR 351.5
m. The new properties contributed to both the company's income and its expenses. In the following,
the result of the fiscal year is compared with the previous year's result. Insofar as changes result in
the contribution of the merged companies, the effects are stated below in the respective line items
1.2.
Takeover bid
At the end of the previous period, Alexandrite Lake Lux Holdings S.à r.l., Luxembourg, Grand Duchy
of Luxembourg (hereinafter also "Bidder") submitted a public takeover bid. At the beginning of the
financial year, the bidder acquired the majority of the shares in alstria.
* Following the takeover, the accounting of alstria and Brookfield will be partially harmonized as of the financial year 2023. Without taking into
account this harmonization, which primarily relates to a change in the capitalization of costs in the area of development projects, the FFO
forecast for the year 2023 would be EUR 66 million.
alstria Annual Report 2022
22
Consolidated Financial Statements
2. EARNINGS POSITION
The following table shows the key operating figures of the audited income statements for the 2022
and 2021 financial years:
in EUR k
Total operating
performance
Other operating
income
Cost of purchased
services
Personnel expenses
Depreciation
Other operating
expenses
financial result
Net result of the
year
2022
% of oper.
perf.
2021
% of oper.
perf.
Change
156,846
100.0
131,209
100.0
25,637
129,880
-32,075
-23,745
-47,305
-42,142
-110,906
30,553
82.8
-20.4
-15.1
-30.2
-26.9
-70.7
19.5
11,709
-25,366
-23,613
-39,455
-37,114
-48,280
-30,910
8.9
-19.3
-18.0
-30.1
-28.3
-36.8
-23.6
118,171
-6,709
-132
-7,850
-5,028
-62,626
61,463
2.1. Operating performance
The net result for the 2022 financial increased by EUR 61,463 k to EUR 30,553 k (compared with EUR -
30,910 k in 2021). As the Company has been exempt from income taxes since its conversion into a REIT
structure, no tax expenses arose in 2022.
The increase in the net result was mainly due to, an increase of other operating income by
EUR 118,171 k as well as an increase of total operating performance by EUR 25,637 k.
On the other hand, the increase in the annual result is reduced by the decrease in the net financial
result by EUR 62,626 k, the increase in depreciation by EUR 7,850 k, the increase in purchased services
by EUR 6,709 k and the increase in other operating expenses by EUR 5,028 k.
2.2.
Total operating performance
alstria’s total operating performance improved in the 2022 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 156,269 k. Together with the changes
in inventory amounting to EUR 577 k, alstria’s total operating performance amounted to EUR 156,269 k
(versus EUR 131,209 k in the previous year).
The increase in sales by EUR 25,105 k compared to the previous year is primarily due to the merger of
subsidiaries. The newly acquired properties contributed EUR 23,680 k to alstria's sales for the first time
in the financial year (see Section 1.1). The remainder of the increase in revenue of EUR 1,425 k is
attributable to rent increases through indexation and new letting.
alstria Annual Report 2022
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Consolidated Financial Statements
2.3. Other operating income
Other operating income increased by EUR 118,172 k compared to the previous year to EUR 129,880 k.
On the one hand, the increase results from merger profits of EUR 59,836 k, which result from the step-
up merger of six subsidiaries at the beginning of the year. In addition, the company sold three
properties in its portfolio in the reporting period. With book values of EUR 61,197 k and purchase prices
of EUR 98,532 k, there were capital gains of EUR 37,335 k. Next to this, the company sold shares of its
investment in alstria office Prime Portfolio GmbH & Co. KG. With book values of EUR 35,417 k and a
total purchase price of EUR 55,518 k, there was a capital gain of EUR 20,101 k. Finally, income from
grants by the KFW for an improvement of energy efficiency, increased the item by another EUR 6,419k.
In contrast, income from compensation payments and penalties decreased by EUR 2,216 k, which
included a few larger individual cases in the previous year. Appreciations on tangible assets also
decreased by EUR 1,703 thousand due to lower market prices. Income from convertible profit
participation rights decreased by EUR 1,703 thousand due to a significantly lower share price on the
conversion date.
2.4.
Purchased services
The cost of purchased services increased by EUR 6,709 k. The increase is mainly due to the step-up
merger of 6 subsidiaries and their properties to alstria (see also section 1.1). The merged properties
burdened the annual result with expenses for purchased services in the amount of EUR 7,391 k. Due to
the sale of three properties, expenses for the remaining portfolio decreased slightly.
2.5.
Depreciation and amortization
Depreciation increased by EUR 7,849 k compared to the previous year, to EUR 47,305 k. The effect is
mainly due to the increase in depreciation and amortization of property, plant and equipment in
connection with the addition of subsidiaries (see Note 1.1) and investments.
2.6. Other operating expenses
Other operating expenses increased by EUR 4,063 k. The increase mainly results from the losses from
the disposal of fixed assets of EUR 6,778 k and the increase in property operating costs by EUR 6,808 k.
The disposal of fixed assets relates to the demolition of a building on an asset owned by the company.
The increase in property operating costs primarily results from the merger of 6 subsidiaries with their
properties (see Section 1.1).
In contrast, the previous year included EUR 10,057 thousand in costs in connection with a takeover bid
(see section 1.2).
alstria Annual Report 2022
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Consolidated Financial Statements
2.7.
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
2022
-19,351
-16,430
-1,931
-8,964
-972
-982
2021
-19,406
-333
-1,940
-842
-48
-107
-48,630
-22,676
0
3,364
4,046
-69,686
-110,906
0
4,778
1,057
-31,439
-48,280
Change
(%)
0
4,834
0
965
1,925
818
114
-
-30
283
122
130
Compared to the previous period, financial expenses increased by EUR 25,953 k to EUR 48,630 k.
The increase is mainly based on the increase in transaction costs (EUR + 16,097 thousand) resulting
from taking out loans in the reporting period. For the same reason, interest expenses from other loans
increased by EUR 8,121 k to EUR 8,964 k. In addition, depreciation of financial assets increased by
EUR 38,247 k compared to the previous year. The increase mainly results from an unscheduled
depreciation of an investment at its fair value.
On the other hand, other interest income increased by EUR 2,989 thousand compared to the previous
year to EUR 4,046 k.
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Consolidated Financial Statements
3. FINANCIAL AND ASSET POSITION
On the balance sheet date, alstria owned 83 real estate properties (in 2021: 72). The following table
illustrates alstria’s changes in investment property in 2022:
in EUR m
Land and Buildings on December 31, 2021
Investments
Adjustments
Acquisitions by step-up merger
Disposals
Appreciations on market value
Nonscheduled depreciation
Ordinary depreciation
Land and Buildings as of December 31, 2022
3.1.
Land and buildings
1,467.49
2.89
5.34
297.26
-68.06
0.92
-2.71
-44.09
1,659.04
The land and buildings line item increased by EUR 191.6 m. In the reporting period, six companies
with a total of 14 properties at book values of EUR 351.5 m were merged on the alstria by a step up
merger. An additional amount of EUR 2.9 m was invested in existing properties. In addition, three
properties with a book value of EUR 61.2 million were sold, and a building with a book value of EUR
6.7 million was demolished.
The following table shows the real estate transactions during the period:
Disposals
Asset
City
Rothebühlstraße 98-100
Stuttgart
Kanzlerstraße 8
Heidenkampsweg 44
Total
Düsseldorf
Hamburg
Sales price
(EUR k)
64,462
24,970
9,100
98,532
Signing
SPA
Transfer of
benefits and
burdens
23.12.2021
16.02.2022
09.12.2021
31.03.2022
30.04.2022
31.03.2022
alstria Annual Report 2022
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Consolidated Financial Statements
Merged assets
Adresse
Drehbahn
Grindelberg
Steinstraße
Bamler Straße
Carl-Reiß-Platz
Carl-Reiß-Platz TG
Carl Living Grundstück
Stadt
Hamburg
Hamburg
Hamburg
Hamburg
Mannheim
Mannheim
Mannheim
Gustav-Nachtigal-Straße
Wiesbaden
Nagelsweg
Schaartor
Hamburg
Hamburg
Insterburger Straße
Frankfurt a.M.
Hauptstätter Straße
Immermannstraße
Augusta Grand
Total
Stuttgart
Düsseldorf
Mannheim
Bookvalue as of merging date
(in EUR k)
53,377
29,772
64,025
43,259
23,048
1,119
1,225
57,590
10,560
11,967
14,343
16,305
14,865
9,994
351,460
3.2.
Prepayments and constructions in progress
The prepayments and constructions in progress increased by EUR 128,591 k compared to the previous
year to EUR 167,996 k. In the year under review, EUR 79,733 thousand was invested in modernization
projects. A further EUR 48,862k increased as a result of the merger with subsidiaries.
3.3.
Financial assets
Financial assets decreased by EUR 306,639 k to EUR 732,142 k compared to the previous year‘s
reporting date. The decline is primarily due to the impairment of an investment at fair value by EUR
68,689 k, the withdrawal of EUR 33,067 k from a subsidiary, and the sale of shares of the same
company with a book value of EUR 35,417 thousand. In addition, subsidiaries with book values totaling
EUR 157,172k were merged to the company in the year under review. Furthermore, loans of EUR
66,965k were repaid in the year under review and an existing loan to third parties was increased by
EUR 55,568k.
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Consolidated Financial Statements
3.4.
Cash position
The Company’s cash position increased by EUR 64,440 k to EUR 335,383 k. The inflow of funds resulted
primarily from income from rents and property-related services (EUR 156,269 k) and the taking out
of loans in the amount of EUR 797,067 k. On the other hand, cash outflows resulted primarily from
the payment of dividends (EUR 756,640 k), investments in fixed assets (EUR 82,675 k) and interest
expenses (EUR 48,630 k).
3.5.
Equity
Total equity amounted to EUR 593,045 k, reflecting an equity ratio of 19.2 %, which is 24 percentage
points below the prior year´s ratio of 43 %. The decrease in equity by EUR 725,570 thousand results
from the distribution of the dividend for the 2021 financial year of EUR 756,640 thousand.
This was partially offset by the annual surplus of EUR 30,554 thousand and a capital increase of EUR
516 thousand as part of the conversion of convertible profit participation rights.
3.6.
Provisions
Provisions increased by EUR 7,356 k, compared with the previous balance sheet date to EUR 37,515 k
as of December 31, 2022. The increase is mainly due to the increase in provisions for outstanding
invoices of EUR 6,035 k and a provision for expected costs for bank charges in connection with taking
out a loan (Market-Flex bonus) of EUR 3,800 k. In contrast, there were no provisions for the share-
based payment system, which expired in the year under review (EUR -2,694 k).
3.7.
Liabilities
Finally, liabilities increased by EUR 737,829 k compared to the previous year's reporting date. In the
reporting period, the company took out loans secured by land charges in the amount of EUR 723,000
k and increased an existing loan by EUR 79,670 k.
On the other hand, liabilities to affiliated companies decreased by EUR 64,215 thousand, primarily as
a result of the acquisition of six subsidiaries and the resulting elimination of receivables from and
liabilities to these companies.
4. ADDITIONAL DISCLOSURE REGARDING ALSTRIA AG
4.1.
Employees
As of December 31, 2022, alstria AG had 178 employees (December 31, 2021: 163). The annual average
number of employees was 173 (previous year: 162). These figures exclude Management Board
members.
4.2. Outlook for alstria AG
The company is managed at group level, so planning is also based on the group's key figures. Overall,
the company expects a stable total overall performance for the next financial year.
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Consolidated Financial Statements
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. alstria AG’s directly and indirectly held
subsidiaries considerably influence its results. Its business performance is fundamentally subject to
the same risks and opportunities as those of the alstria group, 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.
As part of alstria's operating business and its strategic management, alstria weighs opportunities and
risks and ensures that they remain balanced. We aim to identify and evaluate risks and opportunities
as early as possible and take appropriate action to mitigate risk. This should prevent potential damage
and safeguard the Company against losses and risks to its going concern. 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 means growing sustainably and increasing the company's value while
managing appropriate risks and opportunities as well as avoiding inappropriate risks. alstria’s risk-
management system is an integral part of its management and control system, with the risk policy
being specified by the Management Board. The risk-management system is integrated into its regular
reporting to the Management Board and Supervisory Board, which ensures that risks are addressed
proactively and efficiently. The risk-management system thereby focuses on full coverage of the risks.
Identifying and assessing opportunities are 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 risk areas. The risk manager
also informs the Management Board on matters relating to implementing, operating, and overseeing the
risk and internal control system and assists the Management Board by, for example, reporting to the
Audit Committee of the Supervisory Board.
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Consolidated Financial Statements
alstria faces various risk areas 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 one or several so-called “risk owners.” Inherent to the risk owners’
position in the Company is that they represent 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,
Development, and IT
Legal
Finance & Controlling
The risk report presents the findings observed during risk identification, assessment, evaluation, and
monitoring. At the same time, this report’s comprehensive documentation 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 affect.
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
minor
low
moderate
high
very high
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Consolidated Financial Statements
Classification according to likelihood
Probability/likelihood of occurrence
1 to 15 %
16 to 35 %
36 to 55 %
56 to 75 %
76 to 99 %
Description
very unlikely
unlikely
possible
likely
highly likely
According to this framework, a very unlikely risk is defined as one that occurs only in exceptional
circumstances and a highly likely risk as one that is expected to occur within a specified period.
Based on the likelihood that a specific risk event will occur and the affect 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
very high
L = low risk.
M = medium risk.
H = high risk.
In 2022, in principle the Company’s risk-management system was not subject to any significant
changes compared to the previous year. The following updates were implemented as part of the new
version of the auditing standard 340 issued by the Institute of Public Auditors for the audit of the risk
early warning system (IDW PS 340 new version):
▪ Determination of the risk-bearing capacity and comparison with the aggregated overall risk,
▪ use of a Monte Carlo simulation to determine the value at risk,
▪ documentation of the control measures to mitigate the main risks.
1.2.
Internal control system
alstrias’s internal control system (ICS) comprises all principles, policies, procedures, and measures
aimed at implementing the decisions of the Group's management to ensure:
▪ The effectiveness and economic efficiency of alstria’s operations (this encompasses asset
protection, including the prevention and detection of financial losses)
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Consolidated Financial Statements
▪ The correctness and reliability of the accounting (internal control and risk management system
relating to the (consolidated) accounting process)
▪ Compliance with the laws and regulations that apply to the alstria Group.
The ICS is an integral part of the centralized and decentralized internal control and monitoring
processes with corresponding responsibilities and is documented in a corporate policy.
The ICS also includes a compliance management system which reflects the company's risk situation.
Internal monitoring includes both process integrated and process independent measures. Process-
integrated monitoring includes the controls and security measures integrated in the organizational
and operational structure. They include authorization schemes, access restrictions, separation of
functions, completeness and plausibility checks, and limit monitoring.
Controls and measures are regularly assessed within the organization. In addition, Internal Audit
monitors and reviews structures and activities (such as the internal control and risk management
system) independently from processes. The Management Board is thus able to assess the effectiveness
and appropriateness of the internal control and risk management system. In accordance with the
recommendations of the 2022 German corporate Governance Code, the Management Board assessed
the appropriateness and effectiveness of the risk management system and the internal control system
in detail and identified no significant objections.
The Audit Committee deals with the ICS as well.
1.3.
Key characteristics of accounting-related internal controls and risk-management system
Regarding the reporting process, the control and risk-management system aims to ensure 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 and the
combined management report. 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.
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Consolidated Financial Statements
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.
The Accounting Department 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, the Company’s controlling department executes monitoring related to accounting. 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 relevant to the accuracy
of accounting-related data. Risks are identified on a quarterly basis and the risk-management
committee assesses and documents them. Appropriate action is taken to monitor and optimize
accounting-related risks throughout the Group.
1.4.
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 section.
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 indicates the risks’ current
importance to the Group. Additional unknown risks and those currently considered immaterial may
also negatively affect alstria’s business objectives and operations. Unless otherwise stated, the risks
described below relate to all Group companies.
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Consolidated Financial Statements
The individual risks described relate to the planning period from 2023 to 2025.
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 project risks
Vacancy risks
Shortfalls of rental payment risks
Maintenance risks
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
Refinancing on unfavorable terms
Interest rate risks
Breaches of covenants
Tax risks
Liquidity risks
Likelihood
Risk
impact
Risk level
Change since
prior year
likely
unlikely
unlikely
likely
possible
possible
Possible
possible
possible
unlikely
possible
unlikely
unlikely
possible
unlikely
possible
possible
possible
possible
Unlikely
unlikely
high
moderate
moderate
very high
high
high
high
low
low
moderate
very high
moderate
moderate
low
low
very high
very high
high
high
high
moderate
H
L
L
H
M
M
M
L
L
L
H
L
L
L
L
H
H
M
M
M
L
L
unchanged
unchanged
unchanged
increased
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
increased
unchanged
unchanged
unchanged
unchanged
increased
Increased
unchanged
unchanged
unchanged
unchanged
unchanged
Counterparty risks
very unlikely
high
alstria Annual Report 2022
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Consolidated Financial Statements
1.4.1. Impact of Ukrainian war and COVID-19 on alstria‘s risk situation
There are considerable uncertainties regarding the global economic and geopolitical outlook, which
deteriorated significantly in the past year due to multiple headwinds, all of which may continue to
intensify. First and foremost, Russia's invasion of Ukraine and its political and economic consequences,
such as sanctions and countermeasures, result in far-reaching risks. War in Ukraine may have a
negative impact on the economy’s sales development, production processes as well as purchasing and
logistics processes, for example through interruptions in supply chains and energy supplies or
bottlenecks affecting components, raw materials, and intermediate products. The conflict could also
intensify further to the point of expanding to include other warring parties, including NATO countries,
and the use of unconventional weapons. An expansion of the war would have a significant impact on
the market environment. This would fuel already high inflation, with further risk of a sustained wage-
price-spiral. An essential risk is that central banks may fail to get inflation under control and have
then to react even more restrictively.
Alternatively, central banks may overreact, which could lead to rapid monetary tightening. More
restrictive financial conditions would likely push advanced economies into recession and pose a
significant risk to vulnerable emerging economies. Highly indebted (emerging and industrialized)
countries could suffer from increasing financing costs, further U.S. dollar appreciation, and loss of
investor confidence. Other risks could arise for the stability of public finances and the banking sector.
Further risks are coming from other geopolitical tensions (particularly associated with Ukraine, the
Baltics, Eastern Europe, the Western Balkans, China, Taiwan, and Iran). Recent, electoral results
within the European Union may make cooperation and implementation of reforms more difficult. Even
though the latest virus variants have seemed less dangerous, the COVID-19 pandemic is still taking a
toll on global economic activity. Compared to the first years of the pandemic, we are seeing a
recovery in many business sectors, and travel has also normalized in many areas. The availability of
vaccines has improved, although their effectiveness against emerging virus variants cannot yet be
conclusively assessed. However, regional lockdowns as a result cannot be completely ruled out. The
longer such restrictive measures (e.g. curfews) last, the deeper the resulting consequences will be.
Possible consequences include an unchecked increase of public and private debt which hampers the
post-crisis recovery, serious disruptions in the financial system, and insolvencies among alstria’s
tenants and suppliers. In the long term, a reversal of globalization could reduce the potential for
future growth. In all functional areas of alstria, we continue to closely monitor COVID-1 9 events and
engage in active mitigation activities if required.
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Consolidated Financial Statements
Regarding alstria’s risk situation, the developments described have negative effects, in particular on
the market environment risks, valuation risks, and refinancing and interest rate risk (see table above).
The effects are discussed in detail below in these risks’ descriptions.
1.4.2. 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 global markets’ high dependency, especially for the German economy, the global economy’s
development also has an indirect influence on alstria‘s business development, although alstria’s
business activities are limited to the domestic rental market. Moreover, the significant
macroeconomic challenges introduced by the COVID-19 pandemic have not eased, as initially
expected, but have actually intensified under the influence of the Russian war against Ukraine (see
explanations in Section V.1.4.1.). A further escalation of the war would significantly worsen global
growth prospects. A significant risk to alstria’s letting potential and cost structure comes from
mounting supply chain bottlenecks due to the continued lack of availability of circuit boards for
building technology and certain building materials. Bottlenecks in energy supply on the one hand and
in access to raw materials on the other would substantially reduce industrial production potential.
The escalating possibility of major defaults in the Chinese property sector, with potential spillover
effects into the entire real estate market and financial markets, would significantly affect growth
prospects of the Asian emerging countries and China. Further, it might have reverberations even on
the global financial system and the world economy. A further increase in inflation rates could lead to
serious distortions in global currency, capital, and foreign exchange markets if central banks initiate
the tightening cycle too fast and too aggressively. Because the fiscal and monetary policy scope for
action appears already largely exhausted, the economic affect could be much greater compared to
the fiscal year 2022.
Additionally, the highly interconnected global economy remains vulnerable to natural disasters or
further pandemics.
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Consolidated Financial Statements
After the severe economic downturn in the Corona years 2020 to 2021 and the renewed tension due
to the Russian war against Ukraine in 2022, the uncertainties for further economic development in
Germany, the EU and the global economy remain considerable. As a result, the market environment
risks continue to show a high-risk level (H), as was the case on the previous year's reporting date.
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 affect key regulatory requirements and the corporate constitution of the alstria
companies. These include alstria’s classification as a 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 classified as low (L), as they were
in the previous year.
Risk caused by inefficient organizational structures
Within the scope of the business organization’s strategic direction, there are further risks that the
inefficient organizational structures and the Company’s dependence on IT systems and structures
cause. 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. Therefore, the risk of strategic corporate
organization remains low (L).
1.4.3. Operational risks
alstria’s operational risk management addresses property-specific risks and general business risks.
These include vacancy risk, tenants’ creditworthiness, and the risk of falling market rents. This risk
area also monitors personnel-related risks, such as loss of expertise and competencies due to staff
fluctuations. alstria applies various early warning indicators to monitor these risks. Ongoing insurance
checks, such as rent projections, vacancy analyses, and controlling lease terms and termination
clauses, are designed to help identify potential dangers and risks.
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Consolidated Financial Statements
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 utilization in the construction industry places high demands on procuring and
executing contracts due to the limited availability of craftsmen and construction companies. Even
against the background of the COVID-19 pandemic and the Russian war against Ukraine, these
economic bottlenecks have not eased but have itensified. Supply chain issues and high inflation make
planning and executing construction projects difficult. The volume of construction projects planned
for the three financial years after the reporting period has increased compared to the previous years’
long-term average. For these reasons, the risk resulting from refurbishment projects continues to be
classified as high (H).
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. Because of the COVID-19 countermeasures, the economic downturns
described and the increased trend toward working from home already began in the 2020 financial
year. Even if the economic situation recovered somewhat in the reporting period and most companies
had employees moving back from home office to office space, the volume of new leases for office
and commercial space is only slowly picking up speed again. The effect on existing tenancies is very
limited. Due to long-cycle development of the demand for office rental areas, there is usually time
lag between changes in macroeconomic conditions and their effect on alstria’s letting results. Vacancy
risks are 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, after tenants have moved
out, the space cannot be re-let so easily because the demand is no longer comparable due to the
economic situation or the remaining home office times.
Overall, the volume of lettings was again lower than the years before the COVID-19 pandemic
outbreak. Due to the longer planning and decision-making phases regarding the companies leasing
office space, a longer-lasting lag effect is to be expected. As a result, the vacancy risk remains at a
higher level and, as at the end of the previous reporting period, is classified as a medium risk (M).
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Consolidated Financial Statements
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 because of an economic downturn or of a particular case. Due to the described
consequences of the COVID-19 pandemic on many market participants’ economic situation, the risk
had increased that alstria’s tenants could also have trouble in meeting their rental payment
obligations. alstria’s main tenants are predominantly public institutions or companies with a high
rating. Actual defaults were limited over the Corona years through end of 2022. Precautions had
already been taken in the 2020 financial year via increasing the write-downs on receivables. In
addition to the effects of the COVID-19 pandemic, there are the described uncertainties of the Ukraine
war, the high inflation and the increased interest rates on the economic situation of the market
participants and thus also of alstria's tenants. To what extent the situation will affect the future
payment behavior of tenants in the medium term cannot be conclusively assessed at this time. As a
result, the risk of default on rental payments remains a medium risk (M), as was the case on the
previous year’s reporting date.
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 building’s condition, or incorrect
assessment of maintenance requirements could all result in higher-than-planned maintenance costs.
Due to alstria’s 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 decisively affect the Company’s success. The risk of
losing knowledge results from staff member fluctuation 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 its image as an attractive
employer; university marketing; trainee programs; training apprentices; and profit-oriented variable
remuneration schemes. Furthermore, independent external experts anonymously carry out employee
surveys on employee motivation, management, and corporate culture. The takeover by Brookfield
(see Section I.1.) could lead to impaired employee motivation if the impression is given that the
transferred company would not continue the operational and administrative activities in the existing
structure and manner, or if there is a major change in the corporate identity. To counteract this, the
Investor Agreement with the Bidder states that employees are critical to alstria's success and the
Bidder will therefore support alstria in attracting, developing, and retaining talent and maintaining a
collaborative work environment. The Bidder has also undertaken not to take any action that would
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Consolidated Financial Statements
result in terminating alstria employees for operational reasons. In addition, it is still planned to leave
alstria's headquarters in Hamburg and to continue all local branches of alstria in their current form.
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
IT systems support the majority of alstria’s business processes. Any fault affecting the IT systems’
reliability or security could lead to delays or interruptions in operating activities. alstria protects
itself
against
IT
risks
through
constantly
examining
and
enhancing
the
information technology it deploys. In addition, it has installed modern hardware and software
solutions and safeguards against attacks. In view of attempted hacker attacks, measures were
implemented to combat such cyberattacks. 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 can only access
the systems 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.
An external IT consultant’s review confirmed the IT security’s effectiveness in the home offices.
Therefore, overall IT risks are assessed as unlikely to materialize; as in the prior year, their possible
consequences are considered low (L).
Risks relating to property transactions
alstria is exposed to risks related to the acquisition and disposal of real estate properties. A related
risk includes 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
provides potential purchasers certain warranties 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.
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Consolidated Financial Statements
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 properties’ transactions are assessed to be of a low (L) level.
1.4.4. 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 G-REIT segment
basically enables a stock corporation to be more present for investors and to differentiate itself as a
G-REIT on the capital market. The REIT shares are traded on the Frankfurt Stock Exchange. The G-
REIT status does not influence admission to the regulated market (Prime Standard).
The Company has to meet certain requirements to qualify for and retain its designation as a G-REIT.
The most significant requirements are that 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 can 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. A proportion of 90% of
the company's annual profits as resulting under German GAAP-accounting less the loss carryforward
is subject to a distribution obligation pursuant to Section 13 (1) REITG. The G-REIT’s equity cannot
fall below 45 % of the fair value of its real estate assets as recorded under IFRS.
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.
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Consolidated Financial Statements
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. However, if the minimum equity ratio
is 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 55.3 % 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 because of failing to meet the 45 % threshold within the three-year
forecast period through December 31, 2025.
As a result of the takeover (see Section I.1.), the acquiring company, Alexandrite Lake Lux Holdings
S.á r.l., Luxembuorg, Grand Duchy of Luxembuorg, (hereinafter "Alexandrite" or " acquiring company")
directly acquired a stake of more than 10% in alstria-office REIT-AG. As of December 31, 2021, the
share of direct participation in the share capital and voting rights of alstria office REIT-AG amounted
to 33.76%. This share has increased since and as of December 31, 2022 amounted to 83.40 %. In
addition, Lapis Luxembourg Holdings S.à r.l., Luxembuorg, Grand Duchy of Luxembuorg, a company
acting jointly with Alexandrite within the meaning of Section 2, para. 5 WpÜG, directly held around
10.23% of the share capital and the voting rights of alstria office REIT-AG. Furthermore, the free float
pursuant to the REIT Act of shares in the Company fell in the financial year 2022 below the limit of
15% of the shares. As of the balance sheet date, the free float in accordance with the REIT Act was
4.89%.
The requirement to exceed the 10% ownership interest only takes effect once the direct interest has
existed for three years. If the proportion of a direct holding is not reduced to below 10% by the end
of the third year following the end of the year in which it was first exceeded, the REIT status is lost
retrospectively at the end of the second financial year following the end of the year in which it was
first exceeded. If the exceeding maximum investment limit in the present case is not remedied by
December 31, 2024, the REIT status of alstria office REIT-AG would cease to exist at December 31,
2023.
Alexandrite has committed itself to alstria office REIT-AG, if the REIT status is maintained within
three years’ time after December 31, 2021, to take suitable measures to ensure again compliance
with the maximum participation limit with regard to the shareholdings of the Bidder and the Lapis
Luxembourg Holdings S.à r.l. in due time.
The minimum free float ratio of 15% was not reached for the first time in the 2022 financial year. This
means that the REIT status could not be lost before December 31, 2024. Curing this regulation would
be possible until December 31, 2025.
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Consolidated Financial Statements
alstria constantly monitors compliance with all of the REIT criteria described, which the company
could influence. Violations of the two criteria of exceeding the 10 percent maximum ownership
interest and falling below the minimum free float ratio can be cured by the end of the periods
described above for in each case. However, the remaining deadlines for this have now been shortened
since the criterion of the 10 percent maximum ownership interest was not met for the second time.
