Press Release




PRESS RELEASE

Nine months 2020 – Results fully on target  

  • Revenues at EUR 131.5 million and funds from operations (FFO) at EUR 83.4 million
     
  • Rental payments in the third quarter of 2020 at 100% 
     
  • Disposal of eight buildings with a book gain of 7.2%  
     
  • Net LTV at 26.1%, net asset value (EPRA NTA) per share at EUR 17.91
     
  • 2020 forecast confirmed: Revenues of EUR 179 million and FFO of EUR 108 million

Hamburg, November 4, 2020 – alstria office REIT-AG (symbol: AOX, ISIN: DE000A0LD2U1) reports on an operating business according to plan in the first nine months of 2020.

Revenues of EUR 131.5 million and FFO of EUR 83.4 million 
The decline in economic output due to the COVID-19 pandemic had only a marginal impact on alstria’s financial figures in the first nine months of 2020. The third quarter of 2020 proceeded according to plan. Rent collection rate for the quarter was 100% and rents that were temporarily deferred during the second quarter were mostly recovered and paid. Rental income amounted to EUR 131.5 million in the reporting period, compared to EUR 140.5 million in the same period of the previous year. The decrease of EUR 9.0 million is mainly due to the sale of properties and scheduled lease expiries.

The FFO margin increased by 350 basis points to 63.5% (9M 2019: 60.0%), mainly as a result of a reduction in property operating costs, administrative expenses and improvement in net financial income, which largely offset the lower rental income. Therefore, the operating result (FFO after minorities) decline was limited to EUR 0.8 million (EUR 83.4 million vs. EUR 84.2 million 9M 2019).

Consolidated net income for the period under review amounted to EUR -3.0 million (9M 2019: EUR 302.7 million). The main reason for the income change was the valuation result of the real estate portfolio in the first half of 2020.  

Disposal of eight buildings at a book gain of 7.2%
Year to date, alstria has sold eight non-core assets in separate transactions. The total value of all transactions amounted to EUR 126.5 million, with annual rental income from the properties sold totalling EUR 7.6 million. The properties were sold at an average book gain of 7.2% over the last valuation, generating a total book profit of EUR 8.5 million for the period. 

Net LTV at 26.1%, net asset value (EPRA NTA) per share at EUR 17.91
The fair value of investment property as of September 30, 2020 was EUR 4,360,737 k, slightly below the level as of December 31, 2019 (EUR 4,438,597 k). There was no update in the portfolio valuation for the third quarter of 2020. 

As of September 30, 2020, alstria’s cash and cash equivalents and additional current financial assets amounted to EUR 872.2 million (December 31, 2019: EUR 498.0 million). A EUR 350 million capital market bond issued on June 16, 2020 further improved the financial flexibility of the Company and contributed to the significant increase in cash and cash equivalents and short-term investments. In addition, a promissory note in the amount of EUR 37 million was repaid in the reporting period. 

alstria’s equity remained stable at EUR 3,174 million as of September 30, 2020 (December 31, 2019: EUR 3,176 million). The net asset value (EPRA NTA) per share was EUR 17.91 as of September 30, 2020. The company’s balance sheet strength is also reflected in a G-REIT equity ratio of 71.9% and a net LTV of 26.1%. Net debt in relation to EBITDA remained in a comfortable range at 8.1x.

Letting volume of 92,400 sqm – EPRA vacancy rate at 8.0%
The letting market in Germany has slowed down as a result of the pandemic with overall take-up across German markets down by around 42% year on year1. alstria signed new leases for 48,500 sqm (9M 2019: 123,100 sqm) and lease extensions for 43,900 sqm (9M 2019: 81,300 sqm). The EPRA vacancy rate improved by 10 basis points to 8.0% in the course of 2020.  
Source: Jones Lang Lasalle, Office Market Overview (Q1, Q2, Q3 2020)

Sustainability report 2019 / 2020 published
alstria published its annual sustainability report for the financial year 2019. The report provides insights into the decarbonization strategy of alstria and the environmental impact of its operations. It is prepared in accordance with the GRI Standards and EPRA real estate specific guidelines and has obtained a third-party assurance for all environmental and social KPIs.

