alstria office REIT AG

XETRA:AOX

Earnings Call Transcript 2021-Q4

[Operator]

Dear ladies and

gentlemen,

welcome

to

the

conference

call

of

alstria

office

REIT-AG

regarding

the

full-year

results

2021.

At

our

customers'

request,

this

conference

will

be

recorded.

As

a

reminder,

all

participants

will

be

in

a

listen-only

mode.

After

the

presentation,

there

will

be

an

opportunity

to

ask

questions.

[Operator Instructions]

May

I

now

hand

you

over

to

Olivier

Elamine,

who

will

start

today's

conference.

Please

go

ahead.

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Thank

you

very

much

and

welcome

everybody

to

the

full

year

2021

result

presentation

from

alstria.

I'm

here

in

Hamburg

on

a

sunny

day

with

Alex

Dexne

[indiscernible]



(00:00:46) and

Julius,

which

is

from

an

IR

team,

to

walk

you

through

the

financial

result.

Before

we

start,

just

a

short

look

at

the

usual

disclaimer

on

the

forward

looking

statement

and

the

duty

to

update,

and

as

it

is

our

habit

before

the

annual

results

presentation,

we

just

wanted

to

kind

of

start

with

a

bit

of

a

business

update

and

some

thought

about

what

had

happened

in

our

markets

over

the

last

few

years

during

the

COVID

pandemic.

And

one

of

the

– one

of

the

thing

I

think

which

was

kind of

interesting

and

I

have

– I

think

answered

a

number

of

question

that

we

had

about

the

office

market

prior

to

COVID

is

this

kind

of

dichotomy

where

on

the

one

hand

you

can

argue

that

no

one

actually

really

need

an

office.

I

think

we

went

into

that

pandemic

and

when

there

was

a

first

lockdown

and

everybody

went

back

home

and

then

the

office world

did

not

collapse

and

we

were

able

to

work

and

produce

report

and

things were

just

working

fine

despite

the

fact

that

everybody

was

at

home.

But

then

on

the

other

hand,

we

also

figure

out

after

a

while

that

being

at

home,

you

could

do

a

number

of

things,

but

then

there

was

a

number

of

elements

that

you

were

missing.

And

those

are

the

elements

I

think

that

everybody

which

is

keen

in

going

back

to

the

office

today

is

looking

for.

And

where

this

is

interesting,

if

you're

an

office

owner,

is

from

our

perspective,

what

the

pandemic

has

done

and

what

this

kind

of

very

unfortunate

social

experiment

we

all

went

through

has

done,

it

has

highlighted

basically

why

tenants

are

paying

rent

in

an

office.

What

is

the

added

value

that

the

office

have?

And

why

do

– why

should

tenant

pay

and

what

should

they

expect?

And

the

reality

is,

they're

not

paying

for

the

four

walls

and

the

roof

and

the

desk

that

you

got

to put

in

there,

but

they're

paying

for

something

different.

And

you

could

call

it

creativity,

you

can

call

it

teamwork,

you

can

call

it

culture-building.

There's

a

number

of

things

that

can

be

structured

or

color

on

that.

But

this

added

value

of

the

office,

I

think,

has

been

made

very

much

apparent

in

the

– in

the

pandemic.

And I

assume

that

tenants

which

are

looking

for

office

space

today,

are

trying

to

value

whether

or

not

the

office

they're

going to

rent

is

going to

be

able

to

deliver

that.

So

we're

moving

away

from

the

office,

which

is

a

commodity

and

getting

into

a

place

where

you're

trying

to

pay

for

something

which is going

to

add

value

to your

business.

And

this

is

really

at

alstria

something

we've

been

working

on

for

– for

quite

a

while

and

we

intend

to

capitalize

on

that

trend

as

much

as

we

can,

going

forward.

It's

also

hard

to

speak

about

two

years

of

the

pandemic

and

not

touch

on

the

ESG

topic.

