2023
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.
2023
192,026
163,936
−653,374
87,972
−3.66
0.49
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
Balance sheet
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2021
Dec. 31, 2020 Dec. 31, 2019
Investment property (EUR k)
3,971,253
4,606,848
4,775,801
4,556,181
4,438,597
Total assets (EUR k)
Equity (EUR k)
Liabilities (EUR k)
Net asset value (NAV) per
share (EUR)
Net loan-to-value (Net LTV, %)
4,237,518
5,163,774
5,234,372
5,090,249
5,029,328
1,617,547
2,571,400
3,367,083
3,252,442
3,175,555
2,619,971
2,592,374
1,867,290
1,837,806
1,853,773
9.06
58.3
14.42
43.7
18.91
28.8
18.29
27.0
17.88
27.1
G-REIT figures
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2021
Dec. 31, 2020 Dec. 31, 2019
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)
43.0
100
2023
0.51
23.6
18.3
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
EPRA NRV per share (EUR)
EPRA NTA per share (EUR)
EPRA NDV per share (EUR)
EPRA net initial yield (%)
EPRA ‘topped-up’ net initial
yield (%)
EPRA vacancy rate (%)
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
10.87
9.10
10.32
4.2
4.4
8.0
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
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 2023
CONTENT
A.
B.
C.
D.
E.
F.
G.
H.
I.
I.
II.
III.
IV.
V.
VI.
COMBINED MANAGEMENT REPORT ......................................................... 6
ECONOMICS AND STRATEGY ........................................................................... 6
I.
FINANCIAL ANALYSIS .................................................................................. 12
II.
EXPECTED DEVELOPMENTS ........................................................................... 24
III.
REPORT REGARDING ALSTRIA AG .................................................................... 25
IV.
RISK AND OPPORTUNITY REPORT .................................................................... 30
V.
SUSTAINABILITY REPORT ............................................................................. 58
VI.
VII. DISCLOSURES REQUIRED BY TAKEOVER LAW ....................................................... 59
VIII. ADDITIONAL GROUP DISCLOSURE .................................................................... 63
CONSOLIDATED FINANCIAL STATEMENTS ................................................ 66
CONSOLIDATED INCOME STATEMENT ............................................................... 66
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................... 67
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................ 68
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................... 70
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY............................................. 72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 73
RESPONSIBILITY STATEMENT ............................................................. 158
INDEPENDENT AUDITOR’S REPORT ...................................................... 159
REPORT OF THE SUPERVISORY BOARD ................................................. 170
CORPORATE GOVERNANCE STATEMENT ................................................ 177
REMUNERATION REPORT .................................................................. 194
REIT DISCLOSURES ......................................................................... 218
REIT DECLARATION .................................................................................. 218
REIT MEMORANDUM ................................................................................. 220
FINANCIAL CALENDAR/IMPRINT .......................................................... 222
FINANCIAL CALENDAR ............................................................................... 222
CONTACT/IMPRINT .................................................................................. 222
I.
II.
I.
II.
Combined Management Report
DETAIL INDEX COMBINED MANAGEMENT REPORT
G
A.
COMBINED MANAGEMENT REPORT ......................................................... 6
I.
ECONOMICS AND STRATEGY ........................................................................... 6
1. STRATEGY .................................................................................................. 6
2. CORPORATE MANAGEMENT .............................................................................. 7
3. ECONOMY AND OFFICE MARKETS ....................................................................... 8
4. PORTFOLIO ANALYSIS .................................................................................... 9
II.
FINANCIAL ANALYSIS .................................................................................. 12
1. EARNINGS POSITION ..................................................................................... 12
2. FINANCIAL AND ASSET POSITION ....................................................................... 17
3. THE MANAGEMENT BOARD’S OVERALL ASSESSMENT OF THE FINANCIAL YEAR .................. 24
III.
EXPECTED DEVELOPMENTS ........................................................................... 24
1. EXPECTED ECONOMIC DEVELOPMENT ................................................................. 24
2. DEVELOPMENT OF THE REAL ESTATE MARKET: OUTLOOK FOR 2024 .............................. 24
3. OUTLOOK FOR THE ALSTRIA GROUP .................................................................. 24
REPORT REGARDING ALSTRIA AG .................................................................... 25
IV.
1. EARNINGS POSITION ..................................................................................... 25
2. FINANCIAL AND ASSET POSITION ....................................................................... 27
3. ADDITIONAL DISCLOSURE REGARDING ALSTRIA AG .................................................. 29
V.
RISK AND OPPORTUNITY REPORT .................................................................... 30
1. RISK REPORT.............................................................................................. 30
2. REPORT ON OPPORTUNITIES ........................................................................... 55
VI.
SUSTAINABILITY REPORT ............................................................................. 58
VII. DISCLOSURES REQUIRED BY TAKEOVER LAW ....................................................... 59
VIII. ADDITIONAL GROUP DISCLOSURE .................................................................... 63
1. CORPORATE GOVERNANCE GROUP DECLARATION PURSUANT TO SECTIONS 289F
AND 315D HGB (“HANDELSGESETZBUCH”: GERMAN COMMERCIAL CODE) ........................ 63
2. EMPLOYEES ............................................................................................... 63
3. GROUP AND DEPENDENT-COMPANY REPORT ......................................................... 64
4. DIVIDEND .................................................................................................. 64
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alstria Annual Report 2023
Combined Management Report
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, 2023, the alstria group consisted of the
parent company alstria and 36 direct and indirect subsidiaries (hereinafter “alstria” or the “Group”).
Operational decisions are made in the parent company. As of December 31, 2023, alstria’s real estate
portfolio comprised 106 buildings, with a lettable area of 1.4 million m² and a total value of
EUR 4.0 billion. The properties are predominantly located in the major German office markets of
Hamburg, Düsseldorf, Frankfurt, Stuttgart and Berlin, which alstria defines as its core markets and in
which alstria is represented by local and operating offices. As a fully integrated and long-term
oriented company, alstria’s 189 employees actively manage the buildings over their entire life cycle.
In 2022, alstria was taken over by Brookfield Corporation, Toronto/Canada, via its subsidiary
Alexandrite Lake Lux Holdings S.á r.l., Luxembourg, Grand Duchy of Luxembourg (hereinafter
"Alexandrite" or "Acquirer"). According to the most recently published voting rights notification,
Brookfield directly and indirectly held 95.4% of the shares of alstria office REIT-AG at the end of 2023,
whereby no Brookfield subsidiary exceeded a voting interest of 10%.
The year 2023 was again characterized by the implementation of the investment agreement concluded
between alstria and Brookfield at the end of 2021. In particular, this included the new capital
structure published in the ad hoc announcement of April 8,2022 as a key milestone. This includes
return of capital in the amount of EUR 1 billion and the related take-up of additional debt capital in
the amount of EUR 850 million were completed as planned in the financial year 2023.
The Group's business strategy and the growth of the company imply that 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.
alstria Annual Report 2023
6
Combined Management Report
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 forecast published by alstria at the beginning of 2023 was exceeded in the
financial year 2023. The Group's revenues amounted to EUR 192 million (forecast: EUR 190 million)
and FFO reached almost EUR 88 million in the reporting year (forecast: EUR 79 million). The FFO
forecast was already raised from EUR 79 million to EUR 84 million during the course of the year. The
improved earnings performance compared to the forecast was due in particular to a more favorable
development of property operating costs, as well as higher than expected income from cash deposits.
The company also monitors the development of net LTV**, the REIT equity ratio***, net debt**** to
EBITDA and cash and cash equivalents, although these are not the most important performance
indicators for the Group's internal management. As per December 31, 2023, the net LTV ratio was
58.3%, compared to 43.7% at the end of the 2022 financial year. The significant increase in the LTV
ratio was a result of the company's higher debt and the market-related devaluation of the property
portfolio. The REIT equity ratio amounted to 43.0% as at the reporting date, compared to 55.3% in
the previous year. The statutory minimum ratio is 45% and must be restored by December 31, 2025 in
order to maintain the company's REIT status. The net debt to EBITDA ratio was 16.6 as at December
31, 2023, compared to 14.5 as at December 31, 2022.
* For further details, please refer to page 15f.
** Net debt at the fair value of immovable assets (less shares in joint ventures)
*** Ratio of equity to the book value of immovable assets. Minimum requirement in accordance with the G-REIT Act: 45%.
**** Total liabilities less cash and cash equivalents and current financial assets.
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alstria Annual Report 2023
Combined Management Report
The management at the level of the Company primarily focuses on the total operating performance.
alstria AG strives for stable results with low volatility.
3. ECONOMY AND OFFICE MARKETS
3.1.
Economic development*
With a decline in GDP of -0.3%, the German economy stagnated in the past financial year. This was
due on the one hand to the considerable loss of purchasing power among consumers as a result of the
massive rise in energy and food prices, and on the other hand to the weak global economic
development as a result of the ongoing geopolitical crises. The rise in interest rates as a result of
monetary policy tightening also contributed to the weak economic development. Current leading
indicators suggest that the economic weakness is likely to persist throughout the winter and a
recovery is not expected until spring 2024. The cautious optimism is based in particular on the
expected slowdown in inflation and rising real wages. The average annual inflation rate for 2023 was
5.9%.
3.2. Office markets**
3.2.1. Vacancy rate, office lettings and rents
The persistently weak economic development and the economic uncertainty of many corporations
had a direct impact on demand for office space, which in the seven major office markets ("Big 7"
cities: Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart) was 31% below
the previous year's level at just under 2.4 million square meters. The vacancy rate rose to 6.1% over
the course of the year (previous year: 5.1%), while prime rents again increased slightly and average
rents showed a regionally differentiated trend. Average rents per square meter developed as follows
compared to the previous year: Hamburg: EUR 20.60/m² (-2%), Düsseldorf: EUR 21.30 (+8%),
Frankfurt: EUR 22.90 (-4%), Stuttgart: EUR 17.30 (-5%), Berlin: EUR 29.20 (-3%), Cologne: EUR 19.60
(+5), Munich: EUR 24.70 (-1%).
3.2.2. Transactions
The weak economic development combined with the sharp rise in interest rates brought the
transaction market for German commercial real estate to a virtual standstill. In 2023, the transaction
volume in the "Big 7" cities amounted to EUR 7.9 billion. The individual markets developed as follows:
Hamburg: EUR 1.3 billion (-71%), Düsseldorf: EUR 0.6 billion (-78%), Frankfurt: EUR 0.7 billion (-84%),
Stuttgart: EUR 0.5 billion (-55%), Berlin: EUR 2.7 billion (-65%), Cologne: EUR 0.8 billion (-33%),
Munich: EUR 1.4 bn (-66%). The year-on-year decline in the "Big 7" was therefore 69%.
* Source: BMWK- The economic situation in Germany in January 2024.
** Source: Top 7 locations market report Q1-4 2023, German Property Partners. Other sources were used in the previous year, meaning that the
market data in the 2022 annual report is only partially comparable.
alstria Annual Report 2023
8
Combined Management Report
4. PORTFOLIO ANALYSIS
4.1.
Key metrics of the portfolio and investment locations
alstria owns, manages, and develops office buildings with a total lettable area of 1.4 million m². At
the end of 2023, 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 13,100 m² and an average market value of EUR 37.6 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, 2023
Dec. 31, 2022
106
4.0
199.6
5.0
108
4.7
199.7
4.3
1.394.000
1,398,000
8.0
5.3
2.860
14. 61
7.2
5.5
3,329
14.06
Dec. 31, 2023
Dec. 31, 2022
Change (pp)
33
26
23
9
9
35
25
22
9
9
-2
1
1
-
-
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alstria Annual Report 2023
Combined Management Report
4.2.
Tenants and leases
Public tenants and large national and international companies in particular characterize alstria’s
tenant structure. The following table shows the ten largest tenants as of December 31, 2023:
alstria’s main tenants
(% of annual rent)
City of Hamburg
Bundesanstalt für Immobilienaufgaben
Mercedes-Benz AG
City of Frankfurt
GMG Generalmietgesellschaft
HOCHTIEF Aktiengesellschaft
Commerzbank Aktiengesellschaft
Hamburger Hochbahn AG
Deutsche Post Immobilien
City of Berlin
Letting metrics1) (m2)
New leases
Renewals of leases
Total
Dec. 31, 2023
Dec. 31, 2022
Change (pp)
13
13
5
4
3
3
2
2
2
2
2
5
6
3
3
2
2
2
2
1
0
0
-2
0
0
0
0
0
0
1
2023
23,400
110,000
133,400
2022
43,700
63,600
107,300
Change
-20,300
46,400
26,100
1) Total leasing volume including option drawings of existing tenants.
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)
2024
2025
2026
Dec. 31, 2023
Dec. 31, 2022
Change (pp)
8.1
14.2
19.0
10.6
13.7
20.4
-2.5
0.5
-1.4
4.3.
Capital expenditure into the existing portfolio
In 2023, EUR 129 million was invested in the existing portfolio. The largest part of this amount,
EUR 65 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
2023, because alstria still sees the best return opportunities here. The current development portfolio
comprises 20 projects with a total lettable area of 154,300 m2.
alstria Annual Report 2023
10
Combined Management Report
Project
Gustav-Nachtigal-Str. 4, Wiesbaden
Carl-Reiss-Platz 1, Mannheim
Carl-Reiss-Platz 2,3,4, Mannheim1)
Gartenstr. 2, Düsseldorf
Handwerkstr. 4/Breitwiesenstr. 27, Stuttgart
Adlerstr. 63, Düsseldorf
Corneliusstr. 36, Düsseldorf
Uhlandstr. 85, Berlin
Friedrich-Scholl-Platz 1 (Teil A), Karlsruhe
Friedrich-List-Str. 20, Essen
Platz der Einheit 1, Frankfurt
Epplestr. 225 (building 2), Stuttgart
Epplestr. 225 (building 6), Stuttgart
Epplestr. 225 (building 10), Stuttgart
Epplestr. 225 (building 20 & 21), Stuttgart
Epplestr. 225 (building 1), Stuttgart
Hanauer Landstr. 161-173, Frankfurt
Maxstr. 3a, Berlin
Ivo-Beucker-Str. 43, Düsseldorf
Lehrter Str. 17, Berlin
Gesamt
1) Residential building.
4.4.
Transactions
Lettable area
(m²)
Status
Estimated
completion
800
Under construction
8,000
Under construction
4,400
Under construction
5,000
Under construction
6,200
Under construction
2,700
Under construction
3,100
Under construction
11,200
Under construction
5,800
Under construction
8,600
Under construction
28,700
Under construction
11,500
Under construction
11,500
Under construction
9,900
Under construction
4,000
Under construction
4,800
14,100
4,400
7,300
2,300
154,300
Planning
Planning
Planning
Planning
Planning
Q2 2024
Q1 2024
Q2 2024
Q4 2024
Q1 2024
Q1 2024
Q1 2024
Q2 2024
Q4 2024
Q1 2024
Q4 2024
Q2 2024
Q2 2024
Q4 2024
Q4 2024
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. As the transaction market for office properties came to a virtual standstill in 2023, alstria's
disposal volume of only EUR k 3,200 was also significantly below the previous year's level of
EUR k 116,020. The purchase agreement for the building at Amsinckstr. 34, Hamburg, was signed in
2022 and the transfer of benefits and burden took place on March 31, 2023. As in 2022, alstria did not
acquire any new properties in the 2023 financial year.
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alstria Annual Report 2023
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Disposals
Asset
Amsinckstr. 34
City
Hamburg
Mergenthalerallee 45-47
Eschborn
Total Disposals
Disposal
price
(EUR k)
26,550
3,200
29,750
Gain
to book
value
(EUR k)1), 2)
573
300
873
Signing
SPA
Transfer
of benefits and
burdens
Dec. 12, 2022
Mar. 31, 2023
Mar. 28, 2023
Apr. 30, 2023
1) Deviation from the item "Net result from the disposal of investment property" in the income statement. This item only includes contracts that
have an impact on the 2023 financial year, as well as their incidental selling costs and capitalizations made during the year up to the time of
disposal.
2) Rounded to the nearest five thousand Euros.
4.5.
Portfolio valuation
alstria's entire real estate portfolio was valued by an external appraiser (Savills Advisory Services
Germany GmbH & Co. KG) at fair value as per December 31, 2023 in accordance with the requirements
of IAS 40 in conjunction with IFRS 13. For the portfolio as a whole, the 2023 valuation resulted in a
write-down totaling EUR 769.5 million (previous year: write-down of EUR 179.6 million (after
deduction of investments and transactions)). Based on the established market value as per December
31, 2023, this results in an average value of EUR 2,860 per sqm and a yield, based on the ratio of
contractual rent to market value, of 5.0 % for the portfolio as a whole.
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
2023
192,026
163,936
-20,126
20,135
163,946
-769,541
81
-605,514
2022
182,819
153,004
-25,706
13,219
140,517
-179,581
2,896
-36,168
*The previous year's figures were partially adjusted as part of an adjustment of the accounting to the Brookfield Group guidelines. See "Changes
in accounting policies" in section B.VI.2.2.1 of the notes to the consolidated financial statements.
1.1.
Net operating result
alstria closed the 2023 financial year with a net operating result (before financing costs and taxes) of
EUR -605,514 k, compared to EUR -36,168 k for 2022.
alstria Annual Report 2023
12
Combined Management Report
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 192,026 k (2022: EUR 182,819 k). This corresponds to
an increase of 5.0 % or EUR 9.207 k, which is attributable in particular to additional revenue from the
indexation of existing rental agreements and the signing of new leases. The increase in rental income
was partially offset by the planned expiry of rental agreements. Overall, revenue was higher than the
forecast of EUR 190 million published at the beginning of the year, in particular due to higher-than-
planned rent adjustments.
1.3.
Real estate operating expenses
Real estate operating expenses consist of recoverable and non-recoverable operating costs, and they
amounted to EUR 66,257 k (2022: EUR 67,985 k). The expense ratio of non-recoverable operating
costs decreased from 16.6 % in 2022 to 15.4 % in 2023. This was primarily due to higher revenues, but
also to lower real estate operating expenses compared to the previous year. Thus, the Group’s net
rental income increased by EUR 10,932 k to EUR 163,936 k (2022: EUR 153,004).
1.4.
Administrative and personnel expenses
Administrative expenses remained largely stable in 2023 compared to the previous year and amounted
to EUR 9,241 k (2022: EUR 9,647 k). Personnel expenses amounted to EUR 10,884 k in the 2023
financial year, a year-on-year decrease of EUR 5,175 k (2022: EUR 16,059 k). The decrease in
personnel expenses was mainly due to the share-based remuneration incurred in 2022 in connection
with the takeover of the majority shareholding by Brookfield. The sum of administrative and personnel
expenses thus corresponds to around 10.5% of revenue and 0.5% of the fair value of the portfolio
(2022: 14.1% and 0.6%).
1.5. Other operating result
In the 2023 financial year, other operating income amounted to EUR 20,135 k (2022: EUR 13,219 k).
This is due in particular to an increase in other operating income from EUR 16,219 k in 2022 to EUR
20,983 k in 2023. This is due to the valuation of the limited partner contributions of non-controlling
shareholders relates to alstria office Prime Portfolio GmbH & Co. KG. The valuation result was mainly
attributable to the devaluation of the properties held by this company for investment purposes.
Other operating expenses amounted to EUR 848 thousand and compare with EUR 3,000 k in the 2022
financial year.
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alstria Annual Report 2023
Combined Management Report
1.6.
Net result from fair value adjustments to investment property
The net result reported in the 2023 financial year from the fair value adjustments of investment
properties amounted to EUR -769,541 k (2022: EUR -179,581 k). Different changes in value were
recorded at the level of the individual properties. At EUR 22,890 k, markups in value were very low
and were solely attributable to investments made in the financial year. The substantial devaluation
across almost the entire property portfolio as per December 31, 2023 reflected in particular the rise
in interest rates over the course of 2023. The property portfolio was valued by an external appraiser
(Savills Immobilien Beratungs-GmbH, Frankfurt) on the basis of a cash flow discounting model. In this
context, the lower property values were in particular a result of higher discount rates.
1.7.
Net result from the disposal of investment property
As a result of the low volume of property sales in the 2023 financial year the transaction result was
only marginal at EUR 81 k (2022: EUR 2,896 k).
1.8.
Net financial result
EUR k
Interest expenses, corporate bonds
Interest expenses bank loans
Interest result Schuldschein
Interest result from derivatives
Other interest expenses
Financial expenses
Income from financial instruments
Other financial expenses
Net financial result
2023
-16,677
-57,138
-1,419
9,385
-76
-65,925
19,552
-1,005
-47,378
2022
−21,916
−8,351
−1,968
−843
−15
−33,093
4,062
−8,025
−37,056
Financial expenses increased by EUR 32,832 k to EUR 65,925 k, mainly due to the take-up of additional
loans and the increase in refinancing costs. The additional loans were used to repay an maturing bond,
a maturing Schuldschein and to partially finance a special dividend. Income from financial instruments
and other interest income includes interest-like income of EUR 6,380 k resulting from income in
connection with the repurchase of own bonds below their issue value. alstria acquired own bonds with
a nominal value of EUR 22,000 k for EUR 15,620 k in the 2023 financial year. For details on the new
loans, refer to the ‘Noncurrent and current financial liabilities’ section starting on page 18.
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 17 k (2022:
EUR - 782 k).
alstria Annual Report 2023
14
Combined Management Report
1.10. Consolidated profit
The consolidated profit for the financial year 2023 amounted to EUR -653,374 k (2022: EUR -74,614
k) and was therefore EUR 578,760 k lower than in the previous year. The main driver of this
development is the result from the net result from fair value adjustments to investment property,
which amounted to EUR -769,541 k in the financial year, compared to EUR -179,581 k in the previous
year. Basic earnings per share for the 2023 financial year amounted to EUR -3.66 (2022: EUR -0.42).
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)
FFO after minority interests amounted to EUR 87,972 k (2022: EUR 106,562 k) and was therefore above
the forecast of EUR 79 million published at the beginning of 2023. This was due to costs developing
below plan, which is why the FFO forecast was raised to EUR 84 million already during the course of
the year. This trend also continued over the rest of 2023. However, due to the significant increase in
financing costs, FFO for the 2023 financial year of EUR 87,972 k was well below the previous year's
figure of EUR 106,526 k. The FFO margin (Revenues/FFO) fell accordingly to 45.8% in 2023
(2022: 58.3%).
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) related to
non-cash administrative expenses
(EUR 1,557 k), non-recurring other operating
income
(EUR 19,112 k), non-recurring other operating expenses (EUR 1,246 k), the non-cash valuation result
(EUR 769,541 k) and income not attributable to the operating business in the net financial result
(EUR 6,380 k). This income was related to the acquisition of own bonds on the capital market and
represents the difference between the purchase price and the nominal value of the acquired bonds.
The adjustments in other operating income relate to the valuation of the minority interests in alstria
office Prime Portfolio GmbH & Co. KG.
15
alstria Annual Report 2023
Combined Management Report
EUR k1)
Revenues
Revenues from service charge income
Real estate operating expenses
Net rental income
Administrative expenses
Personnel expenses
Other operating income
Other operating expenses
Net result from fair value adjustments to
investment property
Net result from the disposal of investment
property
Net operating result
Net financial result2)
Share of the result of companies accounted
for at equity
Net result from the valuation of derivative
financial instruments
Pretax income
Income tax expenses
Consolidated profit
Minority interests
IFRS P&L
Adjustments
192,026
38,167
−66,257
163,936
−9,241
−10,885
20,983
−848
-
-
-
-
1,557
520
−19,112
-1,246
−769,541
769,541
81
−81
−605,514
751,179
−47,378
-6,380
FFO
2023
192,026
38,167
-66,257
FFO2)
2022
182,819
38,170
−62,043
163,936
158,946
-7,684
-10,364
1,872
-2,094
-
-
−9,477
−22,027
14,353
−351
-
-
145,665
-53,758
141,444
−29,754
17
−721
-
721
17
-
−782
-
−653,596
745,521
91,924
110,908
222
-222
−653,374
745,299
-
−3,953
-
91,924
-3,953
87,972
178,562
0.49
-
110,908
−4,346
106,562
178,291
0.60
Consolidated profit / FFO (after minorities)3)
−653,374
741,346
Number of outstanding shares (k)
FFO per share (EUR)
1) Numbers may not sum up due to rounding.
2) The calculation of the FFO for 2022 was adopted unchanged and not subsequently adjusted to the Brookfield Group repprting standards. For
the reconciliation of the income statement to the new standard, see "Changes in accounting policies" in section B.VI.2.2.1 of the notes to the
consolidated financial statements.
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 2023
16
Combined Management Report
2. FINANCIAL AND ASSET POSITION
2.1.
Investment properties
The total value of investment properties as of December 31, 2023 was EUR 3,971,253 k, compared to
EUR 4,606,848 k at the beginning of 2023. The decline is mainly due to the decrease in the value of
investment properties. This was partially offset by investments in the existing portfolio during the
year, which had a positive effect on the value of the properties.
EUR k
Investment property as of December 31, 2022
Investments
Acquisitions
Acquisition costs
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, 2023
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
4,606,848
137,338
-
-
−3,392
-
-
-
−769,541
3,971,253
16,774
2,834
-
-
3,990,861
Cash and cash equivalents decreased significantly in the reporting period by EUR 248,691 k from
EUR 364,973 k to EUR 116,282 k. A positive cash flow of EUR 89,084 k was generated from operating
activities. Financing activities resulted in net cash outflows of EUR 228,242 k, which were primarily
related to the payment of dividends amounting to EUR 262,469 k (of which special dividend:
EUR 251,772 k). In addition, bonds and promissory notes in the amount of EUR 377,620 k were repaid
and new loans in the amount of EUR 430,937 k were taken out. Investing activities resulted in cash
outflows of EUR 109,533 k, mainly due to investments in the existing portfolio.
17
alstria Annual Report 2023
Combined Management Report
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, 2023
Dec. 31, 2022
Change
1,617,547
178,562
9.06
38.2
43.0
2,571,400
178,291
14.42
49.8
55.3
-37.1%
0.2%
-37.2%
-11.6pp
-12.3pp
Compared to December 31, 2022, equity as per December 31, 2023 decreased significantly by
EUR 953,853 k to EUR 1,617,547 k. This was due in particular to the impairment of the real estate
portfolio and the net loss for the year resulting from the negative valuation result of EUR 653,374 k
as well as the dividend payments of EUR 262,469 k. Finally, equity as per December 31, 2023 was
burdened by a negative hedging valuation reserve in the amount of EUR 39,071 k.
2.4.
Limited partnership capital non controlling interests
Liabilities due to minority interests represent the limited-partner capital of non controlling
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. Due to the negative valuation effect of the real estate portfolio, this
balance sheet item fell to EUR 98,297 k (2022: EUR 120,959 k).
2.5.
Non current 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 2023, alstria concluded new loan agreements with a volume of EUR 388,000 k and increased an
existing loan by a total of EUR 42,937 k. A capital market bond with a volume of EUR 325,000 k and a
promissory note in the amount of EUR 37,000 k were repaid in the reporting period. After the balance
sheet date, a further loan in the amount of EUR 120 million with a maturity of five years was signed
to refinance existing financial liabilities.
alstria Annual Report 2023
18
Combined Management Report
The loan facilities in place as of December 31, 2023 are in the following table.