In addition, a further criterion was not met with falling below the minimum free float ratio on the
balance sheet date. For these reasons and because the loss of REIT status would have a very high
impact due to deferred tax liabilities to be taken into account, the risk of non-compliance with the
REIT criteria is classified as high (H) as of the balance sheet date, while it was still rated as low (L)
in the previous year.
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 management members 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 the 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
2020, 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
General Data Protection Regulation’s requirements. alstria has implemented a compliance
organization, which addresses 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 previous
year’s assessment.
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Consolidated Financial Statements
Litigation risks
alstria AG or any of its subsidiaries could be involved in pending or foreseeable court or arbitration
proceedings that might significantly affect 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.
After the legally binding clarification of the legal disputes in connection with converting DO Deutsche
Office AG into the limited partnership alstria office Prime Portfolio GmbH & Co. KG in 2016, neither
alstria office REIT-AG nor its subsidiaries are involved in current or foreseeable court or arbitration
proceedings that could significantly affect the Group’s economic position. This also applies to
warranty, repayment, or other claims asserted in legal proceedings in connection with the sale of real
estate or development projects carried out in recent years. Appropriate provisions have been made
at the respective Group company for any financial burdens arising from ongoing or foreseeable court
or arbitration proceedings.
Because none of the Group’s companies are currently exposed to civil rights proceedings or other
types 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 imperative to take into account the effect of climate change on the prospects.
Alstria’s assets are in areas with (on a global scale) relatively limited climate sensitivity. In most
cases, the changes in market regulations and tenant demand that will be caused by the transition to
a low-carbon society are known and predictable. The adaptation and innovation need of the
company’s assets and services fit naturally into the modernization cycle of its portfolio. However,
alstria’s business is not immune to the systemic risks created by climate change.
The specific risks related to climate change that the Company faces are listed below.
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Consolidated Financial Statements
Physical risks — acute: alstria’s property portfolio is subject to extreme weather events, such as
flooding, storms, and hail, which may weaken building structures and threaten tenants’ safety. The
potential immediate risk for alstria relates to the cost of repairing a damaged building and reduced
revenues due to reduced office quality/availability during the renovation period. In the worst case,
the structural value of the asset will be negatively impacted. According to many experts, such as the
IPCC (Intergovernmental Panel on Climate Change), extreme weather phenomena will increase in the
coming years. alstria’s control process includes:
▪ Regular update of physical climate-risk assessments to determine which buildings must be
upgraded accordingly.
▪
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 alstria’s assets’ balance sheet value.
Transition risks — regulatory: After the Paris Agreement, new regulations, for example the EU Energy
Performance of Buildings Directive imposes stringent obligations for the energy efficiency of EU’s
building stock to be met by 2050. Failing to meet new climate regulations may decrease the
attractiveness of alstrias assets, which may, in turn, lower or nullify their rental potential and
ultimately decrease the company’s revenues and value. alstrias control process includes:
▪ Ongoing environmental monitoring and compliance with applicable laws and standards.
▪ Participation in industry bodies to monitor emerging legislation early.
▪
Integration of physical, regulatory, and demand-related impacts in all central decision-making
and planning processes (incl. OPEX and CAPEX) along the business cycle (buy, manage,
redevelop, and sell), to reduce the carbon footprint of the company’s building portfolio.
▪ De-carbonization of the company’s revenues/ business model through technological
innovations, e.g., smart building technology, which also enables less carbon-intensive office
offerings in the sharing economy (e.g., alstrias coworking business BEEHIVE).
▪ Putting the development of existing assets at the core of alstrias business model, instead of
ground-up development. From alstrias perspective, new developments have negative
contribution to climate change, regardless of their operational efficiency, because of the
carbon needed for their construction (i.e., embedded carbon).
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Consolidated Financial Statements
Transition risks – market and reputational: Growing climate-change awareness and the cost
considerations following an increase in environmental taxes (e.g., carbon taxes) could shape tenants’
behavior by them requiring more energy-efficient office space. Failing to respond to this demand
could make alstrias assets unattractive, implying a subsequent decline in their rental potential.
alstrias control process includes:
▪ Offering additional services to help tenants run their offices efficiently (e. g., Mieterstrompool
and coworking spaces).
▪ Recognizing early the financial requirements to upgrade and modernize buildings.
Similar to the previous year, environmental risks are assessed at a low (L) level.
Risk of noncompliance with human rights
There is a risk that alstria’s activities will trigger activities or have an effect that violates human
rights. This could be the case, 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 alstria’s legal representatives and employees’ behaviors always remain within
the framework of the legal requirements and at the same time correspond to high ethical standards.
These standards also apply to drafting contracts with contractors or customers, which should be done
to minimize the risk of noncompliance with human rights along the value chain. Throughout the group,
alstria especially respects the UN Guiding Principles on Business and Human Rights, which are
grounded in recognizing that states and companies must 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 protection of human
rights. 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 German law’s framework 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.
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Consolidated Financial Statements
1.4.5. Financial risks
Following the takeover by Brookfield, alstria's strategy was complemented with the objective of
driving further growth by actively pursuing new value-add refurbishment and repositioning
opportunities and accelerated assets rotation.
The partnership with Brookfield enabled alstria to develop a risk-return profile consistent with the
private real estate market and pursue a more effective total return approach than previously possible
in public markets. This included an increase in the level of debt at Group level with the consequence
of a reduction in recurring dividend payments in subsequent years.
Valuation risks
The fair value of the real estate properties the Company owns reflects their market value as
independent appraisers determine, which could be subject to change in the future. Generally, the
real estate properties’ market value depends on various factors, some of which are exogenous and
may be outside alstria’s control. These factors include declining rent levels, decreasing demand, and
increasing vacancy rates. Many qualitative factors also decide a property’s valuation, including its
conditions, expected market rents, and location. The mandated appraiser’s final assessment is to a
certain extent discretionary and may differ from another appraiser’s opinion. 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.
Factors such as economic changes, interest rate fluctuations, and inflation may adversely affect
properties’ value. A further rise in inflation could lead to a further rise in interest rates and thus
make it more expensive to refinance a property. Higher interest rates also make other forms of
investment, such as bonds or similar money market products, more attractive than investing in real
estate. Both could have a negative impact on the demand for real estate and thus on its value.
However, higher inflation rates also lead to higher rental income, since the development of rents for
a large part of alstria's tenants is linked to the consumer price index. This effect would have a positive
impact on the value of the properties. To minimize these risks, regional diversification of investment
portfolios, consistent focus on the tenants’ individual needs, and detailed market research and ana-
lysis (broker reports) are applied. In addition, Independent, internationally recognized experts
determine the market value of all of alstria’s assets at the end of each year. The consequences of
the COVID-19 pandemic had so far no negative effects on the current assessment.
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Consolidated Financial Statements
The risk of higher inflation, which could negatively affect the demand for real estate and thus its
value via the rise in interest rates, is perceived as inconsistent. In return, ceteris paribus, higher
nominal rental income would be expected, so that, at least in terms of model theory, valuation
pressure appears manageable. Historically, real estate has been inflation-proof in practice.
Since the increase in the rate of inflation and interest rates has developed more dynamically in recent
months than ever before and neither the further development nor the subsequent effects on
valuations are fully foreseeable, the risk of unexpected devaluations as of the balance sheet date is
perceived as high (H), after it was still classified as moderate (M) on the same date in the previous
year.
Refinancing risks
The main financial instruments currently used by the Group are fixed rate bonds. In addition, there
are mortgage-backed bank loans. The bonds and bank loans’ main purpose is to finance alstria’s
business activities. The main risks arising from the Group’s financial instruments are cash flow risks,
interest rate risks, and liquidity risks. Even though alstria's Net LTV increased from 28.8% to 43.6 % at
the end of the reporting period compared to the previous year’s reporting date, alstria’s
creditworthiness was rated BBB – (“Investment Grade”) by rating agency Standard & Poor’s. The
Group’s bonds and bank loans have a diversified maturity profile, so that there is a diversified maturity
profile and the refinancing of the entire loan at one point can be avoided (see the maturity profile of
the loans on page 17).
The change in capital structure triggered by the change of control in January 2022 (see section I.1.)
nevertheless resulted in a higher refinancing requirement. Planned financing of around EUR 1,019
million is pending within the three-year risk period. As a result, the extent of the risk has increased
compared to the previous year's reporting date.
The refinancing risk is therefore now classified as a high risk (H) as of the balance sheet date, after
it was still considered a medium risk (H) on the previous year’s reporting date.
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Consolidated Financial Statements
Interest rate risks
Interest rate risks result from fluctuations in market interest rates. These floating rates influence the
sum of interest expenses in the financial year and the three-year forecast period on which risk
management is based. The level of nominal interest rates also depends on the further development
of inflation rates.
alstria's hedging policy included the use of classic interest rate swaps or interest rate caps, if
applicable to limit the Company’s exposure to interest rate fluctuations and provide enough flexibility
to dispose real estate assets. The interest base for the floating rate interest loans is the EURIBOR,
which is adjusted every three months. The majority of alstria’s funding consists of long-term fixed-
interest bonds as well as bank loans whose variable interest rate (3-month EURIBOR) is hedged by
fully efficient interest rate swaps and is therefore not subject to interest rate risk up to its maturity.
The future refinancing requirements as described in the previous chapter, could result in higher
interest rate conditions than planned. In this respect, the probability that the new loans will entail
higher interest expenses than planned has increased by one level from "unlikely" to "possible".
The interest rate risk in total, is still classified as a medium risk (M) as of the balance sheet date.
Breaches of covenants
In the process of issuing corporate bonds, taking out loans and the issuance of a Schuldschein, alstria
agrees to comply with certain covenants, such as achieving a minimum income (debt service coverage
ratios) from mortgaged properties or not exceeding 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,
a lender’s extraordinary termination of a loan.
Although the impact of breaching loan covenants could be significant, the likelihood of breaching
them is considered manageable due to consistent monitoring of compliance with the loan terms.
Overall, the risk from breaches of covenants as of December 31, 2022, as in the previous year, is
classified as a medium risk (M).
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Consolidated Financial Statements
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 lost REIT status or at a subsidiary level. Additionally, the Group 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.
Due to the takeover of the alstria office Prime Group, companies are included in the consolidated
financial statements that are not subject to the REIT legislation’s regulations. The restructuring,
which was implemented during the 2016 financial year, particularly the conversion of these
companies’ legal forms into limited partnerships, resulted in taxing hidden reserves and liabilities
within the acquired companies. Subsequently, the companies are tax transparent.
Due to the income tax exemption as a REIT and internal and external tax experts’ consistent
monitoring of tax-relevant issues, the probability of a tax loss is 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 that could result in high tax obligations over the three-year risk period, the risk
impact is considered significant.
Because of the Federal Constitutional Court judgment, the German legislature passed a new
regulation on property tax at the end of 2020. 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, such as through using 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, year of
construction, and land value. The latter results from the multiplication of the land area by the
standard land value. Therefore, it is unnecessary 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
because passing on costs to tenants was not restricted. The Federal Constitutional Court will allow
applying the current property tax rates until the end of 2024. Therefore, no significantly higher real
estate tax expenses are expected within the next three years.
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Consolidated Financial Statements
The transfer of shares in companies with real estate assets can under certain circumstances, if certain
share quotas are exceeded, result in real estate transfer tax on the real estate of the company or
their subsidiaries. Because of Alexandrite's takeover activities, shares in alstria office REIT-AG were
transferred. Due to the extensive real estate assets of the alstria Group, real estate transfer taxes
could be incurred to a considerable extent in the event of a harmful transfer of shares. Therefore,
the Bidder has guaranteed the company that it will refrain from transferring a harmful number of
shares. In addition, the Bidder has warranted to the Company that it will indemnify the Company and
its affiliates against any property tax damage or loss resulting from a breach of warranty or any other
harmful measures.
Overall, there is therefore a medium (M) tax risk, which is unchanged from the previous year.
Liquidity risk
One of alstria’s core processes is cash management. The Company manages its future cash position
and monitors its progress daily. The Company uses a cash-forecasting tool 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 activities in recent years, such as placing several corporate bonds with diversified
maturity profiles, the substantial liquidity risk arising from repaying all or most of alstria’s credit
commitments in one sum (“balloon repayment”) has been managed successfully. The Group had
implemented most of the new refinancing strategy by the balance sheet date. The existing debt
capital structure can be maintained through the planned refinancing of the bonds and loans that will
expire within the next three years. In addition, cash and cash equivalents amounted to EUR 365 million
as of the balance sheet date. As a result, the liquidity risk from the obligation to repay loans has been
classified as low (L), as in the previous year.
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 leading rating agencies rate. 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.
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Consolidated Financial Statements
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,
could have also contributed to this. alstria is otherwise not exposed to significant credit risks. Hence,
counterparty risk can be classified as low (L), just as it was last year.
1.5. 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 still influenced by the COVID-19 pandemic.
Additionally, the Russian war against Ukraine has affected the risk environment. The latter in
particular provided based on higher energy prices, the initial impetus for a sharp rise in inflation rates
and, as a reaction, an increase in interest rates. This affected the refinancing and valuation risks in
particular. Furthermore, for assessing certain financial risks and risks from violations of the REIT Act
due to the takeover (see Section I.1.), questions arose
These developments result in an overall assessment of a moderate increase in risks.
For the 2022 financial year, compared to 2020, changes were 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 14.5 %
(December 31, 2021: 9,1 %) of all identified risks, whereas medium risks accounted for 30.9 %
(December 31, 2021: 34.5 %). 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.
From the Management Board’s point of view, the liquidity situation and the solid REIT equity ratio
are stabilizing factors. The long-term refinancing position is supported by the S&P rating BBB-
(“investment grade”). The equity ratio of 50% reduces the risk that could arise if the property
valuations come under pressure (e.g., because of inflation-driven interest rate hikes).
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 89.4 million as of the balance sheet
date, compared to EUR 55.1 million as per December 31, 2021.
alstria Annual Report 2022
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Consolidated Financial Statements
The risks described in the aggregated risk report do not threaten, whether individually or
cumulatively, alstria’s ability to continue as a going concern, given the 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 and transform them into business success.
Growth and earnings opportunities result from alstria’s existing real estate portfolio and potential
acquisitions. Depending on where the property stands in its lifecycle, value opportunities might be
unlocked by its repositioning or/and redeveloping, in its re-tenanting, or its disposal.
The Company’s financing activities safeguard the necessary funding to implement the asset business
plans. Financing opportunities rely on ensuring competitive financing, including equity funding, on
favourable terms.
Evaluating opportunities is done in the context of annual budget planning and on an ongoing, basis
during the year. The process begins with a careful analysis of the market environment and 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 addressed to
the management supports monitoring growth initiatives within the budget and planning-approval
processes.
alstria’s 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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Consolidated Financial Statements
2.1.1. Opportunities related to real estate acquisitions
A property’s location is key to its attractiveness. Opportunities arise when favorable demographics
and real estate dynamics that characterize a regional market. Combined with optimal Real Estate
operations, a good location leads to opportunities for long-term capital appreciation. alstria’s
acquisition strategy aim at identifying properties that offer this capital appreciation potential.
Therefore, its investment strategy focuses on acquiring properties and portfolios which are well
located in their respective markets but are (either immediately or at the end of the current occupier
cycle) of a substantial repositioning/redevelopment as its reached the end of its economic life.
Acquisitions are underwritten on the basis of unlevered IRR (Internal Rates of Return) based on a long-
term business plan, which the company assess as delivering adequate returns on a risk-adjusted basis.
2.1.2. Opportunities related to tenant relationships
Structured and active real estate operations, underpin the quality of alstria’s services to tenants and
is the basis for sustainable tenant relationships. Opportunities arise through flexible responses to
existing or potential tenants’ needs. The Company has the knowledge and resources to provide
solutions and implement tenants’ requirements, which allows opportunities to generate sustainable,
long-term cash flows.
2.1.3. Opportunities arising from real estate development
Alstria’s acquisition strategy leads it to own properties that need repositioning/redevelopment in the
mid to long term. Modernizing properties provides value creation opportunities through reshaping
assets for the next 20 to 30 years and strengthening their future attractiveness in the market and for
tenants.
2.1.4. Opportunities from sustainable management
alstria sees itself as a transition agent that aims to transition office real estate that reaches the end
of their economic life into the next operational cycle. As the investment community increase
awareness about the sustainability performance of real estate assets, it increases the attractiveness
of the assets refurbished by the company in the investment market, thereby increasing investor
demand in the market where the company sells. On the other hand, the investment community is
shying away from assets the company buys and uses as primary goods for its value-creation process,
thereby reducing the demand and prices in these markets. The conjunction of the two factors offers
a substantial business opportunity that the company seeks to capture over time.
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Consolidated Financial Statements
2.1.5. Opportunities arising from financing
alstria’s business model is in constant need of a substantial amount of capital. The cost of capital the
company can access (relative to other real estate players) is a key element in the success of the
company’s business. As the financing markets increasingly focus on the "ESG" approach of real estate
players, alstria aims to benefit from the positioning that the company's Management Board has built
up in this area over the past decade. Our ability to access sufficient amounts of capital provides the
opportunity to successfully implement our business plan.
2.2. Overall summary of the Opportunities Report
Overall, alstria's core competencies, which include the consistent implementation of sustainability
measures in the company and in the investment portfolios, offer the opportunity to seize
opportunities and translate them into entrepreneurial success. In terms of revenues, alstria benefits
from rental agreements with an average remaining term of around 5.5 years and a potential increase
in rental income due to implementing value-added development projects. The Company owns a
number of properties that offer attractive and value-adding sustainable refurbishment opportunities.
alstria’s portfolio is well balanced and has high-quality properties with tenants with good credit
ratings. The concept of not building new real estate, but refurbish existing real estate, offers the
opportunity to achieve greater flexibility in the market for rental space and disposal of investment
properties due to the focus of investors and tenants on sustainability aspects.
alstria sees itself well positioned to successfully continue its strategy of acquisition, sustainable
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 repositioning and restructuring projects, which
alstria continues to pursue and implement, provide a strong basis for further organic increases in
value within the portfolio.
alstria Annual Report 2022
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Consolidated Financial Statements
VI. SUSTAINABILITY REPORT*
In November 2022, alstria published its annual sustainability report for the financial year 2021. The
report provides insights into the environmental, employee-related, and societal performance of
alstria. It is prepared in accordance with the GRI standards and the EPRA real estate specific
guidelines. In addition, the recommendations of the FSB Task Force on Climate-related Financial
Disclosure (TCFD) have been considered. The report has received independent limited assurance for
the sections ‘Our Buildings’ and ‘Our People’ as well as for the ‘EPRA Sustainability Performance
Indicators’.
The core elements of alstria’s sustainability strategy are:
▪ Built emissions from the construction of buildings account for the majority of a building’s
total lifecycle emissions. Operational emissions are becoming increasingly smaller due to the
decarbonization of energy grids.
▪ The most efficient way to address CO2 emission reduction in the real estate space is to
refurbish existing buildings for energy efficiency and to use them for as long as possible. New
commercial buildings are now part of the problem, not the solution.
▪ There are no net-zero buildings – compensation and offsetting which are widely used are not
rooted in science and do not work.
▪ The best operational measures for existing buildings are to replace fossil fuel heating
methods (gas/oil) with decarbonizing and renewable energy (district heating and heat
pumps) and to advance the electrification of buildings accordingly.
For further information please refer to alstria’s Sustainability Report 2021/22.
* This section is an unaudited statement.
alstria Annual Report 2022
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Consolidated Financial Statements
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, 2022, alstria’s share capital amounted to
EUR 178,291,272.00, divided into 178,291,272 no-par value bearer shares. All shares are fully paid in
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 Company’s profits. The shareholders’
individual rights and duties 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
The Company was notified in accordance with Section 33 of the German Securities Trading Act (WpGH)
that Brookfield Asset Management Inc., Toronto, Canada held 95.11 % of the voting rights in the
Company as of February 17, 2022. 10.23 % of the voting rights were attributable to Lapis Luxembourg
Holdings S.à r.l. and 83.14 % of the voting rights were attributable to Alexandrite Lake Lux Holdings
S.à r.l. As of the balance sheet date December 31, 2022, alstria was not aware of any other
shareholders whose direct shareholding exceeded 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.
alstria Annual Report 2022
57
Consolidated Financial Statements
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 resolutions of the Annual General Meeting on September 29, 2020, authorized to adapt the wording
of the Articles of Association to the utilization of the Company’s 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
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 5, 2022: Section 5, paras. 1 and 2 of the Articles of Association were
formally adapted to a capital increase executed from the Company’s Conditional Capital III 2017.
Section 5, para. 7 of the Articles of Association was deleted because the Conditional Capital III 2017
had become obsolete following the execution of the capital increase.
7. AUTHORITY OF MANAGEMENT BOARD REGARDING THE ISSUE AND BUYBACK OF SHARES
7.1.
Authorized capital
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.
7.2.
Conditional Capital
alstria holds two conditional capitals (pursuant to Sections 192 et seq. of the AktG), which are
regulated in Section 5, paras. 5 and 8 of the Company’s Articles of Association.
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58
Consolidated Financial Statements
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,
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 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).
alstria Annual Report 2022
59
Consolidated Financial Statements
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 financings, the repayment obligation is subject to a downgrade of the
Company’s or the bonds rating, occurring within 120 days of the control change.
The total volume of obligations under those agreements with corresponding change of control clauses
amounted to approx. EUR 2,356 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. 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/company). Thus, it is made permanently accessible to the public.
2. EMPLOYEES
As of December 31, 2022, alstria had 181 employees (compared to 171 on December 31, 2021). The
annual average number of employees was 17/ (compared to 171 in the previous year). These figures
exclude Management Board members.
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Consolidated Financial Statements
3. GROUP AND DEPENDENT-COMPANY REPORT
In accordance with Section 290 of the German Commercial Code (HGB), alstria is required to prepare
consolidated statements and a Group management report with respect to the Group companies
controlled by alstria. Therefore, alstria office REIT-AG and all associated companies as stated in the
group notes are consolidated in the alstria Group.
Due to the majority interest in alstria held by Brookfield Corporation on December 31, 2022 and the
fact that there is no control agreement with the controlling company and alstria, the Company issued
a separate dependent-company report with affiliated companies, as a dependent stock corporation
pursuant in accordance with Section 312 of the German Stock Corporation Act (AktG). This report
includes the following statement by alstria's management board:
“According to the circumstances that were known to us at the time the legal transactions with
affiliated companies were carried out or the measures were taken or omitted, alstria office REIT-AG,
Hamburg, received appropriate consideration for every legal transaction and was not disadvantaged
by the measures taken or omitted.”
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61
Consolidated Financial Statements
4. DIVIDEND
The Management Board, in agreement with the Supervisory Board, intends to propose to the Annual
General Meeting to use the balance sheet profit of alstria office REIT-AG for the 2022 financial year
to pay a dividend of EUR 0.06 per share. In the event that there are significant changes in the
company's available liquidity in the further course of the 2022 financial year, the Management Board
and Supervisory Board reserve the right to submit a different dividend proposal to the Annual General
Meeting. The payment of a dividend depends on the approval of the General Meeting.
Hamburg, February 27, 2023
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
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62
Consolidated Financial Statements
DETAIL INDEX CONSOLIDATED FINANCIAL STATEMENTS
I.
II.
III.
IV.
V.
VI.
CONSOLIDATED INCOME STATEMENT ............................................................... 64
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................... 65
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................ 66
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................... 68
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY............................................. 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 71
1. BASIS OF PRESENTATION ................................................................................ 71
2. BASIS OF PREPARATION ................................................................................. 72
3. SEASONAL OR ECONOMIC EFFECTS ON BUSINESS .................................................. 103
4. SEGMENT REPORTING ................................................................................. 103
5. NOTES TO THE CONSOLIDATED INCOME STATEMENT ............................................. 104
6. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS ............... 110
7. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND
LIABILITIES .............................................................................................. 120
8. OTHER NOTES .......................................................................................... 129
9. RELATED PARTY RELATIONSHIPS ..................................................................... 131
10. EARNINGS PER SHARE ................................................................................. 132
11. DIVIDENDS PAID AND DIVIDENDS PROPOSED ........................................................ 133
12. EMPLOYEES ............................................................................................. 133
13. SHARE-BASED REMUNERATION ....................................................................... 134
14. FINANCIAL RISK MANAGEMENT ....................................................................... 139
15. SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD ............................. 148
16. UTILIZATION OF EXEMPTING PROVISIONS ........................................................... 148
17. DISCLOSURES PURSUANT TO THE WERTPAPIERHANDELSGESETZ [GERMAN SECURITIES
TRADING ACT] AND EUROPEAN MARKET ABUSE REGULATION [MAR] ............................ 148
18. DECLARATION OF COMPLIANCE PURSUANT TO AKTG SECTION 161 ............................. 150
19. AUDITORS’ FEES ........................................................................................ 151
20. MANAGEMENT BOARD ................................................................................. 152
21. SUPERVISORY BOARD .................................................................................. 153
alstria Annual Report 2022
63
Consolidated Financial Statements
B. CONSOLIDATED FINANCIAL STATEMENTS
I. CONSOLIDATED INCOME STATEMENT
For the period from January 1 to December 31, 2022
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
Net result from the adjustemt of investment
propert
Pretax result
Income tax expenses
Consolidated profit
Attributable to:
Notes
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
2022
182,819
38,170
-62,043
158,946
-10,441
-26,994
16,219
-3,000
2021
183,670
38,908
-59,307
163,271
-8,325
-19,769
5,930
-14,614
-173,794
94,827
2,896
-36,168
15,134
236,454
-37,056
-26,019
-782
-108
-499
-74,505
-109
-74,614
210,327
-649
209,678
Shareholders of alstria office REIT-AG
-74,614
209,678
Earnings per share in EUR
Basic earnings per share
Diluted earnings per share
10
10
-0.42
-0.42
1.18
1.18
alstria Annual Report 2022
64
Consolidated Financial Statements
II. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from January 1 to December 31, 2022
EUR k
Notes
Consolidated profit for the period
Other comprehensive income for the period
(items that can be reclassified to net income):
Market valuation cash flow hegdes
Total comprehensive income for the period
Total comprehensive income attributable to
Shareholders of alstria office REIT-AG
2022
-74,614
32,663
32,663
-41,951
2021
209,678
0
209,678
-41,951
209,678
alstria Annual Report 2022
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Consolidated Financial Statements
III. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2022
ASSETS
EUR k
Noncurrent assets
Investment property
Equity-accounted investments
Property, plant, and equipment
Intangible assets
Financial assets
Derivatives
Total noncurrent assets
Current assets
Trade receivables
Income tax receivables
Other receivables
Cash and cash equivalents
thereof restricted
Assets held for sale
Total current assets
Notes
Dec. 31, 2022
Dec. 31, 2021
6.1
6.2
6.3
6.3
6.4
6.5
6.6
6.6
6.7
6.8
4,606,848
4,775,801
101
20,247
504
94,891
34,767
923
22,936
274
39,185
0
4,757,358
4,839,119
8,166
1,343
5,384
364,973
8,761
26,550
406,416
3,922
1,289
4,258
313,684
0
72,100
395,253
Total assets
5,163,774
5,234,372
alstria Annual Report 2022
66
Consolidated Financial Statements
EQUITY AND
LIABILITIES
Dec. 31, 2022
Dec. 31, 2021
Notes
7.1
EUR k
Equity
Share capital
Capital surplus
Hedging reserve
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
7.2
7.3
7.4
7.5
7.2
7.3
7.5
5.4; 13.2
7.6
7.4
7.5
178,291
507,640
32,663
1,849,321
3,485
2,571,400
120,959
2,026,290
1,802
13,363
178,033
1,261,630
0
1,923,935
3,485
3,367,083
69,798
1,697,605
2,585
14,369
2,162,414
1,784,357
21
372,142
3,581
279
2,188
525
51,224
429,960
15
19,594
3,487
541
4,525
2,439
52,331
82,932
2,592,374
1,867,289
Total equity and liabilities
5,163,774
5,234,372
alstria Annual Report 2022
67
Consolidated Financial Statements
IV. CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ending December 31, 2022
EUR k
Notes
2022
2021
5.8
5.8
5.9
8.3
5.7
6.3
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
Payments for investment in financial assets
6.4
-74,614
209,678
-4,062
41,118
109
174,535
6,678
-2,896
965
-5,958
-15,122
120,753
3,115
-34,343
-2,446
87,079
-1,323
27,343
649
-91,239
5,957
-15,134
942
987
-688
137,172
1,323
-24,705
2,644
116,434
-114,886
161,570
-206,996
24,750
-882
-703
-149
-1,006
-3,093
-87
Net cash generated from/ used in investing activities
44,950
-186,432
alstria Annual Report 2022
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Consolidated Financial Statements
EUR k
Notes
2022
2021
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 issue of bonds and borrowings
Payments of transaction costs for taking out loans
Proceeds from the issue of convertible participation rights
Payments for the redemption portion of leasing obligations
Payments of dividends
Payments due to the redemption of bonds and borrowings
Payments for the acquisition of financial derivatives
7.1
7.1
11
6.5
258
-1
-3,810
760,000
-8,019
0
-457
-756,640
-69,483
-2,588
240
0
-1,957
21,210
0
287
-505
-94,230
-2,323
0
Net cash used in financing activities
-80,740
-77,278
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
51,289
-147,276
313,684
460,960
thereof restricted: EUR 8,761 k; previous year: EUR 0 k
6.7
364,973
313,684
alstria Annual Report 2022
69
Consolidated Financial Statements
V. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from January 1 to December 31, 2022
EUR k
Notes
Share
capital
Capital
surplus
Hedging
reserve
Retained
earnings
Revaluation
surplus
Total
equity
As of Dec. 31, 2021
178,033
1,261,630
0
1,923,935
3,485
3,367,083
Changes in the
financial year 2022
Consolidated profit
Other
comprehensive
income
Total
comprehensive
income
Payments of
dividends
Share-based
Remuneration
Conversion of
convertible
participation rights
0
0
0
0
0
11
5.4;
13.2
0
0
0
0
-74,614
32,663
0
32,663
-74,614
-756,640
2,392
0
0
0
0
0
0
13.2
258
258
0
0
0
0
0
0
-74,614
32,663
-41,951
-756,640
2,392
516
As of Dec. 31, 2022
7.1
178,291
507,640
32,663
1,849,321
3,485
2,571,400
For the period from January 1 to December 31, 2021
EUR k
Notes
Share
capital
Capital
surplus
Hedging
reserve
Retained
earnings
Revaluation
surplus
Total
equity
As of Dec. 31, 2020
177,793 1,356,907
0 1,714,257
3,485 3,252,442
Changes in the
financial year 2021
Consolidated profit
Other comprehensive
income
Total comprehensive
income
Payments of dividends
Share-based
remuneration
Change to the Stock
Awards Compensation
Conditions
Conversion of
convertible
participation rights
0
0
0
0
0
0
0
0
0
-94,230
3,210
-4,497
11
5.4;
13.2
7.1
13.2
240
240
0
0
0
0
0
0
0
209,678
0
209,678
0
0
0
0
0
0
0
0
0
0
0
209,678
0
209,678
-94,230
3,210
-4,497
480
As of Dec. 31, 2021
7.1
178,033 1,261,630
0 1,923,935
3,485 3,367,083
alstria Annual Report 2022
70
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-RETT 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.