As

you

know,

this

is

a

topic

we

as

a

company

have

been

discussing

quite

a

while,

including

in

our

annual

calls,

and

one

of

the

point

which

is

actually

has

been,

I

think

is

a

major

innovation

in

the

last

year

has

been

the

introduction

of

the

EU

Taxonomy.

And fortunately,

and

this

is

really

my

point

of

view,

so

please

disagree

if

you

want

to,

the

Taxonomy

might

be

a

very

good

idea

in

terms

of

sector

and

real

estate

and

is

missing

the

point

by

a

margin.

So,

what

the

Taxonomy

does

and

what

it's

going

to

do,

it's

very

likely

that

it's going

to

be pushing

capital

in

a

place

with

limited

supply

and

where

they

have

actually

little

ESG

benefits,

and

it's

going

to

starve

capital

in

a

place

where

there's

actually

a

need

for

capital

and

where

there's

huge

supply.

So,

if

you

look

at

how

the

different

regulation

are

set

up,

if

you

look

how

the

SFRD

is

set

up,

so

the

reporting

obligation

of

investors,

you

would

realize

that

in

actual

fact,

in

order

to

be

Taxonomy

compliant

and

– and

my

understanding

is

like

everybody

wants

to

be

Taxonomy

compliant

today,

basically,

you

need

to

own

brand

new

buildings,

which

are

considered

as

compliant.

But,

if

you

are

actually

intending

to

transition

buildings,

then

you're

very,

very

unlikely

to

be

Taxonomy

compliant.

And

this,

we

believe,

is

going

to

create

a

tremendous

market

opportunity.

You

– for

people

who

are

going to

be

able

to

walk

next

to

the

Taxonomy

and

bypass

the

– the

needs

of

being

compliant

or

the

urge

of

being

compliant,

the

market

of

building

to

be

refurbished,

which

is

vast

with

a

lot

of

supply,

is

going

to

be starved

for

capital,

and

therefore

there's

going

to be

a

lot

of

interest

and

opportunity

to

invest

in

that

market.

It's

not

yet

the

case,

but

it's

coming.

And

the

market

where

those

building,

when

they

are

refurbished,

you

would

be

able

to

sell

them

to,

which

is

a

market

with

very

limited

supply,

is

going

to

be

where

there

is

all

the

capital

flowing

and

little

assets

that

actually

ticks

the

box

on

offer

and

we

think

that

the

ability

of

a

company

like

alstria

to

take

this

contrarian

view

while

still

sticking

to

its

ESG

targets

is

going

to

be

a

unique

market

opportunity

that

that

we

can

take

with

us.

And

you

know

that

we

have

been

very

much

leading

the

way

on

ESG

and

on

the

thought

process

around

that.

So,

we

believe

that,

you

know,

we

can

still

fulfill

our

purpose

and

transition

buildings

from

the

old

world

to

the

new

world,

take

into

consideration

not

only

the

ESG,

but

also

the

new

work

concept

that

we've

discussed

a

bit

before,

and

that

I

think

it

is

going

to

generate

a

substantial

opportunity.

This

needs –

I

mean,

the

reason

why

I'm

kind

of

highlighting

that

is,

is

because

it

need

also

to

be

put

in

the

context

of

the

transactions

that

we

just

executed

with

Brookfield.

Our

view,

and

rightly

or

wrongly,

and

let

me

maybe

start

with

the

fact

that

we

had

an

incredible

time

in

the

public

equity

market

and

we

have

enjoyed

continuous

support

by

our

public

shareholders

since

the

company

IPO'd and

none

of

us

would

be

there

today

if

it

was

not

for

that

support.

So

we're

very

grateful

for

everything

that

happened.

But

we

came

to

the

conclusion

that

in

the

current

market,

the

public

equity

would

be

relatively

inefficient

because

the change

that

are

happening

are

too

radical

for

the

public

equity

to

take

a

view

and

to

take

a

strong

conviction

of

what's

going

to happen.