Liabilities
Maturity
Principal amount
drawn as of
Dec. 31, 2023
(EUR k)
LTV1) as of
Dec. 31, 2023
(%)
LTV
covenant
(%)
Principal amount
drawn as of
Dec. 31, 2022
(EUR k)
Loan #12)
Loan #23)
Loan #3
Loan #44)
Loan #55)
Loan #66)
Loan #7
Loan #8
Jun 28, 2024
150,000
Mar 29, 2030
Sep 29, 2028
Sep 30, 2027
Aug 29, 2024
Apr 26, 2030
Jun 30, 2028
Aug 31, 2028
90,000
97,000
500,000
107,000
188,000
100,000
100,000
Total secured loans
1,332,000
Bond #2
Bond #3
Bond #4
Bond #5
Apr 12, 2023
Nov 15, 2027
Sep 26, 2025
Jun 23, 2026
Schuldschein 10y/fixed
May 06, 2026
Schuldschein 7y/fixed
May 06, 2023
Revolving credit line7)
Apr 29, 2026
Total unsecured loans
Total
Net LTV
-
328,000
400,000
350,000
40,000
-
-
1,118,000
2,450,000
66.1
n/a
60.2
73.9
n/a
64.3
66.0
64.6
n/a
-
-
-
-
-
-
-
61.3
58.3
70.0
-
65.0
75.0
-
65.0
70.0
65.0
-
-
-
-
-
-
-
-
-
150,000
47,063
97,000
500,000
107,000
-
-
-
901,063
325,000
350,000
400,000
350,000
40,000
37,000
-
1,502,000
2,403,063
1) Calculation based on the market values (as per December 31, 2023) of the properties serving as collateral in relation to the loan amount drawn
down.
2) Agreement of a revolving credit line of EUR 200 million on April 29, 2022.8)
Maturity profile of financial debt in EUR m
900
800
700
600
500
400
300
200
100
0
2024
2025
2026
2027
2028
2029
2030
19
alstria Annual Report 2023
Combined Management Report
2.6.
Financial derivatives
In connection with the raising of additional loans, alstria purchased derivative financial instruments.
As of December 31, 2023, their holdings were as follows:
Product
Strike p.a.
(%)
Start of
Hedging
Maturity
Counterpart
Notional Fair value Notional
Fair
value
Dec. 31,2023
Dec. 31, 2022
(EUR k)
(EUR k)
(TEUR)
(TEUR)
1.7500 Sep 30, 2022
Sep 30, 2027
Societe Generale
500,000
10.714
500,000
29,812
Swap
Swap
Swap
Cap
Swap
Cap
Swap
Cap
Swap
Cap
Swap
Cap
Cap
Swap
Total
1.039
60,000
389
22,450
3,606
1,348
1.9240 Sep 30, 2022
Sep 30, 2028
UniCredit Bank AG
1.9240 Sep 30, 2022
Sep 30, 2028
UniCredit Bank AG
3.5000 Jun 30, 2023 Apr 26, 2030
3.2300 Jun 30, 2023 Mar 29, 2030
Societe Generale
Morgan Stanley
Europe SE
60,000
22,450
70,500
1.191
67,500
-3.561
3.5000 Jun 30, 2023 Mar 29, 2030
Societe Generale
22,500
372
3.1350 Jun 30, 2023 Apr 26, 2032 LB Hessen-Thüringen
70,500
-3.362
3.5000 Jun 30, 2023 Apr 26, 2030
3.0000 Jun 30, 2023
Jun 30, 2028
Societe Generale
LB Baden
Württemberg
47,000
795
50,000
-1.256
3.5000 Jun 30, 2023
Jun 30, 2028
Societe Generale
35,000
323
2.9740 Dec 29, 2023 Aug 29, 2027
3.5000 –
2.5000 Nov 01, 2023 Aug 31, 2028
3.5000 –
2.5000 Nov 01, 2023 Aug 31, 2028
4.0330 –
2.5000 Nov 01, 2023 Aug 31, 2028
Societe Generale
Morgan Stanley
Europe SE
Morgan Stanley
Europe SE
Hamburg Commercial
Bank AG
107,000
-2.367
40,000
10,000
663
165
-1.912
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dec. 31, 2023
Ø cost of
debt
(%)
Ø maturity
(years)
Cash cost of debt
Bank debt
Bonds
Schuldschein
Total
Nominal
amount
(EUR k)
1,332,000
1,078,000
40,000
2,450,000
3.8
1.1
2.8
2.6
50,000
1,152,450
Nominal
amount
(EUR k)
901,063
1,425,000
77,000
3.9
2.7
2.4
3.3
2,403,063
3,193 582,450
34,767
Dec. 31, 2022
Ø cost of
debt
(%)
Ø maturity
(years)
3.2
1.4
2.5
2.1
3.9
2.9
2.0
3.2
The derivative financial instruments held by alstria are exclusively interest rate swaps and caps.
Derivative financial instruments that are not designated for a cash flow hedge relationship were not
held as of the balance sheet date, nor during the year. No netting agreements with counterparties
(master agreements) were agreed. The change in value of the derivatives is reflected in various
balance sheet items.
alstria Annual Report 2023
20
Combined Management Report
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 %
* 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.
21
alstria Annual Report 2023
Combined Management Report
EUR k
Consolidated Net Financial Indebtedness as of the reporting date
Net Financial Indebtedness incurred since the reporting date
Sum Consolidated Net Financial Indebtedness (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)
EUR k
Secured Consolidated Net Financial Indebtedness as of the reporting date
Secured Net Financial Indebtedness incurred since the reporting date
Sum Secured Consolidated Net Financial Indebtedness (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 %)
Dec 31, 2023
2,323,102
-
2,323,102
4,121,236
-
-
4,121,236
56 %
Dec 31, 2023
1,258,464
-
1,258,464
4,174,526
-
-
4,174,526
30 %
Dec 31, 2023
1,998,860
200,154
2,199,014
-
2,199,014
1,064,638
-
1,064,638
207 %
alstria Annual Report 2023
22
Combined Management Report
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 2023
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.
−606,218
769,541
721
−81
18,280
-
145,683
−68,010
15,231
−52,779
2.8
In the 2023 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 to EUR 319,190 k as per December 31, 2023 (December 31, 2022:
EUR 429,960 k). Of this amount, EUR 261,777 k represented current loan liabilities (December 31,
2022: EUR 372,142 k) and EUR 21 k represented limited partner contributions from non-controlling
interests (December 31, 2022: EUR 21 k). Current liabilities also include trade payables in the amount
of EUR 4,717 k (December 31, 2022: EUR 3,581 k). Other current liabilities in the amount of
EUR 44,744 k (December 31, 2022: EUR 51,224 k) primarily include provisions for outstanding invoices
in the amount of EUR 26,638 k (December 31, 2022: EUR 28,490 k) and rent deposits received in the
amount of EUR 8,007 k (December 31, 2022: EUR 8,043 k).
23
alstria Annual Report 2023
Combined Management Report
3. THE MANAGEMENT BOARD’S OVERALL ASSESSMENT OF THE FINANCIAL YEAR
Despite the weak macroeconomic development, persistent inflation and a significant rise in interest
rates, alstria's earnings position developed above plan in the 2023 financial year. Revenues and
earnings reflected the high quality of the real estate portfolio and the efficient corporate structure.
The financial position and net assets were adversely affected by a market-related devaluation of the
real estate portfolio, reflecting in particular the environment of rising interest rates and the resulting
pressure on commercial real estate prices. The liquidity position was sufficient at all times during the
2023 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
Economic conditions are expected to improve only slowly in 2024. The latest leading indicators suggest
that companies are somewhat more optimistic about the future and private households also appear
to be somewhat more optimistic in the wake of falling inflation rates and rising real incomes.
Nevertheless, the risks regarding the expected economic recovery remain high in view of the weak
global economy, the ongoing geopolitical crises and the resulting possible spikes in commodity prices.
The uncertainties regarding the structure of public budgets also constitute a burden for the economic
outlook.
2. DEVELOPMENT OF THE REAL ESTATE MARKET: OUTLOOK FOR 2024
It is to be expected that the continued slowdown in economic growth will continue to have a
dampening effect on the commercial real estate market in 2024. The letting market in 2023 is likely
to remain at the same level as in 2023. The transaction market, on the other hand, is likely to remain
challenging, as the price expectations of buyers and sellers are often still too far apart given the rise
in interest rates. It is therefore to be expected that a liquid transaction market will not emerge until
the second half of 2024 at the earliest. The rise in interest rates will lead to considerable uncertainty
and volatility in real estate pricing.
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 195 million in 2024 despite the expected subdued
alstria Annual Report 2023
24
Combined Management Report
macroeconomic development. By contrast, FFO is expected to fall to EUR 71 million. This
development reflects in particular the higher financing costs as a result of higher interest rates
combined with a higher level of debt.
IV. REPORT REGARDING ALSTRIA AG
1. EARNINGS POSITION
The following table shows the key operating figures of the audited income statements for the 2023
and 2022 financial years:
in EUR k
2023
% of
oper.
perf.
2022
Total operating performance
163,129
100.0
156,846
% of
oper.
perf.
100.0
82.8
-20.4
-15.1
-30.2
-26.9
-70.7
Change
6,283
-102,297
-283
1,533
-14,266
32
-118,845
-
227,842
16.9
-19.8
-13.6
-37.7
-25.8
129,880
-32,075
-23,745
-47,305
-42,142
-140.8
-110,906
-120.9
30,553
19.5
Other operating income
Cost of purchased services
Personnel expenses
Depreciation
Other operating expenses
financial result
Net result of the year
1.1.
Business development
27,583
-32,358
-22,212
-61,571
-42,110
-229,751
-
197,289
The net result for the 2023 financial decreased by EUR 227,842 k to EUR -197,289 k (compared with
EUR 30,553 k in 2022). As the Company has been exempt from income taxes since its conversion into a
REIT structure, no tax expenses arose in 2023.
The decline in the annual result compared to the previous year is mainly due to the lower net financial
result (EUR -118,845 k), the lower other operating income (EUR -102,297 k) as well as the increase of
EUR 14,266 k in depreciation.
In contrast, personnel expenses fell by EUR 1,533 k, while revenues increased by EUR 6,283 k.
1.2.
Total operating performance
Total operating performance rose in the past financial year due to the increase in rental income and
an increase in income from real estate-related services passed on to subsidiaries. Revenue amounted
to EUR 163,998 k in the 2023 financial year. Together with the changes in inventories of EUR -868 k,
this resulted in total operating performance of EUR 163,129 k (previous year: EUR 156,846 k).
The increase in income is mainly the result of rent increases due to indexation and new lettings.
25
alstria Annual Report 2023
Combined Management Report
1.3. Other operating income
Other operating income decreased by EUR 102,298 k to EUR 27,582 k compared to the previous year.
While the absorption by the company of six subsidiaries that held properties led to gains of EUR
59,836 k in the previous year, the merger of two general partners did not contribute to earnings in the
reporting period. Furthermore, the sale of an asset in the financial year resulted in book gains of EUR
13,319 k, which was EUR 44,117 k less than the sale of three assets (EUR 37,335 k) and shares in
subsidiaries (EUR 20,101 k) in the previous year. Finally, income grants, due to the granting of subsidies
, fell by EUR 5,556 k as a result of the lower number of projects affected in the reporting year.
In contrast, income increased by EUR 8,633 k, in particular as a result of the costs of special requests
being passed on to a tenant.
1.4.
Purchased services
The cost of purchased services remained almost constant with an increase of EUR 283 k and stayed in
line with expectations.
1.5.
Depreciation and amortization
Depreciation and amortization increased by EUR 14,266 k to EUR 61,571 k compared to the previous
year, mainly due to the impairment of 4 properties, because of their reduced fair value.
1.6. Other operating expenses
Other operating expenses decreased only insignificantly by EUR 32 thousand, with one-off losses from
asset disposals in the previous year being offset by the expenses for special requests of tenants in the
financial year.
1.7.
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
2023
-14,383
-4,598
-1,396
-47,167
8,174
-207
2022
-19,351
-16,430
-1,931
-7,092
-972
-2,854
-59,577
-48,630
18
3,491
17,008
0
3,364
4,046
-190,691
-69,686
-229,751
-110,906
Change
(%)
-26
-72
-28
565
-941
-93
23
-
4
320
174
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The net financial result fell by EUR 118,845 k to EUR -229,751 k compared to the previous period,
primarily due to the increase in write-downs on financial assets due to lower market values (EUR
121,005 k). In addition, total interest expenses rose by EUR 10,947 k to EUR 59,577 k compared to
the 2022 financial year, primarily due to the increase in interest expenses from loans (EUR 40,075 k)
as a result of the rise in interest rates. This is offset by the decrease in transaction costs (EUR
11,832 k), an improved interest result from derivatives (EUR 9,146 k), which is also due to the increase
in interest rates, and the decrease in other interest expenses (EUR 2,647 k). Finally, other interest
income increased (EUR 12,962 thousand). This includes income of EUR 6,380 k from the repurchase
of shares in a corporate bond; the remaining growth is based on the increase in market interest rates.
2. FINANCIAL AND ASSET POSITION
On the balance sheet date, alstria owned 82 real estate properties (in 2022: 83). The following table
illustrates alstria’s changes in investment property in 2023:
Land and Buildings on December 31, 2022
Investments
Adjustments
Disposals
Appreciations on market value
Nonscheduled depreciation
Ordinary depreciation
Land and Buildings as of December 31, 2023
2.1.
Land, land rights and buildings
in EUR m
1.659,04
17,44
114,62
-13,26
0,00
-14,11
-43,64
1.720,08
The land, land rights and buildings item increased by EUR 61.1 million compared to the previous year's
reporting date. In the reporting period, EUR 17.4 million was invested in existing properties and assets
under construction amounting to EUR 114.62 million were completed. One asset with a carrying
amount totaling EUR 13.3 million was sold in the reporting year.
Four properties were written down by a total of EUR 14.1 million due to permanent impairment.
The following table shows the real estate transactions during the period:
Asset
City
Amsinckstr. 34
Hamburg
Gesamt
Sales price
(EUR k)
26.550
26.550
Signing
SPA
Transfer of
benefits and
burdens
12.12.2022
31.03.2023
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2.2.
Prepayments and constructions in progress
Prepayments and constructions in progress decreased by EUR 44,517 k to EUR 123,479 k compared to
the previous year. EUR 73,153 k was invested in refurbishment projects in the reporting year. A
further EUR 114,617 k was reclassified to land, land rights and buildings following the completion of
the projects.
2.3.
Financial assets
Financial assets decreased by EUR 253,462 k to EUR 478,681 k compared to the previous year's
reporting date. The decrease is primarily due to the write-down of a subsidiary's investment at fair
value by EUR 190,594 k and the withdrawal of EUR 33,067 k from this subsidiary. In addition, loans
from affiliated companies were reduced by a net repayment totaling EUR 29,769 k in the reporting
year.
2.4.
The cash position
The cash position decreased by EUR 229,993 k to EUR 105,390 k in the financial year. The cash
outflows are mainly due to the distributions made in the reporting year (EUR 262,469 k), investments
in fixed assets (EUR 90,713 k) and loan repayments (net EUR 144.635 k).
Cash inflows resulted primarily from the net profit for the year, which amounted to EUR 54,972 k less
non-cash valuation losses from financial assets and write-downs, the payments of profit distributions
by a subsidiary (EUR 170,908 k) and finally the repayment of loans by subsidiaries (EUR 29,769 k).
2.5.
Equity
The equity and liabilities side of the balance sheet shows equity of EUR 133,827 k. As at the balance
sheet date, the equity ratio was 5.4%. This corresponds to a reduction of 13.8 percentage points
compared to 19.2% in the previous year. The decrease in equity of EUR 459,218 k is due to the
distribution of the dividend for the 2022 financial year of EUR 262,469 k and the net loss for the year
of EUR 197,290 k.
In contrast, a capital increase in the course of the conversion of convertible profit participation rights
increased equity slightly (EUR 540 thousand).
2.6.
Provisions
Provisions decreased by EUR 3,562 k to EUR 33,953 k compared to the previous year's reporting date.
The decrease is mainly due to the reduction in provisions for outstanding invoices of EUR -5,581 k,
which is offset by an increase in provisions for the share-based payment system. (EUR 2,543 k).
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2.7.
Liabilities
Liabilities decreased by EUR 144,915 k compared to the previous year's reporting date. A corporate
bond of EUR 325,000 k was repaid on its maturity date of 12 April 2023, and the company itself also
acquired shares in a corporate bond it had issued in the total amount of EUR 22,000 k. Finally, the
tranche of a promissory bill was repaid in the amount of EUR 37,000 k.
On the other hand, the company took out further loans secured by land charges in the amount of
EUR 242,937 k.
3. ADDITIONAL DISCLOSURE REGARDING ALSTRIA AG
3.1.
Employees
As of December 31, 2022, alstria AG had 181 employees (December 31, 2022: 178). The annual average
number of employees was 175 (previous year: 173). These figures exclude the Management Board.
3.2. Outlook for alstria AG
The company is managed at Group level, so the planning is also based on Group key figures. The result
for the year is EUR -197.3 million. After adjusting for non-forecastable earnings components such as
depreciation of financial assets (EUR +190.7 million) and impairment losses on property, plant and
equipment (EUR +14.2 million), the result is EUR -7.6 million. A similar business performance is
expected for the coming financial year.
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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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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
A risk (or an opportunity) is defined as the occurrence of future uncertainties that could result in
either a negative (or a positive) variance from the business plan.
Risks (and opportunities) under risk management are measured on a net basis by taking into account
any existing management and mitigation measures. The time periods and measurement categories
used are closely linked to the short-term and medium-term business planning of the Group and its
entrepreneurial targets.
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.
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Classification according to degree of impact
Expected impact in EUR m
Degree of impact
Between 0.0 and 0.6
Between 0.6 and 1.5
Between 1.5 and 6.0
Between 6.0 and 15.0
Greater than 15.0
Classification according to likelihood
Probability/likelihood of occurrence
1 to 15 %
16 to 30 %
31 to 50 %
51 to 70 %
71 to 99 %
minor
low
moderate
high
very high
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 2023, in principle the Company’s risk-management system was not subject to any significant
changes compared to the previous year.
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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)
▪ 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 (CMS) 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.
Managers responsible for risks and Opportunities are designated at appropriate hierarchy levels to
manage and monitor identified risks and opportunities according to their relevance. These are
essentially the risk owners (department heads responsible for risk; see section V.1.1.1 Structure of
the risk management). They are responsible for formally determining a set of appropriate risk and
opportunity management strategies (in the case of risks: avoidance, mitigation, control, transfer or
acceptance). Working closely with corporate functions and individual managers responsible for
measures, the risk owner and opportunity owner are also responsible for defining and monitoring the
measures aimed at implementing the management and control strategy. The active and specific
management and monitoring of risks and opportunities are critical to the success of our system.
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 the process and recommends corrective measures. 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.
* This section is an unaudited statement.
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1.3.
Compliance Management System*
alstria has implemented a group-wide compliance management system to manage compliance-related
risks systematically and sustainably. alstria sought advice from law firms specializing in such issues
when implementing, reviewing, and assessing the appropriateness and effectiveness of its CMS.
The management board of alstria bears the corporate responsibility for compliance with all relevant
laws and internal guidelines and decides on the CMS and possible changes or additions. He is supported
by the Compliance Officer, who reports directly to the Management Board. If there are any suspicions
against a member of the Management Board, the Compliance Officer reports directly to the Chairman
of the Supervisory Board. The Compliance Officer reports to the Supervisory Board at least once a
year.
We continually develop the essential elements of our CMS to prevent, detect and respond to
compliance-related incidents. Compliance is monitored through regular internal audits carried out by
an auditing firm (most recently in the 2023 financial year).
As part of the CMS, compliance risks are regularly identified based on the compliance goals. In the
case of incidents, the risk analysis can also be repeated after a shorter period of time to check
whether changes to the CMS after an incident have had the desired effect. In addition, a process for
systematic risk identification and reporting has been implemented, in which the identified compliance
risks are analysed as part of risk management with regard to the probability of occurrence and possible
consequences (e.g. amount of damage and reputational consequences).
1.4.
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.
*This section is an unaudited statement.
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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.
Since the 2023 financial year, the key items on the Group's balance sheet and profit and loss
statement, including accounting-related controls, have also been included in a control concept in
accordance with the Sarbanes-Oxley Act of 2002 (SOX).
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.
1.5.
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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The individual risks described relate to the planning period from 2024 to 2026.
Likelihood
Risk
impact
Risk level
Change since
prior year
Corporate risks
Strategic risks
Market environment risks
Risks in relation to changes
to the legal environment
Risks due to inefficient
organizational structures
Operational risks
Property transactions
Refurbishment project risks
Vacancy risks
Shortfalls of rental payment risks
Maintenance risks
HR risks
IT risks
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
Breaches of covenants
Refinancing on unfavorable terms
Valuation risks
Interest rate risks
Tax risks
Liquidity risks
likely
unlikely
unlikely
likely
Possible
possible
possible
Possible
possible
possible
likely
unlikely
unlikely
possible
unlikely
likely
possible
possible
possible
unlikely
unlikely
Counterparty risks
very unlikely
high
moderate
moderate
very high
very high
high
high
high
low
low
very high
moderate
moderate
low
low
very high
very high
very high
high
high
high
high
H
L
L
H
H
M
M
M
L
L
H
L
L
L
L
M
H
H
M
M
M
L
unchanged
unchanged
unchanged
increased
unchanged
unchanged
unchanged
unchanged
unchanged
unchanged
increased
unchanged
unchanged
unchanged
unchanged
increased
unchanged
unchanged
unchanged
unchanged
increased
unchanged
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1.5.1. Impact of Ukrainian/middle east war and other geopolitical risks
There are considerable uncertainties regarding the global economic and geopolitical outlook, which
deteriorated significantly in the past two years due to multiple headwinds, all of which may continue
to intensify. First and foremost, Russia's invasion of Ukraine, as well as the conflict in the middle east
and their political and economic consequences, such as sanctions and countermeasure or supply chain
disruption, result in far-reaching risks. These conflicts can continue to 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. These conflicts 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 would have a significant impact on the market environment.
It would hinder the normalization of high inflation rates, 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 a
further monetary tightening.
Continued tighter 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 foreign exchange risks, 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
tensions in the Middle East, the Baltics, Eastern Europe, the Western Balkans, China, Taiwan, and
Iran). As a result, the predictability of economic development has deteriorated significantly.
Regarding alstria’s risk situation, the developments described have negative effects, in particular on
the market environment risks, property transaction risk, valuation risks, and refinancing and interest
rate risk (see table above). The effects are discussed in detail below in these risks’ descriptions.
1.5.2. 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.
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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 and
the other geopolitical risks (see explanations in Section V.1.5.1.). A further escalation of the war and
the tensions in the Near East would significantly worsen global growth prospects. A significant risk to
alstria’s letting potential and cost structure comes from continued existing supply chain bottlenecks.
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 continued high level of inflation could lead to serious distortions in global currency, capital, and
foreign exchange markets if central banks return to the tightening cycle. Since the fiscal and monetary
policy scope for action had already been largely exhausted and was further restricted by the latest
requirements for the federal budget through the ruling of the Federal Constitutional Court *, the
economic effects could be significantly more serious than in the 2022 and 2023 financial years.
In Germany, too, there have already been bankruptcies among real estate developers, which could
make refinancing in the office real estate sector less attractive for banks.
Additionally, the highly interconnected global economy remains vulnerable to natural disasters or
further pandemics.
After the severe economic downturn in the Corona years 2020 to 2021 and the renewed tension caused
by the conflict in the Middle East as well as other international areas of tension, namely Israel/Gaza,
the civil war in Yemen, which most recently led to the blockade of the Red Sea, 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.
* In its ruling of November 15, 2023 (ref. 2 BvF 1/22), the Federal Constitutional Court (BVerfG) declared the Second
Supplementary Budget Act 2021 to be null and void. This affects funds amounting to up to 60 billion euros from the Climate
and Transformation Fund (CTF). The CTF finances numerous measures to combat the climate crisis.
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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).
1.5.3. 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.
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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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.
A key value driver for the group is the refurbishment and repositioning of office properties held.
Significant investments are planned for the development projects designated for this purpose. A
significant proportion of these financial resources are to be generated from the sale of real estate. If
it is not possible to sell properties, the development projects may not be able to be carried out as
planned. This in turn would have consequences for the rentability of the buildings to be developed.
The lack of leases could result in significant losses of rental revenues. Even though two properties
were sold at the beginning of the financial year, one of which was reported as property held for sale
as of the previous year's reporting date, the market for commercial real estate transactions in
Germany has almost come to a standstill. These developments have significantly increased both the
impact and the likelihood of the risks relating to property transactions.
The risks associated with property transactions are now classified as high (H), after being assessed as
low (L) on the previous year's reporting date.
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 geopolitical tensions described in the market environment risks section,
these economic bottlenecks have not eased but have intensified. Supply chain issues and high inflation
make planning and executing construction projects difficult. The volume of construction projects
planned by alstria for the three financial years after the reporting period has increased compared to
the previous years’ long-term average. Even if some easing should be expected due to the sharp
decline in the initiation of project developments in the German real estate market, the risk resulting
from refurbishment projects is still classified as high (H).
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Vacancy risk
In the cases of lease terminations, leases that are not extended, and existing vacancies, there is a
risk that the rental area will not be re-let as planned, resulting in lower-than-anticipated revenues.
alstria’s budgeting is based on the assumption that rental areas can be re-let within a defined period
following the end of a lease. 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 previous reporting period 2022 and
most companies had employees moving back from home office to office space, the volume of new
leases for office and commercial space only slowly picked up 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 remained 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).
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. Now that the impact of
the COVID-19 pandemic on the economic situation of many market participants has now been
overcome, the situation remained tense for some market participants due to the recessionary market
environment. This poses a risk that alstria's tenants could also have difficulties 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 2023 The
uncertainties described above due to the war in Ukraine, high inflation and increased interest rates
on the economic situation of market participants and thus also of alstria's tenants have not yet been
reflected in a significantly increased default on receivables. To what extent the situation will affect
the future payment behavior of tenants in the medium term cannot be conclusively assessed at this
time.
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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. After the takeover by
Brookfield (see Section I.1.) employee motivation could be impaired 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 Acquirer states that employees are critical to alstria's success
and they will therefore support alstria in attracting, developing, and retaining talent and maintaining
a collaborative work environment. The Acquirer has also undertaken not to take any action that would
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.
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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 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).
1.5.4. 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
has to 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 has to consist of real
estate, and at least 75 % of gross income has to 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 may not
be less than 45 % of the fair value of its investment properties in accordance with IFRS.
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REIT corporations are exempt from German corporate income tax (KSt) and German trade tax
(GewSt). This tax exemption has been applied to the Company with a retrospective effect since
January 1, 2007.
Capital and investment management activities maintain the Company’s G-REIT status in order to
support its business activities.
According to Section 15 of the REIT Act, alstria’s equity (as reported in its consolidated financial
statements) must not fall short of 45 % of its immovable assets. 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.
As of the balance sheet date, the REIT equity ratio of the alstria Group was 43.0 %, after being 55.3 %
at the end of the 2022 financial year. As of the end of the 2023 financial year, alstria did not comply
with the minimum equity ratio in accordance with Section 15 of the REIT Act for the first time. The
REIT Law provides that if the conditions set out in Section 15 are not complied with in three
consecutive business years, the tax exemption lapses on expiry of the third business year.