Alexandrite Lake Lux Holdings S.à r.l., Luxembourg, Grand Duchy of Luxembourg, (hereinafter
"Alexandrite" or “Bidder”) published its decision on December 13, 2021 to offer the shareholders of
alstria office REIT-AG to acquire their bearer shares in alstria office REIT-AG by way of a voluntary public
takeover bid. By the end of the offer period on February 3, 2022, the total number of alstria shares to
be taken into account for the minimum acceptance threshold was exceeded and amounted to 91.63% of
the share capital. The total number of alstria shares to be considered for the minimum acceptance
threshold was reached for the first time on January 11, 2022. This corresponded to a share of 50.50% of
the share capital. The company was thus to be included in the consolidated financial statements of
Alexandrite's ultimate parent company, Brookfield Asset Management Inc., Toronto, Canada
(hereinafter "Brookfield"), for the first time on January 11, 2022. Brookfield Asset Management Inc.
prepares the consolidated financial statements for the largest and smallest group of companies in the
Brookfield Group. Brookfield's consolidated financial statements are published on the company's website
at www.brookfield.com. As of the balance sheet date, December 31, 2022, Alexandrite held 83.28 % of
the shares in the company, so that control on alstria office REIT-AG can be assumed. As a result, alstria
office REIT-AG is accounted for as subsidiary in Brookfield's consolidated financial statements as of the
reporting date.
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 23, 2023.
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, 2022.
alstria Annual Report 2022
71
Consolidated Financial Statements
2. BASIS OF PREPARATION
Apart from investment property (land and buildings), properties held for sale 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.
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, 2022:
EU
Endorsement
June 28, 2021
June 28, 2021
April 01, 2021
Aug. 30, 2021
June 28, 2021
Standard/
interpretation
Amendments to
IFRS 3
Annual Improvement
Content
Business Combinations: Update of an outdated reference in
IFRS 3 without significantly changing its requirements.
„Improvements to IFRSs 2018-2020 Cycle“
Amendments to IFRS 16
„Covid-19-Related Rent Concessions beyond 30 June 2021”
Amendments to IFRS 37
„Onerous Contracts – Costs of Fulfilling a contract”
Amendments to IFRS 16
PP&E: Proceeds before Intended Use
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.
alstria Annual Report 2022
72
Consolidated Financial Statements
New and amended IFRSs and interpretations to existing standards that are not yet effective and
that the Group has not adopted early
EU
Endorsement
Nov. 19, 2021
Not yet
endorsed
Sept. 8, 2022
Standard/
interpretation
IFRS 17
Amendments to
IFRS 16
Amendments to
IFRS 17
Not yet
endorsed
Amendments to
IAS 1
March 2, 2022
Amendments to
IAS 1
March 2, 2022
Aug. 11, 2022
Amendments to
IAS 8
Amendments to
IAS 12
Effects
None
Minor effects
possibe
None
Content
New standard “Insurance contracts”
Applicable for
FY beginning
on/after
Jan. 1, 2023
Lease Liability in a Sale and Leaseback
Jan. 1, 2024
Insurance contracts: Initial Application of
IFRS 17 and IFRS 9 – Comparative
Information
Presentation of Financial Statements:
Classification of Liabilities as Current or
Noncurrent
Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of
Accounting policies
Jan. 1, 2023
Jan. 1, 2024
None
Jan. 1, 2023
None
Definition of Accounting Estimates
Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
Jan. 1, 2023
Jan. 1, 2023
None
None
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 2022 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.
alstria Annual Report 2022
73
Consolidated Financial Statements
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.
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.
alstria Annual Report 2022
74
Consolidated Financial Statements
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.
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.
alstria Annual Report 2022
75
Consolidated Financial Statements
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 44 companies in
the financial year (2021: 46). As of the balance sheet date, 38 companies (prior-year balance sheet
date: 44 companies) existed. In addition, like in the previous year, one joint venture and one
noncontrolling interest have been accounted for using the equity method.
alstria Annual Report 2022
76
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):
Held
by
no.
1
Business activity
Asset management;
holding
Service company;
General Partner of 6
1 General Partner of 7
General Partner
of 8
General Partner
of 10
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Own property
Own property
Own property
Own property
Own property
Own property
General Partner
of 9 and 19
General Partner
of 18
General Partner
of 21 to 44
General Partner
of 20
Service company
General Partner
of 11
Service company
Own property
Intermediate holding
20
Intermediate holding
21
21
21
21
21
21
Own property
Own property
Own property
Own property
Own property
Own property
20
Intermediate holding
No. Company
Headquarters
1 alstria office REIT-AG
Beehive solutions GmbH (former alstria
Bamlerstraße GP GmbH)
2
3 alstria Englische Planke GP GmbH
Hamburg
Hamburg
Hamburg
4 alstria Gänsemarkt Drehbahn GP GmbH
Hamburg
5 alstria Mannheim/Wiesbaden GP GmbH
6 alstria office Bamlerstraße GmbH & Co. KG1)
Hamburg
Hamburg
7 alstria office Englische Planke GmbH & Co. KG1)
Hamburg
alstria office Gänsemarkt Drehbahn
GmbH & Co. KG1)
8
Hamburg
9 alstria office Insterburger Straße GmbH & Co. KG1)
Hamburg
alstria office Mannheim/Wiesbaden
GmbH & Co. KG1)
10
11 alstria office Steinstraße 5 GmbH & Co. KG1)
12 alstria Portfolio 1 GP GmbH
13 alstria Portfolio 3 GP GmbH
14 alstria Prime Portfolio 2 GP GmbH
15 alstria Prime Portfolio GP GmbH
16 alstria solutions GmbH
17 alstria Steinstraße 5 GP GmbH
18 beehive GmbH & Co. KG1)
19 First Pine GmbH & Co. KG3)
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
20 alstria office Prime Portfolio GmbH & Co. KG1)
Hamburg
21 alstria office PP Holding I GmbH & Co. KG1)
22 alstria office Kampstraße GmbH & Co. KG1)
Hamburg
Hamburg
23 alstria office Berliner Straße GmbH & Co. KG1)
Hamburg
24 alstria office Hanns-Klemm-Straße GmbH & Co. KG1)
Hamburg
25 alstria office Maarweg GmbH & Co. KG1)
Hamburg
26 alstria office Heerdter Lohweg GmbH & Co. KG1)
Hamburg
27 alstria office Solmsstraße GmbH & Co. KG1)
28 alstria office PP Holding II GmbH & Co. KG1)
Hamburg
Hamburg
Equity
interest (%)
Parent
company
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
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
alstria Annual Report 2022
77
Consolidated Financial Statements
No. Company
Headquarters
Equity
interest (%)
Held
by
no.
Business activity
29 alstria office Wilhelminenstraße GmbH & Co. KG1)
Hamburg
30 alstria office Hauptstraße GmbH & Co. KG1)
Hamburg
31 alstria office Mergenthaler Allee GmbH & Co. KG1)
Hamburg
32 alstria office Am Hauptbahnhof GmbH & Co. KG1)
Hamburg
33 alstria office Kastor GmbH & Co. KG1)
Hamburg
34 alstria office Heidenkampsweg GmbH & Co. KG1)
Hamburg
35 alstria office An den Dominikanern GmbH & Co. KG1)
Hamburg
alstria office Carl-Schurz-Straße
GmbH & Co. KG1)
36
Hamburg
37 alstria office Pempelfurtstraße GmbH & Co. KG1)
Hamburg
38 alstria office Frauenstraße GmbH & Co. KG1)
Hamburg
alstria office Olof-Palme-Straße
GmbH & Co. KG1)
39
40 alstria office Region Nord GmbH & Co. KG1)
41 alstria office Region Süd GmbH & Co. KG1)
42 alstria office Region Mitte GmbH & Co. KG1)
43 alstria office PP Holding III GmbH & Co. KG1)
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
44 alstria office Vaihinger Straße GmbH & Co. KG1)
Hamburg
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
89.0
28
28
28
28
28
28
28
28
28
28
28
28
28
28
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
20
Intermediate holding
42
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 an upstream merger in financial year 2022.
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, 13 domestic subsidiaries, and 24 domestic second-tier subsidiaries.
Six subsidiaries were terminated as a result of mergers.
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 2022 financial year in comparison to
the consolidated financial statements as of December 31, 2021. All of the Group’s companies are land
or property management companies, holding companies, or general partner companies.
alstria Annual Report 2022
78
Consolidated Financial Statements
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. The companies are accounted for using the equity method. The carrying value of EUR 101 k
relates to a joint venture. The associated company was written down to zero euros due to its business
situation. As of the previous year's reporting date, the book value of the associated company was
EUR 815 k and that of the joint venture was EUR 108 k.
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
Principal
activity
n/a
Place of incorporation
and business
Hamburg,
Germany
Proportion of ownership, interest,
and voting rights held by the Group
Dec. 31, 2021
Dec. 31, 2022
49.0
49.0
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.
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:
alstria Annual Report 2022
79
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.
alstria Annual Report 2022
80
Consolidated Financial Statements
Four tranches of the stock awards described were granted by the end of the reporting period. With
the resolution of the Supervisory Board on December 2, 2021, it was determined that the stock awards
granted in the 2018 financial year are not to be settled with shares in the company, but with cash
settlement. This is a change in the terms of compensation for the Stock Awards, as a result of which
compensation changes from equity-settled to cash-settled. The values required for this are to be
shown as obligations under other provisions. In order to allocate the probable amount to the provision,
the Management Board had exercised the option of withdrawing these allocations from the capital
reserve without affecting income. As a result of this resolution, it was also assumed that the other
existing stock awards that were granted in the financial years 2019 to 2021 would be converted by
cash settlement as a result of a change in the contractual terms. Therefore, provisions were made as
of December 31, 2021 for these stock awards as well.
All Stock Awards were converted against cash settlement in the second quarter of the financial year,
so that there were no longer any provisions for Stock Awards at the end of the reporting period.
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);
▪ positive fair values of derivatives (see Notes 5.8 and 6.5);
▪ expected credit loss (see Note 5.5 and 6.6);
▪ 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 stock awards granted to management (see Note 13.1) and ACES
granted to employees (so called alstria Collective Employee Scheme shares see Note 13.2).
alstria Annual Report 2022
81
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, 2022
Dec. 31, 2021
Investment property and properties held for sale, without prepayments made
4,633,398
4,847,901
Positive fair values of derivatives
expected credit loss
Limited partnership capital of noncontrolling interests
Other provisions
Other provisions
thereof stock award
thereof ACES/previous year: stock awards
34,767
1,469
120,980
525
0
1,802
1,802
0
156
69,813
2,439
2,585
1,911
2,585
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 certain 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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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.
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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.
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.
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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 in the previous section 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.
In estimating the fair value of the properties, their current use of the property is the highest and best
option. In order to align the valuation method with the method predominantly used by the companies
of the ultimate parent company, a different valuation method was used for the valuation on the
balance sheet date than on the previous year's balance sheet date.
The valuation of the investment property at market value as of December 31, 2022 was carried out
by external real estate experts using internationally customary, IFRS-compliant valuation methods.
The properties were valued at the end of the reporting period using the DCF method (discounted cash
flow method). As of December 31, 2021, however, the valuation was based on the so-called "hardcore
and top slice" method. An accredited, external, and independent expert performed the fair value
measurements (Savills Advisory Services Germany GmbH & Co. KG, Frankfurt am Main, Germany). Both
methods are scientifically approved and result in the same values. The basics of the respective
assessment procedure are explained below.
Description of the DCF method
The DCF method is a two-stage financial mathematical model to determine the cash value of the
future yield of the property, which is viewed as its present value. In this coherence, a detailed
forecast computation of the revenue and expenditures for a "holding period" of 10 years is compiled.
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).
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To determine the fair values, the DCF 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);
▪
relets at market rents;
▪ necessary investments for reletting;
▪
▪
▪
▪
leasing commission in the amount of 2 to 3 months’ rent;
an average lease term of 7.5 years for each potential new lease;
rent-free periods from 3 to 7 months’ rent;
a vacancy period of between 2 and 24 months for vacancies existing at the valuation date and
after the expiry of the lease;
▪
vacancy costs in the amount of EUR 0.50/m² to EUR 2.00/m²;
▪ management costs between 1 and 3 % of the market rent;
▪ non-allocable costs of ongoing maintenance between EUR 8.50/m² and EUR 12.00/m²
depending on the property standard;
inflation assumptions;
capitalization and discount rates reflecting the individual risk of the property and market
activity (comparable transactions); and
costs of transaction consisting of real estate transfer tax, notary fees and agency fees.
▪
▪
▪
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.
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).
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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 32 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 3 % of the market rent;
▪ non-allocable costs of ongoing maintenance between EUR 3.50/m² and EUR 11.50/m²
depending on the property standard; and
▪
the net selling price as comparable.
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 methods described also apply to investment properties in which development projects
are realized. In the case of development projects, the construction costs incurred are also taken into
account.
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.
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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.
Further information on leases can be found in Notes 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.
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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.
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.
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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.
The Group recognizes lease payments received under operating leases as income on a straight-line
basis over the lease term as revenues.
2.4.6. 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.
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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.
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.
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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 23 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.
The growth of the tree population on a forest property in accordance with IAS 41 is also reported
under property, plant and equipment. Initial and subsequent valuations are measured at fair value
less estimated cost of sales.
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.
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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.
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.
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All financial assets not classified as measured at amortized cost, are measured at FVTPL. This also
affects the derivative financial instruments that were designated in a hedging position(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.
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.
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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.
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
Closed Derivatives
The Group enters into a variety of derivative financial instruments to manage its exposure to interest
rate risks, including interest rate swaps and interest rate caps. Further details of derivative financial
instruments are disclosed in note 6.5.
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Derivatives are recognised initially at fair value at the date a derivative contract is entered into and
are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is
recognised in profit or loss immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of the recognition in profit or loss depends on the nature of
the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a
negative fair value is recognised as a financial liability. Derivatives are not offset in the financial
statements unless the Group has both a legally enforceable right and intention to offset. The impact
of the master netting agreements on the Group’s financial position is disclosed in note 34. A derivative
is presented as a non-current asset or a non-current liability if the remaining maturity of the
instrument is more than 12 months and it is not due to be realised or settled within 12 months. Other
derivatives are presented as current assets or current liabilities.
Embedded derivatives
An embedded derivative is a component of a hybrid contract that also includes a non-derivative host
– with the effect that some of the cash flows of the combined instrument vary in a way similar to a
stand-alone derivative.
Derivatives embedded in hybrid contracts with a financial asset host within the scope of IFRS 9 are
not separated. The entire hybrid contract is classified and subsequently measured as either amortised
cost or fair value as appropriate.
Derivatives embedded in hybrid contracts with hosts that are not financial assets within the scope of
IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of
a derivative, their risks and characteristics are not closely related to those of the host contracts and
the host contracts are not measured at FVTPL.
If the hybrid contract is a quoted financial liability, instead of separating the embedded derivative,
the Group generally designates the whole hybrid contract at FVTPL.
An embedded derivative is presented as a non-current asset or non-current liability if the remaining
maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months
and is not expected to be realised or settled within 12 months.
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Hedge accounting
The Group designates certain derivatives as hedging instruments in respect of foreign currency risk
and interest rate risk in fair value hedges, cash flow hedges, or hedges of net investments in foreign
operations. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow
hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging
instrument and the hedged item, along with its risk management objectives and its strategy for
undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing
basis, the Group documents whether the hedging instrument is effective in offsetting changes in fair
values or cash flows of the hedged item attributable to the hedged risk, which is when the hedging
relationships meet all of the following hedge effectiveness requirements:
▪ There is an economic relationship between the hedged item and the hedging instrument
▪ The effect of credit risk does not dominate the value changes that result from that economic
relationship
▪ The hedge ratio of the hedging relationship is the same as that resulting from the quantity of
the hedged item that the Group actually hedges and the quantity of the hedging instrument
that the Group actually uses to hedge that quantity of hedged item
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge
ratio but the risk management objective for that designated hedging relationship remains the same,
the Group adjusts the hedge ratio of the hedging relationship (i.e. rebalances the hedge) so that it
meets the qualifying criteria again.
Information on the fair values of the derivatives designated as part of hedging relationships can be
found in Note 6.5. The development of the hedging reserve in equity is shown in Note 7.1.
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.
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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.
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.
alstria Annual Report 2022
98
Consolidated Financial Statements
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 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 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
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.
alstria Annual Report 2022
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Consolidated Financial Statements
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).
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.
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100
Consolidated Financial Statements
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.
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 equity settled compensation schemes and, until the prior-year
reporting date, also cash-settled liability awards.
Equity-settled share-based payments to employees and others providing similar services are measured
at the fair value of the equity instruments at the grant date. The fair value excludes the effect of
non-market-based vesting conditions. Details regarding the determination of the fair value of equity-
settled share-based transactions are set out in note 13.
alstria Annual Report 2022
101
Consolidated Financial Statements
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straightline basis over the vesting period, based on the Group’s estimate of the number of equity
instruments that will eventually vest. At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of the effect of non-market-based vesting
conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to
reserves.
Equity-settled share-based payment transactions with parties other than employees are measured at
the fair value of the goods or services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the equity instruments granted,
measured at the date the entity obtains the goods or the counterparty renders the service.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired,
measured initially at the fair value of the liability. At each reporting date until the liability is settled,
and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair
value recognised in profit or loss for the year.
Further details on the share-based payment schemes are given in Note 13 and the combined
management report.
2.4.17. Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply
with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the
Group recognises as expenses the related costs for which the grants are intended to compensate.
Specifically, government grants whose primary condition is that the Group should purchase, construct
or otherwise acquire non-current assets (including property, plant and equipment) are recognised as
deferred income in the consolidated statement of financial position and transferred to profit or loss
on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for
the purpose of giving immediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable.
alstria Annual Report 2022
102
Consolidated Financial Statements
The benefit of a government Ioan at a below market rate of interest is treated as a government grant,
measured as the difference between proceeds received and the fair value of the loan based on
prevailing market interest rates.
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.
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 220,989 k (2021:
EUR 222,578 k), of which EUR 27,887 k (2021: EUR 25,012 k) are related to leases to the Group’s
largest customer with a share of more than 10% of revenues. In the previous year, there was another
tenant who contributed with EUR 29,936 k in revenues, more than 10% of the 2021 financial year’s
revenues. Due to the termination of leases with this tenant, their share of sales fell to less than 10%
in the year under review.
No other single customer has contributed 10 % or more to the consolidated revenues in the 2021 or
2022 financial years.
alstria Annual Report 2022
103
Consolidated Financial Statements
5. NOTES TO THE CONSOLIDATED INCOME STATEMENT
5.1.
Revenues
EUR k
Revenues from investment properties
Revenues from service charge income
Revenues
2022
182,819
38,170
220,989
2021
183,670
38,908
222,578
Revenues from investment properties mainly comprised rental income. The rental income includes
effects totaling EUR 2,983 k (2021: EUR 3,144 k), which are attributable to rent-free periods. 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 3,196 k (2021: EUR 3,049 k).
Rental income from property leases contains variable rental income amounting to EUR 4,593 k
(2021: EUR 5,945 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
Vacancy costs
Maintenance and refurbishment
Ongoing repairs
Legal and advisory fees
Insurance expenses
Electricity costs
Property management
Rent expenses
Other expenses
Total
2022
37,546
9,237
7,183
4,724
983
475
436
367
126
967
62,043
2021
38,822
7,185
5,431
4,838
1,122
194
286
208
122
1,099
59,307
alstria Annual Report 2022
104
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)
Insurance expenses
Supervisory Board compensation
Leasing payments and rents
Recruitment
Office area costs
Travel expenses
Contributions
Training & workshops
Office equipment
Other
Total
2022
3,841
964
858
796
541
519
491
453
389
368
331
206
140
106
439
2021
2,138
943
656
590
564
446
526
494
290
290
141
200
137
183
727
10,441
8,325
The lease payments and rents in the 2022 financial year amounting to EUR 453 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 long term compensation
2022
13,585
2,098
2,405
8,161
thereof relating to stock options and other long term compensation
thereof relating to the convertible profit participation certificates
and other long term compensation
2,544
5,617
987
2,785
Amounts for Management Board retirement provisions and disability
Other
Total
161
584
26,994
2021
10,983
1,971
2,392
3,772
161
490
19,769
Personnel expenses increased by EUR 7,225 k or 36.5 %. This increase is mainly due to one-off effects
from the restructuring of compensation components as a result of the takeover by Brookfield and
severance payments for employees who have left the company.
See also Sections 13.1 and 13.2 for information on expenses for long-term remuneration.
The convertible profit participation rights granted to employees for the last time in the previous year
entitle 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.
alstria Annual Report 2022
105
Consolidated Financial Statements
The employer’s contribution to statutory pension insurance, included in wages and salaries, amounts
to EUR 974 k for the 2022 financial year.
On average, the Group employed 177 employees in 2022 (2021: 171).
5.5. Other operating income
EUR k
Compensation payments and other recharges
KfW loan grant for green investments
Indemnity payments received
Guarantee builder
Revaluation of the limited partnership capital noncontrolling interests
Property management services
Proceeds from forest management
Health insurance reimbursement
Income from the reversal of accrued liabilities
Revaluation of trade receivables
Other
Total
2022
8,170
4,242
1,324
1,000
541
93
68
45
7
0
729
16,219
2021
1,316
0
2,371
0
0
80
60
61
350
910
783
5,930
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. This item also includes
compensation payments made by a tenant for the postponement of the start of the lease caused by
the tenant.
The revaluation of trade receivables in the previous years is based on a better than originally, in the
light of the COVID-19 pandemic, assumed payment behavior of tenants.
alstria Annual Report 2022
106
Consolidated Financial Statements
5.6. Other operating expenses
EUR k
Impairment on trade receivables
Legal and advisory fees
VAT payments made for previous years
Settlement agreements
Revaluation of the limited partnership capital noncontrolling interests
Other operating expenses
Total
2022
1,469
1,066
345
28
0
92
3,000
2021
156
10,213
377
354
3,476
38
14,614
After the previous year’s Impairment on trade receivables was at a low level because the payment
behavior of the tenants was better than originally assumed in view of the COVID-19 pandemic, the
magnitude of the impairments increased again in the 2022 reporting year.
Legal and consulting fees for the previous year mainly relate to consulting services in connection with
the Brookfield's takeover bid (see Note 1). The higher valuation allowances on receivables in the 2021
financial year were related to higher expected defaults on rent receivables as a result of the COVID-
19 pandemic.
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
2022
161,280
-158,075
-611
2,594
26,550
-25,977
-271
302
2,896
2021
24,750
-25,418
-222
-890
72,100
-55,292
-784
16,024
15,134
In the 2022 financial year, the sale of properties that were sold below their book value resulted in a
loss of EUR 303 k (2021: loss of EUR 890 k).
alstria Annual Report 2022
107
Consolidated Financial Statements
5.8.
Net financial result
The financial result breaks down as follows:
EUR k
Income from financial instruments and other interest income
Interest expenses, corporate bonds
Interest result ”Schuldschein”
Interest expenses, bank loans
Interest result derivatives
Other interest expenses
Financial expenses
Bank loan charges
Commitment fees
Agency fees financial derivatives
Financial expenses lease liability IFRS 16
Miscellaneous other expenses from financial instruments
Other financial expenses
2022
4,062
-21,916
-8,351
-1,968
-843
-15
-33,093
-3,800
−2,959
-158
−87
−1,021
−8,025
2021
1,323
-21,954
-2,142
-1,977
-815
-26,888
0
−283
−89
−82
−454
Net financial result
−37,056
−26,019
Income from financial instruments and other interest income result primarily from loans and interests
received. Negative interest income is included in the previous year in an amount of EUR 316 k.
The increase in interest expense on bank loans is due to new bank loans (see Notes 7.3).
The bank loan charges of EUR 3,800 k relate to a payment obligation in the event that an existing
loan cannot be further syndicated by the lending bank by the end of the third quarter of the 2023
financial year.
Miscellaneous other expenses from financial instruments relate to prepayment penalties for early loan
repayments.
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 3,794 k (interest
expenses, 2021: EUR 2,669 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.
alstria Annual Report 2022
108
Consolidated Financial Statements
A net loss from the change in the fair value of derivative financial instruments in the amount of
EUR 499 k was recognized from the first-time recognition of the counterparty’s credit valuation (so-
called CVA (Credit Valuation Adjustment) risk. Overall, the fair value of the derivative financial
instruments increased by EUR 32,662 thousand, which is reported in Other Comprehensive Income
due to the fully designated effective hedging of the underlying interest payments. There was no net
gain or loss from the change in the fair values of derivative financial instruments in the 2021 financial
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.
alstria Annual Report 2022
109
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:
EUR k
Investment property as of December 31
Investments
Acquisitions
Acquisition costs
Recognition of a right-of-use asset according to IFRS 16
Disposals
Transfer to assets held for sale
Transfer to property, plant, and equipment (owner-occupied properties)
Net loss / gain from fair value adjustments to investment property
Investment property as of December 31
2022
4,775,801
113,147
0
0
504
−83,910
−24,900
0
-173,794
4,606,848
2021
4,556,181
121,590
80,559
5,296
0
−25,400
−55,010
−2,242
94,827
4,775,801
Three properties were sold in the 2022 financial year, two of which were transferred to the buyer in
the financial year and one of which is classified in assets held for sale at the end of the reporting
period. The two properties held for sale as of the previous year's reporting date were transferred to
the buyers in the reporting period.
Property transaction
Contract signed until 2021,
transferred in 2022
Contract signed and
transferred in 2022
Contract signed in 2022,
transferred 2022
Total
Acquisition
Disposal
Number of
properties
Transaction amount
in EUR k
Number of
properties
Transaction amount
in EUR k
0
0
0
0
0
0
0
0
2
2
1
5
72,100
89,470
26,550
188,120
Capital expenditure (EUR 113,147 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 4,991 k.
alstria Annual Report 2022
110
Consolidated Financial Statements
Borrowing costs that would have had to be capitalized as construction costs were not incurred during
the reporting period (2021: 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 207,879 k (2021: EUR 138,493 k) is attributable to a change in unrealized losses.
The total of the increases in value amounted to EUR 34,085 k (2021: EUR 233,320 k). The properties
sold in the financial year did not affect the net result from the valuation of investment properties.
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).
alstria Annual Report 2022
111
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, 2022
Valuation
technique
German offices
4,627,500 DCF
Number of properties:
108
0 ≤ WAULT ≤ 5 Years
German offices
3,299,870 DCF
Number of properties:
85
5 < WAULT ≤ 10 Years
German offices
841,330 DCF
Number of properties:
17
WAULT > 10 Years
German offices
486,300 DCF
Number of properties:
6
Unobservable
inputs
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
Range
Min. Max.
Weighted
average
7.3
3.0%
3.2%
7.3
3.0%
3.2%
8.4
3.0%
3.2%
10.4
3.0%
3.2%
24.6
7.4%
7.5%
24.6
7.4%
7.5%
19.1
6.9%
6.8%
14.8
3.8%
4.0%
13.8
4.3%
4.2%
14.0
4.4%
4.4%
13.1
4.3%
4.2%
13.6
3.2%
3.3%
Sensitivity of measurement to variance of significant unobservable input
A decrease in the estimated rental income decreases the fair value.
An increase in the discount rate decreases the fair value.
