Ready to seize opportunities
- Financial result 2010 in line with guidance: Revenues of EUR 89.1 million and Funds from operations (FFO) at EUR 27.5 million
- Strong balance sheet ratios: G-REIT equity ratio at 49.8% and net LTV at 50.1%
- Guidance for 2011: FFO up by close to 10%
- alstria is well positioned to seize opportunities it sees in the market
alstria office REIT-AG (symbol: AOX, ISIN: DE000A0LD2U1), an internally managed Real Estate Investment Trust (REIT) focused predominately on acquiring, owning and managing office real estate in Germany, today announces its result for the financial year 2010.
Revenues of EUR 89.1 million and FFO of EUR 27.5 million in line with full year guidance
In the 2010 financial year alstria generated revenues of EUR 89.1 million. The decline of 13.1% year-on-year was mainly attributable to the disposal of real estate assets. Funds from operations for the same period amounted to EUR 27.5 million and were slightly higher compared to the 2010 guidance of EUR 27 million. The 2010 profit and loss account was on the one hand burdened by a EUR 35.7 million non-cash loss on financial derivatives, on the other hand alstria benefited from realised capital gains amounting to EUR 9.3 million in context with the successful disposal of real estate assets. alstria?s net profit for the year 2010 amounted to EUR 0.2 million (2009: EUR -79.7 million). The substantial improvement of alstria?s IFRS net profit was mainly driven by lower net devaluations on the properties (EUR 0.7 million in 2010 vs. EUR -86 million in 2009).
Further improvement of balance sheet ratios
Following the refinancing of the syndicated loan in summer 2010, alstria has no refinancing needs before mid 2014. Its average debt maturity was extended from 2.6 years at the end of 2009 to 4.6 years at the reporting date, while its cost of debt remained stable at around 4.3%.
alstria?s equity increased by 9.2% to EUR 692.4 million as of year-end 2010, mainly as a result of the successful capital increase in September 2010. alstria?s G-REIT equity ratio amounted to 49.8% as per December 31, 2010, the company?s net LTV at the reporting date was 50.1%.
Disposals of EUR 166 million of assets at an average premium of 8% above book value substantiate current portfolio valuation
alstria took advantage of the strong demand for core assets and disposed real estate assets worth EUR 166 million in 2010 at an average premium of 8% to book value and an average disposal yield of 4.9%.
As of December 31, 2010, alstria?s investment property totalled EUR 1.35 billion. The decline by approximately 5% compared to December 31, 2009 is mainly attributable to the successful asset disposals realised during 2010. The valuation reflects an overall valuation yield of 6.4%. The overall valuation loss in the portfolio of EUR 12.8 million was mainly attributable to assets with short remaining lease maturities. This loss was almost entirely compensated by the value gain on alstria?s main development projects of EUR 12.1 million.
Successful leasing activities
In 2010 alstria has signed new leases of approximately 20,000 sqm. A major success was the long-term letting of 6,500 sqm in the famous "Alte Post? building to prime national and international tenants. The early lease-up of 45% (4,000 sqm) in alstria?s development project Mundsburg Office Tower was another milestone in the company?s leasing activities in 2010. The total vacancy rate in the portfolio as per year end of 2010 was 7.6% (or 59,300 sqm) and therefore increased by 1.9pp compared to December 31, 2009. The increase is mainly attributable to a higher strategic vacancy related to alstria?s development projects as well as the disposal of fully let assets. The strategic vacancy as per year-end 2010 was 26,600 sqm, while operational vacancy was largely stable at 32,700 sqm. Like-for-like contractual rental growth on the overall portfolio was 2.3%, reflecting the strong leasing result of the company during the year.
Back on growth track
Following the 10% capital increase in September 2010 alstria was able to fully invest the proceeds of EUR 49 million by end of January 2011. The sale-and-leaseback transaction with Württembergische Lebensversicherungs AG and the acquisition of three multi-tenant properties in Hamburg allowed alstria to generate an average gross yield of close to 7% and laid the foundation for accretive growth of the company?s FFO in 2011.
Dividend for 2010
In order to limit the dilution effect of the capital increase on the 2010 dividend, alstria plans to propose at the next AGM that almost 100% of the 2010 FFO is paid out. For the financial year 2010, the management board plans to propose to the annual general meeting a dividend of EUR 0.44 per share. The total dividend therefore will amount to EUR 27.1 million and is fully covered by alstria?s Funds from operations.
"In the past two years we have successfully focused on strengthening our balance sheet and our operational platform. Today we are well positioned, having no legacy issue and being stronger compared to the pre-crisis situation" said Olivier Elamine, CEO of alstria. "The recent acquisitions proved our ability to identify and execute accretive acquisitions. We firmly believe that there are attractive market opportunities coming up and the beneficiaries will be wellcapitalized companies with strong operational focus like alstria"
Based on the recent transactions and the contractually agreed rent, alstria currently expects revenues of EUR 86 million and a Funds from operations (FFO) of EUR 30 million for the financial year 2011.
Invitation to analyst- and press conference on March 04, 2011
The alstria Management Board will present the 2010 financial results during a press conference for analysts and journalists at 10:00 a.m. in Frankfurt. The conference can be followed via webcast on www.alstria.com
 Only includes new leases signed and disregards any lease renewals
alstria office REIT-AG
alstria office REIT-AG is an internally managed Real Estate Investment Trust (REIT) focused solely on acquiring, owning and managing office real estate in Germany. alstria was founded in January 2006 and was converted into the first German REIT in October 2007. Its headquarters are in Hamburg. alstria office REIT-AG owns a diversified portfolio of properties across attractive German office real estate markets. Its current portfolio comprises 74 properties with an aggregate lettable space of approx. 820,800 sqm and is valued at approximately EUR 1.4 bn. The alstria office REIT-AG strategy is based on active asset and portfolio management as well as on establishing and maintaining good relationships with key customers and decision makers. alstria focuses on long-term real estate value creation.