alstria office REIT-AG / Half Year Results
19.08.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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alstria office REIT-AG: H1 2008 Financial Results
- Full year financial guidance confirmed
- Revenues increased by 27% to EUR 49.6 m
- Funds From Operations (FFO) increased by 60% to EUR 20.4 m
- Mark to Market of investment properties leads to a net loss for the
period of EUR 10.4 m
- Sale of non-strategic assets at an average of 18% above IFRS book value
Hamburg, August 19, 2008 alstria office REIT-AG (symbol: AOX, ISIN:
DE000AOSDZU1), an internally managed Real Estate Investment Trust (REIT)
which is solely focused on acquiring, owning and managing office real
estate in Germany, today reports its financial results for the first six
months of 2008.
Key financials strong cash generation
In the first half of 2008, the rental revenues increased by 27% from EUR
39.1 million to EUR 49.6 million. The corresponding Funds From Operations
(FFO) increased from EUR 12.8 million to EUR 20.4 million and the operating
margin from 33% to 41.1%. Due to the non-cash valuation loss on investment
properties of EUR 29.8 million, alstria reports a consolidated loss of EUR
10.4 million for the first six months of 2008. With the strong operating
performance, however, alstria is well on track to achieve its financial
targets for 2008 which were guided at EUR 101 million of revenues and EUR
40 million of Funds From Operations.
in EUR m H1 2008 H1 2007 Change
Revenues 49.6 39.1 26.9%
Net profit for the period -10.4 44.1 -123.6%
FFO 20.4 12.8 59.4%
FFO/share (in EUR) 0.36 0.23 56.5%
in EUR m Jun 30, 2008 Dec 31, 2007 Change
Investment Properties 1,861.1 1,693.7 9.9%
Development Properties 3.1 0.0 na
Investments held for sale 14.6 0.0 na
Cash at hand 33.4 103.0 -67.6%
NNNAV/share (in EUR) 15.08 15.55 -3.0%
G-REIT Equity Ratio 45.4% 51.4% -6.0 pp
LTV-Ratio 58.5% 54.8% 3.7 pp
Successful asset management activities
The asset management activities in the first half of 2008 have been very
successful with more than 7,000 sqm of new leases signed during that period
(vs 7,000 sqm for the full year 2007). The agreement reached with the
Ohnsorg Theater in Hamburg remains one of the most significant achievements
for the company to date, as it will allow alstria to redevelop the office
and retail part of the Grosse Bleichen asset, which is located in one of
the most prestigious areas of Hamburg.
Overall, the vacancy rate of the portfolio has increased in the first half
year from 6.4% to 7.6% following the end of a single tenant lease in
Hamburg (10,500 sqm), and the acquisition of a Hamburg vacant building
(3,100 sqm). The leasing market is still very dynamic in the regions where
we are actively looking for tenants. The ongoing discussions we are having
with potential tenants make us very confident that we will be able to
benefit from the strong tenant demand in order to reduce our vacancy rate
in the second half of the year.
Revaluation losses partly compensated by asset management activities
Given the significant changes in the global environment, alstria has
decided to commission a full third party valuation of the portfolio for
this half year report. The result of this process is a downward adjustment
of the overall value of our portfolio by EUR 29.8 million which negatively
impacts the consolidated Net Profit for the period.
The overall yield expansion applied by Colliers CRE, alstrias valuer, was
32 bps across the portfolio. Based on Colliers assessment of the yield
expansion the total value of the portfolio would have dropped by around EUR
70 million (or 3.7% of the total value). This low valuation result was
partially offset by asset management results on the portfolio for around
EUR 12.5 million and increases in rental income linked to the indexation of
around 35% of the leases.
The valuation adjustment leads to an overall valuation yield of the
portfolio of 5.6%, and a total value for investment properties of EUR 1.861
billion. After the revaluation alstrias G-REIT Equity Ratio is at 45.4%
and the LTV Ratio at 58.5% well within the legal and contractual
requirements, respectively.