An increase in the Exit Cap Rate decreases the fair value.
For the use of the hardcore and top slice valuation method as of the previous year's reporting date,
the main unobservable input parameters were rental income, adjusted yields and the vacancy periods
of rental agreements. The following statements were made about their sensitivities to the
assessment:
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.
alstria Annual Report 2022
112
Consolidated Financial Statements
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.
In the following, the influence of changes in the capitalization rates (discount rate) on the market
values is indicated.
Fair value of investment properties (EUR m)
Capitalization rate
Dec. 31, 2022
Dec. 31, 2021
−0.50 %
−0.25 %
0.00 %
0.25 %
0.50 %
4,819
4,712
4,607
4,506
4,407
5,631
5,169
4,776
4,436
4,139
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 19 years. Most leases include an indexation clause allowing
rental charges to be raised annually according to consumer price indexation.
Future minimum rental charges receivable as agreed in noncancelable operating leases as at
December 31, 2022 are as follows:
EUR k
Within 1 year
After 1 year but not longer than 5 years
Longer than 5 years
Total
Dec. 31, 2022
Dec. 31, 2021
193.053
522.533
388.970
186,926
550,571
428,047
1,104.556
1,165,544
Disclosures concerning expenses/income as recorded in the income statement pursuant to
IAS 40.75 (f) include the following:
▪ EUR 220,989 k (2021: EUR 222,577 k) in revenues from investment properties, of which
EUR 344 k is related to subleases of rights-of-use assets;
▪ EUR 52,806 k (2021: EUR 52,121 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 9,237 k (2021: EUR 7,185 k) in operating expenses (including repairs and maintenance)
arising from investment properties that did not generate rental income during the period
under review.
alstria Annual Report 2022
113
Consolidated Financial Statements
Investment properties, held-for-sale properties, and own used properties amounting to
EUR 1,613,464 k (December 31, 2021: EUR 1,039,701 k) served as collateral for bank loans.
6.2.
Equity-accounted investment
As of the balance sheet date, alstria held shares in an investment with a book value of Euro zero and
shares in a joint venture with a book value of EUR 101 k. Further details on the investments accounted
for using the equity method can be found in Note 2.2.3.
6.3.
Intangible assets and property, plant, and equipment
The intangible assets consist of licenses to other rights and software licenses with carrying amounts
of EUR 424 k and EUR 80 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. Another owner-occupied area in Stuttgart was occupied in the previous year and led to the
reclassification of EUR 2,243 k, which corresponded to the market value of the area at the time the
own use started. The property was sold in the reporting year, so that this area is no longer accounted
for as owner-occupied land and buildings under property, plant and equipment in accordance with
IAS 16 as of the reporting date.
The following table shows the development of property, plant, and equipment.
EUR k
Acquisition and production
cost
Furniture and
fixtures
Plant
Owner-
occupied
property
IFRS 16
right-of-
use assets
Forrest
Total 2022
As of January 1, 2022
1,266
2,807
20,192
2,683
1,209
28,157
Additions
Disposals
As of December 31, 2022
Accumulated amortization,
depreciation, and write-
downs
As of January 1, 2022
Additions
Disposals
0
1,266
1,266
1,239
12
0
As of December 31, 2022
1,251
59
2,026
2,807
5
17,954
20,192
0
2,683
2,683
335
1,544
1,209
399
25,473
28,157
1,834
225
-771
1,288
1,360
318
-17
1,661
0
0
0
0
788
238
0
5,221
793
-788
1,026
5,226
Net book values as of
December 31, 2022
15
738
16,293
2,683
518
20,247
alstria Annual Report 2022
114
Consolidated Financial Statements
EUR k
Acquisition and production
cost
Furniture and
fixtures
Plant
Owner-
occupied
property
IFRS 16
right-of-use
assets
Forrest
Total 2021
As of January 1, 2021
1,266
2,838
17,944
0
Additions
Reclassification from
Investment Property
Disposals
0
0
0
As of December 31, 2021
1,266
91
0
-122
2,807
Accumulated amortization,
depreciation, and write-
downs
5
2,683
2,243
0
0
0
807
402
0
0
22,855
3,181
2,243
-122
20,192
2,683
1,209
28,157
As of January 1, 2021
1,227
1,704
1,034
Additions
Disposals
13
0
219
-89
326
0
As of December 31, 2021
1,239
1,834
1,360
0
0
0
530
257
0
788
4,495
815
-89
5,221
Net book values as of
December 31, 2021
27
973
18,832
2,683
421
22,936
Two (previous year: three) of these properties were pledged with a mortgage to secure loans from
the Group.
The forest property with an area of 2,168 hectares was acquired in the reporting period for sustainable
management and use. The growth is a mixed pine forest. Accounting is carried out in accordance with
IAS 41. There was no change in valuation as of the balance sheet date.
6.4.
Financial assets
EUR k
Dec. 31, 2021
Repayments
Investment in
financial assets
Valuation
Dec. 31, 2022
Noncurrent financial assets
39,185
0
55,667
39
94,891
The financial assets of EUR 94,891 k (December 31, 2021: EUR 39,185 k) are related to long-term
deposits in the amount of EUR 94,432 k with a term up to the end of the 2032 financial year. A further
amount of EUR 273 k is attributable to a below -3 % share in a stock corporation on which alstria cannot
exert any significant influence. A further EUR 186 k was invested in a minority interest in a company
to enable CO2 storage technology.
The increase in financial assets is based on an increase in loans granted in the amount of EUR 55,568 k
and on investments in a company in the amount of EUR 99 k. In addition, there were write-ups of
EUR 39 k.
Current financial assets did neither exist at the end of the reporting period nor at the end of the
previous.
alstria Annual Report 2022
115
Consolidated Financial Statements
There were no value adjustments for financial assets as of the balance sheet date, as they are covered
by the borrower's shares in an investment.
6.5.
Derivative financial instruments
The following derivative financial instruments were in place at the end of the reporting period:
Strike
p.a.
(%)
1.7500
1.9240
1.9240
Product
Swap
Swap
Swap
Financial
derivatives -
cash flow hedges
Start of
Hedging
Maturity
date
Counterpart
Notional Fair value Notional
Fair
value
Dec. 31, 2022
Dec. 31, 2021
Sep. 30,
2022
Sep. 30,
2022
Sep. 30,
2022
Sep. 30,
2027
Sep. 30,
2028
Sep. 30,
2028
Societe
Generale
UniCredit Bank
AG
UniCredit Bank
AG
(EUR k)
(EUR k)
(EUR k)
(EUR k)
500,000
29,812
60,000
3,606
22,450
1,349
582,450
34,767
0
0
0
0
0
0
0
0
The derivative financial instruments held by alstria are exclusively interest rate swaps. All derivative
financial instruments had a positive value as of the balance sheet date, so that the group only
recognized derivative financial assets.
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.
Netting agreements with counterparties (so-called master agreements) have not been agreed.
alstria Annual Report 2022
116
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
Net rent receivables
Service charge receivables
Trade receivables
Other receivables
Creditors with debit balance
Maintenance reserves
Interest receivables
Cash in transit
Receivables against employees
Receivables and other assets
Financial assets
VAT receivables
Deductible capital gains taxes
Capitalized transaction costs on outstanding loan facility
Prepayments made
Non-financial assets
Other receivables
Dec. 31, 2022
Dec. 31, 2021
5,865
2,301
8,166
412
320
318
246
123
33
1,452
1,925
1,029
634
344
3,932
5,384
3,883
39
3,922
92
268
9
6
238
33
636
1,880
1,029
0
713
3,622
4,258
The increase of Trade receivables from EUR 3,922 by EUR 4,244 to EUR 8,166 is based on an increase
in Net rent receivables due to a one-off rent receivable for special services provided to a tenant. The
increases in service charge receivables are mainly based on the increased energy prices due to the
Ukrainian war.
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.
alstria Annual Report 2022
117
Consolidated Financial Statements
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.
On this basis, alstria estimates the following default rates:
EUR k
0-30 days
overdue
31-90 days
overdue
91-180 days
overdue
More than 180 days
overdue
Default rate as of 31.12.2022
Default rate as of 31.12.2021
16.40%
11.22%
63.46%
23.70%
99.96%
41.54%
100.00%
100.00 %
Trade receivables from tenants of alstria as of December 31, 2022 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
856
395
113
269
1,633
7,362
8,995
-140
-252
-113
-269
-774
-
-774
716
143
0
0
859
7,307
8,166
-55
-55
Trade receivables from tenants of alstria as of December 31, 2021 were 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
633
331
368
490
1,822
2,926
4,748
-71
-78
-153
-490
-792
-
-792
562
253
215
0
1,030
2,892
3,922
-34
-34
alstria Annual Report 2022
118
Consolidated Financial Statements
The allowance for trade receivables developed as follows:
EUR k
As of January 1
Additions
Net revaluation of allowances
As of December 31
2022
826
1,469
-1,466
829
2021
1,736
156
-1,066
826
After the previous year’s revaluation of trade accounts receivable at a low level because the payment
behavior of the tenants was better than originally assumed in view of the COVID-19 pandemic, the
magnitude of the additions increased again in the 2022 reporting year.
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.
6.7.
Cash and cash equivalents
EUR k
Bank balances
Dec. 31, 2022
Dec. 31, 2021
313,684
313,684
Current accounts held with banks attract variable interest rates for on-call balances. As of the
reporting date, EUR 8,761 k of the cash and cash equivalents were restricted. The amount corresponds
to accrued interest obligations and other amounts that are not at the Company’s free disposal. There
were no restrictions on cash amounts as of the previous year's reporting date.
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 8,043 k in rent deposits received from tenants
(December 31, 2021: EUR 8,858 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
The assets held for sale comprise two properties. The transfer of benefits and burdens for the property
is expected in the first quarter of 2022 after the preparation of these consolidated financial
statements. The sale of properties resulted in disposal revenues of EUR 26,550 k.
The property reported is not one of the properties shown in the previous year, which were transferred
to the buyer as planned in 2022.
alstria Annual Report 2022
119
Consolidated Financial Statements
The ‘gain on disposal of investment property’ is increased by the valuation result from the property
held for sale in the amount of EUR 302 k (see Note 5.7).
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.
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, 2022
Dec. 31, 2021
Ordinary shares of EUR 1 each
178,291
178,033
The conversion of profit participation rights (Note 13.2) in the second quarter of 2022 resulted in the
issuance of 258,275 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 258,275.00 as compared with
December 31, 2021, and as of December 31, 2022, it is represented by 178,291,272 no-par value
bearer shares.
The following table shows the reconciliation of the number of shares outstanding:
Number of shares
2022
2021
Shares outstanding on January 1
178,032,997
177,792,747
Conversion of convertible participation rights
258,275
240,250
As of December 31
178,291,272
178,032,997
As a result of the takeover bid by Alexandrite (see Note 1), 83.28% of the shares in the company were
attributable to Alexandrite as of the balance sheet date.
Capital reserve
The capital reserve changed as follows during the financial year:
EUR k
As of January 1
Payment of dividends
Share-based remuneration
Change in the payment conditions of the Stock Awards from
equity to cash settled
Conversion of convertible participation rights
As of December 31
2022
1,261,630
−756,640
2,392
0
258
2021
1,356,907
−94,230
3,210
-4,497
240
507,640
1,261,630
alstria Annual Report 2022
120
Consolidated Financial Statements
The previous year’s change in the payment conditions for the Stock Awards is a contractual change,
as a result of which the payment changes from being settled through equity instruments to being
settled in cash. The values required for this settlement are to be shown as obligations under other
provisions. In order to allocate the corresponding amount to the provision, in the financial year 2021
the Management has used the option of allocating them from the capital reserve without affecting
income (see Note 2.3.1).
The share premium resulting from the conversion of 258,275 profit-participation rights resulted in an
increase in capital reserves of EUR 258 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
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.
Hedging reserve
EUR k
Hedging reserve
Dec. 31, 2022
Dec. 31, 2021
32,663
0
For further details on the change in hedging reserve please refer to Note 5.8.
Treasury shares
As of December 31, 2022, 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, 2022, totaled EUR 1,849,321 k (December 31, 2021: profit
carried forward of EUR 1,923,935 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 2022. The reduction in retained earnings results from the consolidated annual result for
the 2022 financial year.
alstria Annual Report 2022
121
Consolidated Financial Statements
Authorized capital
By resolution of the Annual General Meeting on September 29, 2020, the Company’s Authorized
Capital 2019 was renewed through the Authorized Capital I 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.
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, 2021, the conditional
capital amounted to EUR 17,750 k. This was divided into Conditional Capital I 2020 (EUR 16,750 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 258 k. The
Conditional Capital III 2017 became irrelevant after this utilization and matured at May 16, 2022 and
was therefore deleted from the Articles of Association.
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. No limited
partnership shares were acquired in the 2021 and 2022 financial years. In the 2022 financial year,
alstria office REIT-AG sold 8,840,478 limited partnership shares at a sale price of EUR 55,518 k.
In the reporting period, the change in value of the existing limited partnership shares of noncontrolling
interests resulted in a gain of EUR 541 k (2021: expenses of EUR 3,476 k). The fair value of the limited
partnerships of noncontrolling interests reported as of the balance sheet date amounted to
EUR 120,980 k, whereby EUR 120,959 k are to be classified as long term and EUR 21 k as short term.
alstria Annual Report 2022
122
Consolidated Financial Statements
7.3.
Financial liabilities
EUR k
Loans
Corporate bonds
Mortgage loans
Schuldschein
Total
EUR k
Loans
Corporate bonds
Mortgage loans
Schuldschein
KfW-loan
Total
Noncurrent
1,093,249
893,094
39,947
Loan
324,835
0
36,961
Current
Accrued
interest
Total
Total current
Dec. 31, 2022
8,909
171
1,266
333,744
171
38,227
1,426,993
893,265
78,174
2,026,289
361,796
10,346
372,142
2,398,431
Noncurrent
Current
Total
Loan Accrued interest
Total current
Dec. 31, 2021
1,415,486
195,619
76,902
9,598
1,697,605
0
0
0
9,290
9,290
8,964
64
1,276
0
8,964
64
1,276
9,290
1,424,450
195,683
78,178
18,888
10,304
19,594
1,717,199
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.
As of December 31, 2022, 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 2,403,063 k (December 31, 2021: EUR 1,716,788 k). The carrying amount of
EUR 2,398,431 k (EUR 2,026,289 k, noncurrent, and EUR 372,142 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, 2021
Payments
of the
period
Reclassification
noncurrent/
current
Changes in
fair value
December
31, 2022
1,697,605
737,858
19,594
-55,360
-412,312
412,312
3,139
-4,404
2,026,290
372,142
1,717,199
682,498
0
-1,265
2,398,432
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.
alstria Annual Report 2022
123
Consolidated Financial Statements
The following table provides information on the Group's loans and borrowings:
Liabilities
Start
Maturity
Notional in
EUR k
Coupon in
%
Utilized at
31.12.2022
in EUR k
Book value as
of 31.12.2022
in EUR k
OMV as at
31.12.2022
in EUR k
Accrued
interest at
31.12.2022
in EUR k
Mortgage
loan #1
Mortgage
loan #3
Mortgage
loan #4
Mortgage
loan #7
Mortgage
loan #8
Total secured
Bond II
Bond III
Bond IV
Bond V
Schuldschein
10y/fix
Schuldschein
7y/fix
Total
unsecured
Total
II 2016/
IV 2022
II 2016
III 2018/
III 2022
28.06.2024
150,000
30.06.2026
56,000
29.09.2028
97,000
III 2022
30.09.2027
500,000
III 2022
29.08.2024
107,000
3M-
EURIBOR
3M-
EURIBOR
3M-
EURIBOR
3M-
EURIBOR
3M-
EURIBOR
910,000
150,000
148,791
150,000
47,063
97,000
47,031
47,063
96,740
97,000
500,000
494,332
500,000
107,000
901,063
106,200
107,000
893,094
901,063
II 2016
12.04.2023
500,000
2,1250
325,000
324,733
322,498
IV 2017
15.11.2027
350,000
1,5000
350,000
347,853
294,350
III 2019
26.09.2025
400,000
0,5000
400,000
396,740
324,840
II 2020
23.06.2026
350,000
1,5000
350,000
348,757
270,813
II 2016
06.05.2026
40,000
2,7500
40,000
39,947
39,191
II 2016
06.05.2023
37,000
2,2700
37,000
36,961
36,238
28
9
17
96
21
171
4,969
671
528
2,741
1,128
138
1,677,000
2,587,000
1,502,000
1,494,991
1,287,930
10,175
2,403,063
2,388,085
2,188,993
10,346
Corporate bonds
To finance its debt financing, the group predominantly uses corporate bonds. The table presented
before contains a summary of the corporate bonds in existence in the financial year.
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. 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 75,430 k as of the balance sheet date.
alstria Annual Report 2022
124
Consolidated Financial Statements
KfW-Darlehen
The funds from the KfW loans wer used to invest in measures to increase energy efficiency. They were
granted by the KfW or Kreditanstalt für Wiederaufbau, a German development bank. The loans had
been repaid as of the reporting 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 10,346 k have been accrued for interest payment liabilities, which
will be payable in the course of the next 12 months (December 31, 2021: EUR 10,304 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.
As of December 31, 2022, the loans and the convertible bond were reduced by accrued transaction
costs of EUR 14,978 k (December 31, 2021: EUR 9,893 k).
The average debt maturity slightly decreased from 3.9 years as of December 31, 2021, to 3.2 years
as of December 31, 2022. The Group’s average interest rate increased from 1.4 % at the previous
balance sheet date to 2.1 % as of December 31, 2022.
The carrying amounts of the loans are all reported in euros. With the exception of the fixed rate
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.
As of December 31, 2022, an undrawn loan facility of EUR 200,000 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
Dec. 31, 2022
Dec. 31, 2021
0
893,094
893,094
0
158,800
158,800
Dec. 31, 2022
Dec. 31, 2021
901,063
890,962
10,101
209,238
202,688
6,550
alstria Annual Report 2022
125
Consolidated Financial Statements
7.4. Other provisions
EUR k
Other provisions
Provision virtual
share liabilities
Other
Total
Due
Due
up to
1 year
in more
than 1 year
Total
Dec. 31, 2022
up to
1 year
in more
than 1 year
Total
Dec. 31, 2021
0
525
525
1,802
0
1,802
1,802
525
2,327
1,911
528
2,439
2,585
0
2,585
4,496
528
5,024
The development of other provisions is shown in the following overview:
EUR k
Dec. 31, 2021 Consumption Resolution Additions
Dec. 31, 2022
Development of other provisions
Provision virtual share liabilities
Other
Total
4,496
528
5,024
-6,109
-3
-6,112
0
0
0
3,415
0
3,415
1,802
525
2,327
As of the balance sheet date, there were provisions of EUR 1,802k for the ACEs granted to the
Management Board and employees. The program was relaunched in the financial year and replaces
the previous performance-related long term remuneration programs for the Management Board and
employees.
As of the previous year’s balance sheet date, EUR 4,496 k was recognized as a provision for awarding
the Long-Term Incentive Plan (Note 13.1). Due to the termination of the program and the settlement
of all resulting obligations in the reporting period, there were no longer any provisions from this Long-
Term Incentive Plan at the end of the financial year.
Other provisions are mainly related to litigation expenses.
alstria Annual Report 2022
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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, 2022
Trade payables
3,581
0
3,581
Due
up to
1 year
3,487
in more
than 1 year
Total
Dec. 31, 2021
0
3,487
28,490
0
28,490
28,488
0
28,488
Other current liabilities
Accruals for outstanding
invoices
Rent and security deposits
received
IFRS 16 lease liabilities
Market flex premium
Salary obligations
Cash compensation
Accruals for tax consulting
Customers with credit balances
Supervisory Board compensation
Auditing costs
Vacation provisions
Interests for tax provisions
Miscellaneous liabilities
8,043
393
3,800
2,358
961
919
874
491
359
241
0
165
8,050
5,314
0
0
0
0
0
0
0
0
0
0
16,093
8,858
5,707
3,800
2,358
961
919
874
491
359
241
0
165
373
0
2,353
2,565
870
807
525
412
197
521
1,158
9,669
4,700
0
0
0
0
0
0
0
0
0
0
Financial liabilities
47,094
13,364
60,458
47,127
14,369
Advance rent payments
received
1,820
Value-added tax liabilities
2,072
Income tax and social security
contributions
Non-financial liabilities
238
4,130
0
0
0
0
Total other liabilities
51,224
13,364
1,820
3,259
2,072
1,728
238
4,130
64,588
217
5,204
52,331
14,369
0
0
0
0
18,527
5,073
0
2,353
2,565
870
807
525
412
197
521
1,158
61,496
3,259
1,728
217
5,204
66,700
The disclosed carrying amounts approximate their fair values.
The Market Flex premium relates to the commitment to a lending bank. For the portion of the loan
that the bank cannot pass on to a banking syndicate, alstria has committed to pay the Market Flex
premium.
Salary liabilities relate to bonus provisions for the 2022 financial year.
The IFRS 16 lease liabilities relate 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 2022
127
Consolidated Financial Statements
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 per share plus interest. The
decision is meanwhile effective. This led to a resurgence of the liability from the cash value
settlement (Cash compensation), in terms of the outstanding settlement obligation including
interests according to the court decision, in the amount of EUR 6,052 k. At the end of the reporting
period, after part of the obligation has been settled, this still amounts to EUR 961 k, including
interest.
7.6.
Income tax liabilities
The recognition of income tax liabilities as of December 31, 2022, 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.
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Consolidated Financial Statements
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
2022
1,427
900
161
2,489
2021
1,411
900
161
2,472
On the reporting date, liabilities for the compensation of the Management Board members amounted
to EUR 450 k (2021: EUR 433 k).
As of December 31, 2022, no Stock Options were outstanding from the equity-settled share-based
remuneration plan set up in 2018. As of December 31, 2021, there were 234,620 Stock Options issued
to members of the Management Board (see Note 13.1).
Supervisory Board Pursuant to the Articles of Association, Supervisory Board members’ fixed annual
payments amounted to EUR 491 k (2021: EUR 526 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 of the Company.
8.2. Other financial commitments and contingencies
Other financial obligations from refurbishment projects and ongoing maintenance amounted to
EUR 103,819 k (2021: EUR 45,402 k). The increase results from a higher level of ongoing development
projects at the end of the reporting period.
As of December 31, 2022, rental agreements for the car parking spaces and administrative premises
were subject to a minimum lease term. Future financial obligations of EUR 6,035 k arose from other
leasing agreements. Of these, EUR 477 k in obligations has a residual maturity of up to 1 year;
EUR 1,213 k in obligations has a remaining maturity of 1 to 5 years; and the remaining EUR 4,345 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.
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Consolidated Financial Statements
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 2022 financial year amounted to
EUR 87,097 k, which is below the level of previous year’s operating cash flow (EUR 116,434 k). In
addition to the increase in working capital, the decline results on the one hand from lower revenue
received and on the other hand from higher interest payments compared to the previous period. The
net cash generated from operating activities includes other noncash income and expenses totaling
EUR 6,678 k. These essentially relate to allocation to provisions and other liabilities. Cash outflows
for leases amounted to EUR 759 k for the financial year.
The cash flow from investing activities is affected by the cash outflow for investments in the
investment property portfolio in the amount of EUR 114,886 k while the inflow of cash from property
disposals amounted to EUR 161,570 k. The increase in loans granted by EUR 55,568 k (see Note 6.4)
only affected the cash flow statement by EUR 50 k, as it was offset against the sale of 8,840,478
limited partnership shares at a sale price of EUR 55,518 k (see Note 7.2).
The cash flows from financing activities includes cash inflows from taking out a bank loans in the
amount of EUR 760,000 k. Cash outflows resulted mainly from the dividend distribution in the amount
of EUR 756,640 k and the repayment of loans in an amount of EUR 69.483 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).
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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.
Companies with a controlling interest on alstria office REIT-AG, are Alexandrite Lake Lux Holdings S.
á r.l., Luxembourg, Luxembourg (parent company), Brookfield Corporation (ultimate parent company)
and all companies that are directly and indirectly controlled by them. There was no group of
companies with joint management or significant influence with which transactions were conducted
during the reporting period.
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 2022 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 description of the remuneration of key management personnel, please refer to Notes 8.1 and
13.1 and the Company’s remuneration report.
9.3.
Related party transactions
At the end of the reporting period, the Group recorded no receivables from or liabilities to joint
ventures or related persons other than referred to in Note 9.2.
The following table shows transactions with related companies in the 2022 financial year:
in EUR k
Interest Corporate Bonds
Accounting & Reporting services
Containerlease
Revenues/
Expenses (net) (-)
2022
-63
70
-16
Receivables/liabilities (-)
Dec. 31, 2022
-63
0
-3
The accounting and reporting services relate to the preparation of consolidation accounting and
reporting services for Brookfield companies outside the alstria group.
alstria Annual Report 2022
131
Consolidated Financial Statements
The interest expenses relate to corporate bonds that alstria placed on the capital market and that
were acquired by Brookfield companies on the capital market in the 2022 financial year. As of
December 31, 2022, this relate to the following corporate bonds:
Bond
ISIN
Shares
Notional value of
shares
Bond III
Bond IV
Bond V
XS1717584913
XS52053346297
XS2191013171
14,600,000
11,300,000
25,500,000
51,400,000
EUR k
14,600
11,300
25,500
51,400
The construction containers were rented as part of ongoing business for an alstria construction site.
The lessor is a company dependent on Brookfield and is outside of the alstria group of consolidated
companies.
There were no other transactions with related companies and persons in 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.
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)
2022
-74,614
178,098
-0.42
2021
209,678
177,949
1.18
The granted Stock Awards and the convertible profit participation rights did not result in dilution
effects during the period under review.
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Consolidated Financial Statements
alstria office REIT-AG is authorized to issue up to EUR 17,750 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
2022
Dividends on ordinary shares1) not recognized as a liability as of December 31
756,640
Dividend per share
4.25
1) Refers to all shares except treasury shares on the dividend payment date.
2021
94,230
0.53
At the Annual General Meeting held on June 10, 2022, alstria office REIT-AG resolved to distribute
dividends totaling EUR 7,121 k (EUR 0.04 per outstanding share). The dividends were distributed on
June 15, 2022. At the Extraordinary General Meeting on August 31, 2022, a further dividend payment
of EUR 749,519 k (EUR 4.21 per outstanding share) was resolved, which was paid on September 5,
2022. Overall, this represents a dividend payment of EUR 756,640 k (EUR 4.21 per outstanding share).
By comparison, the dividends paid out in 2021 totaled EUR 94,230 k (EUR 0.53 per outstanding share).
The Management Board, in agreement with the Supervisory Board, intends to propose to the Annual
General Meeting to use the balance sheet profit of alstria office REIT-AG for the 2022 financial year
to pay a dividend of EUR 0.06 per share. In the event that there are significant changes in the
company's available liquidity in the further course of the 2023 financial year, the Management Board
and Supervisory Board reserve the right to submit a different dividend proposal to the Annual General
Meeting. The payment of a dividend depends on the approval of the General Meeting.
12. EMPLOYEES
From January 1 to December 31, 2022, the Company had an average of 177 employees (January 1 to
December 31, 2021: 171 employees on average). The average was calculated based on the total
number of employees at the end of each quarter. On December 31, 2022, 181 people were employed
at alstria, excluding the Management Board members (December 31, 2021: 171 employees).
Employees
Average 2022 December 31, 2022 Average 2021 December 31, 2021
Real estate management and development
Finance and legal
Other occupations
Total
106
39
32
177
109
37
35
181
101
39
31
171
104
39
28
171
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Consolidated Financial Statements
13. SHARE-BASED REMUNERATION
13.1. Share-based remuneration (virtual shares and stock awards) for Management Board
members
The share-based payment entitlements issued to the Management Board in previous years, so-called
stock awards, are based on the remuneration system that came into effect on January 1, 2018 and
with adjustments on January 1, 2021. The cornerstones of the Stock Awards are therefore explained
below.
On January 1, 2018, the Supervisory Board set up a share-based payment system as part of the long-
term performance-related remuneration for the members of the Management Board (Long-Term
Incentive). The Long-Term Incentive (LTI) consists of so-called virtual stock awards, which are
converted into alstria shares after a four-year performance period. In each financial year, the
members of the Management Board are granted a long-term variable remuneration element with a
target amount determined in the service contract. The number of stock awards to be granted is based
on the target amount divided by the arithmetic mean of the alstria share price during the 60 trading
days prior to the grant date. The number of stock awards granted is then adjusted depending on the
performance of alstria’s share during the performance period both in absolute and relative terms
compared to a peer group (so called Absolute and Relative TSR or Total Shareholder Return). Payout
of the Long-Term Incentive is capped at 250 % of the target amount.
Absolute TSR
The absolute TSR had a weighting of 25 %. The absolute TSR was generally derived from the weighted
average cost of capital (WACC).
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Consolidated Financial Statements
Relative TSR
The relative TSR had a weighting of 75 %. By using relative TSR, an outperformance of relevant
competitors is incentivized, and interests of the shareholders are taken into account. The relative
TSR measures the return for shareholders consisting of share price development (including reinvested
dividends) of alstria compared to a selected peer group over the entire four-year performance period.
alstria compares its performance to the performance of relevant competitors, the FTSE EPRA/NAREIT
Developed Europe Index. As for the absolute TSR of alstria, 60 trading day averages were used for the
TSR of FTSE EPRA/NAREIT Developed Europe Index as well.