If

you

speak

to

individual

investors,

they

have,

so

lot

of

them,

strong

conviction,

but

the

market

as

a

whole

is

not

in

a

position

to

take

conviction.

And

my

belief

is

that

public

equities

in

the

office

side,

I

don't

know

for

other

part

of

real estate,

but

the

office

side

are

going

to

be struggling

to

try

to

convince

the

concern

about

ESG

and

the

concern

around

the

future

of

office,

are

going

to

[ph]



weight

(00:08:15) heavily

on

the

–

on

the

share

price

going

forward.

What

we

find

in

Brookfield

is

a

partner

that

actually

share

our

conviction

about

where

the

market

is

going

and

that

sense

is

going to

help

the

company

to

be

able

to

make

the

best

of

the

opportunity

we've

described

before.

We

share

the

view

of

what

the

opportunity

is,

and

we

share

the

view

about

how

to

tap

that

opportunity

going

forward.

And

we

believe

that

at

least

for

the

coming

years

or

so,

the

private

market

are

going

to be

more

efficient

because

they

are

able

to

take

stronger

conviction

than

what

the

public

market

will

be

able

to

do

going

forward.

So,

what

changed

for

us

is

not

fundamentally

as

the

business

we're

doing.

Our

purpose doesn't

change,

for

that

matter

of

the

fact

that

we

change

shareholder,

doesn't

change

the

market

in

which

we

operate.

But

what

change

is

our

ability

to

allocate

capital

differently,

to

be

able

to

make

use

of

the

–

of

the

market

opportunities

that

we're

seeing.

I

think

the

best

illustration

of

that

is

the

fact

that,

you

know,

we're

going

to

pay

a

minimum

dividend

or

we're

proposing

to

the

AGM

to

pay

a

minimum

dividend

this

year

of

€0.04

per

share,

compared

to

€0.52.

And

so,

they're

going

to be

retained

earnings

here

and

moving

forward,

the

ability

of

the

company

to

do

more

of

– and

invest

more in

its

portfolio

is

going to

allow

us

to

tap

into

the

refurbishment

opportunity,

and

try

to

benefit

as

much

as

we

can

of

that

change

and

transformation

in

the

markets

and

we're

really

looking

forward

for

the

next

chapter

of

the

company

in

that

respect.

And

finally,

and

just

to

spend

a

few words

on

that,

we

have

published

today

– or

yesterday,

actually,

next

to

our

annual

results

presentation

our

carbon

accounts.

I

would

encourage

you

to

look

at

them

if

you're –

if

you're

interested.

What

the

carbon

account

shows

is

that

the

balance

sheet,

our

carbon

balance

sheet

has

doubled

in

size

and

that's

really

related

to

the

increase

in

price

of

carbon

in

the

course

of

2021,

which

increased

by

almost

150%

in

2021.

And

from

my

perspective,

the

main

lesson

that

we

learned

when

we

look

at

our

carbon

account

is,

the

very

low

impact

of

the

price

of

the

carbon

that

we

emit

from

our

direct

operation

compared

to

the

change

in

value

in

the

embedded

carbon

and

that

highlight

is

that's

still

necessary,

but

it

highlights

the

fact

that

the

challenge

in

real

estate,

at

least

in

the

office

market

is

not

so

much

into

the

efficiency

and

the

operations

and

the

emission

in

operation,

but

it

is

in

the

embodied

carbon

discussion

which

I'm

glad

is

taking

prominent

space

today and

in

the

conversation

about

real

estate

ESG.

But

this

has

been

our

belief

through

the

years,

and

now

it's

showing

the

right

to

be

strongly

in

number.

The

challenge

for

real-estate

company

is

and

managing

the

embedded

carbon

and

not

so

much

into –

or

not

anymore

into

the

operational

emission

which

are

pretty

much

under

control.