Selling assets above 12/07 and 06/08 book values
After the closing date for the H1 accounts alstria has entered into three
sale and purchase agreements which are still subject to the market standard
conditions precedent. The three assets are a plot of land in Hanover sold
to a private investor, one asset in the outskirts of Hamburg, rented on a
long term basis to the City of Hamburg, sold to a private investor, and an
asset in the city centre of Hamburg sold to Norddeutsche Grundvermögen.
Theses sales were realized at a profit to both 31/12/07, and 30/06/08 book
values, and the aggregate sales price of EUR 17.2 million will generate a
net gain of around EUR 2.7 million or 18% above the latest IFRS values.
These transactions highlight the potential gap that can exist between
market perception and actual business opportunities. While it is expected
that all real estate prices are going down in a uniform way, the market
still differentiates between individual assets.
With those sales and taking into account the joint venture signed on the
Alte-Post asset, alstria has agreed to dispose EUR 34.6 million worth of
assets so far.
New long-term financial strategy - first steps successfully implemented
It is intended to switch over time (between now and 2011) from the existing
syndicated loan of EUR 1.1 billion to other financing sources. These
sources will be adjusted in terms of leverage and maturity to the specifics
of the underlying assets business plan. The implementation of this
strategy has started with a new EUR 95 million, seven years non recourse
loan on two long-term leased assets. With this transaction total net debt
of the company is kept constant and the marginal financing cost increases
by 9 bps (the average cost of debt moving from 4.45% to 4.54%). A further
key attraction of the new credit arrangement is that it provides alstria
with greater flexibility in terms of contractual covenants.
Alexander Dexne, alstrias CFO, comments: 'Our strong balance sheet and the
long-term secured cash flows constitute the right ingredients to manage
alstria successfully through the current market conditions. Although this
specific financing is only the first step of a global plan to better align
the maturity of our debt with the maturity of our assets between now and
2011, we believe it also helps to address some short term concerns with
regards to the ability of alstria to raise or refinance debt in the current
market. This financing clearly demonstrates that there is currently
sufficient liquidity in the German debt market to finance high quality
assets at attractive terms.'
Olivier Elamine, alstrias CEO, highlights: 'Although that the lower values
of the whole German real estate have caused us to report a net loss for the
period, this impact was limited by the effect of rent increases and other
asset management activities. This, however, does not influence the cash
generation capabilities of alstria, as this is not dependent on the state
of the real estate investment market. We are therefore very pleased to be
able to confirm today the EUR 101 million of revenues and EUR 40 million of
FFO guidance for the full year 2008.'
About alstria:
alstria office REIT-AG is an internally managed Real Estate Investment
Trust (REIT) solely focused 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 based in
Hamburg.
alstria office REIT-AG owns a diversified portfolio of properties across
attractive German office real estate markets. Its current portfolio
comprises 92 properties with an aggregate lettable space of approximately
953,000 sqm and is valued at approximately EUR 1.9 billion.
alstria intends to expand its portfolio significantly in the upcoming years
as part of a sustainable growth strategy. This strategy is based on
selective investments and active asset and portfolio management as well as
on establishing and maintaining good relationships with its key customers
and decision makers.
For further information, please see: www.alstria.com
Disclaimer
This release constitutes neither an offer to sell nor a solicitation of an
offer to buy any securities. The securities have already been sold.
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.
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.
Press:
Simon Steiner
Tel: +49 - 40 - 226 341 340
E-Mail: pr@alstria.de
Investor Relations:
Brigitte Büchner
Tel: +49 - 40 - 226 341 319
E-Mail: ir@alstria.de
DGAP 19.08.2008
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Language: English
Issuer: alstria office REIT-AG
Fuhlentwiete 12
20355 Hamburg
Deutschland
Phone: +49 (0)40 226 341 300
Fax: +49 (0)40 226 341 310
E-mail: info@alstria.de
Internet: www.alstria.de
ISIN: DE000A0LD2U1
WKN: A0LD2U
Indices: SDAX, EPRA, German REIT Index
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hamburg, München, Stuttgart
End of News DGAP News-Service
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DGAP-News: alstria office REIT-AG: H1 2008 Financial Results
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