As a result of the takeover by Brookfield (see Section I.1.) 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 4.63 % and was therefore
below the minimum free float rate for the second reporting date in a row.
If the free float is not restored by 31/12/2024 the company will loose the REIT status in application
of the REIT Law.
alstria constantly monitors compliance with all of the REIT criteria described, which the company
could influence. The violation of the two criteria, falling below the minimum free float quota and
falling below the REIT-EK quota, can be remedied by the expiry of the deadlines prescribed by the
law. However, the remaining deadlines for this have now shortened, as the criterion of falling below
the minimum free float ratio can only be met within one year from the balance sheet date. The free
float risk is also largely outside of the sphere of influence of the company as it is mainly driven by
shareholders behavior.
Another regulation of the REIT Act that could have a negative impact on alstria's financial position
results from the obligation to distribute at least 90% of the company's annual profit under local GAAP
in accordance with Section 13 (1) REIT Act. The risk relating to this requirement reflects the case,
that the alstria office REIT-AG has a local GAAP gain, but not enough cash to pay for the minimum
distribution as required by REIT-law.
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This could be the case if there are high non-cash profits, for example in the revaluation of a large
subsidiary, such as that of alstria office Prime Portfolio GmbH & Co. KG, whose shares were
significantly devalued in the reporting period, so that for the coming years there is a high non-cash
recovery potential, with the resulting obligation to pay dividends in the amount of the REIT
specifications.
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, as it was in the previous year.
Risks resulting from fraud or non compliance
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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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.
Physical risks: 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:
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▪ Regular update of physical climate-risk assessments to determine which buildings must be
upgraded accordingly.
▪
Insurances covering the portfolio from the loss of due to events such as fire, storms, and other
unforeseen incidents. For the fiscal year 2022, the cost of this insurance was EUR 3.4 m, covering
assets valued at EUR 5,864.9 m.
Transition risks: policy and legal risks: 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 alstria’s assets, which may, in turn, lower or nullify their rental potential and
ultimately decrease the company’s revenues and value. alstria’s 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 factors into 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).
▪ Prioritizing the development of existing assets over ground-up developments. 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.,
embodied carbon).
Market and reputational risks: The growing awareness of climate change, coupled with the increase
in environmental taxes like carbon taxes, is increasingly influencing tenant preferences for energy
efficient office spaces. Failing to meet this emerging demand could result in our assets becoming less
attractive, thereby affecting their rental value. alstria’s control process includes:
▪ Piloting new technologies in alstria’s corporate offices first to prevent complications and
reputational risks when rolling them out across our portfolio.
▪ 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.
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Systemic risks: alstria faces significant indirect risks from climate change; events occurring far away
can still impact its operations by affecting tenant economic stability. Key systemic risks—like climate
refugees, political instability, and disruptions in global supply chains—are expected to affect alstria
more imminently and often than direct risks.
Alstria addresses these risks as follows:
▪ Annual preparation and analysis of a carbon accounting report, including a balance sheet and
profit-loss statement, to detail alstria’s building portfolio's impact on climate change. This report
quantifies the company's operations' unpaid environmental impact, using EU ETS carbon pricing
for calculations.
▪ Facilitating shareholder investments in specific alstria projects through the green dividend.
Though these investments may not directly enhance alstria's risk/return metrics, they aim to
bolster shareholders' portfolio resilience by mitigating systemic climate risk in the real estate
sector and beyond.
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.
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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.
1.5.5. Financial risks
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.
The impact of a breach of covenants could be significant, as this would result in a restriction on the
Group's cash and cash equivalents (so-called cash trap). At the same time, due to the high
devaluations of the Group's investment properties, the LTV has increased significantly, as a result of
which breaches of covenants of loan agreements have become more likely (see Section 2.7
"Compliance with and calculation of the Covenants").
Overall, the risk from a breach of covenants is classified as high (H) as of December 31, 2023, after
being assessed as a medium risk (M) as of the previous year's reporting date.
Refinancing risks
The main financial instruments currently used by the Group are mortgage-backed bank loans and fixed
rate bonds. 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. alstria's Net LTV amounted to 58.4% at the end of the reporting period, compared to
43.7% at the previous year's reporting date. alstria’s creditworthiness was rated BB+ by the rating
agency Standard & Poor's as of the balance sheet date and up to the date of publication of this
combined management report, whereas it was still rated BBB - ("Investment Grade") as of the previous
year's reporting date. 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 18).
The change in the capital structure triggered by the change of control in January 2022 (see Section
I.1.) was implemented by the end of the reporting period. Alstria has thus shown that financing is
feasible in the current situation. On the other hand, planned financing of around EUR 1,047 million is
pending within the three-year risk assessment period.
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Therefore, the refinancing risk as of the balance sheet date is still classified as high risk (H), as was
the case on the previous year's reporting date.
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.
The risk of higher inflation, which could negatively affect the demand for real estate and thus its
value via the rise in interest rates, was taken into account by devaluing the property portfolio by
EUR 769.5 million. In addition, ceteris paribus higher nominal rental income would be expected in
return, so that valuation pressure appears to be manageable, at least in terms of model theory.
Historically, real estate has been inflation-proof in practice.
Since the increase in the rate of inflation and interest rates has developed more dynamically than
ever before in the last year and a half neither the further development nor the subsequent effects on
valuations can be fully predicted. This is also reflected in a transaction market for office properties
that has almost come to a standstill. Therefore, as in the previous year, the risk of unexpected
devaluations on the balance sheet date is classified as high (H).
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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 includes the use of classic interest rate swaps and 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. If the interest rate is higher than planned at the time of
refinancing, this could have a significant impact on the Group's financing costs. Even with inflation
currently weakening, situations could potentially arise in the future that would result in further
interest rate increases by the European Central Bank. The risk that the new loans trigger higher
interest charges than planned is still classified as a medium risk (M) as of the balance sheet date.
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.
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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.
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 Acquirer has guaranteed the company that it will refrain from transferring a harmful number of
shares. In addition, the Acquirer 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.
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Liquidity risk
One of alstria’s core processes is cash management. The Company manages its future cash position
and monitors its progress daily. 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
implemented 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 expire within
the next three years. Due to the high volume of regular refinancing requirements and a lower
inventory of cash and cash equivalents of EUR 116 million as of the balance sheet date (December 31,
2022: EUR 365 million) compared to the previous year, the liquidity risk from the obligation to repay
loans is now considered a medium risk (M) while last year it was rated as low (L).
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. 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.
1.6. 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.
alstria's risk environment was affected in the previous year by the consequences of the Russian war
of aggression on Ukraine. The war in Ukraine triggered a sharp rise in inflation rates via energy prices
and, in response, interest rates. This had affected the refinancing and valuation risks in particular.
Furthermore, questions arose regarding the assessment of certain financial risks and risks arising from
violations of the REIT Act through the takeover (see I.1.).
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These developments resulted in an overall moderate increase in risks in 2022.
There were no developments in the 2023 financial year that led to a fundamentally new assessment
of the risk situation or brought with them new risk areas. The developments manifested themselves,
on the one hand, because inflation initially remained at a high level and led to further interest rate
increases. At the end of the year, however, there was a plateau. The central banks of the USA and
the Eurozone recently refrained from further interest rate increases. This resulted in the risk situation
settling at the relatively high level of the previous year. With regard to the valuation risk, the market
parameters led to a more significant devaluation of the alstria real estate portfolio in the 2023
financial year. This means that the valuation risks of the previous year materialized. This
development, which is not entirely unexpected, takes pressure off the forecast for the further
development of real estate values. At the same time, however, the indicators are still too inconsistent
to forecast whether the assessment has already bottomed out or not. This risk is therefore classified
as material, unchanged from the previous year. Even if no fundamentally new risk areas were
identified, the risk of an illiquid transaction market for real estate came into focus, as the investments
in the real estate portfolio are to be generated from the funds from the sale of investment properties.
If this is not possible due to the illiquid transaction market for real estate, there could be a negative
impact on rental income if the properties cannot be let or cannot be let at the planned rental prices
due to a development and renovation backlog.
As a result for the 2023 financial year, compared to 2022, there were small percentage changes 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 17.3 % (December 31, 2022: 14.5 %) of all identified risks, whereas medium risks
accounted for 30.9 % (December 31, 2022: 30.9 %). 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 perspective, consistent monitoring of the liquidity situation, the long-
term refinancing position with a balanced maturity profile of the loans and the equity ratio, which is
still 38% after the devaluation, provide a scope that limits the risk that could arise if real estate
valuations come under further pressure, for example as a result of interest rate increases driven by
inflation.
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 150.2 million as of the balance sheet
date, compared to EUR 89.4.1 million as per December 31, 2022.
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The increase is essentially due to the possible payment obligations for noncompliance with the
minimum distribution ratio as described in section 1.3.5 “Risks from violations of the REIT law”.
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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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 redevelopment
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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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 5.3 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. alstria decision not to participate in new construction, but focus solely on refurbishing existing
real estate, offers the opportunity to achieve greater flexibility in the market for rental space and
disposal of investment properties due to the increased focus of regulators, investors and tenants on
sustainability aspects associated with the needs to improve existing stock, and increased concerns
around embodied carbon.
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.
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VI. SUSTAINABILITY REPORT*
In November 2023, alstria published its annual sustainability report for the financial year 2022. 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 2022/23.
* This section is an unaudited statement.
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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, 2023, alstria’s share capital amounted to
EUR 178,561,572.00, divided into 178,561,572 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. The shares held by the majority shareholder Brookfield were pledged as part of a financing
agreement and are subject to the usual associated restrictions on the transfer of shares. Similarly,
29,630 shares for which a call option exists in favour of Brookfield are subject to a transfer restriction.
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 Corportion, Toronto, Canada held 95.39 % of the voting rights in the Company as of
December 19, 2023. In each case, 9.27% of the voting rights in the Company are held directly by
Alexandrite Lake Lux Holdings I S.à r.l., Alexandrite Lake Lux Holdings II S.à r.l., Alexandrite Lake Lux
Holdings III S.à r.l., Alexandrite Lake Lux Holdings IV S.à r.l., Alexandrite Lake Lux Holdings V S.à r.l.,
Alexandrite Lake Lux Holdings VI S.à r.l., Alexandrite Lake Lux Holdings VII S.à r.l., Alexandrite Lake
Lux Holdings VIII S.à r.l. and Alexandrite Lake Lux Holdings IX S.à r.l. as well as 9.99% held directly
by Lapis Luxembourg Holdings S.à r.l. and less than 3% were held by Lapis Luxembourg Holdings S.à
r.l. A further 0.02% of the voting rights are held by Lapis Luxembourg Holdings S.à r.l. via an
instrument pursuant to Section 38 para. 1 no. 1 WpHG (call option). As of the balance sheet date
December 31, 2023, alstria was not aware of any other shareholders whose shareholding exceeded
10 % of voting rights.
4. SHARES WITH SPECIAL RIGHTS
There are no shares with special rights of control.
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5. SYSTEM OF CONTROL FOR ANY EMPLOYEE SHARE SCHEME IN WHICH EMPLOYEES DO NOT
DIRECTLY EXERCISE CONTROL RIGHTS
Employees who hold alstria shares exercise their rights of control as any other shareholders do, in
accordance with the applicable law and the Articles of Association.
6. APPOINTMENT AND DISMISSAL OF MANAGEMENT BOARD AND AMENDMENTS TO THE ARTICLES
OF ASSOCIATION
The appointment and dismissal of members of the Management Board are governed by Sections 84
and 85 AktG. In accordance with Section 7 para. 1 of the Company’s Articles of Association, alstria’s
Management Board consists of one or more members. The number of members of the Management
Board is determined by the Supervisory Board in accordance with Section 7 para. 2 of the Articles of
Association. 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 require a resolution by the General Meeting of shareholders
in accordance with Section 179 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 resolutions passed by the
Annual General Meeting on May 4, 2023 and the Supervisory Board on July 19, 2023: In Section 9 para.
1, the number of members of the Supervisory Board was changed from six to four. Furthermore,
Section 5, paras. 1, 2 and 8 of the Articles of Association were formally adapted to a capital increase
executed from the Company’s Conditional Capital III 2020.
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.
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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.
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 1729,700.00 by
issuing up to 729,700 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 May 4, 2023, 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
May 3, 2028. 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).
By resolution of the Annual General Meeting on May 4, 2023, the Management Board is authorised to
use shares acquired on the basis of this or previously granted authorisations - in addition to sale via
the stock exchange or by offer with subscription rights to all shareholders - excluding shareholders'
subscription rights as follows:
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▪ They may be sold in return for cash, provided that the sale price is not significantly lower
than the market price of the Company's shares at the time of sale. The Management Board
may only make use of this authorisation in such a manner that the sum of the (i) shares sold
in accordance with this authorisation, (ii) shares issued using the authorised capital (article 5
paragraph 3, 4 and 4a of the Articles of Association) and (iii) conversion and option rights for
shares granted upon issuance of debentures with conversion or option rights or conversion
obligations – in each case with the exclusion of the shareholders’ subscription rights – does
not exceed 10 % of the share capital at the time the resolution on the sale of the shares is
passed.
▪ They may be sold and transferred in return for contributions in kind, in particular also in the
context of mergers or the acquisition of companies, business units, shareholdings, or other
assets. A sale and transfer, as used here, shall also include the granting of conversion or
subscription
▪
rights as well as purchase options and the lending of shares in the context of a securities
lending transaction.
▪ They may be used in order to satisfy the rights of holders of debentures with conversion or
option rights or conversion obligations issued by the Company or by its subsidiaries.
▪ They may be offered for acquisition and transferred to individuals employed by the Company
or a subsidiary of the Company.
▪ They may be used for distributions in kind to the shareholders, also a so-called scrip dividend,
meaning the shareholders’ right to choose shares of the Company instead of a cash dividend.
▪ They can be redeemed.
8. SIGNIFICANT AGREEMENTS OF ALSTRIA AG THAT TAKE EFFECT UPON A CHANGE OF CONTROL
FOLLOWING A TAKEOVER BID
Financing agreements of alstria AG and its group companies contain clauses common to such contracts
regarding a change of control. In particular, the agreements entitle the lenders to request repayment
of the utilizations or an obligation by alstria to repay the utilizations in the event that any person,
company, or a group of persons should acquire, directly or indirectly, at least or more than 50 % of
the voting rights, capital shares or otherwise 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 2,362 million on the balance sheet date. In addition, a loan agreement of
alstria for EUR 90 million contains an obligation to repay the utilization if, following a change in the
legal form of alstria AG, another person or group of persons (other than Brookfield Corporation or a
company controlled by it) holds more than 25% of the voting rights if the lender can no longer fulfil
the requirements of regulatory or statutory provisions.
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Hedging agreements concluded in connection with these financing agreements grant the contractual
partner a right of termination if the underlying financing agreement is repaid prematurely.
9. COMPENSATION AGREEMENTS WITH MANAGEMENT BOARD MEMBERS AND EMPLOYEES IN CASE
OF A TAKEOVER BID
The employment contract with the CEO provides for a right of termination for the CEO in the event
of a change of control that significantly changes the position of the Management Board member (e.g.
by significantly reducing his responsibilities). A change of control is deemed to have occurred if (i) a
third party acquires at least 30% of the voting rights in the Company pursuant to Sections 29,30
German Takeover Law (WpÜG) or (ii) alstria, as a dependent entity, concludes an intercompany
agreement within the meaning of Sections 291 et seq. AktG or (iii) is merged into another company
pursuant to Sections 2 et seq. 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. If this right of termination is exercised, the member of the Management
Board is entitled to receive a maximum of two years' full remuneration. In addition to the basic
remuneration, the short-term incentive and the long-term incentive are also included in the
calculation of the annual remuneration, whereby the total remuneration for the previous full financial
year is taken into account in each case. The same applies in the event that the appointment of a
member of the Management Board is revoked in connection with a change of control.
With employees, no compensation agreements 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, 2023, alstria had 189 employees (compared to 181 on December 31, 2022). The
annual average number of employees was 185 (compared to 177 in the previous year). These figures
exclude Management Board members.
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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, 2023 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.”
4. DIVIDEND
In the absence of balance sheet profit, the Management Board, in agreement with the Supervisory
Board, do not intends to propose to the Annual General Meeting the payment of a dividend. In the
event that there are significant changes in the company's available liquidity in the further course of
the 2024 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 is subject to
the approval of the General Meeting.
Hamburg, March 1, 2024
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
alstria Annual Report 2023
64
Consolidated Financial Statements
DETAIL INDEX CONSOLIDATED FINANCIAL STATEMENTS
B.
CONSOLIDATED FINANCIAL STATEMENTS ................................................ 66
CONSOLIDATED INCOME STATEMENT ............................................................... 66
I.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................... 67
II.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................ 68
III.
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................... 70
IV.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY............................................. 72
V.
VI.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 73
1. GENERAL BASICS ......................................................................................... 73
2. BASIS OF PREPARATION ................................................................................. 74
3. SEASONAL OR ECONOMIC EFFECTS ON BUSINESS .................................................. 105
4. SEGMENT REPORTING ................................................................................. 105
5. NOTES TO THE CONSOLIDATED INCOME STATEMENT ............................................. 106
6. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS ............... 112
7. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND
LIABILITIES .............................................................................................. 124
8. OTHER NOTES .......................................................................................... 133
9. RELATED PARTY RELATIONSHIPS ..................................................................... 135
10. EARNINGS PER SHARE ................................................................................. 136
11. DIVIDENDS PAID AND DIVIDENDS PROPOSED ........................................................ 137
12. EMPLOYEES ............................................................................................. 138
13. LONG-TERM REMUNERATION ......................................................................... 138
14. FINANCIAL RISK MANAGEMENT ....................................................................... 144
15. SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD ............................. 152
16. UTILIZATION OF EXEMPTING PROVISIONS ........................................................... 152
17. DISCLOSURES PURSUANT TO THE WERTPAPIERHANDELSGESETZ [GERMAN SECURITIES
TRADING ACT] AND EUROPEAN MARKET ABUSE REGULATION [MAR] ............................ 153
18. DECLARATION OF COMPLIANCE PURSUANT TO AKTG SECTION 161 ............................. 154
19. AUDITORS’ FEES ........................................................................................ 155
20. MANAGEMENT BOARD ................................................................................. 156
21. SUPERVISORY BOARD .................................................................................. 156
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alstria Annual Report 2023
Consolidated Financial Statements
B. CONSOLIDATED FINANCIAL STATEMENTS
I. CONSOLIDATED INCOME STATEMENT
For the period from January 1 to December 31, 2023
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 adjustment of investment
property
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
2.3.3
5.9
2023
192,026
38,167
-66,257
163,936
-9,241
-10,884
20,983
-848
2022*
adjusted
182,819
38,170
-67,985
153,004
-9,647
-16,059
16,219
-3,000
-769,541
-179,581
81
-605,514
2,896
-36,168
-47,378
-37,056
17
-721
-653,596
222
-653,374
-782
-499
-74,505
-109
-74,614
Shareholders of alstria office REIT-AG
-653,374
-74,614
Earnings per share in EUR
Basic earnings per share
Diluted earnings per share
10
10
-3.66
-3.66
-0.42
-0.42
* adjusted, see Section “Disclosure of changes in accounting policy" in Note 2.2.
alstria Annual Report 2023
66
Consolidated Financial Statements
II. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from January 1 to December 31, 2023
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
6.5
Total comprehensive income for the period
Total comprehensive income attributable to
Shareholders of alstria office REIT-AG
2023
-653,374
-39,071
-39,071
-692,445
2022
-74,614
32,663
32,663
-41,951
-692,445
-41,951
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alstria Annual Report 2023
Consolidated Financial Statements
III. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2023
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
Derivatives
Cash and cash equivalents
thereof restricted
Assets held for sale
Total current assets
Notes
Dec. 31, 2023
Dec. 31, 2022
6.1
6.2
6.3
6.3
6.4
6.5
6.6
6.6
6.5
6.7
6.8
3,971,253
4,606,848
0
21,395
635
95,350
6,587
101
20,247
504
94,891
34,767
4,095,220
4,757,358
10,814
113
5,735
9,354
116,282
8,031
0
142,298
8,166
1,343
5,384
364,973
8,761
26,550
406,416
Total assets
4,237,518
5,163,774
alstria Annual Report 2023
68
Consolidated Financial Statements
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
Derivatives
Total noncurrent liabilities
Current liabilities
Limited partnership capital noncontrolling
interests
Short-term loans
Trade payables
Notes
7.1
6.5
7.2
7.3
7.4
7.5
7.2
7.3
7.5
Profit participation rights
5.4; 13.2
Derivatives
Income tax liabilities
Other provisions
Other current liabilities
Total current liabilities
Total liabilities
7.6
7.4
7.5
EQUITY AND
LIABILITIES
Dec. 31, 2023
Dec. 31, 2022
178,562
245,961
-6,408
1,195,947
3,485
1,617,547
98,297
2,177,607
1,672
13,203
10,001
178,291
507,640
32,663
1,849,321
3,485
2,571,400
120,959
2,026,290
1,802
13,363
0
2,300,780
2,162,414
21
261,777
4,717
0
2,747
2,177
3,008
44,744
319,191
2,619,971
21
372,142
3,581
279
0
2,188
525
51,224
429,960
2,592,374
Total equity and liabilities
4,237,518
5,163,774
69
alstria Annual Report 2023
Consolidated Financial Statements
IV. CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ending December 31, 2023
EUR k
Notes
2023
2022
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
Proceeds from the equity release of interests in joint ventures
Acquisition of other property, plant, and equipment
Payments for investment in financial assets
6.4
-653,374
-74,614
-19,552
66,929
-222
-4,062
41,118
109
751,439
174,535
6,210
-81
1,557
6,678
-2,896
965
-3,584
-5,958
-7,497
141,825
13,386
-66,349
222
89,084
-15,122
120,753
3,115
-34,343
-2,446
87,079
-137,357
29,750
-114,886
161,570
-22
118
-1,559
-463
-882
0
-703
-149
Net cash used in/ generated from investing activities
-109,533
44,950
alstria Annual Report 2023
70
Consolidated Financial Statements
EUR k
Notes
2023
2022
3. Cash flows from financing activities
Cash received from cash equity contributions
7.1
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
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
11
6.5
271
0
-3,851
430,937
-6,677
-728
-262,469
-377,620
-8,105
258
-1
-3,810
760,000
-8,019
-457
-756,640
-69,483
-2,588
Net cash used in financing activities
-228,242
-80,740
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
-248,691
364,973
51,289
313,684
thereof restricted: EUR 8.031 k; previous year: EUR 8,761 k
6.7
116,282
364,973
71
alstria Annual Report 2023
Consolidated Financial Statements
V. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from January 1 to December 31, 2023
EUR k
Notes
Share
capital
Capital
surplus
Hedging
reserve
Retained
earnings
Revaluation
surplus
Total
equity
As of Dec. 31, 2022
178,291
507,640
32,663
1,849,321
3,485
2,571,400
0
0
0
0
-653,374
-39,071
0
-39,071
-653,374
-262,469
520
0
0
0
0
0
0
0
0
0
0
0
0
-653,374
-39,071
-692,445
-262,469
520
541
13.2
271
270
As of Dec. 31, 2023
7.1
178,562
245,961
-6,408
1,195,947
3,485
1,617,547
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 2023
Consolidated profit
Other comprehensive
income
Total comprehensive
income
Payments of dividends
11
Share-based
Remuneration
Conversion of
convertible
participation rights
5.4;
13.2
Changes in the
financial year 2022
Consolidated profit
Other comprehensive
income
Total comprehensive
income
Payments of dividends
11
Share-based
Remuneration
Conversion of
convertible
participation rights
5.4;
13.2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-74,614
32,663
0
32,663
-74,614
-756,640
2,392
0
0
0
0
0
0
0
0
0
0
0
0
-74,614
32,663
-41,951
-756,640
2,392
516
13.2
258
258
As of Dec. 31, 2022
7.1
178,291
507,640
32,663
1,849,321
3,485
2,571,400
alstria Annual Report 2023
72
Consolidated Financial Statements
VI. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL BASICS
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.
Following the successful takeover of the company by Alexandrite Lake Lux Holding S.a r.l, it was
included in the consolidated financial statements of Alexandrite's ultimate parent company, Brookfield
Corporation, Toronto, Canada (hereinafter "Brookfield"), for the first time on January 11, 2022.
Brookfield Corporation 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, 2023,
95.37% of the shares in the company were allocated to Brookfield through its subsidiaries, 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.
In addition, the company following internal reorganization within the Brookfield Group the company is
consolidated since January 1, 2023 within the financial statements of Brookfield Property Partners LP,
Hamilton, Bermuda (BPY). BPY is listed in both the United States (Nasdaq) and Canada (Toronto). BPY
consolidated
financial
statements
are
published
on
the
company website
at
https://bpy.brookfield.com/.
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 March 1, 2024.
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, 2023.
73
alstria Annual Report 2023
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
2.1.1. 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, 2023:
EU
Endorsement
Nov. 19, 2021
Standard/
interpretation
IFRS 17
Sept. 8, 2022
Amendments to IFRS 17
March 2, 2022
Amendments to IAS 1
March 2, 2022
Amendments to IAS 8
Aug. 11, 2022
Amendments to IAS 12
Nov. 08, 2023
Amendments to IAS 12
Content
New standard “Insurance contracts”
Insurance contracts: Initial Application of
IFRS 17 and IFRS 9 – Comparative Information
Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies
Definition of Accounting Estimates
Income Taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
Income Taxes: International Tax Reform — Pillar Two Model Rules:
Exception to the requirements in the standard that an entity does not
recognise and does not disclose information about deferred tax assets and
liabilities related to the OECD pillar two income taxes.
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 2023
74
Consolidated Financial Statements
2.1.2. 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. 20, 2023
Dec. 19, 2023
Not yet
endorsed
Not yet
endorsed
Standard/
interpretation
Amendments to
IFRS 16
Amendments to
IAS 1
Amendments to
IAS 7
Amendments to
IAS 21
Content
Lease Liability in a Sale and Leaseback
Applicable for FY
beginning on/after
Jan. 1, 2024
Presentation of Financial Statements: Classification of
Liabilities as Current or Noncurrent
Supplier Finance Arrangements (Proposed amendments
to IAS 7 and IFRS 7). Qualitative and quantitative
information about supplier finance arrangements
The Effects of Changes in Foreign Exchange Rates: Lack
of Exchangeability.
Jan. 1, 2024
Jan. 1, 2024
Jan. 1, 2025
No significant impact on financial reporting is expected from the other new standards and
amendments to the existing standards listed above. The changes to IAS 1 for loans with an extension
option could only result in changes with regard to the presentation of the maturity of loans. If the
requirements for exercising the extension are met on the balance sheet date, the end of the term is
postponed to the possible end of the term after exercising this option. alstria reports a loan of
EUR 107,000 k as current because the end of the term is within 12 months of the balance sheet date.
Due to the extension option described, this loan would have to be reported as a noncurrent loan under
the new regulations.
The Group did not adopt any new or amended standards or interpretations early in the 2023 financial
year.
2.2.