What's

also

interesting

to

look

at

is

in

the

operational

carbon,

at

least

when

it comes

to

alstria

the

vast

majority

of

the

carbon

saving

that

we

have

made

relates

to

change

which

are

unrelated

to

us.

So

this

is

basically

decarbonization

of

the

grid

and

that

also

highlight

the

need

for

interaction

with

different

players

across

the

value

chain,

if

we

want

to

effectively

manage

our

carbon

exposure

over

time.

If

we

move

back

to

the

more

standardized

reporting

and

the

operation,

we

had

in

2021,

a

relatively

strong

year

from

a

financial

perspective,

which

is

– which

is

always

at

least

looking

retrospectively,

interesting

if

you

think

about

the

fact

that

for

most

of

the

year,

the

vast

majority

of

our

buildings

were

barely

occupied.

I

think

the

resilience

of

the

company

is

something

that

–

that

is

– is

very

welcome

and

I

think

underlines

the

strength

of

the

portfolio.

With

our

revenue

up

around

3.7%

year

on

year,

a

strong

growth

in

the

FFO

at

around

7.2%

and

also

a

nice

leasing

result.

And

I'm

going to

come

back

to

those

number

in

a

bit

in

more

detail.

We

ended

up

the

year

almost

balanced

from

a

sale

and

acquisition

perspective,

and

we

have

invested

€121

million in

the

portfolio

in

terms

of

CapEx,

which

again,

is

something

we

intend

to

accelerate

in

the

future

as

part

of

the

repositioning

of

the

asset

and

trying

to

size

the

market

opportunities

that

we're

seeing.

The

NAV

is

at

round

about

slightly

short

of

€19,

which

compared

to

€19.50

of

the

offer

that

was

made

and

actually

accepted

by

the

vast

majority

of

our

shareholder

by

Brookfield.

The

portfolio

itself

is

still

very

much

the

same.

The

value

is

€4.8

billion.

We

do

like

relatively

small

assets

in

terms

of

size

12,000 square meter,

13,000

square

meter

on

average

per

asset.

Capital

value,

€3,400

per

square

meter,

which

offer

ample

opportunity

to

spend

money

on

refurbishment

and

improve

the

rental

income.

And

we

have

a

contractual

rent

of

€205

million

in

the

portfolio.

Our

rent

collection

rate

in

2021,

despite

the

pandemic

was

at

100%.

Letting volume

was

relatively

strong

again,

considering

that

we

were

in

the

market,

which

was

pretty

inefficient

from

a letting

perspective.

The

market

is

doing

better

as

we

speak.

There

is

clearly

more

momentum

in

the

letting

markets,

but

the

letting

volume

at

155,000

square

meter

is

nothing

I

think

we

need

to

be

shy

of.

The

average

rent

per

square

meter

on

the

portfolio

has

continued

its

trend

upward

and

we

have

secured

€120

million of

future

income

through

the

different

leasing

that

we

have

executed

across

the

year.

And

all

of

these

letting

activities

have

led

to

a

like-for-like

rental

growth

of

2.8%

in

the

course

of

2021,

bearing

in

mind

that,

I

mean,

we

had

a

bit

of

inflation

in

2021,

but

nothing

compared

to

what

we're

having

right

now,

and

that

inflation

is

clearly going

to

have

a

material

impact

on

the

way.

The

revenue

of

the

company

are

going

to

be moving

forward.

On

the

transaction

side,

we

have

been

continuously

selling

some

of

the

assets

that

we

had

in

the

periphery,

and

2021

was

the

year

where

we

basically

finalized

that

process,

the

asset

in Trier, which was one of

the last nursing home that we had, has been disposed and

that basically

terminates

the sale

of

the

non-core assets

which

we

acquired from the

office

together with

the

company

in

2015, and

so

we're

done

with that

process.