Since the payout per earned virtual share depends on the 60-day average price of alstria shares, the
average share price in the last 60 trading days before the balance sheet date essentially represented
the fair value per virtual share.
The LTIs were equity-settled share-based payments.
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/LTIP 2021.
The following table lists the model specifications used to determine the fair value:
Grant date
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)
Reference price of the FTSE EPRA/NAREIT Developed Europe
Index
Estimated fair value of one option on the grant date (in EUR)
Number of stock options issued and converted in the 2022
financial year Olivier Elamine
Number of stock options issued and converted in the 2022
financial year Alexander Dexne
March 7,
2018
March 4,
2019
March 2,
2020
March 1,
2021
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
4.00
−0.67
24.67
18.25
73.56
3.75
14.15
2,085.51
2,166.92
2,333.61
2,113.90
12.69
12.83
17.40
14.23
2,176.16
2,112.40
2,502.27
2,108.17
8.61
10.22
12.48
10.36
34,673
34,295
25,287
35,137
28,369
28,059
20,690
28,110
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135
Consolidated Financial Statements
The development of the virtual shares through December 31, 2022, is shown in the following table:
Number of Stock Awards
As of January 1
Stock Awards granted in the reporting period
Converted into cash in the reporting period
As of December 31
2022
234,620
0
-234,620
0
2021
240,817
63,247
-69,444
234,620
In 2022, the LTIP generated remuneration expenses amounting to EUR 2,095 k (2021: EUR 987 k). The
increase in LTI expenses is due to the termination of all outstanding stock awards. The reason for this
is the low market capitalization of freely tradable alstria shares that remained after the takeover by
Brookfield. As a result, the development of the alstria share price is no longer meaningful, so that
the calculation of the LTI based on the development of the share price has lost its function as part of
the Management Board remuneration system 2018/2021. With this in mind, the performance periods
of all outstanding LTI tranches granted to Management Board members for prior years up to and
including fiscal year 2021 (i.e. LTI 2019/2023, LTI 2020/2024, LTI 2021/2025) were extended effective
February 3, 2022 ended early and then paid out immediately in cash. The LTI 2022/2026 granted to
the members of the Executive Board under the conditions of the 2021 Executive Board remuneration
system was transferred to the 2022 Executive Board remuneration system. The exercise of all 234,620
stock awards in the first half of 2022 resulted in payments of EUR 6,591 k.
In the 2021 financial year, the LTI resulted in provisions of EUR 4,496 k as of December 31, 2021, in
addition to remuneration expenses of EUR 987 thousand. The 234,620 stock awards issued under the
LTI were originally share-based payments that were intended to be settled through equity
instruments. The change in value was taken into account in the capital reserve up to the 2021 financial
year. Due to a resolution of the Supervisory Board, according to which the LTI 2018 will be settled in
cash instead of converted into shares in the company, the Group recognizes the obligation from
granted stock awards at the end of the reporting period in other provisions at the end of the 2021
reporting period (see Section 2.3.1).
As part of the new remuneration system 2022, the members of the Management Board receive
certificates with a term of two years, the performance of which is linked to certain budget-based key
figures. At the end of the term, a payment is made in cash, whereby the performance and the amount
of the payment can be between 0% and 115% depending on the development of the based key figures.
In the reporting period, the members of the Management Board were granted 900,000 certificates
with a nominal value of EUR 1.00 each, retrospectively as of January 1, 2022. As of December 31,
2022, assuming 100% target achievement, EUR 449 thousand was accrued pro rata temporis.
alstria Annual Report 2022
136
Consolidated Financial Statements
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. Due to the lack of
visibility of the alstria share as described in the previous section as a result of the takeover by
Brookfields, the convertible participatory rights program was also discontinued and replaced by a new
employee participation program (see below).
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 2020 created by resolution of the Annual General Meeting. At the end of
the reporting period, 287.100 certificates related to this Conditional Capital III 2020 had been granted
in business year 2021.
The certificates were 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 279,550 certificates issued on May 7, 2021, this
market condition was fulfilled until the end of the 2022 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.
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137
Consolidated Financial Statements
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.
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, 2022
Expired due to termination of employment
Converted
Granted
December 31, 2022
Sept 30, 2020
May 7, 2021
260,025
-1,750
-258,275
0
0
281,050
-1,500
0
0
Total
541,075
-3,250
-258,275
0
279,550
279,550
For the conversion of 258,275 of the 2020 convertible profit participation rights certificates, the
relevant XETRA share price on the conversion date was EUR 6.915 per share.
Total expenses relating to convertible profit participation rights amounted to EUR 2,392 k in 2022
(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
Sept 30, 2020
May 7, 2021
4.47
−0.82
20.20
2.00
2.00
6.00
11.86
8.57
3.67
−0.69
26.00
2.00
2.00
5.40
14.44
11.49
The expected volatility was based on the implied volatility of alstria shares.
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Consolidated Financial Statements
As a result of the termination of the convertible participation rights program described above, no new
convertible participation rights were granted in the 2022 financial year. For this purpose, a new long-
term remuneration system was generated by the Management Board. In 2022, the employees received
certificates (so-called alstria Collective Employee Scheme or ACES) with a term of two years, the
performance of which is linked to certain budget-based key figures. At the end of the term, a payment
is made in cash, whereby the performance and the amount of the payment can be between 0 % and
115 % depending on the development of the based key figures. In the reporting period, employees
were granted 2,752,583 certificates with a nominal value of EUR 1.00 each, retroactive to January 1,
2022. As of December 31, 2022, assuming 100 % target achievement, EUR 1,374 k was accrued on a
pro rata basis.
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 and a Schuldschein (promissory note loans). The increase in the debt
ratio initiated after the takeover of the majority of the shares by Alexandrite in January of the 2022
financial year (see Note 1) took place, did not change the basic refinancing strategy of the Group. In
particular, neither the corporate bonds nor the promissory note were to be repaid before the end of
their regular term. In the event of the loss of the investment grade rating assigned to alstria by the
rating agency Standard & Poor's (S&P), the bondholders could have had demanded that the corporate
bonds would have to be repaid. In February 2022, S&P confirmed the investment grade rating,
although the rating was downgraded from BBB+ to BBB-, the lowest notch within the investment grade
rating. The main purpose of the debt funding is to 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.
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Consolidated Financial Statements
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 Management Board. 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. Given that all of the Company’s main tenants are public institutions or are highly rated,
the risk of such defaults is currently 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.
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140
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 #12)
Loan #23)
Loan #3
Loan #44)
Loan #55)
Loan #66)
Loan #7
Loan #8
Total secured loans
Bond #2
Bond #3
Bond #4
Bond #5
June 28, 2024
Mar. 28, 2024
June 30, 2026
Sept. 29, 2028
Sept. 30, 2024
Dec. 30, 2022
Sept. 30 2027
Aug. 29, 2024
Apr. 12, 2023
Nov. 15, 2027
Sept. 26, 2025
Jun. 23, 2026
Schuldschein 10y/fixed
May 6, 2026
Schuldschein 7y/fixed
May 6, 2023
Revolving credit line7)
Apr. 29, 2025
Bridge credit facility8)
Apr. 29, 2025
Total unsecured loans
Total
Net LTV
Principal amount
drawn as of
Dec. 31, 2022
(EUR k)
LTV1) as of
Dec. 31, 2022
(%)
LTV
covenant
(%)
Principal amount
drawn as of
Dec. 31, 2021
(EUR k)
150,000
0
47,063
97,000
0
0
500,000
107,000
901,063
325,000
350,000
400,000
350,000
40,000
37,000
0
0
1,502,000
2,403,063
58.8
-
31.1
50.2
-
-
61.2
55.3
55.2
-
-
-
-
-
-
-
−
51.5
43.7
70.0
n/a
65.0
65.0
n/a
n/a
75.0
n/a
–
-
-
-
-
-
-
-
-
-
34,000
45,900
56,000
60,000
13,338
5,550
-
-
214,788
325,000
350,000
400,000
350,000
40,000
37,000
0
0
1,502,000
1,716,788
1) Calculation based on the market values of the properties serving as collateral in relation to the loan amount drawn down.
2) The loan was upgraded by EUR 116 million to EUR 150 million on October 28, 2022.
3) Loan agreement terminated, refinancing occurred on April 14, 2022.
4) The loan was upgraded by EUR 37 million to EUR 97 million on September 5, 2022.
5) Loan agreement terminated, refinancing occurred on July 19, 2022.
6) Loan agreement terminated, refinancing occurred on October 7, 2022.
7) Agreement of a revolving credit line of EUR 200 million on April 29, 2022.
8) Termination of the undrawn bridge financing facility of EUR 1,535 million as of May 31, 2022.
Apart from the risks mentioned above, the Group is not exposed to any commodity or currency risks.
alstria Annual Report 2022
141
Consolidated Financial Statements
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, 2022
Variable interest
Mortgage bank loans
Total
0
0
257,000
257,000
00
00
47,063
47,063
14,550
14,550
318,613
318,613
EUR k
< 1 year
1–2 years
2–3 years
3–4 years
> 4 years
Total
Financial year ending
Dec. 31, 2021
Variable interest
Mortgage bank loans
Total
0
0
0
0
42,800
42,800
0
0
116,000
158,800
116,000
158,800
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.
The term of the derivative financial instruments corresponds to the term of the loan. The derivative
financial instruments are interest rate swaps, in which the company agrees with its contractual
partners to exchange the difference between fixed interest and variable interest amounts at fixed
intervals. This is calculated based on an agreed nominal amount.
The overview in Note 6.5 reflects the status of the derivative financial instruments of alstria office
REIT-AG as of December 31, 2022.
The interest rate swaps are also used to hedge the obligations resulting from 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
2022
3,186
-1,593
2021
1,588
−169
alstria Annual Report 2022
142
Consolidated Financial Statements
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:
Impact on equity
Financial derivatives qualifying for cash flow hedge accounting.
EUR k
+ 100 bps
− 50 bps
14.1.2. Credit risk
2022
22,802
-11,926
2021
n/a
n/a
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, 2022.
alstria Annual Report 2022
143
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, 2022
Corporate bond
Loans
Interest
Schuldschein
Trade payables
Other liabilities
325,000
0
400,000
350,000
350,000
0 1,425,000
0
257,000
0
47,063
500,000
97,000
901,063
48,251
41,958
34,582
28,640
19,929
2,286
175,646
37,000
3,581
0
0
0
0
40,000
0
0
0
0
0
77,000
3,581
51,224
1,994
1,889
1,749
1,739
5,992
64,586
465,056 300,952 436,471 467,452
871,668 105,278 2,646,877
EUR k
< 1 year 1–2 years 2–3 years 3–4 years 4–5 years >5 years
Total
Financial year ending Dec. 31, 2021
Corporate bond
Loans
Interest
Schuldschein
Trade payables
Other liabilities
0
325,000
0
400,000
350,000
350,000 1,425,000
9,290
5,960
83,538
0
56,000
60,000
214,788
23,437
23,853
15,350
14,206
12,218
6,461
95,525
0
37,000
3,487
0
0
0
0
0
40,000
0
0
0
77,000
3,487
52,331
2,321
2,306
2,217
2,127
6,520
67,822
88,545 394,134 101,194 416,423 460,345 422,981 1,883,622
Details on the loans, borrowings, and bonds can be found in Note 7.3. The loans’ maturity profile is
shown in Note 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 1,630,488 k (December 31, 2021:
EUR 1,059,264 k) were provided as collateral.
alstria Annual Report 2022
144
Consolidated Financial Statements
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, 2021 and December 31, 2022.
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.
2022
55.27
90.10
100.00
13.31
2021
G-REIT covenant
69.13
93.05
100.00
13.09
> 45
> 75
> 75
< 501)
alstria Annual Report 2022
145
Consolidated Financial Statements
14.3. Determination of fair value
The following table shows the carrying amount and fair value of all financial instruments disclosed in
the consolidated financial statements:
Carrying
amount
Nonfinanci
al assets
Financial assets
At
amortized
costs
Fair value
through p/l
Assets as per balance
sheet (EUR k) as of
Dec. 31, 2022
Financial assets
Derivatives
Total long-term
Trade receivables
Tax receivables
Receivables and other
assets
Cash and cash
equivalents
Total short-term
Total
94,891
34,767
129,658
8,166
1,343
0
0
0
0
1,343
94,432
0
94,432
8,166
0
5,384
3,932
1,452
364,973
379,866
509,524
0
5,275
5,275
364,973
374,591
469,023
Derivatives
Total
0
94,891
35,266
34,767
Fair
value
94,891
34,767
35,266
129,658
129,658
0
0
0
0
0
8,166
8,166
0
0
1,452
1,452
364,973
364,973
374,591
374,591
459
-499
-40
0
0
0
0
0
-40
35,266 504,249
504,249
Carrying
amount
Nonfinancia
l liabilities
Financial liabilities
Liabilities as per
balance sheet (EUR k)
as of Dec. 31, 2022
Ltd. equity of noncontrolling interests
120,959
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
Total
2,026,290
13,363
2,160,612
21
372,142
3,581
2,188
51,224
429,156
2,589,768
At amortized
costs
Total
Fair
value
120,959
120,959
120,959
2,026,290
2,026,290
1,830,258
13,363
13,363
13,363
2,160,612
2,160,612
1,964,580
21
21
21
372,142
372,142
358,736
3,581
0
3,581
0
3,581
0
47,094
47,094
47,094
422,838
422,838
409,432
2,583,450
2,583,450
2,374,012
0
0
0
0
0
0
0
2,188
4,130
6,318
6,318
alstria Annual Report 2022
146
Consolidated Financial Statements
Carrying
amount
Nonfinancial
assets
Financial assets
At amortized
costs
Fair value
through p/l
39,185
39,185
3,922
1,289
0
0
0
1,289
4,258
3,622
313,684
323,153
362,338
0
4,911
4,911
38,941
38,941
3,922
0
636
313,684
318,242
357,183
Total
39,262
39,262
3,922
0
636
Fair
value
39,262
39,262
3,922
0
636
313,684
313,684
318,242
318,242
321
321
0
0
0
0
0
321
357,504
357,504
Assets as per balance
sheet (EUR k) as of
Dec. 31, 2021
Financial assets
Total long-term
Trade receivables
Tax receivables
Receivables and other
assets
Cash and cash
equivalents
Total short-term
Total
Carrying
amount
Nonfinancial
liabilities
Financial liabilities
Liabilities as per
balance sheet (EUR k)
as of Dec. 31, 2021
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
69,798
1,697,605
14,369
1,781,772
15
19,594
3,487
4,525
52,331
79,952
Total
1,861,724
At amortized
costs
69,798
1,697,605
14,369
Total
69,798
1,697,605
14,369
Fair
value
69,798
1,729,207
14,369
1,781,772
1,781,772
1,813,374
15
19,594
3,487
0
47,127
70,223
15
19,594
3,487
0
47,127
70,223
15
19,594
3,487
0
47,127
70,223
1,851,995
1,851,995
1,883,597
0
0
0
0
0
0
0
4,525
5,204
9,729
9,729
All of the Group's financial instruments recognized at fair value, with the exception of the corporate
bonds, were measured using the Level 2 valuation method.
The disclosures in the notes on the market values of the corporate bonds were based on quoted
market prices and were therefore evaluated according to Level 1.
alstria Annual Report 2022
147
Consolidated Financial Statements
15. SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
Between the balance sheet date and the completion of these consolidated financial statements, there
were no more significant transactions or events.
16. UTILIZATION OF EXEMPTING PROVISIONS
Certain subsidiaries, which have been included in the consolidated financial statements of alstria
office REIT-AG have made use of the exemption from the obligation to prepare annual financial
statements in accordance with the provisions applicable to corporations and certain commercial
partnerships pursuant to Section 264b HGB. An overview of the companies that made use of the
exemption can be found in the table in Note 2.2.2.
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
Topic
Jan 12, 2022
Voluntary public takeover offer to the shareholders of alstria by Brookfield
Feb 24, 2022
April 8, 2022
July 15, 2022
Aug 8, 2022
Management Board resolves to propose the appropriation of a dividend in the amount of EUR 0.04 per
dividend entitled share (2020: EUR 0.53)
alstria intends to take up debts in the amount of presumably up to EUR 850 million, expected proceeds shall
be used to return approximately EUR 1 billion of capital to the shareholders
Conclusion of a EUR 500 million loan agreement and use of proceeds for a special dividend payment of
approx. EUR 500 million
Management Board increases the special dividend proposal to EUR 550 million
Aug 30, 2022
Management Board further increases the special dividend proposal to EUR 750 million
Jan 10, 2023
Portfolio valuation as per December 31, 2022 of EUR 4.6 bn
alstria Annual Report 2022
148
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:
Name of person
subject to the
disclosure
requirement
Marianne Voigt
Function
Member of the
Supervisory Board
Transaction
Tendering1)
Place
Outside a trading
venue
Transaction date
Jan 31, 2022
UTC + 1
Price
per
share in
EUR
19.50
Volume
in EUR
167,700.00
Aggregated information for the transactions by Ms. Voigt on Jan 31, 2022:
Average weighted share price: EUR 19.50; aggregated volume: EUR 167,700.00
1)Tendering of shares in the framework of the voluntary public take over offer from Alexandrite Lake Lux Holdings S.à r.l. in December
2021; pursuant to the conditions of the offer the settlement took place on January 31, 2022.
Name of person
subject to the
disclosure
requirement
Richard
Mully
Aggregated information for the transactions by Mr. Mully on Jan 31, 2022:
Average weighted share price: EUR 19.50; aggregated volume: EUR 390,000.00
1)Tendering of shares in the framework of the voluntary public take over offer from Alexandrite Lake Lux Holdings S.à r.l. in December
2021; pursuant to the conditions of the offer the settlement took place on January 31, 2022.
Function
Member of the
Supervisory Board
Transaction date
Jan 31, 2022
UTC + 0
Place
Outside a trading
venue
Price
per
share in
EUR
19.50
Transaction
Tendering1)
Volume
in EUR
390,000.00
Name of person
subject to the
disclosure
requirement
Dr. Johannes
Conradi
Aggregated information for the transactions by Mr. Conradi on Jan 31, 2022:
Average weighted share price: EUR 19.50; aggregated volume: EUR 1,170,000.00
1)Tendering of shares in the framework of the voluntary public take over offer from Alexandrite Lake Lux Holdings S.à r.l. in December
2021; pursuant to the conditions of the offer the settlement took place on January 31, 2022.
Function
Chairman of the
Supervisory Board
Transaction date
Jan 31, 2022
UTC + 1
Place
Outside a trading
venue
Price
per
share in
EUR
19.50
Transaction
Tendering1)
Volume
in EUR
1,170,000.00
Name of person
subject to the
disclosure
requirement
Benoît
Hérault
Aggregated information for the transactions by Mr. Hérault on Jan 31, 2022:
Average weighted share price: EUR 19.50; aggregated volume: EUR 180,375.00
1)Tendering of shares in the framework of the voluntary public take over offer from Alexandrite Lake Lux Holdings S.à r.l. in December
2021; pursuant to the conditions of the offer the settlement took place on January 31, 2022.
Transaction date
Jan 31, 2022
UTC + 1
Function
Member of the
Supervisory Board
Place
Outside a trading
venue
Price
per
share in
EUR
19.50
Transaction
Tendering1)
Volume
in EUR
180,375.00
Name of person
subject to the
disclosure
requirement
Alexander
Dexne
Function
Transaction
CFO
Tendering1)
Place
Outside a trading
venue
Transaction date
Jan 31, 2022
UTC + 1
Price
per
share in
EUR
Volume
in EUR
19.50
542,100.00
Aggregated information for the transactions by Mr. Dexne on Jan 31, 2022:
Average weighted share price: EUR 19.50; aggregated volume: EUR 542,100.00
1)Tendering of shares in the framework of the voluntary public take over offer from Alexandrite Lake Lux Holdings S.à r.l. in December
2021; pursuant to the conditions of the offer the settlement took place on January 31, 2022.
Name of person
subject to the
disclosure
requirement
Function
Transaction
Place
Transaction date
Price
per
share in
EUR
Volume
in EUR
Olivier Elamine
Aggregated information for the transactions by Mr. Elamine on Jan 31, 2022:
Average weighted share price: EUR 19.50; aggregated volume: EUR 1,347,703.50
Tendering1)
CEO
Outside a trading
venue
Jan 31, 2022
UTC + 1
19.50
1,347,703.50
alstria Annual Report 2022
149
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 until the date of the
preparation of the financial statements, 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.
No.
1
2
3
4
5
Investment GmbH,
Shareholders, registered
office
DWS
Frankfurt, Germany
The Goldman Sachs Group,
Inc. Wilmington, DE, USA
SAS Rue la Boétie, Paris,
France
BlackRock Inc., Wilmington,
Delaware, USA
Brookfield Asset Management
Inc., Toronto, Canada
Voting rights
(new) (%)1)
Amount
of shares
2.78
4.958.004
Date of change
Jan 10, 2022
2.841)
5.060.820
Jan 12, 2022
0.56
989.070
Jan 31, 2022
2.592)
4.613.770
Feb 10, 2022
95.11
169.328.485
Feb 17, 2022
Attribution of
voting rights
Contains 3 % or more of
voting rights from
Yes
Yes
Yes
Yes
Yes
-
-
-
-
Lapis Luxembourg Holdings
S.à r.l. (10.23%), Alexandrite
Lake Lux Holdings S.à r.l.
(83.14%)
l.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) Contains 0.57 % financial instruments pursuant to Sec. 38 para. 1 No. 1 WpHG (corresponds to 3,013,087 voting rights).
3) Contains 0.04 % financial instruments pursuant to Sec. 38 para. 1 No. 1 and No. 2 WpHG (corresponds to 71,552 voting rights).
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.
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.
alstria Annual Report 2022
150
Consolidated Financial Statements
19. AUDITORS’ FEES
On June 10, 2022, the General Meeting elected Deloitte GmbH Wirtschaftsprüfungsgesellschaft,
Dammtorstraße 12, Hamburg auditor of the separate and consolidated financial statements for the
2021 financial year. The fees totaled EUR 541 k in 2021. 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
0
2022
456
85
0
0
541
The non-audit services in the 2022 business year, essentially relate to the review of quarterly reports
and audit related advisory.
On September 2, 2021, the General Meeting elected KPMG Wirtschaftsprüfungsgesellschaft,Ludwig-
Erhard-Strasse 11-17, Hamburg, auditor of the separate and consolidated financial statements for the
2022 financial year. The fees totaled EUR 564 k in 2021. 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
-5
2021
525
28
0
11
564
The non-audit services in the 2021 business year essentially relate to the review of the sustainability
report, the review of quarterly reports and audit related advisory.
Annika Deutsch is the professionally qualified auditor in charge of the financial statements for alstria
office REIT-AG and the Group. She first assumed this position in fiscal year 2022.
alstria Annual Report 2022
151
Consolidated Financial Statements
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
Left alstria’s
Management board on
December 31, 2022
Hamburg, Germany
CFO of the Company
International School of
Management (ISM), Hamburg
Lecturer
The remuneration report details the principles used to define the remuneration of the Management
Board and Supervisory Board.
alstria Annual Report 2022
152
Consolidated Financial Statements
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.
During the 2022 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:
Brad Hyler
Chair
Joined alstria’s
Supervisory Board on
March 1, 2022
London, United Kingdom
Managing Partner, Brookfield
Asset Management
Edyn Apart Hotels (Brookfield
group)
Experimental Group (Brookfield
group)
Temprano Capital (Brookfield
group)
Student Roost (Brookfield group)
Member of the Board of Directors
(non-executive)
Member of the Board of Directors
(non-executive)
Member of the Board of Directors
(non-executive)
Member of the Board of Directors
(non-executive)
Toronto, Canada
Managing Partner, Brookfield
Property Group
Canary Wharf Group Investment
Holding plc
Director (non-executive)
Hamburg, Germany
Lawyer and Partner, Freshfields
Bruckhaus Deringer PartGmbB
Elbphilharmonie und Laeiszhalle
Betriebsgesellschaft mbH
Flughafen Hamburg GmbH
HamburgMusik gGmbH
Member of the Advisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Cobham (Surrey),
United Kingdom
Director, Starr Street Limited
Great Portland Estates plc, UK
Non-Executive Chair
Uzès, France
CEO, Elaia Investement Spain,
SOCIMI, S.A. (Batipart Group),
Spain
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Jan Sucharda
Vice-Chair
Joined alstria’s
Supervisory Board on
March 1, 2022
Dr. Johannes Conradi
Chair
Left alstria’s
supervisory board on
Feb 28, 2022
Richard Mully
Vice-Chair
Left alstria’s
supervisory board on
Feb 28, 2022
Benoît Hérault
Left alstria’s
supervisory board on
Feb 28, 2022
Consolidated Financial Statements
Batipart Immo Long Terme,
Luxemburg (Batipart Group)
Independent Director
Dr. Frank Pörschke
Hamburg, Germany
Aug. Prien Bauunternehmung
(GmbH & Co. KG)
Elisabeth Stheeman
Until Aug 31, 2022
Since Dec 8, 2022
Walton-On-Thames (Surrey),
United Kingdom
Aareal Bank AG
Edinburgh Investment Trust PLC,
UK
W. P. Carey Inc.
CEO, P3 Logistic Parks s.r.o.
(GIC group), Czech Republik
Member of the Supervisory Board
Supervisory Board member in
various companies
Member of the Supervisory Board
Chair of the Board of Directors
(non-executive)
Member of the Board of Directors
(non-executive)
Marianne Voigt
Left alstria’s
supervisory board on
Feb 28, 2022
Karl Wambach
Joined alstria’s
Supervisory Board on
March 1, 2022
Becky Worthington
Joined alstria’s
Supervisory Board on
March 1, 2022
Berlin, Germany
Managing Director,
bettermarks GmbH
BDO AG Wirtschaftsprüfungs-
gesellschaft
DISQ Deutsches Institut für Service-
Qualität GmbH & Co. KG
Member of the Supervisory Board
Member of the Advisory Board
Berlin, Germany
Managing Director, Brookfield
Deutschland
Berkshire, United Kingdom
Chief Financial Officer, Canary
Wharf Group
Hamburg, February 27, 2023
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
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Responsibility statement
C. RESPONSIBILITY STATEMENT
To the best of our knowledge, I confirm that, in accordance with the applicable reporting principles,
the Consolidated Financial Statements for 2022 give a true and fair view of the Group’s assets,
liabilities, financial position and profit or loss, and that the Group Management Report 2022, 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 27, 2023
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
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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/Germany,
and its subsidiaries (the Group) which comprise the consolidated balance sheet as at December 31,
2022, the consolidated statement of profit and loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
financial year from January 1 to December 31, 2022, and the notes to the consolidated financial
statements, including a summary of significant accounting policies. In addition, we have audited the
combined management report for the parent and the group of alstria office REIT-AG,
Hamburg/Germany, for the financial year from January 1 to December 31, 2022. In accordance with
German legal requirements, we have not audited the content of the consolidated corporate
governance statement pursuant to Section 315d German Commercial Code (HGB), which is combined
with the corporate governance statement pursuant to Section 289f HGB and included in section “IX.1
Consolidated corporate governance statement of the Group and alstria AG pursuant to Sections 289f
and 315d HGB” referenced in the combined management report, of the sustainability report
referenced in section “VI. Sustainability Report” of the combined management report, of the core
components of alstria’s sustainability strategy presented in this section and of the executive directors’
statement on the appropriateness and effectiveness of the entire internal control system and of the
risk management system included in section “V.1.2 Internal control system” of the combined
management report.
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
IFRS as adopted by the EU and the additional requirements of German commercial law pursuant
to Section 315e (1) HGB and, in compliance with these requirements, give a true and fair view
of the assets, liabilities and financial position of the Group as at December 31, 2022 and of its
financial performance for the financial year from January 1 to December 31, 2022, and
▪ the accompanying combined management report as a whole provides an appropriate view of
the Group’s posi-tion. 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 audit opinion on
the combined management report does not cover the content of the consolidated corporate
governance statement, which is combined with the corporate governance statement, of the
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sustainability report, of section “VI. Sustainability report” and of the executive directors’
statement on the appropriateness and effectiveness of the entire internal control system and
of the risk management system included in section V.1.2.
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 management
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 Wirtschaftsprüfer (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) point (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 audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit 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, 2022. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole and in forming our audit opinion thereon; we do not provide a separate audit
opinion on these matters.
In the following we present the measurement of investment properties, which we have determined
to be a key audit matter in the course of our audit:
Our presentation of this key audit matter has been structured as follows:
a) description (including reference to corresponding information in the consolidated financial
statements and in the combined management report)
b) auditor’s response
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Measurement of investment properties
a)
Investment property of EUR 4,606.8 million is disclosed in the consolidated financial
statements of alstria office REIT-AG as at 31 December 2022. The share of this item in the balance
sheet total amounts to a total of 89.2% and thus has a material influence on the Group’s assets and
liabilities. alstria office REIT-AG measures the investment property at fair value. In the financial year
2022, a total loss from measurement at fair value of EUR 173.8 million was recognized in the
consolidated statement of profit and loss. For the first time, the investment property was measured
at fair values in accordance with the discounted cash flow method. The measurement date was
December 31, 2022. The fair values were determined by the accredited, external expert Savills
Advisory Services Germany GmbH & Co. KG, Frankfurt am Main/Germany. Next to the actual data
provided by the Parent, which include, for example, the lettable area, vacancy, scheduled
maintenance or modernization measures and the actual rent, further measurement-related
assumptions are taken into account in determining the fair values of the properties. These
assumptions are subject to significant estimation uncertainties and judgment.