Changes in accounting policies
2.2.1. Corporate information
After the takeover by Brookfield, the company was included in the consolidated financial statements
of Brookfield Corporation for the first time on January 11, 2022. Brookfield prepares IFRS consolidated
financial statements as of December 31st as the balance sheet date.
To implement the Brookfield Group guidelines, reconciliations were to be made for certain items in
the income statement. With effect from January 1, 2023, alstria has therefore adjusted its accounting
poli-cies to harmonize the presentation with the parent group. The effects are explained below.
2.2.2. Real estate operating expenses
Certain costs incurred from the management of an investment property were previously treated as
per-sonnel expenses or administrative expenses. They are now reported under property operating
costs. This increases transparency with regard to the more accurate consideration of the cost type.
75
alstria Annual Report 2023
Consolidated Financial Statements
2.2.3. Net Result from fair value adjustments on investment property
Certain costs incurred as part of development projects in existing properties were previously shown
directly in the expense type in which they were incurred. Effective January 1, 2023, they are to be
capitalized as construction activities in accordance with Brookfield corporate policies. This relates to
the proportion of real estate operating expenses, personnel expenses and administrative expenses
that were paid for investments in development projects. They will be capitalized first. The capitalized
costs can impact the net result from fair value adjustments on investment property as a result of the
fair value measurement as of the reporting date.
The effects of these changes on the income statement are shown in the following tables.
The changes in accounting methods described do not have any impact on the balance sheet and thus
the equity of the alstria Group as the consolidated result for the period remains unchanged.
alstria Annual Report 2023
76
Consolidated Financial Statements
The following overview shows the adjustments resulting from the change in accounting policy for
2023:
Net rental revenues
Service charge income
Real estate operating costs
Net Rental Income
Administrative expenses
Personnel expenses
Other operating income
Other operating expenses
Net result from fair value adjustments
on investment property
Result on disposal of investment property
Net Operating Result
Net financial result
Share of the result of joint ventures and equity-accounted
investments
Net result from fair value adjustments
on financial derivatives
Pre-Tax Income (EBT)
Income tax result
Consolidated profit for the period
Current
Adjustments
2023
EUR k
192,026
38,167
-66,257
163,936
-9,241
-10,884
20,983
-848
2023
EUR k
0
0
4,003
4,003
-1,079
-11,164
0
0
Previous
accounting
policy
2023
EUR k
192,026
38,167
-62,254
167,939
-10,320
-22,049
20,983
-848
-769,541
8,240
-761,301
81
-605,514
-47,378
17
-721
-653,596
222
-653,374
0
0
0
0
0
0
0
0
81
-605,514
-47,378
17
-721
-653,596
222
-653,374
77
alstria Annual Report 2023
Consolidated Financial Statements
The following overview shows the reported prior-year figures as they would appear if the current
accounting policies had already been applied in the prior-year’s reporting period:
As stated prior
year
Adjustments
Net rental revenues
Service charge income
Real estate operating costs
Net Rental Income
Administrative expenses
Personnel expenses
Other operating income
Other operating expenses
Net result from fair value adjustments
on investment property
Gain/Loss on disposal of investment property
Net Operating Result
Net financial result
Share of the result of joint ventures and equity-accounted
investments
Net result from fair value adjustments
on financial derivatives
Pre-Tax Income (EBT)
Income tax result
Consolidated profit for the period
2022
EUR k
182,819
38,170
-62,043
158,946
-10,441
-26,994
16,219
-3,000
-173,794
2,896
-36,168
-37,056
-783
-499
-74,505
-109
-74,614
Current
accounting
policy
2022
EUR k
182,819
38,170
-67,985
153,004
-9,647
-16,059
16,219
-3,000
2022
EUR k
0
0
-5,942
-5,942
794
10,935
0
0
-5,787
-179,581
0
0
0
0
0
0
0
0
2,896
-36,168
-37,056
-783
-499
-74,505
-109
-74,614
alstria Annual Report 2023
78
Consolidated Financial Statements
2.3.
Basis of consolidation
2.3.1. Subsidiaries
The consolidated financial statements incorporate the financial statements of alstria office REIT-AG
and entities controlled by the Company and its subsidiaries. Control is achieved when the Company
▪ exercises authority over the investee;
▪
▪
is exposed or has rights to variable returns from its involvement with the investee; and
can use its authority to affect the amount of its returns.
The Company reassesses whether it controls an investee if facts and circumstances indicate changes
to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, the income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of
profit or loss and other comprehensive income from the date when the Company gains control until
the date when the Company ceases to control the subsidiary.
The profit or loss and each component of the other comprehensive income are attributed to the
Company’s owners and noncontrolling interests. The total comprehensive income of the subsidiaries
is attributed to the Company’s owners and noncontrolling interests, even if this results in the
noncontrolling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to align their
accounting policies with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions
between members of the Group are eliminated in full upon consolidation.
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.
79
alstria Annual Report 2023
Consolidated Financial Statements
When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is
calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any
retained interest, and
(ii) the previous carrying amount of the assets (including any goodwill) and liabilities of the
subsidiary and any noncontrolling interests.
All amounts previously recognized in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary
(i.e., reclassified to profit or
loss or transferred to another category of equity, as
specified/permitted by applicable IFRSs).
Business combinations
Acquisitions of businesses within the meaning of IFRS 3 are accounted for using the acquisition
method. The consideration transferred in a business combination is measured at fair value, which is
calculated as the sum of the acquisition-date fair values of the assets transferred by the Group,
liabilities incurred by the Group to the former owners of the acquiree, and the equity interests issued
by the Group in exchange for control of the acquiree. Acquisition-related costs are generally
recognized in profit or loss as incurred.
At the acquisition date, the identifiable acquired assets and the assumed liabilities are recognized
at their fair value.
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.
alstria Annual Report 2023
80
Consolidated Financial Statements
When a business combination is achieved in stages, the Group’s previously held equity interest in
the acquiree is remeasured to its acquisition-date fair value, and the resulting gain or loss, if any,
is recognized in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date that have previously
been recognized in other comprehensive incomes are reclassified as profit or loss, where such
treatment would be appropriate if that interest were disposed of.
Significant companies wherein alstria office REIT-AG is directly or indirectly able to significantly
influence financial and operating decisions (associates), or directly or indirectly share control (joint
ventures), are accounted for using the equity method.
The acquisition of real estate property companies that do not represent a business in the sense of
IFRS 3 is shown as a direct purchase of real estate (asset deal). The acquisition costs of the property
company are assigned to the individually identifiable assets and liabilities on the basis of their fair
values. In this case, there is no goodwill.
2.3.2. Fully consolidated subsidiaries
The Group of consolidated companies, including alstria office REIT-AG, comprised 41 companies in
the financial year (2022: 44). As of the balance sheet date, 37 companies (prior-year balance sheet
date: 38 companies) existed. In addition one joint venture and one noncontrolling interest have been
accounted for using the equity method, with these companies being liquidated or sold during the
financial year.
81
alstria Annual Report 2023
Consolidated Financial Statements
In the consolidated financial statements of alstria office REIT-AG, the following companies are
included (statement according to Section 313 para. 2 and Section 315 (e) HGB):
No. Company
Headquarters
1 alstria office REIT-AG
Beehive solutions GmbH (formerly: alstria
Bamlerstraße GP GmbH)
2
3 alstria Englische Planke GP GmbH1)
4 alstria Mannheim/Wiesbaden GP GmbH1)
alstria Portfolio 4 GP GmbH (formerly alstria
Gänsemarkt Drehbahn GP GmbH)
5
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
6 alstria Prime Portfolio 3 GP GmbH & Co. KG2)
Hamburg
7 alstria Prime Portfolio 4 GP GmbH & Co. KG2)
Hamburg
8 alstria Prime Portfolio 5 GP GmbH & Co. KG2)
Hamburg
9 alstria Portfolio 1 GP GmbH
10 alstria Portfolio 3 GP GmbH
11 alstria Prime Portfolio 2 GP GmbH
12 alstria Prime Portfolio GP GmbH
13 alstria solutions GmbH
alstria Prime Portfolio 5 GP GmbH (formerly
alstria Steinstraße 5 GP GmbH)
14
15 beehive GmbH & Co. KG3)
16 First Pine GmbH & Co. KG3)
alstria office Prime Portfolio
GmbH & Co. KG3)
17
18 alstria office PP Holding I GmbH & Co. KG3)
19 alstria office Kampstraße GmbH & Co. KG3)
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
Hamburg
20 alstria office Berliner Straße GmbH & Co. KG3)
Hamburg
alstria office Hanns-Klemm-Straße
GmbH & Co. KG3)
21
22 alstria office Maarweg GmbH & Co. KG3)
Hamburg
Hamburg
23 alstria office Heerdter Lohweg GmbH & Co. KG3)
Hamburg
24 alstria office Solmsstraße GmbH & Co. KG3)
Hamburg
25 alstria office PP Holding II GmbH & Co. KG3)
Hamburg
alstria office Wilhelminenstraße
GmbH & Co. KG3)
26
27 alstria office Hauptstraße GmbH & Co. KG3)
alstria office Mergenthaler Allee
GmbH & Co. KG3)
28
Hamburg
Hamburg
Hamburg
29 alstria office Am Hauptbahnhof GmbH & Co. KG3)
Hamburg
30 alstria office Kastor GmbH & Co. KG3)
Hamburg
31 alstria office Heidenkampsweg GmbH & Co. KG3)
Hamburg
alstria office An den Dominikanern
GmbH & Co. KG3)
alstria office Carl-Schurz-Straße
GmbH & Co. KG3)
32
33
Hamburg
Hamburg
34 alstria office Pempelfurtstraße GmbH & Co. KG3)
Hamburg
35 alstria office Frauenstraße GmbH & Co. KG3)
Hamburg
alstria office Olof-Palme-Straße
GmbH & Co. KG3)
36
37 alstria office Region Nord GmbH & Co. KG3)
Hamburg
Hamburg
Held
by No.
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
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
89.0
89.0
89.0
89.0
89.0
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
17
18
18
18
18
18
18
17
25
25
25
25
25
25
25
25
25
25
25
25
Business activity
Asset management;
Holding
Service company
General partner
General partner
General partner
General partner
Own property
Own property
Own property
General partner
General partner
General partner
General partner
Service company
General partner
Service company
Own property
Intermediate holding
Intermediate holding
Own property
Own property
Own property
Own property
Own property
Own property
Intermediate holding
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
Own property
alstria Annual Report 2023
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Consolidated Financial Statements
No. Company
Headquarters
Equity
interest(%)
Held
by No.
38 alstria office Region Süd GmbH & Co. KG3)
Hamburg
39 alstria office Region Mitte GmbH & Co. KG3)
Hamburg
40 alstria office PP Holding III GmbH & Co. KG1); 3)
Hamburg
41 alstria office Vaihinger Straße GmbH & Co. KG1); 3)
Hamburg
89.0
89.0
89.0
89.0
25
25
17
40
Business activity
Own property
Own property
Intermediate holding
Own property
1) Terminated by accretion or merger with its shareholder in the 2023 financial year.
2) Founded in fiscal year 2023.
3) 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.
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, 14 domestic subsidiaries, and 21 domestic second-tier subsidiaries.
Four subsidiaries (No. 3, 4, 40 and 41 of the table) were terminated as a result of mergers. Three
companies (No. 6-8 of the table) were newly founded.
The reporting date for the consolidated financial statements is the same as the reporting date for the
alstria office REIT-AG and consolidated subsidiaries.
There were no further changes to the consolidated group in the 2023 financial year in comparison to
the consolidated financial statements as of December 31, 2022. All of the Group’s companies are land
or property management companies, holding companies, or general partner companies.
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2.3.3. Interests in joint ventures and noncontrolling interests
As of the balance sheet date, the group no longer holds any shares in joint ventures and associated
companies. The shareholding in an associated company, which was devalued to zero euros in the 2022
financial year due to its business situation, was sold in the reporting period for a symbolic purchase
price of one euro. As of the previous year's reporting date, there was also an interest in a joint venture
that was liquidated in the 2023 financial year. The book value of the associated company was EUR 0
as of the previous year's reporting date, and that of the joint venture was EUR 101 k. Accounting was
carried out using the equity method. The book value as of the previous year's reporting date of EUR
101 thousand related to the joint venture.
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, 2023
Dec. 31, 2022
n/a
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.
2.4.
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.
2.4.1. Judgements
Management has made the following discretionary decisions in line with the Group’s accounting
policies. Apart from decisions involving estimations, it has the most significant effect on the amounts
recognized in the financial statements:
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Consolidated Financial Statements
Operating lease commitments—the Group as lessor
The Group has entered into commercial property leases in its investment-property portfolio. Based
on an evaluation of the terms and conditions of the arrangements, the Group has determined that all
significant risks and rewards of ownership of these properties remain with the Group. As a result, the
contracts are treated and accounted for as operating leases.
2.4.2. 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 and negative fair values of derivatives (see Note 6.5);
▪ expected credit loss (see Note 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 long term compensation granted to Management Board (see Note
13.1) and ACES granted to employees (so called alstria Collective Employee Scheme shares see
Note 13.2).
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, 2023
Dec. 31, 2022
Investment property and properties held for sale, without prepayments made
3,971,253
4,633,398
Positive fair values of derivatives
Expected credit loss
Limited partnership capital of noncontrolling interests
Other current provisions
thereof ACES and longterm compensation board
Other noncurrent provisions
thereof ACES and longterm compensation board
Negative fair values of derivatives
15,941
636
98,318
3,008
2,543
1,672
1,672
12,748
34,767
1,469
120,980
525
0
1,802
1,802
0
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2.5.
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.
2.5.1. 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.”
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.
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2.5.2. Investment property
Investment properties are properties held to earn rental income and/or for capital appreciation
(including property under construction for such purposes). They are not used in production or for
administrative purposes. This includes properties that are in production and are intended to serve the
aforementioned purposes. Investment properties are measured initially at cost at the time of purchase
or construction, including transaction costs. In accordance with IAS 40.17, costs incurred subsequently
for dismantling, replacement of parts, or maintenance of property are also included, insofar as these
contribute to an increase in the fair value of the property.
Costs of debt, which can be directly allocated to the acquisition or production of investment property,
are capitalized in the year in which they arise.
For subsequent measurement, the Company uses the fair value model according to IFRS 13.61 et seq.,
which reflects an income-capitalization approach combined with market conditions at the end of the
reporting period.
In the context of the fair value hierarchy described above, only inputs from Levels 2 and 3 are
applicable for property. The majority is categorized as Level 3. Inputs used in the valuation approach
that the Group has adopted for all of its properties include rental revenues, adjusted yield figures
(e.g., property-based capitalization rates), and vacancy periods. These inputs are not observable in
markets and are considered significant. Therefore, the fair value measurement used by the Group for
valuation of all investment properties is generally categorized as Level 3. Information about the
significant unobservable inputs used and their sensitivities to the fair values of the Group’s investment
property is presented in Note 6.1.
When determining the fair value, climate-related risks are indirectly taken into account on a property-
specific basis through appropriate deductions for the expected cash inflows and surcharges for future
investment expenditure.
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.
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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.
2.5.3. Valuation process for investment properties
The fair value hierarchy gives no information about the applied valuation techniques.
The basis for deriving fair value, as defined by IFRS 13.61, should, if possible, be based on valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, thereby maximizing the use of relevant observable inputs and minimizing the use
of unobservable inputs. The analysis 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.
The valuation of the investment property at market value as of December 31, 2023 was carried out,
as in the previous year, by external real estate experts using internationally customary, IFRS-
compliant valuation methods. The properties were valued using the DCF method (discounted cash
flow method). An accredited, external, and independent expert performed the fair value
measurements (Savills Advisory Services Germany GmbH & Co. KG, Frankfurt am Main, Germany).
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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).
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);
▪ new 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 to 10 years for each potential new lease;
▪
rent-free periods from 4 to 10 months’ rent;
▪ a vacancy period of between 2 and 72 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.
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The valuation method described also applies 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.
2.5.4. 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.
2.5.5. 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.
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(i) As a lessee
At commencement or on modification of a contract that contains a lease component, the
contractually agreed fee is to be allocated on the basis of its relative stand-alone prices. However,
for the leases of property, the Group has elected not to separate non-lease components and account
for the lease and non-lease components as a single lease component.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred, and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, minus any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects
that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is determined on the same basis as those of property
and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date and is discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group
uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and the type of
asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
▪
▪
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index
or rate as of the commencement date;
▪ amounts expected to be payable under a residual value guarantee; and
▪
the exercise price under a purchase option that the Group is reasonably certain to exercise,
lease payments in an optional renewal period if the Group is reasonably certain to exercise
an extension option, and penalties for early termination of a lease unless the Group is
reasonably certain that it will not terminate early.
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
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termination option, or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or it is recorded in profit or loss if the carrying amount of the right-
of-use asset has been reduced to zero. The Group presents right-of-use assets that do not meet the
definition of investment property in “property, plant, and equipment” and lease liabilities in “loans
and borrowings” in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value
assets and short-term leases, including IT equipment. The Group recognizes the lease payments
associated with these leases as an expense in a straight-line basis over the lease term.
(ii) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance
lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether
the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying
asset. If this is the case, the lease is a finance lease; if not, it is an operating lease. As part of this
assessment, the Group considers certain indicators such as whether the lease is for the major part of
the asset’s economic life. The Group has classified the sublease contracts on the basis of the right of
use and not the underlying asset, and it has come to the conclusion that the leases are operating
leases in accordance with IFRS 16.
The Group recognizes lease payments received under operating leases as income on a straight-line
basis over the lease term as revenues.
2.5.6. 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.
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This is usually the case when services are rendered or goods or products have been delivered and the
risk has thus been transferred.
Revenue is measured at the fair value of the consideration received, excluding discounts, rebates,
and other sales taxes or duties. Revenues are recorded, excluding VAT. In addition, the following
specific recognition criteria must be met before revenues are recognized.
Rental income from operating leases on investment properties is, according to IFRS 16, recognized
on a straight-line basis over the terms of the relevant lease, regardless of the payment date. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount
of the leased asset.
Revenues from service charge income are, according to IFRS 15, realized over the period of
performance, which essentially corresponds to the time at which service charge expenses are
recorded. With regard to the service charge costs of letting, alstria has a principal position. In this
respect, the operating costs charged to the tenants must be shown as sales. The costs incurred relating
to the provision of services in this context are presented as real estate operating expenses.
Proceeds from the sale of investment properties are recognized when the risks and opportunities
associated with ownership of the property have passed to the buyer (transfer of ownership, benefits,
and burdens of the property).
Operating expenses are recognized at the time of the service or when they are incurred.
Interest expenses and interest income are recognized using the effective interest method.
2.5.7. 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.
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2.5.8. Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to the shareholders of the
parent company by the weighted-average number of shares outstanding during the financial year.
Diluted earnings per share are calculated based on the assumption that all potentially dilutive
securities and share-based payments are converted or exercised.
2.5.9. 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.
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.
2.5.10. 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.
2.5.11. 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.
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2.5.12. Financial instruments
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognized when they are originated. All
other financial assets and liabilities are initially recognized when the Group becomes a party to the
contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial
liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are
directly attributable to its acquisition or issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at:
▪
▪
▪
amortized cost;
FVOCI — debt investment;
FVOCI — equity investment;
▪ or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes
its business model for managing financial assets, in which case all affected financial assets are
reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not
designated at FVTPL:
▪
it is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
▪
its contractual terms give rise to specified dates for cash flows that are solely payments of
principal and interest on the principal amount outstanding.
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A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated at FVTPL:
▪
it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and
▪
its contractual terms provide an increase of specified dates for cash flows that are solely
payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably
elect to present subsequent changes in the investment’s fair value in OCI. This election is made on
an investment-by-investment basis.
All financial assets not classified as measured at amortized cost, are measured at FVTPL. This 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.
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Financial assets – Subsequent measurement and gains and losses
Financial assets at
These assets are subsequently measured at fair value. Net gains and losses, including any interest or
FVTPL
dividend income, are recognized in profit or loss.
These assets are subsequently measured at amortized cost using the effective interest method. The
Financial assets at
amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses,
amortized cost
and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in
profit or loss.
Financial liabilities – Classification, subsequent measurement, and gains and losses
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is
classified as being at FVTPL if it is categorized as held-for-trading, it is a derivative, or it is designated
as such on initial recognition.
Financial liabilities at FVTPL are measured at fair value; net gains and losses, including any interest
expense, are recognized in profit or loss.
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method. Interest expenses and foreign exchange gains and losses are recognized in profit or loss. Any
gain or loss on derecognition is also recognized in profit or loss. All financial liabilities are currently
classified at amortized cost.
Derecognition
Financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or when it transfers the rights to receive the contractual cash flows in a
transaction in which all significant risks and rewards of ownership of the financial asset are transferred
or in which the Group neither transfers nor retains all significant risks and rewards of ownership and
does not retain control of the financial asset.
Financial liabilities
The Group derecognizes a financial liability when its contractual obligations are discharged, are
cancelled, or expire. The Group also derecognizes a financial liability when its terms are significantly
modified and the cash flows of the modified liability are substantially different, in which case a new
financial liability based on the modified terms is recognized at fair value.
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Upon derecognition of a financial liability, the difference between the carrying amount extinguished
and the consideration paid (including any noncash assets transferred or liabilities assumed) is
recognized in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to set off
the amounts and intends either to settle them on a net basis or to realize the asset and settle the
liability simultaneously.
Derivative financial instruments
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.
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
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Consolidated Financial Statements
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.
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.
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Consolidated Financial Statements
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.
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.
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Consolidated Financial Statements
2.5.13. 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.
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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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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.
2.5.14. 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.
2.5.15. 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.
2.5.16. Share-based payments
The share-based compensation included equity-based compensation plans, which were last settled
using equity instruments in the reporting period.
Equity-settled share-based payments to employees and others providing similar services were
measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments was expensed
on a straightline basis over the vesting period and was based on the Group's expectations with regard
to the equity instruments, which were most likely assessed as vesting. At each reporting date, the
Group had to review its estimates regarding the number of equity instruments that would vest. The
effects of the changes to the original estimates, if any, were to be recognized in profit or loss. The
recognition was carried out in such a way that the total expense reflected the change in estimates
and, if necessary, led to a corresponding adjustment to the reserve for employee benefits offset by
equity instruments.
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Consolidated Financial Statements
There were no share-based payments compensated by equity instruments to parties who are not
employees or who do not provide comparable services.
2.5.17. 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.
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.
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104
Consolidated Financial Statements
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 230,193 k (2022:
EUR 220,989 k), of which EUR 26,794 k (2022: EUR 27,887 k) are related to leases to the Group’s
largest customer with a share of more than 10% of revenues.
No other single customer has contributed 10 % or more to the consolidated revenues in the 2022 or
2023 financial years.
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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
2023
192,026
38,167
230,193
2022
182,819
38,170
220,989
Revenues from investment properties mainly comprised rental income. The rental income includes
effects totaling EUR 3,411 k (2022: EUR 2,983 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 3,427 k (2022: EUR 3,196 k).
Rental income from property leases contains variable rental income amounting to EUR 5,080 k
(2022: EUR 4,593 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
Personnel expenses for real estate management
Maintenance and refurbishment
Ongoing repairs
Vacancy costs
Legal and advisory fees
Real estate-related administrative costs
Property management
Electricity costs
Rent expenses
Insurance expenses
Other expenses
Total
1) See note 2.2.3
2023
36,600
8,705
8,312
4,728
4,472
1,253
839
379
368
151
41
409
2022
adjusted1)
37,546
8,791
7,183
4,724
5,732
983
656
367
436
126
475
966
66,257
67,985
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106
Consolidated Financial Statements
5.3.
Administrative expenses
EUR k
Legal and consulting fees
Depreciation
Communication and marketing
IT maintenance
Audit fee (audit and audit-related services)
Leasing payments and rents
Insurance expenses
Travel expenses
Office area costs
Recruitment
Training & workshops
Contributions
Office equipment
Supervisory Board compensation
Other
Reclassified to real estate operating expenses 1)
Reclassified to Net result from fair value adjustments
on investment property1)
Total
1) See note 2.2.3
2023
3,095
1,557
939
745
684
564
478
427
373
298
207
181
159
110
502
-839
-239
9,241
2022
adjusted1)
3,841
964
796
858
541
453
519
331
368
389
140
206
106
491
438
-656
-138
9,647
The reclassifications to real estate operating expenses and Net result from fair value adjustments on
investment properties relate to the effects of the changes in accounting methods (see note 2.2.3).
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
thereof long-term compensation components (previous year also share-
based compensation from stock options) of the Management Board
thereof relating to the convertible profit participation certificates and
other long term compensation
Amounts for Management Board retirement provisions and disability
Other
Total
1) See note 2.2.3
2023
6,094
986
1,541
1,856
325
1,531
88
319
2022
adjusted1)
6,847
913
1,235
6,526
2,544
3,982
161
377
10,884
16,059
107
alstria Annual Report 2023
Consolidated Financial Statements
Personnel expenses decreased by EUR 5,175 k or 32.2 %. This decline is mainly due to one-off effects
in the previous year from the restructuring of compensation components as a result of the takeover
by Brookfield as well as severance payments for employees who left, also in the previous year.
The change in the reporting of parts of personnel expenses described in note 2.2.3 has resulted in
EUR 11,164 k (2022: EUR 10,935 k) no longer being reported under personnel expenses. Overall, the
expenses for remuneration for employees and the Managent Board in the financial year amounted to
EUR 22,049 k (2022: EUR 26,994 k).
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 2021 financial
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. This right was exercised for the last time in the
reporting period, as there were no convertible profit participation rights outstanding as of the balance
sheet date (see note 13.2).
The employer’s contribution to statutory pension insurance, included in wages and salaries, amounts
to EUR 1.053 k for the 2023 financial year (2022: EUR 974 k).
On average, the Group employed 184 employees in 2023 (2022: 177).
5.5. Other operating income
EUR k
Revaluation of the limited partnership capital noncontrolling interests
Compensation payments and other recharges
Indemnity payments received
Income from the reversal of accrued liabilities
Income from the reversal of EWB
Health insurance reimbursement
Property management services
Proceeds from forest management
KfW loan grant for green investments
Guarantee builder
Other
Total
2023
18,811
497
343
289
83
51
21
16
0
0
872
20,983
2022
541
8,170
1,324
7
0
45
93
68
4,242
1,000
729
16,219
The Revaluation of the limited partnership capital noncontrolling interests concerns alstria office
Prime Portfolio GmbH & Co. KG, in which the non-controlling partners have an interest. The valuation
was essentially impacted due to the devaluation of the investment properties held by this company.
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.
alstria Annual Report 2023
108
Consolidated Financial Statements
5.6. Other operating expenses
EUR k
Impairment on trade receivables
VAT payments made for previous years
Legal and advisory fees
Settlement agreements
Other operating expenses
Total
2023
637
118
49
0
44
848
2022
1,469
345
1,066
28
92
3,000
Legal and advisory fees for the previous year mainly relate to consulting services in connection with
the Brookfield's takeover bid (see Note 1). The higher Impairment on trade receivables in the 2022
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
2023
29,750
-29,648
-21
81
0
0
0
0
81
2022
161,280
-158,075
-611
2,594
26,550
-25,977
-271
302
2,896
In the 2023 financial year, no properties were sold at a sales price below their book value. In the 2022
financial year, the sale of properties that were sold below their book value resulted in a loss of
EUR 303 k).