Major sustainability accomplishments for the FY 2019 include:

  • alstria is the first German speaking real estate company to set science-based targets with the aim of reducing corporate and portfolio’s GHG emissions by at least 30% by 2030 from 2018 as a base year.
     
  • alstria’s is the first German speaking real estate company to respond to Task Force on Climate-related Financial Disclosures (TCFD), providing its stakeholders with greater transparency into how the business deals with climate-related risks and opportunities.
     
  • alstria’s first attempt to account for the embedded carbon emissions from its current development pipeline.
     
  • alstria is the first German speaking real estate company to introduce its low-carbon design principles providing alstria’s developers and service providers with a framework for low-carbon refurbishment and thus help reducing carbon emissions across its portfolio. 
     
  • alstria reduced its market based operational GHG emissions by 63% compared to base year 2013, mainly as an effect of its energy procurement policy and increased engagement with the tenants. 
     
Guidance for FY 2020 confirmed  
alstria confirms its guidance for the FY 2020 with expected revenues of around EUR 179 million and an operating result (FFO) of EUR 108 million.

“The COVID-19 impact remains the dominant factor driving the real estate office market and the economy as a whole”, says Olivier Elamine, CEO of alstria. “As long as we will not have a clear exit route of the health situation, a volatile trading environment is to be expected. More importantly, the longer the health crisis lasts, the deeper the recession will be, and the stronger the impact on the leasing markets. alstria is well positioned to manage these risks, but also size potential opportunities with our low LTV, strong cash position, and 70% prelet quota in our refurbishment pipeline. Our approach never relied solely on expectation of market driven rental growth and is therefore less sensitive to the current situation”.

The interim report for the first nine months of 2020 is available at:
www.alstria.com/investor/#reports

Invitation to the conference call on November 5, 2020
The alstria Management Board, CEO Olivier Elamine and CFO Alexander Dexne, will present the 9M results during a conference call at 10:00 a.m. (CET). 

Please use one of the following dial-in numbers:
Germany:          + 49 69 201 744 220

UK:                   + 44 203 009 2470
PIN:                  322 89 633#

Please note that you can follow the management’s presentation live as a webcast on our website www.alstria.com. The presentation slides will be available for download on our website, shortly before the conference call begins.

Contact                                    
Ralf Dibbern                          
Steinstrasse 7                                      
20095 Hamburg, Germany                  
+49 40 22 63 41-329                   
[email protected]

Further information 
www.alstria.com
www.green-dividend.com
www.beehive.work
www.twitter.com/alstria_REIT
www.linkedin.com/company/alstria-office-reit-ag

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About alstria:

alstria office REIT AG is the leading real-estate operator focusing solely on German office property in selected German markets. Our strategy is based on the ownership and an active management of our properties throughout their entire life cycle, strong added-value services to our customers and deep knowledge of the markets in which we operate. alstria strives for sustainable long-term value creation while taking advantage of short-term arbitrage of inefficiencies in the real estate markets. As of September 30, 2020, the portfolio comprises 110 buildings with a lettable area of 1.4 million square meters and a total portfolio value of EUR 4.4 billion.  

Disclaimer:
This release constitutes neither an offer to sell nor a solicitation of an offer to buy any shares. As far as this press release contains forward-looking statements with respect to the business, financial condition and results of operations of alstria office REIT-AG (alstria), these statements are based on current expectations or beliefs of alstria’s management. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those reflected in such forward-looking statements. Apart from other factors not mentioned here, differences could occur as a result of changes in the overall economic situation and the competitive environment – especially in the core business segments and markets of alstria. Also, the development of the financial markets and changes in national as well as international provisions particularly in the field of tax legislation and financial reporting standards could have an effect. Terrorist attacks and their consequences could increase the likelihood and the extent of differences. 

The current COVID-19 outbreak is creating substantial uncertainty in the marketplace. Although alstria has diligently reviewed the information contained in this release it is based on its own analysis and estimate, as well as available public sources and not on active discussion with tenants. As such the current liquidity risk of the tenants can materially differ from alstria’s own estimate, and the actual impact of the COVID 19 outbreak may differ substantially from the current previsions.

alstria undertakes no obligation to publicly release any revisions or updates to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Copyright © 2020 alstria office REIT-AG, All rights reserved.

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