Even minor changes in the assumptions relevant for the measurement can lead to material changes
in the fair values resulting from the computation. The main measurement assumptions for the
measurement of investment properties are current and future market rents as well as capitalization
and discount rates. Against this backdrop, and due to the complexity of the valuation model, this
subject was of particular importance within the context of our audit.
The disclosures of the executive directors regarding the measurement of investment properties are
included in sections 2.4.2 and 2.4.3 of the notes to the consolidated financial statements.
b)
As part of our audit, we gained an understanding of the process for measuring property assets,
examined the internal control system that was in place to assess the fair values determined by the
external expert and performed a test of the design and implementation, and operating effectiveness
of implemented controls relevant for the audit. We made a critical assessment of the competence,
capabilities and objectivity of the external expert. Together with our own internal real estate
valuation experts, we examined the conformity of the valuation technique applied with IAS 40, in
conjunction with IFRS 13, and made sample on-site visits, held critical discussions with the external
expert and checked the calculation logic supporting the values that had been determined in the expert
report. We checked the input parameters used in the measurement process by reference to underlying
contractual data or – to the extent that they were based on assumptions and estimates – assessed
their appropriateness with regard to the methods, assumptions and data used by the Parent, also
based on available market data.
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In addition, we audited the completeness and accuracy of the disclosures made in the notes to the
consolidated financial statements in accordance with IAS 40 and IFRS 13.
4. OTHER INFORMATION
The executive directors and/or the supervisory board are responsible for the other information. The
other information comprises:
▪
▪
▪
▪
▪
▪
▪
the report of the supervisory board,
the consolidated corporate governance statement pursuant to Section 315d HGB, which is
combined with the corporate governance statement pursuant to Section 289f HGB and
included in section “IX.1 Consolidated corporate governance statement of the Group and
alstria AG pursuant to Sections 289f and 315d HGB” referenced in the combined management
report,
the separate sustainability report referenced in section “VI. Sustainability Report” of the
combined management report,
section “VI: Sustainability report” of the combined management report,
the executive directors’ statement on the appropriateness and effectiveness of the entire
internal control system and of the risk management system included in section “V.1.2 Internal
control system” of the combined management report,
the remuneration report pursuant to Section 162 German Stock Corporation Act (AktG)
the executive directors’ confirmation regarding the consolidated financial statements and the
combined management report pursuant to Section 297 (2) sentence 4 HGB and Section 315
(1) sentence 5 HGB, and
▪
all other parts of the annual report,
▪ but not the consolidated financial statements, not the audited content of the combined
management report and not our auditor’s report thereon, not the declaration of the executive
board regarding the compliance with the requirements under Sections 11 to 15 German REIT
Act and regarding the composition of income previously taxed and not previously taxed
pursuant to Section 19 (3) in conjunction with Section 19a German REIT Act (“REIT
declaration”) and not our auditor’s memorandum pursuant to Section 1 (4) German REIT Act
(“auditor’s memorandum”).
The supervisory board is responsible for the report of the supervisory board. The executive directors
and the supervisory board are responsible for the statement pursuant to Section 161 AktG concerning
the German Corporate Governance Code, which is part of the consolidated corporate governance
statement combined with the corporate governance statement, as well as for the remuneration report
pursuant to Sec. 162 AktG. Otherwise the executive directors are responsible for the other
information.
Our audit 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 audit opinion or any other
form of assurance conclusion thereon.
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In connection with our audit, our responsibility is to read the other information identified above and,
in doing so, to consider whether the other information
▪
is materially inconsistent with the consolidated financial statements, with the audited
content of the combined management report or our knowledge obtained in the audit, or
▪ otherwise appears to be materially misstated.
5. RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND THE SUPERVISORY BOARD FOR THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE COM-BINED MANAGEMENT REPORT
The executive directors are responsible for the preparation of the consolidated financial statements
that comply, in all material respects, with IFRS 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, the executive directors are
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
(i.e., fraudulent financial reporting and misappropriation of assets) or error.
In preparing the consolidated financial statements, the executive directors are 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 operations, or there is no realistic alternative but to do so.
Furthermore, the executive directors are 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, the executive directors are 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 assertions in the combined management report.
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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.
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 audit 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
Generally 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 procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our audit opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than the risk of not detecting a material
misstatement resulting from error, as fraud may involve collusion, forgery, intentional
omissions, 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 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 audit opinion on the effectiveness of
these systems.
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▪ evaluate the appropriateness of accounting policies used by the executive directors and the
reasonableness of estimates made by the executive directors and related disclosures.
▪
conclude on the appropriateness of the executive directors’ 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
consolidated financial statements and in the combined management report or, if such
disclosures are in-adequate, to modify our respective audit 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
statements, 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 IFRS as adopted by the EU and with 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 audit 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 audit opinions.
▪
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 the executive
directors in the combined management report. On the basis of sufficient appropriate audit
evidence we evaluate, in particular, the significant assumptions used by the executive
directors 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 audit opinion
on the prospective information and on the assumptions used as a basis. There is a substantial
unavoidable risk that future events will differ materially from the prospective information.
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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 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 actions taken or
safeguards applied to eliminate independence threats.
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 for the current
period and are therefore the key audit matters. We describe these matters in the 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 Reproductions of the Consolidated Financial Statements and
of the Combined Management Report Prepared for Publication Pursuant to Section 317 (3a) HGB
Audit Opinion
We have performed an audit in accordance with Section 317 (3a) HGB to obtain reasonable assurance
whether the electronic reproductions of the consolidated financial statements and of the combined
management report (hereinafter referred to as “ESEF documents”) prepared for publication,
contained
in
the
file,
which
has
the
SHA-256
value
8F1E736662DD3A9CED029A0C49DFC3315264E9C0E763D4BDCA487B84A775A462, meet, in all material
respects, the requirements for the electronic reporting format pursuant to Section 328 (1) HGB (“ESEF
format”). In accordance with the German legal requirements, this audit only covers the conversion
of the information contained in the consolidated financial statements and the combined management
report into the ESEF format, and therefore covers neither the information contained in these
electronic reproductions nor any other information contained in the file identified above.
In our opinion, the electronic reproductions of the consolidated financial statements and of the
combined management report prepared for publication contained in the file identified above meet,
in all material respects, the requirements for the electronic reporting format pursuant to Section 328
(1) HGB. Beyond this audit opinion and our audit opinions on the accompanying consolidated financial
statements and on the accompanying combined management report for the financial year from
January 1 to December 31, 2022 contained in the “Report on the Audit of the Consolidated Financial
Statements and of the Combined Management Report” above, we do not express any assurance
opinion on the information contained within these electronic reproductions or on any other
information contained in the file identified above.
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Basis for the Audit Opinion
We conducted our audit of the electronic reproductions of the consolidated financial statements and
of the combined management report contained in the file identified above in accordance with Section
317 (3a) HGB and on the basis of the IDW Auditing Standard: Audit of the Electronic Reproductions of
Financial Statements and Management Reports Prepared for Publication Purposes Pursuant to Section
317 (3a) HGB (IDW AuS 410 (06.2022)). Our responsibilities in this context are further described in the
“Group Auditor’s Responsibilities for the Audit of the ESEF Documents” section. Our audit firm has
applied the IDW Standard on Quality Management: Requirements for Quality Management in the Audit
Firm (IDW QS 1).
Responsibilities of the Executive Directors and the Supervisory Board for the ESEF Documents
The executive directors of the parent are responsible for the preparation of the ESEF documents
based on the electronic files of the consolidated financial statements and of the combined
management report according to Sec-tion 328 (1) sentence 4 no. 1 HGB and for the tagging of the
consolidated financial statements according to Sec-tion 328 (1) sentence 4 no. 2 HGB.
In addition, the executive directors of the parent are responsible for such internal controls that they
have considered necessary to enable the preparation of ESEF documents that are free from material
intentional or unintentional non-compliance with the requirements for the electronic reporting
format pursuant to Section 328 (1) HGB.
The supervisory board is responsible for overseeing the process for preparing the ESEF documents as
part of the financial reporting process.
Group Auditor’s Responsibilities for the Audit of the ESEF Documents
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from
material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB.
We exercise professional judgment and maintain professional skepticism throughout the audit. We
also
▪
identify and assess the risks of material intentional or unintentional non-compliance with the
requirements of Section 328 (1) HGB, 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 on the ESEF documents in
order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an assurance opinion on the effectiveness of these controls.
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▪ evaluate the technical validity of the ESEF documents, i.e. whether the file containing the
ESEF documents meets the requirements of the Delegated Regulation (EU) 2019/815, in the
version in force at the balance sheet date, on the technical specification for this electronic
file.
▪ evaluate whether the ESEF documents enable a XHTML reproduction with content equivalent
to the audited consolidated financial statements and to the audited combined management
report.
▪ evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in
accordance with the requirements of Articles 4 and 6 of the Delegated Regulation (EU)
2019/815, in the version in force at the balance sheet date, enables an appropriate and
complete machine-readable XBRL copy of the XHTML reproduction.
Further Information pursuant to Article 10 of the EU Audit Regulation
We were elected as Group auditor by the general meeting on June 10, 2022. We were engaged by the
supervisory board on June 13, 2022. We have been the group auditor of alstria office REIT-AG,
Hamburg/Germany, since the financial year 2022.
We declare that the audit 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).
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III. OTHER MATTER – USE OF THE AUDITOR’S REPORT
Our auditor’s report must always be read together with the audited consolidated financial statements
and the audit-ed combined management report as well as with the audited ESEF documents. The
consolidated financial statements and the combined management report converted into the ESEF
format – including the versions to be submitted for inclusion in the Company Register – are merely
electronic reproductions of the audited consolidated financial statements and the audited combined
management report and do not take their place. In particular, the ESEF report and our audit opinion
contained therein are to be used solely together with the audited ESEF documents made available in
electronic form.
IV. GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT
The German Public Auditor responsible for the engagement is Annika Deutsch.
Hamburg, February 27, 2023
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
[Original German version signed by:]
Annika Deutsch
Wirtschaftsprüferin
[German Public Auditor]
Maximilian Freiherr v.Perger
Wirtschaftsprüfer
[German Public Auditor]
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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 2022.
I. FOCUS OF THE DISCUSSION
The main topics discussed by the Supervisory Board and its committees in the 2022 financial year
were the acquisition by Alexandrite Lake Lux Holdings S.à r.l. (Bidder), a company indirectly
controlled by Brookfield, of more than 95% of alstria’s shares (Takeover), the development of the
Company’s real estate portfolio and the review of the Company’s capital structure. Further main
topics have been the adjustment of the Company’s corporate governance structure to the new post
Takeover shareholding structure, such as the changes in the Supervisory Board’s composition and the
adjustment of the Management Board’s remuneration system.
II. MONITORING AND ADVISING THE COMPANY’S MANAGEMENT
In the 2022 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 situation, 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 real estate portfolio, rental activities and important events. The chairmen of the
Supervisory and Management Boards held regular informative and advisory meetings.
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Report of the Supervisory Board
III. BOARD MEMBERS
After the change of control occurred in the course of the Takeover in January 2022, the members of
the Supervisory Board Dr Johannes Conradi (chair), Richard Mully (deputy chair), Benoît Hérault and
Marianne Voigt resigned from their offices effective end of February 28, 2022. The resignations were
made in accordance with the provisions of the investment agreement with the bidder in the context
of the Takeover. As successors, in the first place the court appointed, and later the 2022 annual
general meeting elected, Brad Hyler, Jan Sucharda, Becky Worthington and Karl Wambach to the
Supervisory Board.
Following the changes in the Supervisory Board’s composition, the number of permanent committees
has been reduced from four to two (Audit Committee and Nomination and Remuneration Committee)
in order to reduce complexity. The matters which had formerly been discussed in the terminated
committees are now being included in the agenda of the Supervisory Board in plenary session. On
March 21, 2022 a Special Committee Finance has been set up in order to approve of financing
instruments.
In the year 2022, the Supervisory Board and its committees comprised the following members:
Supervisory Board member
Audit
Committee
Nomination &
Remuneration
Committee
Finance &
Investment
Committee1)
ESG
Committee1)
Brad Hyler3) (chair)
Member
Chair
Jan Sucharda3) (deputy chair)
−
Member
Dr Frank Pörschke
Elisabeth Stheeman
Karl Wambach3)
Becky Worthington3)
Dr Johannes Conradi (chair)4)
Richard Mully (deputy chair)4)
Benoît Herault4)
Marianne Voigt4)
Member
−
−
−
Chair
−
−
Member
−
−
Chair
−
Member
Member
Chair
−
−
−
Member
Member
−
−
−
Chair
−
−
1)
2)
3)
4)
Until March 21, 2022
From March 21 to December 31, 2022
Since March 1, 2022
Until February 28, 2022
Special
Committee
Finance2)
Chair
Member
−
−
−
Member
−
−
−
−
−
−
Chair
Member
−
Member
−
−
−
−
In December 2022, the Supervisory Board last updated 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 (Profile for the Supervisory Board), as presented in the Company’s
Corporate Governance Statement on pages 175 to 192 of the annual report and reviewed its
implementation status. Currently, the composition of the Supervisory Board meets these objectives.
The Profile for the Supervisory Board is complete.
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 2022, the Company completed an
alstria Annual Report 2022
168
Report of the Supervisory Board
onboarding process for four new Supervisory Board members. In addition, the Company supports
Supervisory Board members’ training measures with regular internal training courses, especially with
regular updates on the legal framework. In the 2022 financial year, these training sessions were part
of the onboarding process for the new Supervisory Board members which also included property tours.
No conflicts of interest occurred in the past financial year for members of the Supervisory or
Management Boards. All Supervisory Board members are independent from the Company and its
Management Board. All Supervisory Board members are independent from the controlling shareholder
except for Brad Hyler, Jan Sucharda and Karl Wambach.
IV. MEETINGS OF THE SUPERVISORY BOARD
The full Supervisory Board held five meetings in the 2022 financial year. Based on detailed documents,
we also made eight decisions via circular resolution. In the 2023 financial year, one additional meeting
of the full Supervisory Board and one circular resolution have taken place before this report’s
completion. In the reporting year, the Supervisory Board held physical meetings while offering the
possibility for guests to join via video conference.
At its meetings the Supervisory Board discussed the Company's financial results (the interim
quarterly and half-year financial reports and the annual and consolidated financial statements) as
well as the Company’s situation, development, course of business and market situation with the
Management Board. Committee chairs reported on the committees’ work.
In February 2022, the Supervisory Board, via electronic communication, decided on the Corporate
Governance Statement which is submitted jointly with the Management Board as well as on the
remuneration report for financial year 2021. At the meeting in February 2022, the Supervisory Board
addressed the annual and consolidated financial statements as of December 31, 2021, and the
consolidated management report 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, 2021 and agreed with the Management Board's proposal to appropriate
the annual net profit for the 2021 financial year. The Supervisory Board discussed with the
Management Board the status of the Takeover, approved a financing agreement and discussed the
variable remuneration for the Management Board members.
In March 2022, the Supervisory Board held its first meeting after the judicial appointment of the new
Supervisory Board members and resolved on the new Supervisory Board set-up by appointing a chair
and deputy-chair, reducing the number of permanent committees from four to two and revising the
rules of procedure for Supervisory Board and the profiles for Supervisory and Management Boards.
The Supervisory Board resolved on a new term of office for the CEO starting in January 2023, based
on the existing management board service agreement. In April 2022, the Supervisory Board resolved
on the new Management Board remuneration system 2022, reflecting the new shareholding structure,
alstria Annual Report 2022
169
Report of the Supervisory Board
on the virtual format and recommendations for resolution to the annual general meeting 2022 and on
a corporate governance declaration pursuant to section 161 German Stock Corporation Act (AktG).
In June 2022, the Supervisory Board resolved on further investments into the Company’s real estate
portfolio and on new leases. After the annual general meeting in June 2022 had approved the new
Management Board Remuneration System 2022, the Supervisory Board implemented this system by
updating the management board service agreements and settling the outstanding tranches of the old
long term incentive plan. Furthermore, the Supervisory Board approved new financings agreements
and asset disposals. Over summer the Supervisory Board resolved by way of written circular resolutions
on the virtual format and recommendations for resolution of an extraordinary general meeting and
approved of financing agreements.
At the meetings in autumn 2022, the Management and Supervisory Boards discussed the Company's
largest properties and related development projects. The Supervisory Board resolved on the
Company’s budget and business plan for the 2023 financial year, the adjustment of the profile for the
Supervisory Board and of the rules of procedures for the Supervisory Board, its committees and the
Management Board, approved a new financing agreement and made editorial amendments to the
Company's articles of association to reflect a capital increase from conditional capital: Approximately
260,000 new shares were issued to Company employees under the Company's employee participation
plan. By way of electronic communication, the Supervisory Board dealt with the performance targets
for the Management Board’s variable remuneration elements for financial year 2023.
In February 2023, the Supervisory Board passed a resolution via electronic communication on the
corporate governance statement and on the remuneration report for the 2022 financial year. At the
balance sheet meeting in February 2023, the Supervisory Board dealt with the annual and consolidated
financial statements as of December 31, 2022 and with the Management Board's proposal for
appropriating profits for the 2022 financial year.
alstria Annual Report 2022
170
Report of the Supervisory Board
Attendance of Supervisory Board members at meetings
Supervisory Board members attended all meetings of the Supervisory Board in the 2022 financial year.
Attendance at meetings*
Total number of meetings:
attended /during office term
Number of
physical meetings
Number of
meetings via video
conference
Participation
in %
Full Supervisory Board
Brad Hyler (chair)
Jan Sucharda (deputy chair)
Dr Frank Pörschke
Elisabeth Stheeman
Karl Wambach
Becky Worthington
Dr Johannes Conradi
Richard Mully
Benoît Hérault
Marianne Voigt
Audit Committee
Becky Worthington (chair)
Brad Hyler
Dr Frank Pörschke
Marianne Voigt
Benoît Hérault
Nomination and Remuneration
Committee
Brad Hyler (chair)
Jan Sucharda
Elisabeth Stheeman
Dr Johannes Conradi
Benoît Hérault
Finance and Investment Committee
Richard Mully (chair)
Dr Frank Pörschke
Elisabeth Stheeman
ESG Committee
Dr Johannes Conradi (chair)
Richard Mjully
Marianne Voigt
Special Committee Finance
Richard Mully (chair)
Jan Sucharda
Becky Worthington
Total
5
4/4
4/4
5/5
5/5
4/4
4/4
1/1
1/1
1/1
1/1
6
4/4
4/4
6/6
2/2
2/2
2
1/1
1/1
2/2
1/1
1/1
1
1/1
1/1
1/1
1
1/1
1/1
1/1
1
1/1
1/1
1/1
* Participation in a meeting can also be via telephone or video conference
5
0
3
3
1
1
1
1
1
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
alstria Annual Report 2022
171
Report of the Supervisory Board
V. COMMITTEES OF THE SUPERVISORY BOARD
The six-member Supervisory Board established two (four at the beginning of the 2022 financial year)
standing committees to support its work and staffed each of them with 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. Information regarding the number and format of committee meetings can be found in the table
above. The main topics discussed in the Supervisory Board’s committees in financial year 2022 are
described below:
1. AUDIT COMMITTEE
At the beginning of the reporting year, the Audit Committee thoroughly dealt with the property
valuation as of December 31, 2021. The Audit Committee discussed the annual financial statements,
the consolidated financial statements as of December 31, 2021, and the consolidated management
report 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 para. 4 of the REIT Act, dealt with the audit quality, handled the non-
auditing services provided by the auditors in the 2022 financial year and approved certain non-auditing
services by the auditors for the 2023 financial year. In the summer, the Audit Committee dealt with
the half-year financial report issued as of June 30, 2022 prior to publication and discussed this with
the auditor. The Company’s risk situation was discussed regularly. Other topics included a tender
process for the audit services for the 2022 financial year, the audit of the auditor’s independence and
the appointment of Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, (Deloitte) as auditor.
Besides the audit results, the Audit Committee discussed with the auditor the audit risk assessment,
the audit strategy and audit planning. The chair of the Audit Committee discussed the progress of the
audit with the auditor and reported thereon to the committee. The committee discussed with the
Management Board the accounting, the accounting process, the risk management system, the material
risks identified, the effectiveness of the internal control and audit system and alstria’s compliance
system. The Audit Committee also discussed the internal audit’s results for the 2022 financial year
with the external auditors from Price Waterhouse Coopers. The Management Board attended all of
the meetings of the Audit Committee; however, when the Audit Committee consulted with the auditor
on his reports, this was done in the absence of the Management Board. The division heads of
Accounting & Reporting and Finance as well as the Compliance Officer, the auditors and the external
auditors for the internal audit also participated in some of the Audit Committee’s meetings.
alstria Annual Report 2022
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Report of the Supervisory Board
2. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee dealt with the adjustment of the Management Board
remuneration system to the post Takeover shareholding structure. The committee also dealt with the
regular issues of Management Board remuneration and, in particular, prepared the remuneration
report for the 2021 financial year and deliberated on the achievement of targets for the variable
remuneration for the Management Board’s members, also taking into account their individual
performance in each case. They also submitted corresponding resolution proposals to the full
Supervisory Board. They reviewed the Management and Supervisory Board’s composition and
succession planning and recommended reappointing the CEO for another term of office and electing
new Supervisory Board members. The profiles for the Management and the Supervisory Boards with
the criteria for the composition of both bodies were further developed by the Nomination and
Remuneration Committee in the reporting year and the committee recommended their adaptation to
the Supervisory Board. The external remuneration experts participated in some of the Nomination
and Remuneration Committee’s meetings.
3. FINANCE AND INVESTMENT COMMITTEE
The Finance and Investment Committee recommended approving a financing agreement to the
Supervisory Board. An external legal consultant participated in the meeting.
4. ESG COMMITTEE
With the Management Board and the Company’s Head of Sustainability & Future Research, the ESG
Committee discussed the Company’s sustainability report 2020/2021.
5. SPECIAL COMMITTEE FINANCE
In March 2022, the Supervisory Board established the Special Committee Finance, which consisted of
the Supervisory Board members Brad Hyler as chair, Jan Sucharda and Becky Worthington and which
was set up until December 31, 2022. The Special Committee Finance dealt with the potential of a
corporate bond and approved a financing agreement.
VI. AUDIT OF THE ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS
Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, audited the annual financial statements
and the management report of alstria office REIT-AG prepared by the Management Board as well as
the consolidated financial statements for the fiscal year from January 1 to December 31, 2022
including the group management report and issued an unqualified audit opinion.
The annual financial statements of alstria office REIT-AG, the consolidated financial statements and
the combined management report, the Management Board’s proposal for the appropriation of the net
income, as well as the auditor's reports, were made available to all Supervisory Board members
immediately after their preparation. The Supervisory Board comprehensively reviewed the documents
prepared by the Management Board in the Audit Committee and in the plenary session. At the Audit
alstria Annual Report 2022
173
Report of the Supervisory Board
Committee meeting, the auditor reported on his audit’s scope, the audit risk assessment, the 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 combined
management report 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 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 net profit.
Moreover, the Management Board presented the report on relations to affiliated companies pursuant
to sec. 312 AktG to the Supervisory Board. Likewise, the auditor’s report prepared thereto by Deloitte
was presented to the Supervisory Board. Both reports were also communicated to each member of
the Supervisory Board. The audit opinion of the auditor reads as follows:
“In regards to our duty bound audit and assessment, we certify that,
1. the actual details of the report are correct,
2. in regard to the legal transactions which are listed in the report, the services of the company
have not been inadequately high or the disadvantages have been compensated,
3. there are no circumstances that would justify a materially different assessment of the
measures listed in the report than that made by the Management Board.”
The Supervisory Board also reviewed this report by the Management Board and has affirmatively taken
note of the report prepared thereto by the auditor. In accordance with the final result of its own
review, the Supervisory Board approves the statement of the Management Board regarding the report
pursuant to sec. 312 para. 3 AktG.
The Supervisory Board thanks the Management Board and all employees for their extraordinary
performance, which made it possible for alstria to look back on a successful financial year 2022.
Hamburg, February 2023
For the Supervisory Board
Brad Hyler
Chair of the Supervisory Board
alstria Annual Report 2022
174
Corporate Governance Statement
F. CORPORATE GOVERNANCE STATEMENT
In this statement, the Management Board and Supervisory Board of alstria office REIT-AG (“alstria” or
“Company”) report on the corporate governance at the Company pursuant to Sections 289f and 315d of
the German Commercial Code (Handelsgesetzbuch, HGB) and as prescribed in Principle 23 of the
German Corporate Governance Code (“Code”).
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
The Management Board is responsible for managing the enterprise in its own best interests. In
particular, the Management Board develops the enterprise’s strategy, coordinates it with the
Supervisory Board and ensures its 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 enterprise (Compliance).
The Company’s Articles of Association stipulate that alstria’s Management Board consists of one or
more members. The Supervisory Board appoints the members of the Management Board and
determines their number.
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. Resolutions of the Management Board are passed by a simple majority, whereby a
unanimous vote shall generally be sought.
Significant business transactions stipulated in the rules of procedure for the Management Board
require the approval of the Supervisory Board. The Supervisory Board’s approval is required, for
example, for the acquisition or disposal of real estate property and 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 and exceeding a total annual amount of
EUR 2 million. Furthermore, transactions with related parties pursuant to Section 111 b para.1 of the
German Stock Corporation Act (Aktiengesetz, AktG) require the approval of the Supervisory Board.
The Management Board provides the Supervisory Board regularly and promptly with comprehensive
information on all issues relevant to the Company and the Group relating to questions of the strategy,
the development of the business and financial position of the Company, planning, material business
alstria Annual Report 2022
175
Corporate Governance Statement
transactions as well as on the risk position, risk management and compliance of the Company. At least
once a year, the Management Board reports on the planned business policy and on other fundamental
issues of corporate planning for the Company and the Group. At least quarterly, the Management
Board reports on the state of business, in particular sales revenues and income, material accounting
indicators, REIT and EPRA indicators and the development of the net assets, financial position and
results of operations. The work of the Management Board, the reporting and information obligations
to the Supervisory Board and the transactions requiring Supervisory Board approval are detailed in
the rules of procedure for the Management Board.
In financial year 2022, the Management Board of alstria office REIT-AG was composed of the following
members:
Member
Olivier Elamine
Alexander Dexne
Chief Executive Officer
Chief Financial Officer
Term of office
(in years)
16
15
Appointed until
31.12.2027
31.12.2022
Alexander Dexne’s appointment as member of the Management Board ended at the close of
December 31, 2022.
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 Chair of the Supervisory
Board. In particular, a member of the Management Board shall not directly compete with the Company
through private real estate investments; real estate transactions between the Company and a member
of the Management Board are forbidden. Major business transactions between the Company on the
one hand and a Management Board member, 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. A Management Board’s
member requires 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 period. There
were also no agreements or transactions between the Company and members of the Management
Board and related parties. With the approval of the Supervisory Board, Management Board members
sit on 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 152 of the Company’s Annual Report.
The compensation of the members of the Management Board is presented in the Remuneration Report
on pages 193 to 214 of the Company’s Annual Report. The Remuneration Report, together with the
other documents required by Section 289 f HGB, is also available on the Company's website at
www.alstria.com → Company → Corporate Governance → Remuneration.
alstria Annual Report 2022
176
Corporate Governance Statement
2. PROFILE FOR THE MANAGEMENT BOARD
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,
on March 21, 2022 the Supervisory Board last 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. Acting members of
the Management Board will only be reappointed more than one year before the end of their term of
office and their current appointment 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.
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;
alstria Annual Report 2022
177
Corporate Governance Statement
▪ 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
In its current composition, the Management Board meets all the requirements of the Profile for the
Management Board.
alstria Annual Report 2022
178
Corporate Governance Statement
3. SUPERVISORY BOARD
The Supervisory Board supervises and advises the Management Board in the management of the
enterprise. Supervision and advice also include sustainability issues, in particular. The Supervisory
Board reviews the annual and consolidated financial statements along with the combined management
report of alstria, adopts the annual financial statements and approves the consolidated financial
statements and the combined management report. It examines the proposal for the profit
appropriation and, with the Management Board, submits it to the Annual General Meeting for
resolution. On the substantiated recommendation of the Audit Committee, the Supervisory Board
proposes the auditors for election by the Annual General Meeting. After the corresponding resolution
is passed by the Annual General Meeting, the Audit Committee awards the contract to the auditors and
monitors the audit of the financial statements together with the independence and quality of the
auditors. Details of the activities of the Supervisory Board in the reporting year are contained in the
report by the Supervisory Board on pages 167 to 174 of the Company’s Annual Report.
In accordance with the Company’s articles of association, the Supervisory Board consist of six members,
which are generally elected by the Annual General Meeting. The Company’s Supervisory Board is
composed exclusively of shareholder representatives.