109
alstria Annual Report 2023
Consolidated Financial Statements
5.8.
Net financial result
The financial result breaks down as follows:
EUR k
Interest income
Interest like income
Income from financial instruments and other interest income
Interest expenses, bank loans
Interest expenses, corporate bonds
Interest result ”Schuldschein”
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
2023
9,850
9,702
19,552
-57,138
-16,677
-1,419
9,385
-76
-65,925
0
-700
0
-105
-200
-1,005
2022
834
3,228
4,062
-8,351
-21,916
-1,968
-843
-15
-33,093
-3,800
−2,959
-158
−87
−1,021
−8,025
Net financial result
−47,378
−37,056
The increase in interest income essentially results from higher loans and higher interest rates
compared to the previous year. Negative interest income was included in the amount of EUR 3 k and
in the previous year in the amount of EUR 102 k. Interest-like income includes EUR 6,380 k in income
from the repurchase of own corporate bonds below their issue value. alstria acquired its own
corporate bonds with a nominal value of EUR 22,000 k for EUR 15,620 k.
The increase in interest expense on bank loans is due to new bank loans to the taking out of new bank
loans and the refinancing of a corporate bond when interest rates increased (see Notes 7.3).
The positive interest result from derivative financial instruments reflects the increase in interest rates
over the course of the 2023 financial year, which leads to compensation payments for the interest
rate swaps and caps entered into to secure the variable loan interest rates. Further details and
explanations on derivatives are presented in Note 6.5.
Overall, financial expenses increase by EUR 32,832 from EUR 33,093 k to EUR 65,925 k, as both the
volume of financing and interest rates have increased.
The previous year’s bank loan charges of EUR 3,800 k related to a payment obligation in the event
that an existing loan could not have been further syndicated by the lending bank by the end of the
third quarter of the 2023 financial year.
The total interest expenses calculated by applying the effective interest method for financial
alstria Annual Report 2023
110
Consolidated Financial Statements
liabilities (i.e., not recognized at fair value through profit or loss) amounted to EUR 5,916 k (interest
expenses, 2022: EUR 3,794 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.
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.
On August 4, 2023, the government in Canada, where the ultimate parent company Brookfield
Corporation is based, circulated a proposed law that would transform the Pillar 2 rules into Canadian
national law from January 1, 2024. The law had not come into force at the time of publication. In
Germany, the regulations were transformed into national law with the approval of the Bundesrat on
December 15, 2023.
alstria is currently examining the impact of the legislation in collaboration with Brookfield on the
Pillar 2 rules on the company's future profitability.
111
alstria Annual Report 2023
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 (Capital expenditure))
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
2023
2022
4,606,848
4,775,801
137,338
113,147
0
0
0
−3,392
0
0
-769,541
3,971,253
0
0
504
−83,910
−24,900
0
-173,794
4,606,848
In the 2023 financial year, a property was sold and transferred to the buyer. In addition, the property
held for sale as of the previous year's reporting date was transferred to the buyer in the reporting
period.
Property transaction
Contract signed until 2022,
transferred in 2023
Contract signed and
transferred in 2023
Contract signed in 2023,
transferred 2024
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
1
1
0
2
26,550
3,200
0
29,750
Capital expenditure (EUR 137,338 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 4,276 k (December 31, 2022: EUR 4.991 k).
alstria Annual Report 2023
112
Consolidated Financial Statements
Borrowing costs that would have had to be capitalized as construction costs were not incurred during
the reporting period (2022: 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 2.5.
The item “net result from fair value adjustments on investment property” on the income statement
in the amount of EUR 770,201 k (2022: EUR 207,879 k) is attributable to a change in unrealized losses.
The total of the increases in value amounted to EUR 660 k (2022: EUR 34,085 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).
113
alstria Annual Report 2023
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, 2023
Valuation
technique
German offices
3,971,253 DCF
Number of properties:
106
0 ≤ WAULT ≤ 5 Years
German offices
2,518,853 DCF
Number of properties:
79
5 < WAULT ≤ 10 Years
German offices
776,100 DCF
Number of properties:
18
WAULT > 10 Years
German offices
676,300 DCF
Number of properties:
9
Range
Min. Max.
Weighted
average
Unobservable
inputs
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
8.95
28.53
3.50%
7.50%
4.00%
7.50%
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
9.20
28.53
3.55%
7.50%
4.00%
7.50%
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
8.95
23.93
4.00%
7.50%
4.30%
7.50%
Estimated rental value
(EUR/m²/mo.)
Discount Rate
Exit Cap Rate
11.21
23.89
3.50%
4.25%
4.25%
6.50%
15.77
5.00%
5.35%
15.75
5.22%
5.23%
14.66
5.46%
5.72%
17.99
3.64%
5.47%
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.
alstria Annual Report 2023
114
Consolidated Financial Statements
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, 2023
Dec. 31, 2022
−1.00 %
−0.50 %
−0.25 %
0.00 %
0.25 %
0.50 %
1.00
4.340
4.151
4.059
3.971
3.885
3.801
3.639
-
4,819
4,712
4,607
4,506
4,407
-
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, 2023 are as follows:
EUR k
Within 1 year
After 1 year but not longer than 5 years
Longer than 5 years
Total
Dec. 31, 2023
Dec. 31, 2022
191.251
485.180
372.789
193.053
522.533
388.970
1,049,220
1,104.556
Disclosures concerning expenses/income as recorded in the income statement pursuant to
IAS 40.75 (f) include the following:
▪ EUR 230,193 k (2022: EUR 220,989 k) in revenues from investment properties, of which
EUR 302 k is related to subleases of rights-of-use assets;
▪ EUR 56,243 k (2022: EUR 52,806 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 10,014 k (2022: EUR 9,237 k) in operating expenses (including repairs and maintenance)
arising from investment properties that did not generate rental income during the period
under review.
Investment properties, held-for-sale properties, and own used properties amounting to EUR 1,985.1 m
(December 31, 2022: EUR 1,613.5 m) served as collateral for bank loans.
115
alstria Annual Report 2023
Consolidated Financial Statements
6.2.
Equity-accounted investment
As of the balance sheet date, the group holds no investments in associated companies or joint venture.
As of the previous year's reporting date, there was also an interest in a joint venture that was
liquidated in the 2023 financial year and in an associated company that was sold in that year. The
book value of the associated company was EUR 0 as of the previous year's reporting date, and that of
the joint venture was EUR 101 k. Accounting was carried out using the equity method. 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 502 k and EUR 133 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 area in Stuttgart was accounted for as owner-occupied area until the property was sold
in the previous year. After the sale of the property, the area accounted for as owner-occupied land
and buildings under property, plant and equipment in accordance with IAS 16 was disposed in the
previous financial year 2022 in the amount of EUR 2,243 k.
The following table shows the development of property, plant, and equipment.
EUR k
Acquisition and production
cost
Furniture
and
fixtures
Owner-
occupied
property
IFRS 16
right-of-use
assets
Forrest
Plant
Total 2022
As of January 1, 2023
1,266
2,026
17,954
2,683
1,544
25,473
Additions
Disposals
0
0
168
0
816
0
151
0
963
0
2,098
0
As of December 31, 2023
1,266
2,194
18,770
2,834
2,507
27,571
Accumulated amortization,
depreciation, and write-
downs
As of January 1, 2023
1,251
1,288
1,661
Additions
Disposals
12
0
184
0
335
0
As of December 31, 2023
1,263
1,472
1,996
0
0
0
0
1,026
5,226
419
0
951
0
1,445
6,177
Net book values as of
December 31, 2023
3
722
16,774
2,834
1,062
21,395
alstria Annual Report 2023
116
Consolidated Financial Statements
EUR k
Acquisition and production
cost
Furniture
and
fixtures
Owner-
occupied
property
IFRS 16
right-of-use
assets
Forrest
Plant
Total 2022
As of January 1, 2022
1,266
2,807
20,192
2,683
1,209
28,157
Additions
Disposals
0
0
59
-840
As of December 31, 2022
1,266
2,807
5
-2,243
20,192
0
0
335
0
2,683
1,209
399
-3.083
28,157
Accumulated amortization,
depreciation, and write-
downs
As of January 1, 2022
1,239
1,834
1,360
Additions
Disposals
12
0
225
-771
318
-17
As of December 31, 2022
1,251
1,288
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
Two of the owner occupied 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 2021 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, 2022 Repayments
Investment
in financial
assets
Valuation
Dec.
31, 2023
Noncurrent financial assets
94,891
0
463
-4
95,350
The financial assets of EUR 95,350 k (December 31, 2022: EUR 94,891 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 269 k is attributable to a below -3 % share in a stock corporation on which alstria cannot
exert any significant influence. A further EUR 649 k was invested in a minority interest in a company
to enable CO2 storage technology.
The increase in financial assets is based on investments in this company in the amount of EUR 463 k.
In addition, there were write-offs of -EUR 4 k.
Current financial assets did neither exist at the end of the reporting period nor at the end of the
previous.
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.
117
alstria Annual Report 2023
Consolidated Financial Statements
6.5.
Derivative financial instruments
The following derivative financial instruments were in place at the end of the reporting period:
Product
Strike
p.a.
(%)
Start of
Hedging
Maturity
date
Counterpart
Notional Fair value Notional
Fair
value
(EUR k)
(EUR k)
(EUR k)
(EUR k)
Dec. 31, 2023
Dec. 31, 2022
Swap
3.1350
30.06.2023 26.04.2030
Landesbank Hessen-
Thüringen
Girozentrale
70,500
-3,362
n/a
Cap
3.5000
30.06.2023 26.04.2030
Societe Generale
70,500
1,191
n/a
n/a
n/a
Swap
Swap w/
Floor
4.0330 -
2.5000
01.11.2023 31.08.2028
3.0000
30.06.2023 30.06.2028
Swap
3.2300
30.06.2023 29.03.2030
Cap
Cap
3.5000 -
2.5000
3.5000 -
2.5000
01.11.2023 31.08.2028
01.11.2023 31.08.2028
Hamburg Commercial
Bank AG
Landesbank Baden-
Württemberg
Morgan Stanley
Europe SE
Morgan Stanley
Europe SE
Morgan Stanley
Europe SE
50,000
-1,912
n/a
n/a
50,000
-1,256
n/a
n/a
67,500
-3,561
n/a
n/a
10,000
165
n/a
n/a
40,000
663
n/a
n/a
Swap
1.7500
30.09.2022 30.09.2027
Societe Generale
500,000
10,714 500,000
29,813
Cap
Cap
Cap
Swap
Swap
Swap
3.5000
30.06.2023 29.03.2030
Societe Generale
22,500
372
n/a
3.5000
30.06.2023 30.06.2028
Societe Generale
35,000
323
n/a
3.5000
30.06.2023 26.04.2030
Societe Generale
47,000
795
n/a
2.9740
29.12.2023 29.08.2027
Societe Generale
107,000
-2,367
n/a
1.9240
30.09.2022 30.09.2028
UniCredit Bank AG
1.9240
30.09.2022 30.09.2028
UniCredit Bank AG
60,000
22,450
1,039
60,000
389
22,450
n/a
n/a
n/a
n/a
3,606
1,348
Financial derivatives - cash flow
hedges
1,152,450
3,193 582,450
34,767
The derivative financial instruments held by alstria are exclusively interest rate swaps and caps.
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.
Offsetting agreements with counterparties (so-called master agreements) were not agreed.
The change in value of the derivatives is taken into account in different balance sheet items.
alstria Annual Report 2023
118
Consolidated Financial Statements
The following table shows the change in financial derivatives since December 31, 2022:
EUR k
Hedging instruments as at January 1,
2023
Effective change in fair values cash
flow hedges
Ineffective change in fair values cash
flow hedges
Net result from fair value changes in
financial derivatives not qualifying for
cash flow hedging
Reclassification of cumulated loss from
equity to income statement
Reclassification due to change of
residual term
in
Changes
concerning financial derivatives
interests
accrued
Acquisitions
Disposals
Hedging instruments as at
December 31, 2023
Cash flow
hedge
Financial assets
Financial liabilities
Total
reserve Non-current
Current
Non-current
Current
32,663
34,767
0
0
0
34,767
-39,086
-23,326
-2,093
-10,920
-2,747
-39,086
0
0
15
0
0
0
0
807
-1,827
314
0
0
0
0
-13,134
13,134
113
9,450
-2,090
0
367
-227
0
0
0
0
0
605
0
0
0
0
0
0
0
-706
0
0
113
9,818
-1,713
-6,408
6,587
9,354
-10,001
-2,747
3,193
The notional amount of the financial derivatives effective at the end of the reporting period is
EUR 1,152,450 k (December 31, 2022: EUR 34,767 k). This includes cash flow hedges and derivatives
not qualifying for cash flow hedging.
Since all derivatives are designated for a cash flow hedging relationship, the nominal value of the
non-designated derivatives is zero euros (December 31, 2022: EUR 0).
A decrease in the fair values of derivatives of an amount of EUR 39,086 k that are effective in a cash
flow hedge was recognised in the equity in the hedging reserve in 2023 (2023: increase of
EUR 32,663 k). An amount of EUR 15 k (2022: EUR 0 k) was reclassified from the reserve for cash flow
hedging to the income statement; these are amounts that relate to terminated derivatives and are
amortized over the remaining term of the underlying loan.
The ineffective portion that arises from cash flow hedges amounted to a fair value loss of EUR 721 k
(2022: loss of EUR 499 k) and is recognised in profit or loss.
Netting agreements with counterparties (so-called master agreements) have not been agreed.
119
alstria Annual Report 2023
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, 2023
Dec. 31, 2022
10,001
813
10,814
693
392
148
323
1
194
1,751
1,975
1,029
600
380
3,984
5,735
5,865
2,301
8,166
412
320
318
246
123
33
1,452
1,925
1,029
634
344
3,932
5,384
The increase of Trade receivables from EUR 8,166 by EUR 2,648 to EUR 10,814 is based on an increase
in Net rent receivables due to a one-off rent receivable for special services provided to a tenant. The
reduction in service charge receivables is essentially due to the increased rental advance payments
received as a result of the increase in energy prices in the previous year.
The deductible capital gains taxes are related to the taxation on hidden reserves in the course of the
change of legal form in subsidiaries in the 2016 financial year. Affected are companies of the Prime
Portfolio subgroup, which, following the takeover of the former DO Deutsche Office Group, changed
from the legal form of a limited liability company to the legal form of a limited partnership.
All receivables are due within 1 year from the balance sheet date. The fair value of all receivables is
equal to their carrying amount.
The expected credit losses are calculated in two ways. For alstria’s key tenants, default probabilities
observed on the market made available by Bisnode Deutschland GmbH, Darmstadt, Germany, are
used. For its receivables from the remaining (non-key) tenants, alstria uses an impairment matrix.
The receivables of these other tenants are valued based on historical probabilities of default. Future
developments or macroeconomic indicators are monitored, and adjustments are made if necessary.
alstria Annual Report 2023
120
Consolidated Financial Statements
On this basis, alstria estimates the following default rates:
EUR k
Default rate as of 31.12.2023
Default rate as of 31.12.2022
0-30 days
overdue
31-90 days
overdue
91-180 days
overdue
More than 180
days overdue
22.83%
16.40%
45.58%
63.46%
90.47%
99.96%
100.00%
100.00%
Trade receivables from tenants of alstria as of December 31, 2023 are valued as follows:
EUR k
0-30 days overdue
31-90 days overdue
91-180 days overdue
More than 180 days overdue
Total other tenants
Key tenants
Total
Provision made
for default of
receivables over
the entire term
Provision made
for default of
receivables over
12 months
Gross amount
1,790
548
134
182
2,654
9,150
11,804
-409
-249
-121
-182
-961
-
-961
-29
-29
Net amount
1,381
299
13
0
1,693
9,121
10,814
Trade receivables from tenants of alstria as of December 31, 2022 were valued as follows:
EUR k
0-30 days overdue
31-90 days overdue
91-180 days overdue
More than 180 days overdue
Total other tenants
Key tenants
Total
Provision made
for default of
receivables over
the entire term
Provision made
for default of
receivables over
12 months
Gross amount
Net amount
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
121
alstria Annual Report 2023
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
2023
829
636
-475
990
2022
826
1,469
-1,466
829
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, 2023
Dec. 31, 2022
116,282
364,973
Current accounts held with banks attract variable interest rates for on-call balances. As of the
reporting date, EUR 8,031 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.
Restrictions on cash amounts as of the previous year's reporting date to EUR 8,761 k.
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 6,647 k in rent deposits received from tenants
(December 31, 2022: EUR 8,043 k). These tenant deposits, recognized under cash and cash
equivalents, are offset by an item included under Other Liabilities.
alstria Annual Report 2023
122
Consolidated Financial Statements
6.8.
Assets held for sale
As of the balance sheet date, the Group did not hold any properties held for sale.
The property held for sale reported in the previous year was transferred to the buyer as planned in
the 2023 financial year.
The prior year’s ‘gain on disposal of investment property’ was 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.
123
alstria Annual Report 2023
Consolidated Financial Statements
7. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY
AND LIABILITIES
7.1.
Equity
For detailed information on equity, please refer to the consolidated statement of changes in
consolidated equity.
Share capital
EUR k
Ordinary shares of EUR 1 each
Dec. 31, 2023
Dec. 31, 2022
178,562
178,291
The conversion of profit participation rights (Note 13.2) in the second quarter of 2023 resulted in the
issuance of 270,300 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 270,300.00 as compared with
December 31, 2022, and as of December 31, 2023, it is represented by 178,561,572 no-par value
bearer shares.
The following table shows the reconciliation of the number of shares outstanding:
Number of shares
Shares outstanding on January 1
Conversion of convertible participation rights
As of December 31
2023
2022
178,291,272
178,032,997
270,300
258,275
178,561,572
178,291,272
As a result of the takeover bid by Brookfield (see Note 1), 95.37% of the shares in the company were
attributable to Brookfield 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
Conversion of convertible participation rights
As of December 31
2023
507,640
−262,469
520
270
2022
1,261,630
−756,640
2,392
258
245,961
507,640
The share premium resulting from the conversion of 270,300 profit-participation rights resulted in an
increase in capital reserves of EUR 270 k.
alstria Annual Report 2023
124
Consolidated Financial Statements
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, 2023
Dec. 31, 2022
-6,408
32,663
For further details on the change in hedging reserve please refer to Note 6.5.
Treasury shares
As of December 31, 2023, the Company held no treasury shares.
By resolution of the Annual General Meeting held on May 4, 2023, 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 May 3, 2028. There is no intention to make use of this authorization
at present.
Retained earnings
Retained earnings as of December 31, 2023, totaled EUR 1,195,947 k (December 31, 2022: profit
carried forward of EUR 1,849,321 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 2023. The reduction in retained earnings results from the consolidated annual result for
the 2023 financial year.
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.
125
alstria Annual Report 2023
Consolidated Financial Statements
Conditional capital
The Company’s share capital has been conditionally increased to grant convertible profit participation
rights to the employees of the Company and its subsidiaries and to issue bearer convertible or option
bonds, profit participation rights, or participating bonds. As of December 31, 2023, the conditional
capital amounted to EUR 17,479 k. This was divided into Conditional Capital I 2020 (EUR 16,750 k)
and Conditional Capital III 2020 (EUR 730 k).
In the year under review, Conditional Capital III 2020 was used in the amount of EUR 270 k.
7.2.
Noncontrolling interests of limited partners
In the 2017 financial year, alstria office REIT-AG acquired 2,128,048 limited partner shares. A further
3,593,463 limited partner shares were redeemed against cash compensation by alstria office Prime.
In the financial years 2018 to 2020, a further 47,781 limited partner shares were acquired. No limited
partnership shares were acquired in the 2021 to 2023 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 18.811 k (2022: gain of EUR 541 k). The fair value of the limited
partnerships of noncontrolling interests reported as of the balance sheet date amounted to
EUR 98.318 k (2022: EUR 120,980 k), whereby EUR 98,297 k are to be classified as long term and
EUR 21 k as short term liabilities.
7.3.
Financial liabilities
EUR k
Loans
Corporate bonds
Mortgage loans
Schuldschein
Total
EUR k
Loans
Corporate bonds
Mortgage loans
Schuldschein
Total
Noncurrent
Current
Accrued
interest
Loan
Total
Total current
Dec. 31, 2023
1,073,345
1,064,299
39,963
0
3,898
256,517
0
644
718
3,898
257,161
718
1,077,243
1,321,460
40,681
2,177,607
256,517
5,260
261,777
2,439,384
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
2,026,290
361,796
10,346
372,142
2,398,432
The table presents the long-term loans and the net of the current portion as stated under noncurrent
liabilities. Furthermore, it shows the current amount due within 1 year, recorded as an item in short-
term loans in current liabilities.
alstria Annual Report 2023
126
Consolidated Financial Statements
As of December 31, 2023, 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 2,450,000 k (December 31, 2022: EUR 2,403,063 k). The carrying amount of
EUR 2,439,384 k (EUR 2,177,607 k, noncurrent, and EUR 261,777 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
1) Changes in deferred loan costs (effective interest).
2) Changes in the accrued interest.
December
31, 2022
Payments of
the period
Reclassification
noncurrent/
current
Changes in
fair value
December
31, 2023
2,026,290
408,937
-257,000
-620
2,177,607
372,142
-362,000
257,000
-5,365
261,777
2,398,432
46,937
0
-5,985
2,439,384
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.
127
alstria Annual Report 2023
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
31.12.2023
in EUR k
Book value
as of
31.12.2023
in EUR k
OMV as at
31.12.2023
in EUR k
Accrued
interest at
31.12.2023
in EUR k
Mortgage
loan #1
Mortgage
loan #2
Mortgage
loan #3
Mortgage
loan #4
Mortgage
loan #5
Mortgage
loan #6
Mortgage
loan #7
Mortgage
loan #8
Total secured
Bond III
Bond IV
Bond V
Schuldschein
10y/fix
Total
unsecured
Total
II 2016/
IV 2022
II 2016/
II 2023
III 2018/
III 2022
28.06.2024
150,000 3M-EURIBOR
150,000
149,578
149,750
31.03.2030
90,000 3M-EURIBOR
90,000
89,265
89,019
29.09.2028
97,000 3M-EURIBOR
97,000
96,775
94,336
59
38
40
III 2022
30.09.2027
500,000 3M-EURIBOR
500,000
495,444
495,639
226
III 2022
29.08.2024
107,000 3M-EURIBOR
107,000
106,673
106,824
III 2023
26.04.2030
188,000 3M-EURIBOR
188,000
185,183
186,423
III 2023
30.06.2028
100,000 3M-EURIBOR
100,000
99,365
99,409
IV 2023
31.08.2028
100,000 3M-EURIBOR
100,000
98,267
100,000
1,332,000
1,332,000 1,320,550
1,321,400
IV 2017
15.11.2027
350,000
III 2019
26.09.2025
400,000
1.5000
0.5000
328,000
326,314
245,574
400,000
397,926
343,080
46
82
47
101
639
335
500
II 2020
23.06.2026
350,000
1.5000
350,000
349,105
279,528
3,067
II 2016
06.05.2026
40,000
2.7500
40,000
39,963
39,148
718
1,140,000
2,472,000
1,118,000 1,113,308
907,329
2,450,000 2,433,858 2,228,729
4,621
5,260
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 110,000 k were repaid before the end of their term, so that the Schuldschein had a
notional value of EUR 40,000 k at the end of the reporting period. The fair value (hierarchy Level 2)
amounted to EUR 39,148 k as of the balance sheet date.
alstria Annual Report 2023
128
Consolidated Financial Statements
Further details regarding the loan liabilities
The current portion of the loans relates to planned repayments (EUR 257,000 k), effective interest
accruals to be deducted (EUR-749 k), bank account overdrafts (EUR 267 k) and interest accruals for
the loans. The latter amounted to EUR 5,260 k as of the balance sheet date (December 31, 2022:
EUR 10,346 k) and is to be paid in the course of the next twelve months.
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.
As of December 31, 2023, the loans, the bond and the promissory note (Schuldschein) were reduced
by accrued transaction costs of EUR 16,143 k (December 31, 2022: EUR 14,978 k).
The average debt maturity slightly increased slightly from 3.2 years as of December 31, 2022, to 3.3
years as of December 31, 2023. The Group’s average interest rate increased from 2.1 % at the previous
balance sheet date to 2.6 % as of December 31, 2023.
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, 2023, 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, 2023
Dec. 31, 2022
256,251
1,064,299
1,320,550
0
893,094
893,094
Dec. 31, 2023
Dec. 31, 2022
1,332,000
1,321,994
10,006
901,063
890,962
10,101
129
alstria Annual Report 2023
Consolidated Financial Statements
7.4. Other provisions
EUR k
Other provisions
Provision ACES and other
long term incentives
Other
Total
Due
Due
up to
1 year
in more
than 1 year
Total
Dec. 31, 2023
up to
1 year
in more than
1 year
Total
Dec. 31, 2022
2,543
465
3,008
1,672
0
1,672
4,215
465
4,680
0
525
525
1,802
0
1,802
1,802
525
2,327
The development of other provisions is shown in the following overview:
EUR k
Development of other provisions
Provision ACES and other long term
incentives
Other
Total
Dec. 31,
2022 Consumption
Resolution
Additions
Dec. 31,
2023
1,802
525
2,327
0
-13
-13
-131
-48
-179
2,543
0
2,543
4,215
465
4,680
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.
Other provisions are mainly related to litigation expenses.
alstria Annual Report 2023
130
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, 2023
Trade payables
4,717
0
4,717
Due
up to
1 year
3,581
in more
than 1 year
Total
Dec. 31, 2022
0
3,581
Other current liabilities
Accruals for outstanding
invoices
Rent and security deposits
received
IFRS 16 lease liabilities
Market flex premium
Salary obligations
Accruals for tax consulting
Cash compensation
Customers with credit balances
Auditing costs
Vacation provisions
Supervisory Board compensation
Interests for tax provisions
Miscellaneous liabilities
24,132
0
24,132
28,490
0
28,490
6,647
680
3,800
2,467
790
735
486
343
329
110
0
68
8,438
4,765
0
0
0
0
0
0
0
0
0
0
15,085
5,444
3,800
2,467
790
735
486
343
329
110
0
68
8,043
393
3,800
2,358
919
961
874
359
241
491
0
165
8,050
5,314
0
0
0
0
0
0
0
0
0
0
16,093
5,707
3,800
2,358
919
961
874
359
241
491
0
165
Financial liabilities
40,587
13,203
53,790
47,094
13,364
60,458
Value-added tax liabilities
2,299
Advance rent payments
received
Income tax and social security
contributions
Non-financial liabilities
1,535
323
4,157
0
0
0
0
Total other liabilities
44,744
13,203
2,299
2,072
1,535
1,820
323
4,157
57,947
238
4,130
51,224
13,364
0
0
0
0
2,072
1,820
238
4,130
64,588
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 2023 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 8,941 k.
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
131
alstria Annual Report 2023
Consolidated Financial Statements
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 735 k, including
interest.
7.6.
Income tax liabilities
The recognition of income tax liabilities as of December 31, 2023, 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.
alstria Annual Report 2023
132
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
Long Term Incentiv Plan (LTIP)
Postemployment benefits
Total
2023
992
500
88
1,580
2022
1,427
900
162
2,489
On the reporting date, liabilities for the compensation of the Management Board members amounted
to EUR 250 k (2022: EUR 450 k).