The Supervisory Board elects a Chair and a Deputy Chair from among its members. The Chair of the
Supervisory Board coordinates the Supervisory Board’s activities, chairs its meetings and represents its
interests externally. The Chair maintains regular contact with the Management Board and discusses
strategy, planning, business development, the risk situation, risk management and corporate
compliance with it. The Management Board immediately informs the Chair of important events that
are of material significance for assessing the situation as well as for development and management. If
necessary, the Chair then informs the Supervisory Board and, when appropriate, convenes a Supervisory
Board meeting.
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 Chair permits it for an individual case.
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 Chair 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
alstria Annual Report 2022
179
Corporate Governance Statement
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 period, there were no conflicts of interest involving members of alstria's Supervisory
Board and there were also no agreements on transactions between the Company on the one hand and
members of the Supervisory Board and related parties on the other.
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 Code. The Supervisory Board
regularly assesses the effectiveness of the work of the full Supervisory Board and its committees. The
last self-assessment has been conducted with very positive results in the 2021 financial year by means
of online questionnaires.
More detailed information on the individual members of the Supervisory Board can be found on the
Company's website, which 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 pages 153to
154 of the Company’s Annual Report. The rules of procedure for the Supervisory Board can also be
viewed on the Company’s website.
The compensation paid to the individual Supervisory Board members is presented in the Remuneration
Report on pages 210 to 212 of the Company’s Annual Report. The Remuneration Report, together with
the other documents required by Sec. 289 f of the HGB, is also available on the Company's website at
www.alstria.com → Company → Corporate Governance → Remuneration.
4. SUPERVISORY BOARD COMMITTEES
To manage its tasks efficiently, the Supervisory Board has currently two standing committees from
among its members: an Audit Committee and a Nomination and Remuneration Committee. Both
committees have their own rules of procedure, which further regulate the committee’s affairs, tasks
and decision-making powers, where appropriate.
The Supervisory Board reports on the activities of its committees’ work during the 2022 financial year
in its report to the Annual General Meeting on pages 172 to 173 of the Company’s Annual Report.
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. From January 1 to February 28, 2022, the Audit Committee consisted of
Marianne Voigt as Chair as well as Benoît Hérault and Dr. Frank Pörschke as additional members. From
alstria Annual Report 2022
180
Corporate Governance Statement
March 21, 2022, the Audit Committee consisted of Becky Worthington as Chair as well as Brad Hyler
and Dr. Frank Pörschke as additional members.
4.2.
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. From January 1 to February 28, 2022 the Nomination and Remuneration Committee
comprised Dr. Johannes Conradi as Chair as well as Benoît Hérault and Elisabeth Stheeman as further
members. From March 21, 2022 the Nomination and Remuneration Committee comprised Brad Hyler
as Chair as well as Elisabeth Stheeman and Jan Sucharda as further members.
4.3.
Further Committees
As a result of the changes in the composition of the Supervisory Board following the takeover of the
Company by Alexandrite Lake Lux Holdings S.à r.l., the Supervisory Board reduced the number of its
standing committees from March 21, 2022 in order to reduce complexity. Consequently, the Finance
and Investment Committee, heaving dealt in particular with the approval of the Supervisory Board
regarding financing agreements and acquisitions or disposals of real estate properties with a volume
between EUR 30 million EUR 100 million as well as the ESG Committee, heaving dealt with
environmental social governance issues, were terminated. The issues previously dealt with in the
terminated committees are since then dealt with by the full Supervisory Board. The Finance and
Investment Committee comprised Richard Mully as Chair as well as Dr. Frank Pörschke and Elisabeth
Stheeman as further members and the ESG Committee comprised Dr. Johannes Conradi as Chair as
well as Richard Mully and Marianne Voigt as further members.
From March 21 to December 31, 2022, the Supervisory Board had a Special Committee Finance which
was authorized to deal with approvals regarding the issuance of a corporate bond and the conclusion
of a financing agreement. The Special Committee comprised Brad Hyler as Chair as well as Jan
Sucharda and Becky Worthington as further members.
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Corporate Governance Statement
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 fulfil their duties and complement one another. For this reason, on
December 5, 2022 the Supervisory Board has last 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 HGB and the 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
▪ Age of up to 70 years, as a rule
5.2. 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, including such regarding sustainability issues
relevant to the Company.
▪ Viewed as a whole, the members must be familiar with the real estate sector.
▪ At least two members of the Audit Committee, including the Chair, shall be financial experts:
At least one member shall have gained special expertise and experience in accounting, the
application of accounting principles and internal control systems (. At least one further
member shall have gained special expertise and experience in the auditing of annual
statements.
▪ The members of the Supervisory Board shall complement one another in terms of gender. At
least two members shall be female. At least two members shall be male.
5.3.
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.
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Corporate Governance Statement
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 two years before its
appointment;
▪ has, or had within the year 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;
▪
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;
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.
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:
▪ The number of members of the Supervisory Board that shall be independent from a controlling
shareholder is determined taking into consideration the relative ownership of such
shareholder as well as the legal requirements for independence in the committees.
▪ No more than two Supervisory Board members shall be former members of the
Management Board.
▪ The Chair of the Supervisory Board shall be independent from the Company and its
Management Board. The Chair of the Audit Committee shall be independent from the
Company and its Management Board and from a controlling shareholder.
▪ The Chair of the Nomination and Remuneration Committee shall be independent from the
Company and its Management Board.
alstria Annual Report 2022
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Corporate Governance Statement
5.4.
Succession planning and 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 chooses the candidates whom it recommends to the Annual General Meeting
for an election as follows: Whenever a Supervisory Board members’ office term comes to an end, the
Supervisory Board 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. When doing so, the Supervisory
Board takes into consideration the criteria for independence mentioned above. The Supervisory Board
strives to fulfil the Profile for the Supervisory Board.
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 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.
5.5.
Status of implementation
The profile of skills and expertise and diversity concept with targets for the composition of the
Supervisory Board is taken into account in the election proposals to the Annual General Meeting as
well as into any application to judicial appointment of Supervisory Board members, with care being
taken to ensure that the profile is met for the Supervisory Board as a whole. This was most recently
the case for the following personnel changes in the Supervisory Board:
Following the takeover of the Company by Alexandrite Lake Lux Holdings S.à r.l., Dr. Johannes
Conradi, Benoît Hérault, Richard Mully and Marianne Voigt resigned as members of the Company’s
Supervisory Board with effect from February 28, 2022. At the Company’s request Brad Hyler, Jan
Sucharda, Karl Wambach and Becky Worthington were appointed by the Hamburg Local Court as
members of the Supervisory Board of the Company with effect from March 1, 2022 and elected by the
Annual General meeting on June 10, 2022 as members of the Supervisory Board until the end of the
Annual General Meeting in 2023, or 2027, respectively.
The current composition of the Supervisory Board meets all the objectives set out in the Profile for
the Supervisory Board. In the opinion of the Supervisory Board, all current members of the Supervisory
alstria Annual Report 2022
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Corporate Governance Statement
Board are independent from the Company and its Management Board. Furthermore, all current
members of the Supervisory Board are independent from the controlling shareholder, except for Brad
Hyler, Jan Sucharda and Karl Wambach, who each have a business relation with Brookfield, the
controlling shareholder of alstria. Brad Hyler also belongs to the governing bodies of Brookfield.
Having held the position as CFO at various companies for many years, Becky Worthington (as Chair of
the Audit Committee) has professional expertise in the fields of accounting and auditing, namely
special knowledge and experience in the application of accounting principles and internal control and
risk management systems as well as special knowledge and experience in the auditing of financial
statements, including sustainability reporting and its audit and assurance.
Having been a CEO of several companies, Dr. Frank Pörschke has professional expertise in the field of
accounting, namely special knowledge and experience in the application of accounting principles and
internal control and risk management systems, including sustainability reporting.
alstria Annual Report 2022
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Corporate Governance Statement
Status of implementation of the Profile for the Supervisory Board:
Brad Hyler1) Jan
Dr.
Frank
Elisabeth
Karl
Becky
Sucharda
Pörschke
Stheeman
Wambach
Worthington2)
Year of birth
Term of office in years3)
Appointed until
1978
1
2027
1960
1
2027
1965
2
2024
1964
2
2024
1980
1
2023
1971
1
2023
Diversity
Gender
Nationality
Independence
m
m
m
f
m
f
US-American
Canadian
German
German &
German &
British
British
American
Term of office for more than 12
no
years4)
Personal
relationship
with
no
Management Board5)
Material business relationship6)
no
Relationship
with
controlling
yes
no
no
no
yes
no
no
no
no
no
no
no
no
no
no
no
yes
no
no
no
no
shareholder7)
Knowledge and experience
Industry background
Real estate sector
Financial expert accounting
Financial expert audit
ESG
Real Estate
Real Estate
Real Estate
Finance
Real Estate
Real Estate
X
X
X
X
X
X
X
X
X
X
X
X
X
X
1)
2)
3)
4)
5)
Chair of Supervisory Board and Nomination and Remuneration Committee
Chair of Audit Committee
until the close of the Annual General Meeting in the respective financial year
Relating to the Supervisory Board member and his/her close relatives
Former member or close relative of a member of alstria’s Management Board, relating in each case to the Supervisory Board member and his/her close
relatives
6) With alstria or a member of the Management Board, directly or as a shareholder or in a responsible function of a company outside the Group, currently
7)
or within the year up to his/her appointment, relating in each case to the Supervisory Board member and his/her close relatives
Member of the executive governing body of controlling shareholder and /or business or personal relationship with controlling shareholder, relating in each
case to the Supervisory Board member and his/her close relatives
alstria Annual Report 2022
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Corporate Governance Statement
II. WOMEN IN LEADING POSITIONS
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 will apply until December 31, 2026 and has been achieved
with 33.3 % as of December 31, 2022. 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 which will apply until December 31, 2024. This target was reached at 33.3 % as of
December 31, 2022. The target for the proportion of women on the Management Board was set to at
least 30% and will apply until December 31, 2024. This target was not reached as of December 31,
2022 as the appointments of the Company’s CEO and CFO initially both ended at the close of December
31, 2022. Alexander Dexne was not available for a further term of office as CFO. The Supervisory
Board extended the appointment of Olivier Elamine as the Company’s CEO until December 31, 2027.
New appointments of external candidates on the positions of the Company’s CEO and CFO were not
intended.
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
website (www.alstria.com). alstria complied and complies with the recommendations of the 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 April 24, 2022:
Declaration of compliance dated April 24, 2022
“Since its last Corporate Governance Declaration on April 2, 2022, alstria office REIT-AG has complied
with the recommendations of the ‘Government Commission German Corporate Governance Code’ in
the version which entered into force on March 20, 2020 (“GCGC”) apart from the exceptions stated
below. alstria intends to continue to comply with the GCGC recommendations to the same extent.
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Corporate Governance Statement
Management Board Remuneration System 2022
In April 2022, the newly composed supervisory board adjusted the management board remuneration
system to the framework conditions resulting from the successful takeover of the Company by
Brookfield. As the new majority shareholder Brookfield now controls more than 90% of the Company’s
shares, the share price is no longer a suitable performance indicator. The supervisory board decided
to introduce a new remuneration system for the management board members (“Management Board
Remuneration System 2022”) which better reflects this new situation and no longer complies with
all recommendations by the GCGC. It shall be presented to the annual general meeting 2022 for
approval and enter into force as per January 1, 2022.
Non financial performance criteria, G. 1 GCGC
According to the recommendations in G. 1 GCGC, the remuneration system for the members of
the management board shall define the non-financial performance criteria relevant for the
granting of variable remuneration components. The Management Board Remuneration System
2022 no longer contains ESG targets for the short term incentive (STI) in order to reduce
complexity of the remuneration system and simplify performance measurement. The supervisory
board is convinced that alstria’s management board team is a front runner in terms of sustainable
real estate management even without non financial performance criteria embedded in the
remuneration system.
Setting and change of performance targets, G. 7 and 8 GCGC
Pursuant to no. G.7 GCGC, the supervisory board shall establish performance criteria for each
management board member for the forthcoming financial year and pursuant to G.8 GCGC
subsequent changes to the target values or comparison parameters shall be excluded. The
supervisory board is in agreement that it will determine the performance targets for all
management board members and all variable remuneration elements before the start of each
respective financial year. However, due to the implementation of the Management Board
Remuneration System 2022 in the course of financial year 2022, this was not possible for financial
year 2022. The supervisory board will set these targets after the approval of the Management
Board Remuneration System 2022 by the annual general meeting.
Share based remuneration and deferral, G. 10 GCGC
Pursuant to G.10 GCGC, the management board members’ variable remuneration shall be
predominantly invested in company shares or shall be granted predominantly as share-based
remuneration. Granted long-term variable remuneration components shall be accessible to
management board members only after a period of four years. As the share price performance is
no longer a suitable indicator for management board performance, the Management Board
Remuneration System 2022 does no longer provide for a share based variable remuneration or
Share Ownership Guidelines. Furthermore, the Management Board Remuneration System 2022
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Corporate Governance Statement
shortens the deferral from 4 to 2 years in order to meet the statutory provisions and fully align
management board remuneration with the overall employee remuneration scheme.”
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.
alstria has implemented large parts of the recommendations and suggestions of the 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 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 whistleblower portal where employees and third parties 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
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Corporate Governance Statement
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.
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 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 Chair of the Annual General Meeting 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.
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Corporate Governance Statement
3.3.
Financial reporting
alstria regularly informs shareholders and third parties during each financial year by means of the
consolidated financial statements and the group management report, as well as by interim financial
information. 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. Deloitte
GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, was appointed to audit the annual financial
statements of alstria office REIT-AG and of the Group for the 2022 financial year and for further interim
financial reports until the next ordinary general meeting in 2023. WPin/StBin Annika Deutsch is the
auditor responsible for auditing the financial statements of alstria office REIT-AG and the Group.
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Corporate Governance Statement
4. SUSTAINABILITY
Sustainability is part of alstria’s corporate DNA. This includes all actions alstria takes to promote and
protect the environmental, social and economic interests of its stakeholders in the long term.
As a commercial organization, alstria’s main objective is to increase the value of the Company on a
sustainable basis and to generate the best possible return on its capital in the long-term. Before
making any decisions, the Company weighs the risk–benefit of all three areas 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 2022
The Management Board
The Supervisory Board
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Remuneration Report
G. REMUNERATION REPORT
The remuneration report of alstria office REIT-AG (alstria) explains the main elements of the
remuneration of the Company’s Management Board and Supervisory Board members. It describes the
amount and structure of the remuneration. The Management Board and the Supervisory Board have
jointly created this remuneration report and ensured that it corresponds with the legal requirements
of section 162 German Stock Corporation Act (AktG). The remuneration report was audited by Deloitte
GmbH Wirtschaftsprüfungsgesellschaft in accordance with the requirements of section 162 (3) AktG.
The
note
of
the
audit
of
this
remuneration
report
(http://www.alstria.com/auditreportremunerationreport2022), the current remuneration system for
the Management Board (https://alstria.com/remuneration-system-management-board-2022) and the
Supervisory Board (https://alstria.com/remuneration-system-supervisory-board-2021) as well as this
remuneration report (https://alstria.com/remuneration-report-2022.pdf) are published on the
website of the Company.
The remuneration of the Management Board for the financial year 2022 was based on the revised
remuneration system 2022, which was put to vote at the annual general meeting of shareholders on
June 10, 2022 and approved by 99.5 % of votes cast (Management Board Remuneration System
2022). The remuneration report 2021 was approved by 99.8 % of votes cast. Given the high approval
at the annual general meeting, we do not see reason for changes to the remuneration report and
remuneration system. We will continue the high level of disclosure already established in the
remuneration report 2021.
1. VIEW ON THE FINANCIAL YEAR 2022
• Russian attack on Ukraine: burden for the German economy
•
•
Letting markets still difficult
Sharp rise in interest rates slows down transaction activities
• Continuous investment in the existing portfolio
• Takeover by Brookfield and changes in the Supervisory Board
•
Introduction of Management Board Remuneration System 2022 with premature termination
and payout of LTIPs
The fiscal year 2022 was dominated by the consequences of the Russian attack on Ukraine, which led
to a slowdown of economic growth, increased inflation and a sharp rise in interest rates. The
commercial letting market continued to be difficult given the uncertainties in the economic
environment. Despite the weak commercial leasing market, alstria achieved a leasing performance
(in terms of new lettings, lease renewals and option drawings) of 107,300 sqm.
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Remuneration Report
In 2022, alstria invested a total of EUR 113 million in the existing portfolio. The lion's share of this
sum (EUR 87 million) was spent on development investments, which significantly improved the quality
of the space in order to achieve higher rents for new leases. Development investments maintained on
a high level in 2022, because alstria still sees the best return opportunities in these properties. The
current development portfolio comprises 21 projects with a total lettable area of 377,100 sqm.
alstria's investment decisions are based on the knowledge of the local markets, individual
consideration of the respective building in terms of location, size and quality compared to direct
competitor properties, as well as long-term value enhancement potential.
alstria's strategy is to build what it considers to be a lucrative portfolio size in the respective locations
(concentration on "Big 7" office markets in Germany), but also sell mature or non-core assets to
optimize its capital allocation. In this context, five assets for a total consideration of EUR 188 million
were sold in the course of the year. The sales proceeds were mainly used to finance the development
measures in the existing portfolio.
The financial year 2022 was also characterized by the changes resulting from the takeover of more
than 95 % of the shares in alstria by Brookfield (Takeover) which occurred in January 2022. These
changes affected the composition of the Supervisory Board, in which alstria’s major shareholder
Brookfield is now represented through Brad Hyler, Jan Sucharda and Karl Wambach.
In this context, the remuneration system for the Management Board members was adjusted to allow
for a continued pay-for-performance connection. At the time the Management Board remuneration
system 2021 was resolved, alstria had a very diverse shareholder structure which made the share price
one of the key indicators to measure the shareholder value and, hence, the performance of the
Management Board members by using alstria's share price performance in the Long-Term Incentive
(LTI). After the Takeover, alstria's share price had become severely restricted by the high level of the
shareholding of alstria's major shareholder and the relatively low number of other shareholders. As a
consequence, the share price was considered no longer a suitable indicator for the performance of
the Management Board members. In order to further allow for a significant pay-for-performance
connection regarding the Management Board on the one hand, and to also ensure remuneration
alignment throughout the organization on the other hand, the LTI under the Management Board
Remuneration System 2022 was designed to follow the structure of the long-term incentive scheme
for alstria’s eligible employees as described below.
As the share price was no longer considered a suitable indicator for Management Board performance,
the Management Board Remuneration System 2022 also provided to terminate the LTI tranches with
performance periods reaching beyond 2022. Therefore, the LTI tranches 2019 – 2023, 2020 – 2024 and
2021 – 2025 were terminated early and paid out in 2022.
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The main changes in the Management Board Remuneration System 2022 are summarized in the
following figure:
The revised Management Board Remuneration System 2022 continues to be performance-based and
geared towards promoting sustainable company performance. It is systematically depicted in the
diagram below and its main features are described in the following.
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2. REMUNERATION OF THE MANAGEMENT BOARD MEMBERS
2.1.
Remuneration Governance
The Supervisory Board is responsible for determining, implementing and reviewing the remuneration
of the Management Board. The nomination and remuneration committee formed from among the
members of the Supervisory Board discusses and reviews the remuneration system for the Management
Board at regular intervals and whenever necessary and prepares resolutions on changes. Therefore,
changes or relevant updates for the remuneration system will generally be prepared by the
nomination and remuneration committee. However, the whole Supervisory Board is responsible for
the final decision. The remuneration system will be submitted to the annual general meeting of
shareholders for approval in the event of significant changes, but at least every four years.
Total remuneration of the individual Management Board members is determined by the Supervisory
Board and covers all activities within the alstria Group. Criteria for the appropriateness of the
remuneration include the duties of the individual Management Board member, the personal
performance, the economic situation, the success and future prospects of alstria, as well as the
customary nature of the remuneration, taking into account the competitive environment and the
remuneration structure otherwise applicable in alstria.
To assess the appropriateness of the total remuneration of the members of the Management Board
compared to other companies, the Supervisory Board regularly conducts a remuneration benchmark
using a suitable peer group of comparable companies, e.g. relevant competitors in the Real Estate
business. When the Supervisory Board revised the remuneration system for the Management Board in
financial years 2020/2021, this peer group comprised the following companies of the EPRA Germany
Index (ADO Properties, Aroundtown, Deutsche Euroshop, Deutsche Wohnen, Grand City Properties,
Hamborner REIT, LEG Immobilien, TAG Immobilien, TLG Immobilien, Vonovia), and, in addition, for
the European perspective, the companies of the EPRA Developed Europe Office Index. In order to
reflect national market practice and company size, MDAX companies were also considered.
In order to assess the customary nature of remuneration within alstria, the ratio of Management Board
remuneration to the remuneration of senior management reporting directly to the Management Board
and of all employees is taken into account. Thereby, alstria regularly compares the remuneration
levels (fixed salary, bonus, long-term incentive, excluding pension and healthcare) and reviews and
publishes the CEO pay ratio, which shows the CEO target remuneration in relation to the median
target remuneration of all employees and managers. The table below shows the respective
compensations as well as the development of the CEO pay ratio since 2020.
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A lack of independence and conflicts of interest of members of the Supervisory Board and its
nomination and remuneration committee may prevent independent advice and supervision when
determining the remuneration of the Management Board. The Supervisory Board considers its
members and the members of its nomination and remuneration committee as independent from the
Company and its Management Board. The Supervisory Board considers its members Dr Frank Pörschke,
Elisabeth Stheeman and Rebecca Worthington as independent from the controlling shareholder.
Furthermore, the members of the Supervisory Board and the nomination and remuneration committee
are required by law, the German Corporate Governance Code in its current version as of April 28, 2022
(GCGC) and the internal rules of procedure for the Supervisory Board to disclose immediately any
conflicts of interest they may have. In such cases, the Supervisory Board takes appropriate measures
to take account of the conflict of interest. For example, the members concerned do not participate
in discussions and resolutions.
The remuneration in the financial year 2022 is fully in line with the Management Board Remuneration
System 2022. The details of the application in the financial year are presented hereafter.
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202020212022CEO1)1,127,000 €1,267,000 €1,259,000 €Employees + managers2)73,928 €77,412 €77,000 €15.2 : 116.4 : 116.4 : 11) Calculated as the CEO target all-in compensation without insurance and pension benefits in relation to the median all-in compensation of all employees and managers. The numbers differ from the published numbers in the social data part of the ESG report due to different calculation bases.2) Median target compensation of employees and managers of alstria was considered, therefore deviating from the average compensation awareded and due in the comparative presentation.CEO pay ratio
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2.2. Management Board Remuneration System
The following table summarizes the essential remuneration components and further contractual
provisions of the Management Board Remuneration System 2022, which are described in more detail
below, and compares them to the previous remuneration system. Main changes compared to the
previous system are highlighted by underlining.
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2.2.1. Target Remuneration and Remuneration Structure
The target remuneration of the Management Board members for the financial years 2022 and 2021,
which is contractually defined as payable upon 100 % target achievement, and the resulting
remuneration structure are presented below. The target remuneration has not been increased in the
last year, therefore the structure of the total target compensation remains nearly identical for both
members of the Management Board.
The sum of the fixed and variable remuneration elements constitutes the total target remuneration
in the event of 100 % target achievement by a Management Board member. The focus on the long-
term and sustainable development of alstria pursuant to section 87 (1) sentence 2 AktG is ensured by
the higher weighting of the Long-Term Incentive Plan compared to the Short-Term Incentive Plan.
The share of the Short-Term Incentive Plan in the variable remuneration amounts to around 33 %,
whereas the share of the Long-Term Incentive Plan accounts for around 67 % of the variable
remuneration.
2.2.2. Fixed Remuneration
Annual Base Salary
The annual base salary is paid in twelve equal monthly installments at the end of each month. If the
service contract begins or ends during a financial year, the annual base salary for that financial year
is payable on a pro rata temporis basis.
Fringe Benefits
Members of the Management Board also receive fringe benefits; 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. The fringe benefits are included in the
maximum remuneration and therefore capped.
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Target remuneration20212021in T€in %in T€in T€in %in T€Annual base salary5003750040036400Fringe benefits1922828333Company car9-1719-24Insurances10-119-9Pension allowance8868873773Short-Term Incentive2501825020018200STI 2021--250--200STI 2022250--200--Long-Term Incentive5003750040036400LTI 2021-2025--500--400LTI 2022-2023500--400--Total target remuneration1,3571001,3661,1011001,106Olivier Elamine (CEO)2022Alexander Dexne (CFO)2022
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Furthermore, the company has taken out a D&O insurance (Directors & Officers Liability Insurance)
for the benefit of the members of the Management Board with a deductible of 10 % of the damage up
to the amount of one and a half times the annual fixed remuneration of the respective Management
Board member.
Pension Allowance
In addition, the Company grants the members of the Management Board monthly cash payments for
pension purposes in form of a pension allowance. These pension benefits amount to approximately
18 % of the members’ annual fixed salaries.
2.2.3. Variable Remuneration
Short-Term Incentive (STI)
As a short-term performance-based remuneration component, the STI is linked to the development
of the quantitative performance target Funds from Operations (FFO) per share. It is designed as a
target bonus system. A possible STI payout amount is calculated as the overall target achievement
times the individual target amount as indicated in the respective service contract; it is capped at
150 % of the individual target amount (cap) and is paid out in cash. In addition to the performance
target, an individual multiplier ranging between 0.8 to 1.2 is applied to determine the final payout.
The STI functions as follows:
Performance target
The STI performance target is the Funds From Operations per share. FFO are a key metric of alstria’s
strategy since they define the cash flow from operations. FFO per share is a non-GAAP metric which
is frequently used for real estate companies in lieu of earnings per share. alstria annually publishes
its FFO and FFO per share as well as a detailed reconciliation with its IFRS accounts.
The impact that acquisitions or disposals and changes to alstria’s share capital have on the FFO per
share for a financial year, will be disregarded by the Supervisory Board to guarantee a fair and well-
balanced incentive.
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T n n i n n n i i n in €T n in € n i i i i in € n i T i n
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The payout amount of the STI depends on the degree of target achievement for the FFO per share.
The ratio of the FFO per share actually achieved during the financial year is measured against the
budgeted FFO per share. Target achievement can range between 0 % and 150 %. For a payout to occur,
at least 70 % of the performance target value must be achieved (threshold). If the actually achieved
FFO per share is equal to the budgeted FFO per share the target achievement will be 100 %. A
maximum of 130 % of the performance target value can be achieved (cap) and results in a target
achievement of 150 %.
The values of FFO per share set for the financial year 2022 as well as the actually achieved value and
the resulting overall target achievement are shown in the following table:
Multiplier
The preliminary payout value achieved is then multiplied with an individual multiplier ranging
between 0.8 and 1.2. This enables the Supervisory Board to take into account the personal
performance of the individual Management Board member in addition to the achievement of financial
performance.
The Supervisory Board set the individual modifier for the financial year 2022 on 1.0 for both Olivier
Elamine and Alexander Dexne. Thus, the Supervisory Board takes into account the excellent
operational performance in financial year 2022 in difficult market conditions and against the
background of the Takeover.
The target achievement of the individual performance criterium as well as the resulting overall target
achievement after application of the individual modifier is shown in total below:
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STI 2022FFO per share 1)Threshold0 42 €Target value0 59 €Maximum0 77 €Actual value 2)0 62 €Target achievement 2)108%1) Before minorities.2) Preliminary numbers at the time of the preparation of this report.Target achievementFFO per shareMultiplierTotal target achievementOlivier Elamine108%1.0108%Alexander Dexne108%1.0108%STI Target achievement 2022
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Long-Term Incentive 2022 - 2023
The Long Term Incentive Plan is constructed as an incentive scheme to reward general performance
and overall achievement of alstria and is issued in annual tranches with a performance period of two
years. The Supervisory Board sets at least 4 Key Performance Indicators (KPI), the achievement of
which during the performance period will determine the final payout amount of the LTI. LTI KPIs
correspond to either an explicit quantifiable target in the multi-year business plan or the achievement
of a project of relevance within the respective performance period.
The following picture shows how the LTI functions:
For the period 2022-2023, the LTI KPIs are defined as follows:
After the end of the performance period, the performance achieved for each LTI KPI is determined
by dividing the actually achieved KPIs by the KPI target value. The resulting performance achievement
of each KPI is then multiplied with a factor in accordance with the following rule:
▪
▪
▪
If the performance achievement is lower than 90 %, the factor is zero.
If the performance achievement lies between 90 % and 110 %, then the factor increases
linearly between 0.85 and 1.15
If the performance achievement is higher than 110 %, the factor is 1.15.
The respective target achievements resulting from the multiplication of performance achievement
and factor are then multiplied with the respective weighting of the KPI to determine each KPI
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contribution to the final payout amount of the respective tranche. The final payout amount is the
sum of each individual LTI KPI contribution multiplied with the target value of each LTI granted.
The LTI will be paid out no later than in the month following the adoption of the financial statements
of the performance period and is capped at 115 % of the individually granted target amount.
The payment is made pro rata temporis, taking into account the number of active months of the
respective Management Board member in the performance period.
The initially granted LTI 2022 – 2026 under the previous remuneration system 2021 was transferred to
the LTI under the new Management Board Remuneration System 2022. The target value for the LTI
2022 – 2023 is reported in the table displaying target remuneration.
LTI 2018 – 2022 and terminated Long-Term Incentive Tranches
As the LTI 2018 – 2022 was paid out in the financial year 2022, its functioning and the determination
of the target achievement are explained in the following. The performance period of the LTI 2018 -
2022 ended regularly on March 4, 2022.
Furthermore, given the Takeover by Brookfield, alstria’s share price performance was no longer
conclusive, leaving the calculation of the remaining LTI plans, which were granted before the financial
year 2022 and the regular performance periods of which had not yet come to an end (i.e. LTI 2019 –
2023, LTI 2020 – 2024, LTI 2021 – 2025, together the “Terminated LTI Tranches”), without
functioning. Against this background the introduction of the new Management Board Remuneration
System 2022 also provided that the performance periods of those Terminated LTI Tranches were
ended early. The termination was made with effect as of February 3, 2022 (the last day of the
acceptance period of the Takeover offer) and paid out in cash after the annual general meeting of
shareholders 2022 had approved the new Management Board Remuneration System 2022.
The LTI 2018 – 2022 as well as the Terminated LTI Tranches consisted of so-called virtual stock awards,
which were converted into alstria shares after a four-year performance period. In each financial year,
the members of the Management Board were granted a long-term variable remuneration element with
a target amount determined in the service contract. The number of stock awards granted was based
on the target amount divided by the arithmetic mean of the alstria share price during the 60 trading
days prior to the grant date. The number of stock awards granted was then adjusted depending on
the performance of alstria’s share during the performance period both in absolute and relative terms
compared to a peer group. As shown in the figure below, the performance targets implemented in
the LTI were the absolute TSR with a weighting of 25 % as well as the relative TSR with a weighting of
75 %. The overall target achievement was capped at 150 %, the payout of the Long-Term Incentive was
capped at 250 % of the target amount.
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The following picture shows how the LTI for the Terminated LTI Tranches functioned:
The following table provides an overview of the target achievement resulting for the LTI 2018 – 2022,
which ended regularly and was paid out in 2022:
In addition, the target achievement resulting from the Terminated LTI Tranches is presented in the
table below. As the Terminated LTI Tranches were terminated early with effect of February 3, 2022,
share price development up until that point was used for the calculation of the target achievement.
These tranches were also paid out in 2022.
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alstria officeREIT-AGFTSE EPRA/NAREIT developed Europe IndexAbsolute TSR p.a.14.13%-Target achievement absolute TSRDevelopment 2018 - 202269.59%26.07%OutperformanceTarget achievement relative TSROverall target achievementOlivier ElamineAlexander DexneLT T in T€ LTI Tranche 2018 - 2022150%43.52%144%145%440360alstria officeREIT-AGFTSE EPRA/NAREIT developed Europe Indexalstria officeREIT-AGFTSE EPRA/NAREIT developed Europe Indexalstria officeREIT-AGFTSE EPRA/NAREIT developed Europe IndexAbsolute TSR p.a.19.86%-10.42%-46.04%-Target achievement absolute TSRDevelopment69.75%28.93%21.00%4.19%42.01%19.24%OutperformanceTarget achievement relative TSROverall target achievementOlivier ElamineAlexander DexneLTI Tranche 2021 - 2025150%22.77%123%130%360LTI Tranche 2019 - 2023LTI Tranche 2020 - 2024Terminated LTI Tranches150%16.81%143%150%440360LT T in T€ 500400440117%125%40.82%141%
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2.2.4. Malus & Clawback
As a rule, all variable remuneration components of the Management Board members are only paid out
after the end of the regular performance period. In the event that a Management Board member
deliberately commits a material breach of
▪
a material duty of care within the meaning of section 93 German Stock Corporation Act (AktG)
or
▪
a material duty under the service contract,
the Supervisory Board may at its reasonable discretion (section 315 of the German Civil Code
(Bürgerliches Gesetzbuch, ‟BGB”)) reduce the unpaid variable remuneration in the performance
period of which the breach occurred in part or in full (‟Malus”) or reclaim parts or all of the gross
amount of any variable remuneration already paid out (‟Clawback”).
Notwithstanding the above, Management Board members must repay any variable remuneration
already paid out if and to the extent that
▪
it turns out after the payment that the audited and approved consolidated financial statement
on which the calculation of the payment amount was based was incorrect and must therefore
be publicly restated according to legal requirements and the relevant accounting standards,
and
▪ based on the restated, audited consolidated financial statement and the relevant
remuneration system, a lower or no payment amount would have been owed from the variable
remuneration.
In the financial year 2022 no Malus or Clawback regulations were applied.
2.2.5. Remuneration Related Legal Provisions
Explanations of the post-contractual non-competition obligations agreed on with the members of the
Management Board, the provisions in the event of premature contract termination, and the
information required under section 162 (2) AktG on possible third-party benefits are provided below.
Third-Party Benefits
The Members of the Management Board were not awarded any third-party benefits in the financial
year 2022 for their activities as a Management Board member of alstria.
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Contract Termination Provisions
In the event of resignation from office by the member of the Management Board or a withdrawal of
the appointment as member of the Management Board pursuant to section 84 paragraph 3 AktG, the
service contract ends after the expiration of the notice period of section 622 BGB. The right of alstria
and the Management Board member to terminate the service contract for good cause (‟wichtiger
Grund”) pursuant to section 626 paragraph 1 BGB remains unaffected.
In case of an early termination of the service contract by mutual agreement, the Management Board
member will receive the remuneration for the rest of the term of the service contract, but no more
than the value of two years’ full remuneration in any case calculated on the basis of the total
remuneration for the foregoing full financial year (severance payment). The same shall apply in case
of a withdrawal of the appointment according to section 84 paragraph 3 AktG, (but not in case of
resignation by the Management Board member), if the withdrawal of appointment occurred for
reasons the Management Board member is not responsible for.
Any withdrawal of the appointment occurring within a period of up to twelve months following a
change of control, shall be considered as a withdrawal the Management Board member is not
responsible for, unless the withdrawal is for good cause (‟wichtiger Grund” pursuant to section 626
paragraph 1 BGB).
In case within a period of up to twelve months after a change of control the position as member of
the Management Board is materially negatively impacted (e.g., by a material reduction of his
responsibilities), the Management Board member has the right to resign from office and to terminate
the service contract with a notice period of three months to the end of a month. In this case, the
Management Board member will receive the severance payment.
A change of control occurs if (i) a third party acquires at least 30 % of the voting rights in alstria
pursuant to sections 29, 30 German Takeover Law (WpÜG) or (ii) alstria as a dependent entity,
concludes a corporate agreement within the meaning of section 291 et seq. AktG or (iii) alstria is
merged with a non-affiliated entity pursuant to section 2 et seq. of the German Reorganization Act
(UmwG), unless the enterprise value of the other entity is, at the time the merger decision is made
by the transferring company, less than 20 % of alstria’s enterprise value.
In the event of a contract termination, the STI shall be forfeited in case the contract is terminated
by alstria for good cause or the Management Board member has terminated the service relationship
without notice and without good cause (“wichtiger Grund”). In any other cases, the STI shall remain
unaffected.
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If a Management Board member retires from service with alstria for reasons of reaching the retirement
age, invalidity, occupational disability, early retirement, or death the payment for the LTI is made
pro rata temporis, taking into account the number of active months of the respective Management
Board member in the performance period. If the service contract with alstria is terminated by alstria
for good cause (“wichtiger Grund”) subject to section 626 BGB, the LTI forfeits. The same applies in
the event that the Management Board member has resigned from office without good cause.
In the financial year 2022 no change-of-control provisions were applied with regards to the possibility
of an early termination of the service agreements of the Management Board members. Due to the
change of control, the LTI tranches 2019 – 2023, 2020 – 2024 and 2021 – 2025 were terminated early.
Post-Contractual Non-Compete Obligation
Post-contractual non-compete-obligations are agreed on with the Management Board members. For
the duration of six months after the termination of the service contract (for whatever reason), the
Management Board member may not exercise any professional activity for an enterprise which is in
direct or indirect competition to alstria. The Management Board member also undertakes, for the
duration of six months, not to set up or to acquire or to participate in such a company directly or
indirectly. alstria may waive the post-contractual non-compete-obligation at any time, and with the
expiration of a period of notice of six months.
For the duration of the post-contractual non-compete-obligation, alstria shall pay to the Management
Board member a remuneration amounting to 100 % of his last base salary. Payment of this
remuneration is due at the end of each month. Remuneration from any professional activity which is
not in competition to alstria shall be set off against accordingly. Furthermore, any severance payment
to a Management Board member will be offset against any payments according to the post-contractual
non-compete-obligation as far as the severance payment is due for the duration of the post-
contractual non-compete-obligation.
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3.
INDIVIDUALIZED DISCLOSURE OF THE REMUNERATION OF THE MANAGEMENT BOARD
The following table shows on an individual basis the remuneration awarded and due in accordance
with section 162 AktG for the members of the Management Board. Furthermore, the compliance with
the maximum remuneration according to section 87a AktG is reported.
The service contract of Alexander Dexne has regularly been terminated at the end of the financial
year 2022. Since then, he is subject to the post-contractual non-compete obligation under the terms
described in this remuneration report. He does not receive any severance payments. The STI 2022
and the LTI 2022 – 2023 will not be terminated early but will be settled after the regular end of the
performance periods.
3.1.
Remuneration Awarded and Due
As part of the individualized disclosure of the remuneration awarded and due to the members of the
Management Board for the financial year 2022, the following specific remuneration elements are
reported:
▪ The base salary as well as the fringe benefits and the pension allowance that were paid in the
financial year 2022
▪ The STI 2022 assessing performance in 2022 that will be paid out in the financial year 2023
▪ The LTI tranche 2018 - 2022, as the performance period ended in 2022 and it was paid out in
financial year 2022
▪ The LTI tranches 2019 – 2023, 2020 – 2024 and 2021 – 2025 that were terminated prematurely
and paid out in the financial year 2022.
In order to allow for a transparent disclosure, the respective remuneration amounts for the financial
year 2021 are included as additional information.
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Remuneration awarded and due20212021in T€in %in T€in T€in %in T€Annual base salary5002650040026400Fringe benefits1912828133Company car9-1719-24Insurances10-119-9Pension allowance8858873573Short-Term variable remuneration2691426621514213STI 2021--266--213STI 2022 1)269--215--Long-Term variable remuneration1,0405493685154765LTI 2017-2021--936--765LTI 2018-20221,040--851--Total remuneration1,9161001,8181,5671001,484Terminated Long-Term variable remuneration2,595--2,106--LTI 2019-20231,034--846--LTI 2020-2024650--532--LTI 2021-2025911--729--Total remuneration incl. terminated LTIs4,511-1,8183,673-1,4841) Preliminary numbers at the time of the preparation of this report.Alexander Dexne (CFO)20222022Olivier Elamine (CEO)
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3.2. Maximum Remuneration according to section 87a AktG
Pursuant to section 87a paragraph 1 sentence 2 number 1 AktG, the Supervisory Board is required to
set a maximum remuneration for all remuneration elements, comprising base salary, fringe benefits,
pension allowance and short-term variable as well as long-term variable remuneration.
For the CEO, the maximum remuneration that can be paid in relation to any given year is
EUR 2,600,000. For the CFO and potential future Ordinary Management Board members, maximum
remuneration that can be paid in relation to any given year is set at EUR 2,100,000. Extraordinary
performance is required to actually achieve these maximum amounts.
The total of all payments resulting from commitments for the 2022 financial year can only be
determined after the expiry of the two-year performance period of the Long-Term Incentive.
However, in compliance with the maximum remuneration pursuant to section 87a paragraph 1
sentence 2 number 1 AktG it can already be ensured today, that even in the event of a payout of the
Long-Term Incentive amounting to 115 % of the target amount (cap) the total of all remuneration
components would be below the maximum remuneration. A detailed report on compliance with the
maximum remuneration of the remuneration granted for the financial year 2022 will be provided in
the remuneration report for the corresponding year after the end of the performance period of the
LTI tranche 2022-2023.
Given the premature termination of the LTI tranche 2021 – 2025 and the respective payout in the
financial year 2022, compliance with the maximum remuneration for the financial year 2021 can now
be assessed. It can be confirmed that the maximum remuneration in accordance with §87a AktG for
CEO and CFO for the financial year 2021 was not exceeded.
Regarding the financial year 2018 as well as the financial years 2019 and 2020 (LTI tranche 2018 –
2022 ended regularly and was paid out in 2022, LTI tranches 2019 – 2023 and 2020 - 2024 were
terminated early and paid out in 2022), no compliance with maximum remuneration can be
determined as no maximum remuneration had been set at the time of grant. However, it can be noted
that the remuneration paid for those financial years does also lie within the currently defined
maximum remuneration according to § 87a AktG.
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4. REMUNERATION OF THE SUPERVISORY BOARD MEMBERS
The remuneration system of the Supervisory Board as well as the individual remuneration awarded
and due to the members of the Supervisory Board in the financial year 2022 are shown below.
4.1.
Remuneration system for the Supervisory Board Members
4.1.1. Remuneration governance
After the end of the fiscal year, the members of the Supervisory Board receive remuneration for that
fiscal year, which is determined by resolution of the annual general meeting. The remuneration for
the members of the Supervisory Board was last confirmed by the annual general meeting of
shareholders in 2021 by 99.7 % of votes cast (Supervisory Board Remuneration System 2021). The
determination shall apply until the annual general meeting decides otherwise. At least every four
years or in case of a change, the remuneration system of the members of the Supervisory Board is
resubmitted to the annual general meeting of shareholders for resolution. In the event that the annual
general meeting of shareholders does not approve a remuneration system put to the vote, a revised
remuneration system shall be presented at the latest at the following annual general meeting of
shareholders.
4.1.2. Remuneration system
The remuneration of the Supervisory Board members is not performance-related. It consists of a fixed
remuneration and a likewise fixed remuneration for committee work. The company reimburses the
expenses of the members of the Supervisory Board. The company has, at its own expense, taken out
an appropriate liability insurance (D&O insurance) for the benefit of the members of the Supervisory
Board to cover the risks arising from the performance of their duties (Art. 13 par. 2 of the Articles of
Association).
Members of the Supervisory Board each receive an annual fixed remuneration of EUR 50,000. The
chair of the Supervisory Board receives an additional annual amount of EUR 100,000 (factor 3); the
deputy chair receives an additional amount of EUR 25,000 (factor 1.5).
Membership in the audit committee entitles a member to an additional remuneration of EUR 10,000,
while the chair of the audit committee receives EUR 20,000 per year (factor 2). Membership in the
nomination and remuneration committee entitles a member to an additional annual remuneration of
EUR 7,500 while the chair of this committee is compensated with additional EUR 15,000 per year
(factor 2). The same applies to the finance and investment committee, which was dissolved effective
March 21, 2022. Membership in temporary committees does not entitle a member to additional
remuneration.
Members who belong to the Supervisory Board respectively one of its committees for only part of a
year receive a pro rata temporis remuneration. Variable remuneration elements do not exist and no
attendance fees are paid.
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The following table shows the remuneration structure for the supervisory board.
4.2.
Individualized Disclosure of the Remuneration of the Supervisory Board
Following the Takeover of Brookfield, the Supervisory Board members Dr. Johannes Conradi, Marianne
Voigt, Benoît Hérault and Richard Mully terminated their Supervisory Board membership as per
February 28, 2022. Brad Hyler, Jan Sucharda, Karl Wambach and Rebecca Worthington have been
appointed as members of the Supervisory Board of the Company by court order in accordance with
section 104 AktG with effect from March 1, 2022. They were subsequently elected and confirmed by
the annual general meeting 2022.
The remuneration awarded and due to the current and former members of the Supervisory Board in
the 2022 financial year is presented in the following. A distinction is made between fixed
remuneration and committee remuneration.
alstria Annual Report 2022
211
Supervisory Board RemunerationTotalremunerationTotalremuneration T€in % T€in % T€ T€in % T€in % T€Brad Hyler (Chair) 1)- 2)-- 2)-------Jan Sucharda (Deputy Chair) 1) - 2)-- 2)-------Karl Wambach 1) - 3)-- 3)-------Rebecca Worthington 1)41.97315.72757.6-----Dr. Frank Pörschke50.08111.61961.632.97411.52644.4Elisabeth Stheeman50.0859.11559.132.9779.92342.8Dr. Johannes Conradi 4)24.2912.4926.7150.09115.09165.0Richard Mully 4)12.1832.41714.575.08315.01790.0Marianne Voigt 4)8.1713.22911.350.07120.02970.0Benoît Hérault 4)8.1742.82610.950.07417.52667.5Sum194.5-47.4-241.8390.8-88.9-479.71) Elected by court order with effect from March 1, 2022 and elected by the annual general meeting 2022.2) The supervisory board member waived the payment of the fixed annual remuneration for the membership in the Company's supervisory board and its committees. alstria paid taxes. 3) The supervisory board member waived the payment of the fixed annual remuneration for the membership in the Company's supervisory board and its committees. 4) Resigned their membership early in course of the execution of the takeover offer with effect from Februray 28, 2022.20222021FixedremunerationCommittee remunerationFixed remunerationCommittee remuneration
Remuneration Report
In order to allow for more comprehensibility of the committee compensation above, the following
table gives an overview over the committee work of the current and former Supervisory Board
members for the year 2022.
5. COMPARATIVE PRESENTATION OF REMUNERATION AND COMPANY PERFORMANCE
In addition to the individualized disclosure of the remuneration of the Management Board and
Supervisory Board, section 162 (1) sentence 2 of the German Stock Corporation Act (AktG) also
requires a comparative presentation thereof with the remuneration of the workforce as well as the
Company’s performance. The following table therefore compares the remuneration awarded and due
to members of the Management and Supervisory Board with the average employee remuneration and
the key financial figures revenues and FFO per share, which were selected on the basis of their central
management function for the Company.
alstria Annual Report 2022
212
MembershipDuration of membershipMembershipDuration of membershipMembershipDuration of membershipBrad Hyler (Chair) 1)M21.03. - 31.12.2022C21.03. - 31.12.2022--Jan Sucharda (Deputy Chair) 1)--M21.03. - 31.12.2022--Karl Wambach 1)------Rebecca Worthington 1)C21.03. - 31.12.2022----Dr. Frank PörschkeM01.01. - 31.12.2022--M01.01. - 21.03.2022Elisabeth Stheeman--M01.01. - 31.12.2022M01.01. - 21.03.2022Dr. Johannes Conradi 2)--C01.01. - 28.02.2022--Richard Mully 2)----C01.01. - 28.02.2022Marianne Voigt 2)C01.01. - 28.02.2022----Benoît Hérault 2)M01.01. - 28.02.2022M01.01. - 28.02.2022--1) Elected by court order with effect from March 1, 2022 and elected by the annual general meeting 2022.2) Resigned their membership early in course of the execution of the takeover offer with effect from Februray 28, 2022.3) M = Member, C = Chair.4) Until March 21, 2022.Audit CommitteeNomination and Remuneration CommitteeFinance and Investment Committee 4)Committee work 3)2022
Remuneration Report
For the average employee remuneration, all employees of alstria are considered, with the exception
of trainees, interns, working students and marginally employed employees. In addition, employees
who were not employed for the entire year under review or who were absent for more than two
months during the year under review are also not included. The remuneration stated comprises the
base salary and the bonus (each extrapolated to full-time equivalents) for the year in question, the
long-term variable remuneration amount paid out during the year in question as well as contributions
to the pension scheme. Furthermore, fringe benefits such as payments for a job ticket or allowances
for a company car are also taken into account. The remuneration stated does not include the profit
the employees made from a disposal of the shares, which they received in the 2022 financial year as
long-term incentive, to the Takeover bidder at a disposal price equal to the offer price paid in the
course of the Takeover. In the investment agreement made in the context of the Takeover, the bidder
had agreed with the Company to acquire the employees’ shares which were to be granted in the 2022
and the 2023 financial years at the offer price. If this disposal profit was added to the average
employee remuneration in 2022, the average employee remuneration would be EUR 115k and would
have increased by 20 % compared to the 2021 financial year.
alstria Annual Report 2022
213
Comparative presentation20222021Development 2022/2021Development 2021/2020in T€in T€in %in %Management BoardOlivier Elamine4,5111,818148-15Alexander Dexne3,6731,484148-16Supervisory BoardBrad Hyler (Chair) 1)----Jan Sucharda (Deputy Chair) 1)----Karl Wambach 1)----Rebecca Worthington 1)58---Dr. Frank Pörschke624439-Elisabeth Stheeman594338-Dr. Johannes Conradi 2)27165-840Richard Mully 2)1590-840Marianne Voigt 2)1170-840Benoît Hérault 2)1168-840EmployeesAverage remuneration9596-18Company performanceRevenues182,819183,67004FFO per share (in EUR) 3)0.620.67-781) Elected by court order with effect from March 1, 2022 and elected by the annual general meeting 2022.2) Resigned their membership early in course of the execution of the takeover offer with effect from Februray 28, 2022.3) Before minorities.
Remuneration Report
Looking at the remuneration development from 2021 to 2022, it shall be pointed out that the increase
in remuneration for the Supervisory Board members Dr Pörschke and Ms. Stheeman arises from their
election in the annual general meeting 2021 and therefore the pro-rated remuneration for the
financial year 2021. With regard to the Management Board members, it shall further be noted that
the significant increase of 148 % results from the implementation of the new Management Board
Remuneration System 2022 as approved by the Annual General Meeting in 2022 and the corresponding
early termination of the LTI tranches in financial year 2022 that are reported as part of the
remuneration awarded and due. The adjusted development, not taking into account the early
terminated LTI tranches, would be at 5 % for Mr. Elamine and 6 % for Mr. Dexne. This development, in
turn, is due to the slightly higher payout of the LTI tranche 2018 - 2022 in comparison to the LTI
tranche 2017 - 2021 as the relevant share price development of alstria was slightly better.
Looking at the corporate development in the reporting period, revenues were EUR 182.8 million
(compared to EUR 183.7 million in 2021). The decline of 0.5 % is primarily the result of the scheduled
expiry of rental agreements and transaction-related changes in revenue, which were largely offset by
an increase in revenue from new leases, indexations and proceeds from leases of the properties
acquired in fiscal 2021. The FFO (before minorities) amounted to EUR 110.9 million (prior year:
EUR 118.7 million). The decline in FFO was due to higher financing costs, which are a reflection of
the higher indebtedness of the Company. In addition, alstria recorded an increase in personnel
expenses mainly related to the transaction with Brookfield in 2022. The FFO per share (before
minorities) declined from EUR 0.67 to EUR 0.62 per share.
Hamburg, February 2023
alstria office REIT-AG
The Supervisory Board
The Management Board
Brad Hyler
Chairman of the Supervisory Board
Olivier Elamine
CEO
alstria Annual Report 2022
214
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, 2022, the Management Board of alstria office REIT-AG (alstria or the
company) 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, 4.89 % 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 9, 2023. This is a deviation from the regulation
of Section 11 (1) of the REIT Act, according to which at least 15% of the shares in a REIT stock
corporation must be in free float. As of the previous year's reporting date, 46.69% of the shares
were still in free float.
2. Alexandrite Lake Lux Holdings S.à rl, Luxembourg, Grand Duchy of Luxembourg, directly held
148,688,601 or 83.40 % of alstria’s shares as of the balance sheet date. Additionnaly, Lapis
Luxembourg Holdings S.à r.l., Luxembourg, Luxembourg, was reported to directly hold 18.213.868
or 10,23 % of alstria’s shares. This is a deviation from the regulation of Section 11, Paragraph 4 of
the REIT Act, which means that no investor should directly hold 10% or more of the shares in the
company . Apart from the two named companies, according to our knowledge, no investor directly
owns 10% or more of the shares in our company or shares to such an extent that he has 10% or
more of the voting rights. The criterion for the maximum voting rights participation pursuant to
Section 11 (4) of the REIT Act was not met for the first time as of December 31, 2021.
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 4,652,475 k, which
equals 90.10 % 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 615 k
and therefore 0.01 %.
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)
alstria Annual Report 2022
215
REIT Disclosures
a) For the financial year 2022, the entire sales revenues plus other earnings from immovable assets
amounted to EUR 49.3 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 93 k in the financial year 2022. This equals 0.19 % of the Group’s
total revenue plus other earnings from immovable assets.
5. In financial year 2022, a dividend payment of EUR 756,640 k for the prior financial year was
distributed to the shareholders. Financial year 2021 resulted in a net loss amounting to
EUR 30,910 k, according to commercial law.
6. alstria office REIT-AG’s dividend is not derived from already taxed parts of the annual profit.
7. Since 2018, the Group has realised 13.31 % 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 2,571.4 million, as shown in the IFRS
Consolidated Financial Statements. This equals 55.27 % 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 27, 2023
alstria office REIT-AG
Olivier Elamine
CEO
alstria Annual Report 2022
216
REIT Disclosures
II. REIT MEMORANDUM
Auditor’s memorandum according Section 1 (4) REIT Act
To alstria office REIT-AG, Hamburg
As the auditor of the annual financial statements and the consolidated financial statements of alstria
office REIT-AG, Hamburg/Germany, for the financial year from January 1 to December 31, 2022, we
have audited the disclosures on compliance with the requirements conferred by Sections 11 to 15
German REIT Act and on the income composition with regard to previously taxed and not previously
taxed income according to Section 19 (3) in con-junction with Section 19a German REIT Act as of
December 31, 2022 contained in the attached declaration of the executive board (hereafter referred
to as “REIT declaration”). The Company’s executive board is responsible for the disclosures contained
in the REIT declaration. Our responsibility is to express an opinion on these disclosures based on our
audit.
We conducted our audit in accordance with Auditing Practice Statement IDW AuPS 9.950.2
promulgated by the Institute of Public Auditors in Germany (IDW): Specifics Regarding the Audit of a
German REIT Stock Corporation in Accordance with Section 1 (4) German REIT Act, of a German pre-
REIT Stock Corporation in Accordance with Section 2 Sentence 3 German REIT Act and Regarding the
Audit in Accordance with Section 21 (3) Sentence 3 German REIT Act. Therefore, we have planned
and performed our audit procedures on the disclosures in the REIT declaration so as to obtain
reasonable assurance on whether the disclosures on the free float ratio and the maximum
shareholding per shareholder according to Section 11 (1) and (4) German REIT Act correspond to the
notifications according to Section 11 (5) German REIT Act as of December 31, 2022 and whether the
disclosures on compliance with the requirements under Sections 12 to 15 German REIT Act and the
composition of income with regard to previously taxed and not previously taxed income according to
Section 19a German REIT Act are correct. Gaining a comprehensive understanding or performing a
comprehensive audit of the tax assessments of the relevant companies was not included in the scope
of the audit. As part of our audit, we compared the disclosures on the free float ratio and the
maximum shareholding per shareholder according to Section 11 (1) and (4) German REIT Act contained
in the REIT declaration with the notifications in accordance with Section 11 (5) Ger-man REIT Act as
of December 31, 2022 and squared the disclosures on Sections 12 to 15 German REIT Act contained in
the REIT declaration with the corresponding disclosures in the annual financial statements and the
consolidated financial statements. In addition, we audited the adjustments made to the valuation of
immovable as-sets held as investment concerning their compliance with the requirements under
Section 12 (1) German REIT Act. We believe that our audit provides a reasonable basis for our opinion.
alstria Annual Report 2022
217
REIT Disclosures
In our opinion, on the basis of the knowledge obtained in the audit, the disclosures on the free float
ratio and the maximum shareholding per shareholder according to Section 11 (1) and (4) German REIT
Act contained in the REIT declaration correspond to the notifications according to Section 11 (5)
German REIT Act as of December 31, 2022 and the disclosures on compliance with the requirements
under Sections 12 to 15 German REIT Act and the income composition with regard to previously taxed
and not previously taxed income pursuant to Section 19a German REIT Act are correct.
This memorandum is solely provided for submission to the tax authorities of the city of
Hamburg/Germany as part of the tax declaration according to Section 21 (2) German REIT Act and
must not be used for other purposes.
Hamburg, February 27, 2023
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
[Original German version signed by:]
Annika Deutsch
Wirtschaftsprüferin
[German Public Auditor]
Maximilian Freiherr v. Perger
Wirtschaftsprüfer
[German Public Auditor]
alstria Annual Report 2022
218
Financial Calendar/Imprint
I. FINANCIAL CALENDAR/IMPRINT
I. FINANCIAL CALENDAR
Events 2023
May 2
May 4
August 8
November 7
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
Ralf Dibbern
Phone +49 (0) 40 22 63 41−329
Fax
+49 (0) 40 22 63 41−310
E-Mail
rdibbern@alstria.de
alstria Annual Report 2022
219
BUILDING
YOUR
FUTURE
alstria office REIT-AG
www.alstria.com
info@alstria.de
Elisabethstr. 11
40217 Düsseldorf, Germany
+ 49 (0)211 / 30 12 16 - 600
Platz der Einheit 1
60327 Frankfurt / Main, Germany
+ 49 (0)69 / 15 32 56 - 740
Steinstr. 7
20095 Hamburg, Germany
+ 49 (0)40 / 22 63 41 - 300
Reuchlinstr. 27
70176 Stuttgart, Germany
+ 49 (0)711 / 33 50 01 - 50
Rankestr. 17
10789 Berlin, Germany
+ 49 (0)30 / 89 67 795 - 00