The LTIP granted to the Management Board represent the long-term, key figure-based remuneration
for the Management Board. The actual compensation to be achieved after the end of the term depends
on the performance of these key figures. Further details on the LTIP can be found in Section 13.1 and
in the remuneration report.
Supervisory Board Pursuant to the Articles of Association, Supervisory Board members’ fixed annual
payments amounted to EUR 110 k (2022: EUR 491 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 94,391 k (2022: EUR 103,819k). The increase results from a higher level of ongoing development
projects at the end of the reporting period.
As of December 31, 2023, rental agreements for the car parking spaces and administrative premises
were subject to a minimum lease term. Future financial obligations of EUR 6,475 k arose from other
leasing agreements. Of these, EUR 774 k in obligations has a residual maturity of up to 1 year;
EUR 1,553 k in obligations has a remaining maturity of 1 to 5 years; and the remaining EUR 4,148 k
has more than 5 years.
8.3.
Consolidated cash flow statement
The cash flow statement shows how the Group’s cash and cash equivalents have changed over the
financial year as a result of cash received and paid. In accordance with IAS 7, cash flows are
distinguished from operating activities and from investing and financing activities.
Cash flows from investing and financing activities are calculated based on payments, whereas cash
flows from operating activities are indirectly derived based on the consolidated profit for the year.
133
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Consolidated Financial Statements
The net cash generated from operating activities for the 2023 financial year amounted to
EUR 89,084 k, which is above the level of previous year’s operating cash flow (EUR 87,079 k). The
increase results from a lower increase in working capital and higher sales revenue compared to the
previous period. The net cash generated from operating activities includes other noncash income and
expenses totaling EUR 6,210 k. These essentially relate to allocation to provisions and other liabilities.
Cash outflows for leases amounted to EUR 833 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 137,357 k while the inflow of cash from property
disposals amounted to EUR 29,750 k.
The cash flows from financing activities includes cash inflows from taking out a bank loans in the
amount of EUR 430,937 k. Cash outflows resulted mainly from the repayment of loans in the amount
of EUR 377,469 k and the dividend distribution in an amount of EUR 262,469 k.
Cash and cash equivalents reported in the cash flow statement relate to all liquidity items disclosed
on the balance sheet (e.g., cash in hand and bank balances).
alstria Annual Report 2023
134
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 2023 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 2023 financial year:
in EUR k
Interest Corporate Bonds
Accounting & Reporting services
Containerlease
Letting
Revenues/
Expenses (net) (-)
2023
-1.549
100
-44
15
Receivables/
liabilities (-)
Dec. 31, 2023
-862
0
0
2
These are transactions with the parent company of the Group.
The accounting and reporting services relate to the preparation of consolidation accounting and
reporting services for Brookfield companies outside the alstria group.
135
alstria Annual Report 2023
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 2023 financial year. As of
December 31, 2023, this relate to the following corporate bonds:
Bond
ISIN
Bond III
Bond IV
Bond V
XS1717584913
XS52053346297
XS2191013171
Shares
Notional value of
shares
87,500,000
100,000,000
55,900,000
EUR k
87,500
100,000
55,900
243,400,000
243,400
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.
alstria Annual Report 2023
136
Consolidated Financial Statements
The following table reflects the income and share data used in the earnings per share computations:
Earnings per share
Profit attributable to the shareholders (EUR k)
Average number of shares outstanding (thousands)
Basic earnings per share (EUR)
2023
-653.374
178.466
-3,66
2022
-74.614
178.098
-0,42
The granted Stock Awards and the convertible profit participation rights did not result in dilution
effects during the period under review.
alstria office REIT-AG is authorized to issue up to EUR 17,479 k in shares as conditional capital. These
contingently issuable shares could dilute basic earnings per share in the future, but they were not
included in the calculation of diluted earnings per share because they are nondilutive for the
presented period.
11. DIVIDENDS PAID AND DIVIDENDS PROPOSED
EUR k
Dividends on ordinary shares1) not recognized as a liability as of
December 31
Dividend per share
1) Refers to all shares except treasury shares on the dividend payment date.
2023
262,469
1.47
2022
756,640
4.25
At the Annual General Meeting held on May 4, 2023, alstria office REIT-AG resolved to distribute
dividends totaling EUR 10,697 k (EUR 0.06 per outstanding share). The dividends were distributed on
May 9, 2023. At the Extraordinary General Meeting on December 1, 2023, a further dividend payment
of EUR 251,772 k (EUR 1.41 per outstanding share) was resolved, which was paid on December 6,
2023. Overall, this represents a dividend payment of EUR 262,469 k (EUR 1.41 per outstanding share).
By comparison, the dividends paid out in 2022 totaled EUR 756,640 k (EUR 4.25 per outstanding
share).
The Management Board, in agreement with the Supervisory Board, intends to propose to the Annual
General Meeting to forego the distribution of a dividend for the 2023 financial year in the absence of
a retained profit for alstria office REIT-AG. In the event that there are significant changes in the
company's available liquidity in the further course of the 2024 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.
137
alstria Annual Report 2023
Consolidated Financial Statements
12. EMPLOYEES
From January 1 to December 31, 2023, the Company had an average of 185 employees (January 1 to
December 31, 2022: 177 employees on average). The average was calculated based on the total
number of employees at the end of each quarter. On December 31, 2023, 189 people were employed
at alstria, excluding the Management Board members (December 31, 2022: 181 employees).
Employees
Real estate management and development
Finance and legal
Other occupations
Total
13. LONG-TERM REMUNERATION
Average 2023 December 31, 2023
117
37
31
185
121
37
31
189
Average 2022 December 31, 2022
109
37
35
181
106
39
32
177
13.1. Long-term remuneration components for the Management Board
The share-based payment entitlements issued to the Management Board in previous years, so-called
stock awards, were 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) consisted of so-called virtual stock awards, which are
converted into alstria shares after a four-year performance period. Up to and including the 2021
financial year, the members of the Board of Management were allocated a long-term variable
remuneration element in each financial year, the target amount of which was set in the service
contract. The number of stock awards to be 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 (so
called Absolute and Relative TSR or Total Shareholder Return). Payout of the Long-Term Incentive
was capped at 250 % of the target amount.
alstria Annual Report 2023
138
Consolidated Financial Statements
Absolute TSR
The absolute TSR had a weighting of 25 %. The absolute TSR was generally derived from the weighted
average cost of capital (WACC).
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.
139
alstria Annual Report 2023
Consolidated Financial Statements
The following table lists the model specifications used to determine the fair value:
Grant date
March 7, 2018
March 4, 2019
March 2, 2020
March 1, 2021
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
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
Since all of the remaining 234,620 Stock Awards were converted in the 2022 financial year, there
were no longer any effects from the Stock Awards program described for the reporting period. In
2022, the LTIP generated remuneration expenses amounting to EUR 2,095 k. The background for the
conversion of all stock awards at the same time was the low remaining market capitalization of freely
tradable alstria shares after the takeover by Brookfield. As a result, the development of the alstria
share price was no longer meaningful, so that the calculation of the LTI based on the development of
the share price had lost its function as part of the Management Board remuneration system 2018/2021.
Against this background, the performance periods of all outstanding LTI tranches granted to the
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 adjusted with effect February 3, 2022 terminated 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.
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.
The following table shows the development of the certificates granted to the members of the
Management Board, each with a nominal value of EUR 1.00.
alstria Annual Report 2023
140
Consolidated Financial Statements
Number certificates
2023
20221)
20221)
Total
Olivier Elamine
Olivier Elamine Alexander Dexne
Certificates granted as at Jan. 1
As of Dec. 31, 2023
Time pro rata as of Dec. 31, 2023
Degree of target achievement as of
Dec. 31, 2023
Provision made as of Dec. 31, 2023
in EUR
500,000
500,000
49.9%
100%
500,000
500,000
100.0%
400,000
400,000
50.0%2)
75%
75%
1,400,000
1,400,000
n/a
n/a
249,315
375,000
150,000
774,315
1) Year of issue, values in the table refer to 2023
2) Proportionate consideration until the board member leaves office.
The provisions for long-term remuneration components of the Management Board amount to
EUR 774 k as of December 31, 2023 (December 31, 2022: EUR 449 k). The expenses from these
remuneration components amounted to EUR 325 k in the 2023 financial year after EUR 449 k in the
2022 financial year.
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 were not considered employees of the Company for the purposes of this
convertible profit participation rights program, which has now ended in the reporting period. 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 because of the
takeover by Brookfield, the convertible profit participatory rights program was also discontinued and
replaced by a new employee participation program (see below).
The main terms of the convertible profit participatory rights program can be summarized as follows:
The nominal amount of each certificate is EUR 1.00, which is payable upon issuance.
The certificates were issued as nontransferable rights and were not sellable, pledgeable, or otherwise
chargeable.
The maximum term of each certificate was 5 years.
141
alstria Annual Report 2023
Consolidated Financial Statements
During its term, each certificate entitled 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 was reduced pro rata temporis.
Each certificate 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
had 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 2023 financial year.
Upon conversion of a certificate, the beneficiary paid an additional conversion price to the Company
for each certificate to be converted. This conversion price corresponded the aggregate proportionate
amount of the Company’s share capital to which the certificate entitled the holder; this amount was
payable in addition to the offer price.
The fair values of the inherent options for conversion were estimated on the respective grant dates
using a binary barrier option model based on the Black-Scholes model. The conversion were
automatically be affected once the barrier had been reached. The model considered the terms and
conditions upon which the instruments were granted.
The following share-based payment agreements under the employee profit participation program still
existed during this year:
Number of certificates
Grant date of tranche
January 1, 2023
Expired due to termination of employment
Converted
December 31, 2023
May 7, 2021
279,050
-8,750
-270,300
0
For the conversion of 270,300 of the 2021 convertible profit participation right certificates, the
relevant XETRA share price on the conversion date was EUR 5.8900 per share.
Total expenses relating to convertible profit participation rights amounted to EUR 520 k in 2023 (see
Note 5.4).
alstria Annual Report 2023
142
Consolidated Financial Statements
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
May 7, 2021
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.
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.
Employees also receive certificates (so-called ACES) as part of the “alstria Collective Employee
Scheme”. The ACES have a term of two years and their performance 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 underlying
key figures. The following table shows the development of the ACES granted to employees with a
nominal value of EUR 1.00 each:
Number ACES
As of Dec. 31, 2022
ACES granted during reporting period
Changes
As of Dec. 31, 2023
Time pro rata as of Dec. 31, 2023
Degree of target achievement as of Dec. 31, 2023
Provision made as of Dec. 31, 2023 in EUR
1) Year of issue, values in the table refer to 2023
Granted 2023
Granted 20221)
0
2,752,583
2,641,070
0
212,681
-230,264
Total
2,752,583
2,641,070
-17,583
2,853,751
2,522,319
5,376,070
49.9%
100%
100.0%
80%
n/a
n/a
1,422,966
2,017,855
3,440,821
The provisions for long-term remuneration components for employees (ACES) amounted to
EUR 3,441 k as of December 31, 2023 (December 31, 2022: EUR 1,374 k). The expenses from these
remuneration components amounted to EUR 1,531 k in the first half of the financial year after EUR
1,374 k in the 2022 financial year.
143
alstria Annual Report 2023
Consolidated Financial Statements
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- (“outlook stable”), the lowest notch within
the investment grade rating. Even though there was subsequently a change from “outlook stable” to
“outlook negative” on May 9, 2023 and a downgrade to BB+ (“issuer rating”) on October 20, 2023, the
rating of the bonds was confirmed as BBB-. This means that the conditions for bondholders to demand
a repayment of the corporate bonds before the end of their term are no longer met. 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.
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.
alstria Annual Report 2023
144
Consolidated Financial Statements
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.
The following table presents the single-LTV ratios and covenants for the Group’s loans as of the end
of the reporting period:
Principal
amount
drawn as of
Dec. 31,
2023
(EUR k)
LTV1) as of
Dec. 31,
2023
(%)
LTV
covenant
(%)
Principal
amount
drawn as of
Dec. 31,
2022
(EUR k)
Maturity
Liabilities
Loan #12)
Loan #23)
Loan #3
Loan #44)
Loan #55)
Loan #66)
Loan #7
Loan #8
Jun 28, 2024
150,000
Mar 29, 2030
Sep 29, 2028
90,000
97,000
Sep 30, 2027
500,000
Aug 29, 2024
107,000
Apr 26, 2030
188,000
Jun 30, 2028
100,000
Aug 31, 2028
100,000
Total secured loans
1,332,000
Bond #2
Bond #3
Bond #4
Bond #5
Schuldschein 10y/fixed
Schuldschein 7y/fixed
Revolving credit line7)
Total unsecured loans
Total
Net LTV
Apr 12, 2023
-
Nov 15, 2027
328,000
Sep 26, 2025
400,000
Jun 23, 2026
350,000
May 06, 2026
40,000
May 06, 2023
Apr 29, 2026
-
-
1,118,000
2,450,000
66.1
n/a
60.2
73.9
n/a
64.3
66.0
64.6
n/a
-
-
-
-
-
-
-
61.3
58.3
70.0
150,000
-
65.0
75.0
47,063
97,000
500,000
-
107,000
65.0
70.0
-
-
-
-
-
-
-
-
-
-
-
-
901,063
325,000
350,000
400,000
350,000
40,000
37,000
-
1,502,000
2,403,063
1) Calculation based on the market values of the properties serving as collateral in relation to the loan amount drawn down.
2) Agreement of a revolving credit line of EUR 200 million on April 29, 2022.
145
alstria Annual Report 2023
Consolidated Financial Statements
Apart from the risks mentioned above, the Group is not exposed to any commodity or currency risks.
14.1.1. Interest rate risk
The following tables display the carrying amount of the Group’s financial instruments that are exposed
to interest rate risk by maturity:
EUR k
< 1 year
1–2 years
2–3 years
3–4 years
> 4 years
Total
Financial year ending Dec.
31, 2023
Variable interest
Mortgage bank loans
Total
EUR k
Financial year ending Dec.
31, 2022
Variable interest
Mortgage bank loans
Total
257,000
257,000
0
0
0
0
500,000
575,000
1,332,000
500,000
575,000
1,332,000
< 1 year
1–2 years
2–3 years
3–4 years
> 4 years
Total
0
0
257,000
257,000
00
00
47,063
47,063
14,550
318,613
14,550
318,613
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, 2023.
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.
alstria Annual Report 2023
146
Consolidated Financial Statements
Interest expenses per annum
EUR k
+ 100 bps
− 50 bps
2023
13,820
-6,910
2022
3,186
-1,593
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
2023
38,324
-18,963
2022
22,802
-11,926
Effects on the income statement and correspondingly on equity
Financial derivatives without cash flow hedge accounting
As all derivatives were designated in a cash flow hedge relationship at the end of the reporting
period and the previous period, there are no effects from interest rate changes in the 3-month
EURIBOR for this category.
14.1.2. Credit risk
Credit risks are managed at the group level, except for those relating to accounts receivable balances.
The department responsible for managing the operating business property oversees and analyzes credit
risks in relation to each reletting activity before the standard payment and lease terms and conditions
are offered. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits
with banks and financial institutions, and credit exposures to customers (including outstanding
receivables and other compensatory commitments). Only banks and financial institutions are accepted
as counterparties—and only if they are independently rated parties with a minimum rating of
“investment grade.” If the tenants are independently rated, then their ratings are applied. If there is
no independent rating, the tenant’s credit quality is assessed; its financial position, past experience,
and other factors are taken into account. Credit limits are generally not provided to tenants. Lease
receivables from tenants are settled in bank transfers, which are usually due at the beginning of each
payment term. Tenants must pay a deposit or provide other warranties prior to the start of a lease
term.
147
alstria Annual Report 2023
Consolidated Financial Statements
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, 2023.
The following chart shows the related future undiscounted cash flows of financial liabilities:
EUR k
Financial year ending
Dec. 31, 2023
Loans
Corporate bond
Interest
Schuldschein
Trade payables
Other liabilities
EUR k
Financial year ending
Dec. 31, 2022
Corporate bond
Loans
Interest
Schuldschein
Trade payables
Other liabilities
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
257,000
0
0
500,000
297,000
278,000
1,332,000
0
400,000
350,000
328,000
0
0
1,078,000
61,955
51,892
45,981
40,000
0
38,629
18,158
11,289
227,904
0
0
0
0
0
0
40,000
4,717
0
0
2,355
2,159
1,904
1,885
4,899
57,946
0
4,717
44,744
368,416
454,247
438,140
868,533
317,043
294,188 2,740,567
< 1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
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
37,000
3,581
51,224
41,958
34,582
0
0
0
0
28,640
40,000
0
19,929
2,286
175,646
0
0
0
0
77,000
3,581
1,994
1,889
1,749
1,739
5,992
64,587
465,056
300,952
436,471
467,452
871,668
105,278 2,646,877
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 1,985,100 k (December 31, 2022:
EUR 1,630,488 k) were provided as collateral.
alstria Annual Report 2023
148
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, 2022 and December 31, 2023.
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.
2023
42.99
94.18
100.00
13.09
2022
55.27
90.10
100.00
13.31
G-REIT
covenant
> 45
> 75
> 75
< 501)
149
alstria Annual Report 2023
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:
Assets as per balance
sheet (EUR k) as of
Dec. 31, 2023
Financial assets
Derivatives
Total long-term
Trade receivables
Tax receivables
Receivables and other
assets
Derivate
Cash and cash
equivalents
Carrying
amount
Nonfinanci
al assets
Financial assets
At
amortized
costs
Fair value
through
p/l
Derivativ
es
Total
Fair
value
95,350
6,587
101,937
10,814
113
5,735
9,354
116,282
0
0
0
0
94,432
0
94,432
10,814
113
0
3,984
1,751
0
0
0
116,282
918
-721
197
0
95,350
95,350
7,309
6,587
6,587
7,309
101,937
101,937
0
0
0
0
0
0
0
0
0
9,354
10,814
10,814
0
0
1,751
9,354
1,751
9,354
0
116,282
116,282
9,354
138,201
138,201
Total short-term
142,298
4,097
128,847
Total
244,235
4,097
223,279
197
16,663
240,138
240,138
Carrying
amount
Nonfinancia
l liabilities
Financial liabilities
Liabilities as per
balance sheet (EUR k)
as of Dec. 31, 2023
Ltd. equity of
noncontrolling interests
Long-term loans
Other liabilities
Derivatives
98,297
2,177,607
13,203
10,001
Total long-term
2,299,108
Ltd. equity of
noncontrolling interests
Short-term loans
Trade payables
Derivatives
Tax liabilities
Other liabilities
Total short-term
Total
21
261,777
4,717
2,747
2,177
44,744
At
amortized
costs Derivatives
Total
Fair
value
98,297
2,177,607
13,203
0
0
0
0
10,001
98,297
98,297
2,177,607
1,972,155
13,203
10,001
13,203
10,001
2,289,107
10,001
2,299,108
2,093,656
21
261,777
4,717
0
0
40,586
0
0
0
2,747
0
0
21
21
261,777
256,575
4,717
2,747
0
4,717
2,747
0
40,586
40,586
0
0
0
0
0
0
0
0
0
2,177
4,157
316,183
6,334
307,101
2,747
309,848
304,646
2,615,291
6,334
2,596,208
12,748
2,608,956
2,398,303
alstria Annual Report 2023
150
Consolidated Financial Statements
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
Carrying
amount
Nonfinanci
al assets
Financial assets
At
amortized
costs
Fair value
through
p/l
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
0
364,973
5,275
374,591
459
-499
-40
0
0
0
0
0
Derivativ
es
0
35,266
Total
94,891
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
Total
509,524
5,275
469,023
-40
35,266
504,249
504,249
Liabilities as per
balance sheet (EUR k)
as of Dec. 31, 2022
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
Total
Carrying
amount
Non-
financial
liabilities
120,959
2,026,290
13,363
2,160,612
21
372,142
3,581
2,188
51,224
0
0
0
0
0
0
0
2,188
4,130
Financial liabilities
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
429,156
6,318
422,838
422,838
409,432
2,589,768
6,318
2,583,450
2,583,450
2,374,012
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.
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Consolidated Financial Statements
15. SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
Between the balance sheet date and the preparation of these consolidated financial statements,
shares in outstanding corporate bonds were made to the following extent:
Bond
ISIN
Bond III
Bond IV
Bond V
XS1717584913
XS52053346297
XS2191013171
Shares acquired after
December 31, 2023
Notional value of shares
16,600,000
16,200,000
12,300,000
45,100,000
EUR k
16,600
16,200
12,300
45,100
In addition, in February 2024, EUR 111,720 k of a loan agreed with DZ HYP AG on December 22, 2023
for a total of EUR 120,000 k was paid out to the company. The loan has a term until December 28,
2029 and has a float rate interest rate based on the 3-month EURIBOR.
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 2.3.2.
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Consolidated Financial Statements
17. DISCLOSURES PURSUANT TO THE WERTPAPIERHANDELSGESETZ [GERMAN SECURITIES
TRADING ACT] AND EUROPEAN MARKET ABUSE REGULATION [MAR]
17.1. Ad hoc announcements
The following table summarizes the announcements pursuant to Art. 17 MAR, as published by the
Company during the reporting period:
Date
Jan 12, 2024
Oct 13, 2023
Jan 10, 2023
Topic
External portfolio valuation as per December 31, 2023 determines value of around EUR 4 bn
alstria office REIT-AG intends to return EUR 250 m of capital by end of 2023 via special dividend and
increases the FFO guidance for financial year 2023
Portfolio valuation as per December 31, 2022 of EUR 4.6 bn
17.2. Directors’ dealings
The following transaction regarding the shares of the Company (ISIN DE000A0LD2U1) has been
reported to the Company during the reporting period pursuant to Art. 19 MAR:
Name of person
subject to the
disclosure
requirement
Olivier Elamine
Function
CEO
Transaction
Buy
Place
Outside a trading
venue
Transaction date
Dec 18, 2023
UTC - 5
Price per
share
in EUR
2.3625
Volume
in EUR
70,000.88
Aggregated information:
Average weighted share price: EUR 2.3625; aggregated volume: EUR 70,000.88
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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 Company received one notification pursuant to Section 33 para. 1 WpHG and published it pursuant
to Section 40 para. 1 WpHG:
Shareholders, registered
office
Brookfield Corporation,
Toronto, Canada
Voting rights
(new) (%)1)
95.392)
Amount
of shares
Date of
change
170,291,615 Dec 19, 2023
Attribution of
voting rights
Yes
Contains 3 % or more of
voting rights from
Lapis Luxembourg Holdings
S.à r.l., (10.01%)2)
Alexandrite Lake Lux
Holdings I S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings II S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings III S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings IV S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings V S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings VI S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings VII S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings VIII S.à r.l. (9.27%)
Alexandrite Lake Lux
Holdings IX S.à r.l. (9.27%)
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 0.02 % voting rights attached to financial instruments pursuant to Sec. 38 para. 1 No. 1 WpHG (corresponds to 29,630
voting rights).
During the reporting period the Company did neither receive any notifications on no longer existing
shareholdings nor notifications pursuant to Section 20 para. 1 and 4 AktG or pursuant to Section 33
para. 2 WpHG.
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.
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Consolidated Financial Statements
19. AUDITORS’ FEES
On May 4, 2023, the General Meeting elected Deloitte GmbH Wirtschaftsprüfungsgesellschaft,
Dammtorstraße 12, Hamburg auditor of the separate and consolidated financial statements for the
2023 financial year. The fees totaled EUR 687 k in 2023. 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
2023
589
26
0
98
0
0
687
2022
456
85
0
0
541
The non-audit services in the 2023 business year essentially relate to the review of the sustainability
report, the review of quarterly reports and audit related advisory.
The non-audit services in the 2022 business year, essentially relate to the review of quarterly reports
and audit related advisory.
Annika Deutsch is the auditor directly responsible for the audit of the financial statements for alstria
office REIT-AG and the Group. She first assumed this position in fiscal year 2022.
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Consolidated Financial Statements
20. MANAGEMENT BOARD
During the financial year, the Company’s Management Board was:
Name
Olivier Elamine
Place of residence
External Mandate
Hamburg, Germany
Urban Campus Group SAS
Profession
Function
CEO of the Company
Member of the Advisory Board
The remuneration report details the principles used to define the remuneration of the Management
Board and Supervisory Board.
21. SUPERVISORY BOARD
Pursuant to the Company’s Articles of Association (Section 9), the Supervisory Board consists of four
members who are elected at the General Meeting of the shareholders. The Articles of Association
were changed in the reporting period so that the Supervisory Board now consists of only four members
instead of the previous six.
During the 2023 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:
Place of residence
External Mandate
Profession
Function
Name
Information on alstria
mandate
Brad Hyler
Chair
London, United Kingdom
Edyn Apart Hotels (Brookfield
Group), United Kingdom
Experimental Group (Brookfield
Group), France
Temprano Capital (Brookfield
Group), Spain
Jan Sucharda
Vice-Chair
Toronto, Canada
Brookfield India Real Estate Trust
(Brookfield Group), India
Canary Wharf Group Investment
Holdings plc, United Kingdom
London, United Kingdom
Richard Powers
Joined alstria’s
supervisory board on
May 4, 2023
Managing Partner, Brookfield
Asset Management, United
Kingdom
Member of the Board of Directors
(non-executive)
Member of the Board of Directors
(non-executive)
Chair of the Board of Directors
(non-executive)
Managing Partner, Brookfield
Property Group, Canada
Director (non-executive)
Director (non-executive)
Managing Partner, Brookfield
Asset Management, United
Kingdom
Becky Worthington
Berkshire, United Kingdom
Chief Financial Officer, Canary
Wharf Group, United Kingdom
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Name
Information on alstria
mandate
Dr Frank Pörschke
Left alstria’s
supervisory board on
May 31, 2023
Place of residence
External Mandate
Hamburg, Germany
Profession
Function
CEO, P3 Logistic Parks s.r.o. (GIC
group), Czech Republik
Aug. Prien Bauunternehmung
(GmbH & Co. KG), Germany
Member of the Supervisory Board
Walton-On-Thames (Surrey),
United Kingdom
Supervisory Board member in
various companies
Edinburgh Investment Trust PLC,
United Kindom
W. P. Carey Inc., United States of
America
Chair of the Board of Directors
(non-executive)
Member of the Board of Directors
(non-executive)
Berlin, Germany
Managing Director, Brookfield
Germany
Elisabeth Stheeman
Left alstria’s
supervisory board on
May 31, 2023
Karl Wambach
Left alstria’s
supervisory board on
May 4, 2023
Hamburg, March 1, 2024
alstria office REIT-AG
The Management Board
Olivier Elamine
CEO
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Responsibility Statement
C. RESPONSIBILITY STATEMENT
To the best of my knowledge, I confirm that, in accordance with the applicable reporting principles,
the Consolidated Financial Statements for 2023 give a true and fair view of the Group’s assets,
liabilities, financial position and profit or loss, and that the Group Management Report 2023, 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, March 1, 2024
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 subsidi-aries (the Group) which comprise the consolidated statement of financial position as
at December 31, 2023, the consolidated income statement, the consolidated statement of
comprehensive income, the consolidated state-ment of changes in equity and the consolidated
statement of cash flows for the financial year from January 1 to December 31, 2023, 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, 2023. In
accordance with German legal requirements, we have not audited the content of the combined
corporate governance statement referenced in the section “VIII.1 Consolidated corporate governance
statement of the Group and alstria AG pursuant to Sections 289f and 315d German Commercial Code
(HGB)” referenced in the combined management report, of the sustainability report referenced in
the section “VI. Sustainability Report” of the combined management report, of the core components
of alstria’s sustainability strategy presented in this section, of the section “V.1.2 Internal control
system” of the combined management report, including the execu-tive directors’ statement on the
appropriateness and effectiveness of the entire internal control system and of the risk management
system included therein, and of the section “V.1.3 Compliance management 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
International Financial Reporting Standards (IFRS) as adopted by the EU and the additional
requirements of German commercial law pursuant to Section 315e (1) German Commercial
Code (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, 2023 and of its financial
performance for the financial year from January 1 to December 31, 2023, and
▪ the accompanying combined management report as a whole provides an appropriate view of
the Group’s position. In all material respects, this combined management report is consistent
with the consolidated financial statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future development. Our audit opinion on
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the combined management report does not cover the contents of the combined corporate
governance statement, of the sustainability report and of the section “VI. Sustainability report”
referred to above. Furthermore, our audit opinion on the combined management report does
not cover the contents of the section “V.1.2 Internal control system” and the executive
directors’ statement on the appropriateness and effectiveness of the entire internal control
system and of the risk management system included therein, and of the section “V.1.3
Compliance management system”.
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 ac-cordance 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 profes-sional law,
and we have fulfilled our other German professional responsibilities in accordance with these re-
quirements. 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, 2023. 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 mEUR 3,971.3 is disclosed in the consolidated financial statements of
alstria office REIT-AG as at December 31, 2023. The share of this item in total assets amounts to a
total of 93.7% and thus has a material influence on the Group’s assets and liabilities. alstria office
REIT-AG measures the investment properties at fair value. In the financial year 2023, a total loss from
measurement at fair value of mEUR 769.5 was recognized in the consolidated income statement. The
investment properties were measured at fair values in accordance with the discounted cash flow
method. The measurement date was December 31, 2023. The fair values were determined by the
accredited external expert Savills Advisory Services Germany GmbH & Co. KG, Frankfurt am
Main/Germany. Apart from 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
matter was of particular importance within the context of our audit.
The disclosures of the executive directors with respect to the measurement of investment properties
are included in sections 2.5 and 6.1 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 to the audit. We critically assessed the competence, capabilities
and objectivity of the external expert. Together with our own internal real estate valuation experts,
we examined the conformity of the measurement technique applied in accordance 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 squared the input parameters used in the measurement process with 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
referenced in the section “VIII.1 Consolidated corporate governance statement of the Group
and alstria AG pursuant to Sections 289f and 315d German Commercial Code (HGB)” of the
combined management report,
the separate sustainability report referenced in the section “VI. Sustainability report” of the
combined management report,
section “VI: Sustainability report” of the combined management report,
section “V.1.2 Internal control system” of the combined management report, including the
executive directors’ statement on the appropriateness and effectiveness of the entire internal
control system and of the risk management system included therein,
section “V.1.3 Compliance management system” in 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 independent auditor’s report thereon, not the declaration of
the executive board regarding compliance with the requirements under Sections 11 to 15
German REIT Act and regarding the income composition with regard to previously taxed and
not previously taxed income 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.
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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.
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 com-ply, in all material respects, with IFRS as adopted by the EU and the additional requirements
of German commer-cial 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 perfor-mance 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 materi-al 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 pre-sents 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 Sec-tion 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 inadequate, 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.
▪ evaluate the consistency of the combined management report with the consolidated financial
statements, its conformity with German law, and the view of the Group’s position it provides.
▪ perform audit procedures on the prospective information presented by 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
inde-pendence 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
36ebd98317f74eb40e4962f73ba948d87d375a9497ce1007f0257af02d07017c, 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 infor-mation 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 man-agement 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 com-bined management report for the financial year from
January 1 to December 31, 2023 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 requirements of the IDW Quality Management Standards.
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 Section 328 (1) sentence 4 no. 1 HGB and for the tagging of the
consolidated financial statements according to Section 328 (1) sentence 4 no. 2 HGB.
In addition, the executive directors of the Parent are responsible for such internal controls that they
have con-sidered necessary to enable the preparation of ESEF documents that are free from material
intentional or unin-tentional 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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alstria Annual Report 2023
Independent Auditor‘s Report
▪ 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 reporting 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 reporting 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 May 4, 2023. We were engaged by the
superviso-ry board on June 1 and 2, 2023. We have been the group auditor of alstria office REIT-AG,
Hamburg/Germany, without interruption 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).
alstria Annual Report 2023
168
Independent Auditor‘s Report
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 audited 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 consoli-dated financial statements and the audited combined
management report and do not take their place. In par-ticular, 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, March 1, 2024
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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alstria Annual Report 2023
Report of the Supervisory Board
E. REPORT OF THE SUPERVISORY BOARD
Dear shareholders,
In this report, we explain the Supervisory Board’s consultation with and monitoring of 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 2023.
I. FOCUS OF THE DISCUSSION
The main topics discussed by the Supervisory Board and its committees in the 2023 financial year
were the development of the Company’s real estate portfolio and financing structure. Further topics
have been the adjustment of the Company’s corporate governance structure to the new shareholding
structure after the acquisition of more than 95% of alstria’s shares by companies indirectly controlled
by Brookfield (Takeover) as well as the Company’s REIT-status. The size and composition of the
Supervisory Board have been adjusted and a new remuneration system for the Supervisory Board
members has been established in financial year 2023.
II. MONITORING AND ADVISING THE COMPANY’S MANAGEMENT
In the 2023 reporting year, we performed the duties incumbent on us under the law and 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, the articles of association, or 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 important
events. The chairmen of the Supervisory and Management Boards held regular informative and
advisory meetings.
alstria Annual Report 2023
170
Report of the Supervisory Board
III. BOARD MEMBERS
On May 4, 2023, the Company’s annual general meeting elected Richard Powers as new member of
the Supervisory Board as successor of Karl Wambach, whose term of office came to an end. In the
context of the reduction of the Supervisory Board’s size from six to four members, Dr Frank Pörschke
and Elisabeth Stheeman resigned from their offices as members of the Supervisory Board effective
May 31, 2023.
Following the changes in the Supervisory Board’s composition, the number of permanent committees
has been reduced from two to the legal minimum of one (Audit Committee) in order to further reduce
complexity. The matters which had formerly been discussed in the terminated Nomination and
Remuneration Committee are now being included in the agenda of the Supervisory Board in plenary
session.
In the year 2023, the Supervisory Board and its committees comprised the following members:
Supervisory Board member
Audit
Committee
Nomination &
Remuneration
Committee1)
Brad Hyler (chair)
Member
Chair
Jan Sucharda (deputy chair)
Richard Powers3)
Becky Worthington
Dr Frank Pörschke4)
Elisabeth Stheeman4)
Karl Wambach5)
1)
2)
3)
4)
5)
Until 19. Juli 2023
From 1. Juni 2023
From 4. Mai 2023
Until 31. Mai 2023
Until 4. Mai 2023
Member2)
Member2)
Chair
Member
−
−
Member
−
−
−
Member
−
In July 2023, the Supervisory Board last updated the profile for the Supervisory Board with concrete
objectives regarding the composition of the Supervisory 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 177 to 193 of the annual report and reviewed
its implementation status in February 2024. 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 2023, the Company completed an
onboarding process for one new Supervisory Board member. In addition, the Company supports
Supervisory Board members’ training measures with regular internal training, especially with regular
updates on the legal framework. In the 2023 financial year, these training sessions included the
onboarding process for the new Supervisory Board member, a corporate governance update and a
property tour. All Supervisory Board members are independent from the Company and its Management
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alstria Annual Report 2023
Report of the Supervisory Board
Board. The chair of the audit committee Becky Worthington is also independent from the controlling
shareholder. The members of the Supervisory Board Brad Hyler (chair), Jan Sucharda (deputy chair)
and Richard Powers represent the controlling shareholder. Beyond this no conflicts of interest
occurred in the past financial year for members of the Supervisory or Management Boards.
IV. MEETINGS OF THE SUPERVISORY BOARD
The full Supervisory Board held six meetings in the 2023 financial year. Based on detailed documents,
we also made seven decisions via circular resolution. In the 2024 financial year, two additional
meetings 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 four physical meetings while
offering the possibility for guests to join via video conference, two meetings were held as video
conferences.
At its ordinary 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 as well as
compliance with the Management Board. Committee chairs reported on the committees’ work.
In February 2023, the Supervisory Board decided on the Corporate Governance Statement which is
submitted jointly with the Management Board as well as on the remuneration report for financial year
2022. At the meeting in February 2023, the Supervisory Board addressed the annual and consolidated
financial statements as of December 31, 2022, the consolidated management report as well as alstria
office REIT-AG’s report on relations with affiliated parties pursuant to section 312 German Stock
Corporation Act (AktG) 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, 2022 and the Management Board’s recommendation for the appropriation of the net
profit for the 2022 financial year, approved alstria’s report on relations with affiliated parties for
financial year 2022 and agreed with the results of the audit of such report. The Supervisory Board
also resolved on the variable remuneration for the Management Board members.
In March and April 2023 the Supervisory Board prepared the Company’s annual general meeting,
approved a financing agreement and resolved on the annual corporate governance declaration
pursuant to section 161 AktG. In its meeting after the Company’s annual general meeting in May 2023
and by circular resolution in July 2023, the Supervisory Board adjusted the Company’s corporate
governance to the reduced size of four Supervisory Board members. In this context, the composition
of the audit committee was adjusted. It is still chaired by Becky Worthington as independent
Supervisory Board member and composed of all four Supervisory Board members. The Supervisory
Board further resolved on new leases and made editorial amendments to the Company's articles of
association to reflect a capital increase from conditional capital: Approximately 270,000 new shares
were issued to Company employees under the Company's employee participation plan.
alstria Annual Report 2023
172
Report of the Supervisory Board
At the meetings in autumn and winter 2023, 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 2024 financial year and approved new financing
agreements. The supervisory board further prepared the Company’s extraordinary general meeting in
December 2023 and reviewed the appropriateness of the proposed further dividend payment for
financial year 2022 in light of the current market conditions and the expected year-end valuation of
the Company’s portfolio. Furthermore, the Supervisory Board dealt with the performance targets for
the Management Board’s variable remuneration elements for financial year 2024.
In February 2024, the Supervisory Board passed a resolution on the corporate governance statement
and on the remuneration report for the 2023 financial year. At the balance sheet meeting in
February 2024, the Supervisory Board dealt with the annual and consolidated financial statements as
of December 31, 2023, with the Management Board's proposal for appropriating profits for the 2023
financial year and with the Management Board’s report on relations with affiliated parties pursuant
to section 312 AktG for financial year 2023.
Attendance of Supervisory Board members at meetings
The supervisory Board members attended all meetings of the Supervisory Board in the 2023 financial
year.
Attendance at meetings*
Full Supervisory Board
Brad Hyler (chair)
Jan Sucharda (deputy chair)
Richard Powers
Becky Worthington
Dr. Frank Pörschke
Elisabeth Stheeman
Karl Wambach
Audit Committee
Becky Worthington (chair)
Brad Hyler
Richard Powers
Jan Sucharda
Dr Frank Pörschke
Nomination and Remuneration
Committee
Brad Hyler (chair)
Jan Sucharda
Elisabeth Stheeman
Total
* Attendance can also be via telephone or video conference
Total number of meetings:
attended /during office term
Number of
physical meetings
Number of
meetings via video
conference
Participation
in %
6
6/6
6/6
5/5
6/6
2/2
2/2
1/1
6
6/6
6/6
3/3
6/6
3/3
1
1/1
1/1
1/1
4
2
3
3
1
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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alstria Annual Report 2023
Report of the Supervisory Board
V. COMMITTEES OF THE SUPERVISORY BOARD
At the beginning of financial year 2023, the six-member Supervisory Board had two standing
committees to support its work and staffed each of them with three members. After the reduction of
the Supervisory Board’s size from six to four members took effect in summer 2023, the Supervisory
Board reduced the number of standing committees to one (Audit Committee) and staffed it with all
four Supervisory Board members. The committees prepared some of the Supervisory Board’s
resolution via resolution recommendations; in some cases, decision-making powers had been
delegated to the committees to the extent permitted by law. No further committees have been
established in the financial year 2023. 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 2023 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, 2022. The Audit Committee discussed the annual financial statements,
the consolidated financial statements as of December 31, 2022, and the consolidated management
report as part of the audit of the financial statements. It 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 report on relations with
affiliated parties of alstria office REIT-AG and 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 2023 financial year and approved certain non-auditing services by the auditors for
the 2024 financial year. In summer 2023, the Audit Committee dealt with the half-year financial
report issued as of June 30, 2023 prior to publication and discussed this with the auditor.
The Company’s risk situation was discussed regularly. Other topics included the results of the EMIR
(European Market Infrastructure Regulation) audit for financial year 2022 conducted by Deloitte GmbH
Wirtschaftsprüfungsgesellschaft, Hamburg (Deloitte). The Audit Committee also dealt with the
auditor’s independence and the appointment of Deloitte as auditor for the 2023 financial reports.
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 and the effectiveness of the internal control and audit system. The Audit Committee
also discussed the internal audit’s results for the 2023 financial year with the external auditors from
PricewaterhouseCoopers.
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Report of the Supervisory Board
The Management Board attended all of the Audit Committee's meetings; 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, the auditors and the external
auditors for the internal audit and the EMIR audit also participated in some of the Audit Committee’s
meetings.
2. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee dealt with the Management Board remuneration and,
in particular, prepared the remuneration report for the 2022 financial year and, in the absence of the
Management Board, deliberated on the achievement of targets for the variable remuneration for the
Management Board’s members, also taking into account their individual performance. It also
submitted corresponding resolution proposals to the full Supervisory Board. It deliberated the very
good results of the employee satisfaction survey for financial year 2022 and prepared the Supervisory
Board elections. In the context of the slimming of the Supervisory Board, the Nomination and
Remuneration Committee was dissolved effective July 2023.
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, 2023
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
profit, as well as the auditor's reports, were made available to all Supervisory Board members
immediately after their preparation. The Supervisory Board comprehensively reviewed the documents
prepared by the Management Board in the Audit Committee and in the plenary session. At the Audit
Committee meeting, the auditor reported on his audit’s scope, 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 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 for the financial year 2023, along with the combined management
report and discussed the results of the audit. 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 the net
profit.
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alstria Annual Report 2023
Report of the Supervisory Board
Moreover, the Management Board presented its report on relations to affiliated companies pursuant
to section 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:
“Following our audit and judgment performed in keeping our professional duties, we confirm that
1. the facts in the report are stated accurately,
2. the consideration given by the Company for the legal transactions set out in the report was
not excessive or disadvantages have been compensated,
3. no circumstances regarding the measures set out in the report give rise to an opinion
materially different from that of the executive board.”
The Supervisory Board also reviewed the report by the Management Board on relations to affiliated
companies 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 sections 312 para. 3 AktG.
The Supervisory Board thanks its former members Dr Frank Pörschke, Elisabeth Stheeman and Karl
Wambach, whose office terms ended in financial year 2023, for their valuable contribution to the
Supervisory Board’s work. And the Supervisory Board also thanks the Management Board and all
employees for their dedicated performance in financial year 2023.
London, March 2024
For the Supervisory Board
Brad Hyler
Chair of the Supervisory Board
alstria Annual Report 2023
176
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 Principle 23 of the German Corporate
Governance Code (“Code”).
I. MANAGEMENT BOARD AND SUPERVISORY BOARD
German stock corporations are required by law to have a dual management system (two-tier board),
which provides a strict separation of personnel and functions between the Management Board as the
management body, and the Supervisory Board as the monitoring and advising body. Within this dual
management system, Management Board and Supervisory Board cooperate closely and faithfully in
the Company’s interests.
1. MANAGEMENT BOARD
The Management Board is responsible for managing the enterprise in the best interests of the
enterprise. In particular, the Management Board develops the enterprise’s strategic direction,
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 specified 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 the conclusion of new financing agreements with
a consideration or volume of more than EUR 30 million, or modernization measures that are not
included in the budget approved by the Supervisory Board and exceed a total annual amount of EUR 2
million. Furthermore, transactions with related parties pursuant to Section 111 a para.1 of the German
Stock Corporation Act (Aktiengesetz, AktG) require the approval of the Supervisory Board.
The Management Board regularly and promptly provides the Supervisory Board with comprehensive
information on all issues relevant to the Company and the Group relating to the strategy, development
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alstria Annual Report 2023
Corporate Governance Statement
of the business and financial position of the Company, planning, material business transactions as
well as on the risk situation, 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 course of business, in particular revenues and income, material accounting indicators, the 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 governed by rules of
procedure for the Management Board.
In financial year 2023, the Management Board of alstria office REIT-AG consisted of one member:
Member
Olivier Elamine
Chief Executive Officer
17
31.12.2027
Term of office
(in years)
Appointed until
Management 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. The rules of procedure for the Management Board stipulate that conflicts of interest must
immediately be disclosed to the Chair of the Supervisory Board. A member of the Management Board
shall also 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 prohibited.
Significant transactions between the Company on the one hand and a Management Board member or
related parties 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 member requires the Supervisory Board’s approval to conduct secondary
activities, particularly memberships in supervisory boards of companies outside the Group. In the
reporting period, there were no conflicts of interest involving the CEO that were not reported to the
Supervisory Board. There were also no agreements or transactions between the Company on the one
hand and the CEO or parties related to him pursuant to Section 111a AktG on the other hand. With
the approval of the Supervisory Board, the CEO holds a mandate in the board of a company outside
the Group. A list of the CEO’s memberships in supervisory boards of listed companies or companies
with comparable requirements pursuant to Section 285 No. 10 HGB can be found on page 156 of the
Company’s Annual Report.
The compensation of the Company’s CEO is presented in the Remuneration Report on pages 194 to
217 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.
2. PROFILE FOR THE MANAGEMENT BOARD
The Supervisory Board appoints and dismisses the members of the Management Board and, with the
support of the Management Board, ensures long-term succession planning. The Supervisory Board
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178
Corporate Governance Statement
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 July 19, 2023 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;
▪ 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
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alstria Annual Report 2023
Corporate Governance Statement
▪ 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.
3. SUPERVISORY BOARD
The Supervisory Board advises and supervises the Management Board in the management of the
enterprise. Advice and supervision also include sustainability issues. 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 170 to 176 of the Company’s Annual Report.
The number of statutory members of the Supervisory Board was reduced from six to four in the 2023
financial year by resolution of the Annual General Meeting on May 4, 2023. The Company’s Supervisory
Board is composed exclusively of shareholder representatives, which are generally elected by the
Annual General Meeting.
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
the interests of the Supervisory Board externally. The Chair maintains regular contact with the
Management Board and discusses the enterprise’s strategy, business development, the risk situation,
risk management and compliance. 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
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Corporate Governance Statement
management. If necessary, the Chair then informs the Supervisory Board and, when appropriate,
convenes a Supervisory Board meeting.
Supervisory Board resolutions are adopted by a majority of votes of 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 participate in meetings
of the Supervisory Board in person or via telephone, video conference, 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 (including e-mail and video conference) if the Chair so determines in individual cases.
All Supervisory Board members are obliged to act in 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. The rules of procedure for the Supervisory Board stipulate that 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 also not directly compete with the Company through private real estate
investments; real estate transactions between the Company and members of the Supervisory Board are
prohibited. Significant transactions between the Company on the one hand and members of the
Supervisory Board or related parties 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 that were not disclosed and there were also no such
agreements on transactions between the Company on the one hand and members of the Supervisory
Board and related parties on the other.
Each member of the Supervisory Board ensures that it has sufficient time available to fulfill its duties.
The members of the Supervisory Board observe the overboarding rules as defined in the Code. The
Supervisory Board regularly assesses how effectively the full Supervisory Board and its committees
fulfill their duties. The last self-assessment has been conducted by means of online questionnaires in
the 2021 financial year with very positive results.
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 156 to
157 of the Company’s Annual Report. The rules of procedure for the Supervisory Board can also be
viewed on the Company’s website under www.alstria.com → Company → Corporate Governance.
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The compensation paid to the individual Supervisory Board members is presented in the Remuneration
Report on pages 211 to 215 of the Company’s Annual Report. The Remuneration Report, together with
the other documents required by Section 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
During the reporting period, the Supervisory Board initially had two standing committees from among
its members: an Audit Committee and a Nomination and Remuneration Committee. As a result of the
reduction in the number of Supervisory Board members from six to four, the Nomination and
Remuneration Committee was dissolved with effect from July 19, 2023 for reasons of efficiency.
The Supervisory Board reports on the activities of its committees’ work during the 2023 financial year
in its report to the Annual General Meeting on pages 174 to 175 of the Company’s Annual Report.
4.1.
Audit Committee
The Audit Committee has its own rules of procedure, in which its matters, tasks and decision-making
powers are regulated in more detail. It 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 May 31, 2023, the Audit Committee
consisted of Becky Worthington (Chair) as well as Brad Hyler and Dr. Frank Pörschke. From June 1,
2023, the Audit Committee consisted of Becky Worthington (Chair), Brad Hyler, Jan Sucharda and
Richard Powers.
4.2.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee, which was dissolved with effect from July 19, 2023,
was responsible for 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 also used to deal with the succession planning for the
Management Board and decide 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 was responsible for preparing 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 the determination of the
compensation for the Supervisory Board, and it was responsible for dealing with any insider
information that fall within the Supervisory Board’s remit. These issues are now dealt with by the full
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Corporate Governance Statement
Supervisory Board. From January 1 until its dissolution on July 19, 2023 the Nomination and
Remuneration Committee comprised Brad Hyler (Chair) as well as Elisabeth Stheeman and Jan
Sucharda, whereby Elisabeth Stheeman had already resigned from the Supervisory Board with effect
from May 31, 2023.
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
July 19, 2023 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 provisions in Section 289 f HGB and in 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 one member shall be female. At least one member shall be male.
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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.
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 regarding
the composition of the plenum and the Audit Committee:
▪ 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.
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
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Corporate Governance Statement
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:
The terms of office of the Supervisory Board members Karl Wambach and Rebecca Worthington
expired at the end of the Company's Annual General Meeting on May 4, 2023. Rebecca Worthington
and Richard Powers were elected to the Supervisory Board by the Annual General Meeting for a
(further) term of office of five years. The Annual General Meeting also reduced the statutory number
of members of the Supervisory Board from six to four. As part of this reduction in the size of the
Supervisory Board, Supervisory Board members Dr Frank Pörschke and Elisabeth Stheeman each
resigned from office with effect from May 31, 2023.
The current composition of the Supervisory Board fulfills 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
Board are independent from the Company and its Management Board. Furthermore, the Chair of the
Audit Committee, Rebecca Worthington, is independent from the controlling shareholder. Brad Hyler,
Jan Sucharda and Richard Powers each have a business relation with group companies of Brookfield,
the controlling shareholder of alstria. Brad Hyler and Richard Powers also belong 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.
With many years of experience as a director on several boards of Brookfield's property portfolio
companies, Brad Hyler 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. Through his work as Chairman of the Company's Supervisory Board, Brad Hyler has also gained
experience in sustainability reporting and its audit and assurance.
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Status of implementation of the Profile for the Supervisory Board:
Brad Hyler1)
Jan Sucharda
Richard Powers
Becky Worthington2)
Year of birth
Term of office in years3)
Appointed until
Diversity
Gender
Nationality
Independence
1978
2
2027
1960
2
2027
1963
1
2028
1971
2
2028
m
m
m
f
US-American
Canadian
British &
British
US-American
Term of office for more than 12 years4)
no
Personal relationship with Management
no
Board5)
Material business relationship6)
no
Relationship with controlling shareholder7)
yes
no
no
no
yes
no
no
no
yes
no
no
no
no
Knowledge and experience
Industry background
Real estate sector
Financial expert accounting
Financial expert audit
ESG
Real Estate
Real Estate
Real Estate
Real Estate
X
X
X
X
X
X
X
X
1)
2)
3)
4)
5)
Chair of Supervisory Board and until July 19, 2023 Chair of the 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
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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 41.67 % as of December 31, 2023. 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 had initially set a target figure of at least 30 % for the proportion of women on
the Supervisory Board. In light of the reduction of the Supervisory Board from 6 to 4 members, this
target was adjusted to 25% and applies until December 31, 2027. The target was reached at 25 % as
of December 31, 2023. In view of the fact that Olivier Elamine has been appointed as CEO of the
Company until December 31, 2027 and there are no plans to re-fill the position of CFO, the target
figure for the proportion of women on the Management Board has been set at a minimum of 0%. This
target will apply until December 31, 2027 and was reached as of December 31, 2023.
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 February 27, 2024:
Declaration of compliance dated February 27, 2024
“Since its last Corporate Governance Declaration on March 15, 2023, 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 June 27, 2022 (“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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Management Board Remuneration System 2022
Following the takeover of the Company by Alexandrite Lake Lux Holdings S.à r.l., a company
controlled by Brookfield Corporation (former Brookfield Asset Management) (“Brookfield”), the
Supervisory Board had adjusted the remuneration system for the members of the Management Board
(“Management Board Remuneration System 2022”). The annual general meeting on June 10, 2022
approved the Management Board Remuneration System 2022 with a majority of 99.55%.
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 does no longer contain ESG targets for the variable remuneration. The Supervisory Board is
convinced that alstria’s Management Board is a front runner in terms of sustainable real estate
management even without non-financial performance criteria embedded in the remuneration
system.
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 following the takeover of the
Company, 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 shortens the deferral of the long-term variable remuneration from 4
to 2 years in order to meet the statutory provisions and fully align management board
remuneration with the overall employee remuneration scheme.
Candidate proposals by nomination committee, D. 4 GCGC
Pursuant to D. 4 GCGC, the Supervisory Board shall form a nomination committee, composed
exclusively of shareholder representatives, which names suitable candidates to the Supervisory Board
for its proposals to the general meeting.
The selection of candidates for the election of Supervisory Board members at the 2023 Annual General
Meeting was made directly by the full Supervisory Board. For cost and efficiency reasons, the
Management Board and Supervisory Board proposed to the Annual General Meeting that the number
of Supervisory Board members be reduced from six to four. In this context, two Supervisory Board
members resigned from office with effect from May 31, 2023. As the full Supervisory Board was already
intensively involved in its future composition in this context, candidates were also selected in plenary
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Corporate Governance Statement
sessions. As part of the reduction in the size of the Supervisory Board, the Nomination and
Remuneration Committee, was terminated with effect from July 19, 2023 for reasons of efficiency.
Supervisory Board Remuneration System 2023, G. 17 GCGC
According to the recommendations in G. 17 GCGC, the remuneration of the supervisory board
members shall take into account, in an appropriate manner, the higher time commitment of the chair
and the deputy chair of the supervisory board as well as of the chairs and the members of committees.
In accordance with the resolution of the Annual General Meeting on May 4, 2023, only the chair of the
Audit Committee is to be remunerated, in particular to reflect the demands of this activity on the
Supervisory Board. The further members of the Supervisory Board shall receive no remuneration; the
reimbursement of expenses shall remain unaffected.
The granting of fixed (and not variable) remuneration exclusively to the chair of the audit committee
ensures that in particular the chair of the audit committee of the Supervisory Board can exercise the
supervisory and advisory function independently. In addition, the non-granting of remuneration
ensures that all members of the Supervisory Board will be able to carry out their activities
independently of the short-term success of alstria. In this way, the Supervisory Board can concentrate
primarily on its activities with regard to the long-term development of alstria.
The level of remuneration for the chair of the audit committee reflects the function and the area of
responsibility and is appropriate to the situation of alstria. In particular, the greater amount of time
required to be spent by the chair of the audit committee and the higher technical skills they need to
possess are adequately taken into account.”
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
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Corporate Governance Statement
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, e.g. of the code of conduct or the Company’s internal guidelines. In addition, the
Management Board regularly discusses the Company’s compliance with the Supervisory Board.
Violations of the code of conduct will not be tolerated and will be fully investigated and sanctioned.
These may include disciplinary measures up to and including termination of employment, the assertion
of a claim for damages and criminal charges.
Integrity is also an essential condition for building trusting partnerships and cooperation with our
business partners. For this reason, alstria has introduced a code of conduct for its service providers,
craftsmen, suppliers and business partners, which describes fundamental legal and ethical
requirements. This code of conduct for service providers is published on the website of alstria and
defines the Company’s expectations of integrity and compliant behavior of its business partners.
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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. After holding some General Meetings virtually and others in person in the recent years, the
Company is currently planning to hold the Annual General Meeting 2024 in person. The convening
notice and the documents to be made available for inspection for the Annual General Meetings 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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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 if and as long as it does not
consist of all members of the entire Supervisory Board 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 2023 financial year and for further interim financial
reports until the next ordinary general meeting in 2024. 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 2024
The Management Board
The Supervisory Board
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Remuneration Report
G. REMUNERATION REPORT
The remuneration report of alstria office REIT-AG (alstria or Company) for financial year 2023
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 paragraph 3 AktG.
The audit note for this remuneration report (https://www.alstria.com/audit-report-remuneration-
report-2023),
the
current
remuneration
systems
for
the
Management
Board
(https://alstria.com/remuneration-system-management-board-2022) and the Supervisory Board
(https://alstria.com/remuneration-system-supervisory-board-2023) as well as this remuneration
report (https://alstria.com/remuneration-report-2023.pdf) are published on the Company’s website.
The remuneration of the Management Board for the financial year 2023 was based on the
remuneration system 2022, which was put to vote at the annual general meeting of shareholders on
June 10, 2022 and approved by 99.6 % of votes cast (Management Board Remuneration System
2022). The remuneration report 2022 was approved by 99.9 % of votes cast and the revised
remuneration system for our Supervisory Board (Supervisory Board Remuneration System 2023) was
approved by 99.9% of the votes cast by our annual general meeting of shareholders on May 4, 2023.
Given the high approval, we do not see reason for changes to the remuneration report and
remuneration systems. We will continue the high level of disclosure already established in the
remuneration reports 2021 and 2022.
1. VIEW ON THE FINANCIAL YEAR 2023
The relevant remuneration KPIs were influenced in 2023 mainly by the following effects:
• German economy stagnated in 2023 (GDP –0.3%)
• Annual inflation rate (CPI) for 2023 was 5.9%
• Difficult, but stable letting markets
•
Sharp rise in interest rates brought transaction market to a standstill
• Continuous investment in the existing portfolio
• Revenues and FFO per share above plan in 2023
• Downsizing of supervisory board from 6 to 4 members and implementation of new Supervisory
Board Remuneration System 2023
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With a decline in GDP of -0.3%, the German economy stagnated in 2023. This was due on the one hand
to the considerable loss of purchasing power among consumers as a result of the massive rise in energy
and food prices, and on the other hand to the weak global economic development as a result of the
ongoing geopolitical crises. The rise in interest rates as a result of monetary policy tightening also
contributed to the weak economic development. The average annual inflation rate (CPI) was 5.9% in
2023. Despite the weak commercial leasing market, alstria’s letting performance was stable compared
to the prior year, with 106,800 sqm in terms of new lettings, lease renewals and option drawings.
The weak economic development and the sharp rise in interest rates led to a virtual standstill in the
commercial transaction market and put real estate prices under pressure. The valuation of alstria’s
real estate portfolio by Savills Advisory Services Germany GmbH & Co. KG resulted in a write-down of
EUR 769.5 million to a total valuation of EUR 4.0 billion (previous year: write-down of EUR 173.8
million) as per December 31, 2023. The new portfolio value represents an average value of EUR 2,860
per sqm and a yield of 5.0 % for the portfolio, based on the ratio of contractual rent to market value.
In 2023, alstria invested a total of EUR 129 million in the existing portfolio. Half of this sum (EUR 65
million) was spent on development investments, which significantly improved the quality of the space
in order to achieve higher rents for new leases. The current development portfolio comprises 20
projects with a total lettable area of 154,300 sqm.
The revenue and FFO forecast published by alstria at the beginning of 2023 was exceeded in the
financial year 2023. The Group's revenues amounted to EUR k 192,026 (forecast: EUR 189 million) and
FFO after minorities reached EUR k 87,972 in the reporting year (forecast: EUR 79 million, adjusted
to EUR 84 million in October 2023). This translates into FFO per share of EUR 0.49 (forecast: EUR
0.44).
The financial year 2023 was also still 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 Richard Powers. In financial year
2023, the size of the supervisory board had been reduced from six to four members and the number
of permanent committees has been reduced from two to one, being the audit committee. In this
context, the Company implemented the new Supervisory Board Remuneration System 2023.
In financial year 2022, the Management Board Remuneration System 2022 had been implemented to
allow for a continued pay-for-performance connection. 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. The new long-term incentive (LTI) under the
Management Board Remuneration System 2022 also ensures remuneration alignment throughout the
organization as it was designed to follow the structure of the long-term incentive scheme for alstria’s
eligible employees as described below. The Management Board Remuneration System 2022 also
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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.
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 Supervisory Board discusses and reviews the remuneration system for
the Management Board at regular intervals and whenever necessary and resolves on changes. 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 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
compensation as well as the development of the CEO pay ratio since 2021.
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A lack of independence and conflicts of interest of members of the Supervisory Board may prevent
independent advice and supervision when determining the remuneration of the Management Board.
The Supervisory Board considers all its members as independent from the Company and its
Management Board and its member Rebecca Worthington as also independent from the controlling
shareholder. Furthermore, the members of the Supervisory Board 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 2023 is fully in line with the Management Board Remuneration
System 2022. The details of the application in the financial year 2023 are presented hereafter.
2.2. Management Board Remuneration System
Management Board remuneration is granted in line with the Management Board Remuneration System
2022, which is systematically depicted in the diagram below.
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202120222023CEO1)1,267,000 €1,259,000 €1,261,000 €Employees + managers2)77,412 €77,000 €77,864 €16,4 : 116.4 : 116.2 : 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 awarded and due in the comparative presentation.CEO pay ratio
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The main essential remuneration components and further contractual provisions of the Management
Board Remuneration System 2022 are described in more detail below.
2.2.1. Target Remuneration and Remuneration Structure
The target remuneration of the Management Board members for the financial years 2023 and 2022,
which is contractually defined as payable upon 100 % target achievement, and the resulting
remuneration structure are presented below. The term of office of CFO Alexander Dexne ended on
December 31, 2022. The target remuneration for the Management Board has not been increased in
the last year, therefore the structure of the total target compensation remains nearly identical for
the CEO Olivier Elamine.
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-
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Fixed remuneration Annual base salary • Annual base salary paid in twelve monthly installments Pension allowance • Monthly grants of cash for private pension purposes Fringe benefits • Use of company cars and insurance premiums Variable remuneration Short-Term Incentive Plan Type of plan • Target bonus Performance period • 1 year Targets • 100% FFO per share (0% -150%) • Individual multiplier (0.8-1.2) Payout • Payout 0% - 150% of target amount in cash Long-Term Incentive Plan Type of plan • Long term target bonus Performance period • 2 years Targets • Budget based KPIs or projects of relevance for the Company (0-115%) Payout • Payout 0% - 115% of target amount in cash Malus & Clawback • Reduction of variable remuneration which has not been paid out and reclaim of variable remuneration which has been paid out in cases of compliance violations and/or incorrect consolidated financial statements Termination in case of change of control • Management Board members are considered not to be responsible for a withdrawal after a change of control for up to 12 months after a change of control Share Ownership Guidelines • None Maximum Remuneration • Maximum remuneration p.a. for the CEO is EUR 2,600,000 and for the CFO EUR 2,100,000. Post-Contractual Non-Compete Obligation • Comprehensive post-contractual non-competition clause for a period of six months after termination of the service agreement, irrespective of the reason for termination. • Compensation in the amount of 100% of the last annual • base salary for the duration of the non-competition clause.
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term and sustainable development of alstria pursuant to section 87 paragraph 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.
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 payments for pension
purposes in form of a pension allowance. These pension benefits amount to approximately 18 % of the
members’ annual fixed salaries.
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Target remuneration20222022in T€in %1)in T€in T€in %in T€Annual base salary50037500--400Fringe benefits23319--28Company car11-9--19Insurances12-10--9Pension allowance88688--73Short-Term Incentive25018250--200STI 2022--250--200STI 2023250-----Long-Term Incentive50037500--400LTI 2022-2023--500--400LTI 2023-2024500-----Total target remuneration1,3611001,357--1,101Olivier Elamine (CEO)2023Alexander Dexne (CFO)20231) Numbers commercially rounded.
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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.
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 %.
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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 values of FFO per share set for the financial year 2023 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 and its responsibilities withing alstria in
addition to the achievement of financial performance. When determining the multiplier, the
Supervisory Board will take into account extraordinary events or developments as well as unexpected
significant fluctuation in financial measures.
The performance target (FFO per share) for the STI 2023 has been overachieved. The Supervisory
Board has set the individual modifier for the financial year 2023 on 1.0 for Olivier Elamine. With this
multiplier, the Supervisor Board recognizes the good performance in the reporting year in challenging
market conditions.
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 2023FFO per share 1)Threshold0 32 €Target value0 46 €Maximum0 60 €Actual value 2)0 51 €Target achievement 2)119%1) Before minorities.2) Unaudited numbers at the time of the preparation of this report.Target achievementFFO per shareMultiplierTotal target achievementTarget amount T 3 in T€ Payout T 3 in T€ Olivier Elamine119%1.0119%250296STI 2023
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Long-Term Incentive (LTI)
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:
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
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.
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LTI 2022 – 2023 and LTI 2023 - 2024
For the periods 2022-2023 and 2023-2024, the LTI KPIs are defined as follows:
The target values for the KTI 2022 – 2023 and for the LTI 2023 – 2024 are reported in the table
displaying target remuneration.
The LTI 2022 – 2023 assesses performance in financial years 2022 and 2023. The following table
provides an overview of the target achievement resulting for the LTI 2022 – 2023, which will be paid
out in early 2024:
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KPI target achievementKPI multiplierKPI contributionIncome managementTotal annualized rental income of new leases signed, leases renewed or options taken by tenants over the period0.91190.86780.2170Capital recyclingValue of assets to be sold over the period0.19100.00000.0000Capital structureValue of debt to be financed over the period1.1000 (capped)1.15000.2875Capital growthnumber of development projects to be delivered (at a given cost) during the period1.05301.07950.2699Overall target achievement0.7744LT in T€ Presence factorLT in in T€ Olivier Elamine5001387.200Alexander Dexne4000.5154.880LTI Tranche 2022 - 2023
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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.
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 2023 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 paragraph 2 AktG on possible third-party benefits are provided
below.
Third-Party Benefits
The member of the Management Board has not been awarded any third-party benefits in the financial
year 2023 for his activities as a Management Board member of alstria.
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
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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.
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 2023 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.
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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.
For the first six months of financial year 2023, alstria’s former CFO Alexander Dexne was subject to
a post-contractual non-compete obligation and alstria paid him the contractually agreed
compensation amounting to 100% of his last base salary.
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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. For the first six months of financial year 2023, he was subject to the post-contractual non-
compete obligation under the terms described in this remuneration report. He did not receive any
severance payments. The STI 2022 was regularly paid out to him in 2023 and the LTI 2022 – 2023 has
not be terminated early but settled after the regular end of the performance period.
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 2023, 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 2023 as well as the remuneration for the post-contractual non-compete-
obligation
▪ The STI 2023 assessing performance in 2023 that will be paid out in the financial year 2024
▪ The LTI 2022-2023 assessing performance in financial years 2022 and 2023 that will be paid
out in the financial year 2024
In order to allow for a transparent disclosure, the respective remuneration amounts for the financial
year 2022 are included as additional information.
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Remuneration awarded and due20222022in T€in %in T€in T€in %in T€Annual base salary5003950020056400Fringe benefits23219--28Company car11-9--19Insurances12-10--9Pension allowance88788--73Short-Term variable remuneration29623269--215STI 2022--269--215STI 2023 1)296-----Long-Term variable remuneration387301,04015544851LTI 2018-2022--1,040--851LTI 2022-2023 1)387--155--Total remuneration1,2941001,9163551001,567Terminated Long-Term variable remuneration--2,595--2,106LTI 2019-2023--1,034--846LTI 2020-2024--650--532LTI 2021-2025--911--729Total remuneration incl. terminated LTIs1,294-4,511355-3,6731) Unaudited numbers at the time of the preparation of this report.Alexander Dexne (CFO)20232023Olivier Elamine (CEO)
Remuneration Report
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 a 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 remuneration paid for financial year 2022 to the CEO (EURk 1,916) and to the former CFO
(EURk 1,567) was below the respective maximum remuneration pursuant to section 87a paragraph 1
sentence 2 number 1 AktG. The payments made in financial year 2022 for the prematurely terminated
long term variable remuneration for financial years 2019, 2020 and 2021 (LTI 2019- 2023, LTI 2020-
2024 and LTI 2021-2025) have not been made for financial year 2022 and thus, may not be taken into
account for the calculation of the maximum remuneration for financial year 2022.
The total of all payments resulting from commitments for the 2023 financial year can only be
determined after the expiry of the two-year performance period of the Long-Term Incentive and the
calculation of target achievement based on the audited financial report for 2024. 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
2023 – 2024 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 2023 will be provided in the
remuneration report for the corresponding year after the end of the performance period of the LTI
tranche 2023-2024.
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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 2023 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 adjusted by the annual general meeting of
shareholders on May 4, 2023 (AGM 2023) by 99.9 % of votes cast (Supervisory Board Remuneration
System 2023). 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, see
section 113 paragraph 3 AktG. 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.
The remuneration in the financial year 2023 is fully in line with the applicable supervisory board
remuneration systems. The Supervisory Board Remuneration System 2021 (as defined below) applied
from January 1 until the Company’s AGM 2023 and the Supervisory Board Remuneration System 2023
applied for the time after the AGM 2023 and December 31, 2023. The details of the application in the
financial year are presented hereafter.
4.1.2. Supervisory Board Remuneration System 2023
Some members of the Supervisory Board had waived their Supervisory Board remuneration. The
Company wished to take this development into account. Therefore, remuneration is now granted only
to the chair of the audit committee of the Supervisory Board, in particular to reflect the demands of
this activity on the Supervisory Board. The chair of the audit committee receives a remuneration of
EUR 70,000.00 p.a., which is fixed and not performance related. Members who chair the audit
committee for only part of a year receive remuneration pro rata temporis. The further members of
the Supervisory Board receive no remuneration. The Company reimburses the expenses of the
members of the Supervisory Board and 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 paragraph 2 of the Articles of Association). No
further remuneration is granted. Variable remuneration elements do not exist and no attendance fees
are being paid. The granting of fixed (and not variable) remuneration exclusively to the chair of the
audit committee ensures that in particular the chair of the audit committee of the supervisory board
can exercise the supervisory and advisory function independently. In addition, the non-granting of
remuneration or granting of fixed remuneration ensures that all members of the Supervisory Board
will be able to carry out their activities independently of the short-term success of alstria. In this
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way, the Supervisory Board can concentrate primarily on its activities with regard to the long-term
development of alstria.
4.1.3. Supervisory Board Remuneration System 2021
Until the annual general meeting on May 4, 2023, the remuneration for the members of the
Supervisory Board was granted in line with the old supervisory board remuneration system as last
confirmed by the annual general meeting of shareholders in 2021 by 99.7 % of votes cast (Supervisory
Board Remuneration System 2021). The remuneration granted in line with the Supervisory Board
Remuneration System 2021 was not performance-related. It consisted of a fixed remuneration and a
likewise fixed remuneration for committee work. The Company reimbursed the expenses of the
members of the Supervisory Board. The Company had, 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 paragraph 2 of the Articles of
Association). Members of the Supervisory Board each received an annual fixed remuneration of
EUR 50,000. The chair of the Supervisory Board received an additional annual amount of EUR 100,000
(factor 3); the deputy chair received an additional amount of EUR 25,000 (factor 1.5).
Membership in the audit committee entitled a member to an additional remuneration of EUR 10,000,
while the chair of the audit committee received EUR 20,000 per year (factor 2). Membership in the
nomination and remuneration committee entitled a member to an additional annual remuneration of
EUR 7,500 while the chair of this committee was compensated with additional EUR 15,000 per year
(factor 2). The same applied to the finance and investment committee, which was dissolved effective
March 21, 2022. Membership in temporary committees did not entitle a member to additional
remuneration.
Members who belonged to the Supervisory Board respectively one of its committees for only part of a
year received a pro rata temporis remuneration. Variable remuneration elements did not exist and
no attendance fees have been paid.
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212
Remuneration Report
4.1.4. Significant changes compared to the remuneration system 2021
The following table shows the remuneration structure for the Supervisory Board in financial year 2023.
Changes between the Supervisory Board Remuneration System 2021 and the Supervisory Board
Remuneration System 2023 are marked in underlined lettering.
According to the Supervisory Board Remuneration System 2021, all supervisory board members
received fixed remuneration, with the amount being dependent on the tasks assumed by each member
within the supervisory board and its committees. The Supervisory Board Remuneration System 2023,
by contrast, only provides for an annual fixed remuneration for the chair of the audit committee. The
further members of the Supervisory Board receive no remuneration; the reimbursement of expenses
remains unaffected.
Increased qualification requirements are placed on the members of the audit committee. According
to the Profile for the Supervisory Board, at least two members of the audit committee, including the
chair, should be financial experts. At least one member should have acquired particular skills and
experience in accounting, in applying accounting principles and internal controls. At least one further
member should have acquired particular skills and experience in audit. In addition, the Profile for the
Supervisory Board provides that the chair of the audit committee should be independent from the
Company and its Management Board and from any controlling shareholder.
The increased requirements in terms of qualification and independence are of particular importance
for the Company especially due to the scope and significance of the audit committees' work, and in
particular apply to the chair of the audit committee. According to the rules of procedure for the
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Supervisory Board, the audit committee in particular deals with the audit of the annual financial
statements and intra-year financial information, accounting and the accounting process, risk
management, the internal control and audit system as well as compliance.
Compared to the other members of the Supervisory Board and the audit committee, the chair has a
higher workload, needs to spend more time and has greater responsibility. Therefore, the chair of the
audit committee receives annual remuneration for this work. In addition, the remuneration for the
work of the chair of the audit committee is to ensure that the Company will be able, also in future,
to fill this position with competent persons.
Moreover, the Supervisory Board Remuneration System 2023 ultimately reflects the payment of the
remuneration to the members of the Supervisory Board and its committees in office in the 2022
financial year. In fact, under release agreements with the Company, three Supervisory Board members
waived the fixed remuneration to which they were entitled under the Supervisory Board Remuneration
System 2021 for financial year 2022.
The provisions on the reimbursement of expenses remain unchanged compared to the Supervisory
Board Remuneration System 2021.
The remuneration system for the members of the Supervisory Board 2023 does not provide for any
obligation of the Supervisory Board members to acquire shares in alstria. No corresponding voluntary
self-commitments have been declared.
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214
Remuneration Report
4.2.
Individualized Disclosure of the Remuneration of the Supervisory Board
The composition of the Supervisory Board changed in financial year 2023: The annual general meeting
on May 4, 2023 appointed Mr Richard Powers as member of the Supervisory Board of the Company.
The term of office as member of the Supervisory Board of Karl Wambach terminated the same day.
The annual general meeting on May 4, 2023 further resolved to downsize the Supervisory Board from
six to four members. The Supervisory Board members Dr. Frank Pörschke and Elisabeth Stheeman
resigned from their offices effective May 31, 2023.
The remuneration awarded and due to the current and former members of the Supervisory Board in
the 2023 financial year is presented in the following. A distinction is made between fixed
remuneration and committee remuneration.
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alstria Annual Report 2023
Supervisory Board RemunerationTotalremunerationTotalremuneration T€in % T€in % T€ T€in % T€in % T€Brad Hyler (Chair) 1)- 3)-- 3)--- 3)-- 3)--Jan Sucharda (Deputy Chair) 1) - 3)-- 3)--- 3)-- 3)--Richard Powers 2)----------Rebecca Worthington 1)17,02453,07670,041,97315,72757,6Dr. Frank Pörschke 4)17,0833,41720,450,08111,61961,6Elisabeth Stheeman 4)17,0872,51319,550,0859,11559,1Karl Wambach 5)- 6)-- 6)--- 6)-- 6)--Sum51,0-58,9-109,9141,9-36,4-178,31) Elected by court order with effect from March 1, 2022 and elected by the annual general meeting 2022. 2) Elected by the annual general meeting 2023.3) The supervisory board member waived the payment of the fixed annual remuneration for the membership in the Company's supervisory board and its committees. alstria paid taxes. 4) Resigned membership in the course of the downsizing of the supervisory board from 6 to 4 members with effect from May 31, 2023.5) Term expired on May 4, 2023.6) The supervisory board member waived the payment of the fixed annual remuneration for the membership in the Company's supervisory board and its committees. 2022Fixedremuneration2023Fixed remunerationCommittee remunerationCommittee remuneration
Remuneration Report
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 paragraph 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.
For the average employee remuneration, all employees of alstria are considered, with the exception
of interns, working students, apprentices 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 also include the profit the employees made from a disposal of the
shares, which they received in the 2022 and 2023 financial years 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. Without adding this disposal profit, the average employee remuneration would be
(i) EUR 93k in 2023 and would have decreased by 2% compared to the 2022 financial year and (ii)
EUR 95k in 2022 and would have decreased by 1% compared to the 2021 financial year.
alstria Annual Report 2023
216
2023Development 2023/20222022Development 2022/20212021Development 2021/20202020in T€in %in T€in %in T€in %in T€Management BoardOlivier Elamine1,294-714,5111481,818-152,143Alexander Dexne 1)355-903,6731481,484-161,760Supervisory BoardBrad Hyler (Chair) 2)- 4)-- 4)----Jan Sucharda (Deputy Chair) 2)- 4)-- 4)----Richard Powers 3)-------Rebecca Worthington 2)702158----Dr. Frank Pörschke 5)20-67624044--Elisabeth Stheeman 5)20-67593843--Karl Wambach 2),6)- 7)-- 7)----EmployeesAverage remuneration110-41152096889Company performanceRevenues192,0265182,8190183,6704177,063FFO per share (in EUR) 8)0.51-180.62-70.6780.621) Until December 31, 2022.2) Elected by the annual general meeting 2022. 3) Elected by the annual general meeting 2023.4) 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. 5) Resigned membership in the course of the downsizing of the supervisory board from 6 to 4 members with effect from May 31, 2023.6) Term expired on May 4, 2023.7) The supervisory board member waived the payment of the fixed annual remuneration for the membership in the Company's supervisory board and its committees. 8) Before minorities.
Remuneration Report
When looking at the remuneration development for the Management Board from 2022 to 2023, it is
noticeable that the remuneration has decreased significantly. This is partly due to the fact that the
term of office of the former Chief Financial Officer ended on December 31, 2022 and that there has
not been a replacement. Besides this, the changes mainly result from a decrease in long-term variable
remuneration. In 2022, the remuneration was impacted by 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 that are reported as part of the
remuneration awarded and due in financial year 2022. The vesting values of the long-term incentive
for the Management Board members for financial year 2022 (LTI 2022-2023) are below target values.
The adjusted development, not taking into account the early terminated LTI tranches in financial
year 2022, would show a decrease of 33 % for the CEO's remuneration in the 2023 financial year
(EUR 1,294k) compared to the previous year (EUR 1,916k).
The Supervisory Board remuneration is also decreasing. This was driven by the changes in the
composition of the Supervisory Board over the last two years and by the introduction of the
Supervisory Board Remuneration System 2023.
Looking at the corporate development in the reporting period, revenues were EUR 192 million
(compared to EUR 183 million in 2022). The increase of 5% is primarily the result of revenues from the
indexation of rental contracts and from new leases. The FFO per share (before minorities) amounted
to EUR 0.51 (prior year: EUR 0.62). The decline in FFO per share was due to increasing financing costs.
Hamburg, February 2024
alstria office REIT-AG
The Supervisory Board
The Management Board
Brad Hyler
Chairman of the Supervisory Board
Olivier Elamine
CEO
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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, 2023, 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, 4.63 % 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, 2024. 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. The criterion for the minimum free float pursuant to Section
11 (1) of the REIT Act was not met for the first time as of December 31, 2022.
2. In accordance with Section 11 paragraph 4 REIT Act, as per balance sheet date, no shareholder
owned directly 10 % or more of our shares or shares of such an amount, that he holds 10 % or more
of the voting rights.
3. In relation to the sum of the assets pursuant to the consolidated statements less the 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 3,990,861 k, which
equals 94.18 % 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 944 k
and therefore 0.02 %.
4. In relation to the sum of the entire sales revenue plus the other earnings from immovable assets
pursuant to the IFRS consolidated financial statements (Section 12 paragraph 3 and 4 REIT Act)
a) the financial year 2023, the entire sales revenues plus other results from immovable assets
amounted to EUR -539.3 million. This equals 100 % of total revenues plus other earnings from
immovable assets;
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218
REIT Disclosures
b) The sum of the sales revenue plus the other earnings from immovable assets of the REIT service
companies amounted to EUR 15 k in the financial year 2023. This equals 0.00 % of the Group’s
total revenue plus other earnings from immovable assets.
5. In financial year 2023, a dividend payment of EUR 262,469 k for the prior financial year was
distributed to the shareholders. Financial year 2022 resulted in a net gain amounting to
EUR 30,554 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 2019, the Group has realised 12.53 % 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 plus the shares in subsidiaries included in the
consolidated financial statements in accordance with Section 315e of the German Commercial
Code (HGB) reported as debt was EUR 1,715.9 million, as shown in the IFRS Consolidated Financial
Statements. This equals 42.99 % 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).
For the first time, the equity ratio fell below the threshold pursuant to Section 15 REIT act.
Hamburg, March 1, 2024
alstria office REIT-AG
Olivier Elamine
CEO
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alstria Annual Report 2023
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, 2023, 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, 2023 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, 2023 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, 2023 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 2023
220
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, 2023 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, March 1, 2024
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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alstria Annual Report 2023
Financial Calendar/Imprint
I. FINANCIAL CALENDAR/IMPRINT
I. FINANCIAL CALENDAR
Events 2024
May 28
June 6
August 20
November 26
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 2023
222
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
BUILDING YOUR FUTURE