And

on the

acquisition side,

we've

been

again

here

consistent

with

the

view of

acquiring

buildings that

require

repositioning. Acquiring

two

property

was in Berlin

and marrying

them

and

the

other

one

in Frankfurt

and

[indiscernible]

(00:16:07)

which

are

two

properties

that

we intend

to

reposition

over

the

years

and

which

offer a

substantial

value potential

from our

perspective

once

the repositioning

will be

done.

Moving

on

to

the

financial

and

the

numbers,

I'm

going

to

go very

briefly

through

them, investment

property

is

up

year-on-year

by

around

5%

and

that's

essentially

reflecting

the

market – towards

the

CapEx

that

we

have

spent

on

the

property

and

the OMV

gain.

Our

equity

is

up

slightly

again

here.

We're

going

to

go

back

to

the

NAV

bridge in

a

minute

and

our

net

financial

debt

have

increased again,

which

is

essentially the

reflection

of

the

investment

that

we

have

made

during

the

year

through the

bond

that

we

have

issued back

in 2019

at

the

very

beginning

of

the

pandemic.

If

we

look

at

the

EPRA

NAV

bridge,

just

to

highlight, I

don't think

there

is

going

to

be

a

lot

of

surprises here.

In

essence, the

dividend

payment

is

nicely

balanced by the

operational

profit

and

the

change

in

NAV

is

being

reflected

or

impacted

by

both

the revaluation

and

the

disposal gains,

those being

disposal gains

being

realized

gains

and

revaluation

unrealized gains.

So,

what

– I

mean,

if

you

were

likely

to

look

at

the

same

bridge next

year, well,

the

dividend

will

not

be

there

anymore and

the

rest

will

– I mean,

not

giving any

guidance

on

the

revaluation, but

the

rest

would

be

probably looking

in

a

similar way.

And

so

the

– retaining the

dividend

is

just

going to

have

a

positive impact

on

NAV.

Going forward,

if we

look

at

the

debt,

well,

first

of all

we

are

kind

of very

happy

that

S&P

has

confirmed

our Investment

Grade rating

at BBB

minus.

We

still –

we're downgraded

following

the

transaction,

but

we

remain

at

the

investment

grade

level.

The

current

debt

structure which

is

shown on

the

– on

this

slide,

is

going

to

change in

the

coming

weeks.

Our

intention is

to increase

the

overall

leverage

of

the

company again

in

order to

be

able

to

adjust the

capital structure

to

the

opportunities that

we're

seeing.

But

that

you

have

on

that

slide

the

structure with a

net

LTV of

slightly

short

of

30%

at

the

end

of

2021, with

our

intention

to

move

that

closer to

the

50%

level

as

we go

through

the

2022 level,

and

then

finally, if

we

look

at

the

profit

and loss

position

across the

company,

we've

briefly touched

base

on that

before.

We

have

a strong

increase

in

the

FFO

of

7.2%

and

a

slight increase

in

the

SG&A

which essentially

reflect

the higher

kind of

cost

in

the

employment

market

in Germany,

and

some

of

the

virtual shares

and

the

non-cash

item

linked

to

the

employee participation

program,

which is

reflected

in those

numbers.

That's

it

from

my perspective

for

the

year-end

presentation I

would

now

open

for

the

questions.

[Operator]

Thank

you. Ladies

and

gentlemen,

we

will

now begin our

question-and-answer

session.

[Operator Instructions]



One

moment,

please,

for

the

first

question.

And

the

first

question

is

from

Kai

Klose

at

Berenberg.

Your

line

is

now

open.

Please

go

ahead.

[Kai Klose]

Yes,

hello.

Good

afternoon.

I've

got

three

questions if

I

may.

The

first

one

is

on

page

31

of

the

company

report.

Just

want

to

understand

the

amount

of

maintenance

CapEx

which

you

deduct

from

the

FFO

towards

your

AFFO

wasn't

really

lower

compared

to

2020.

What

was

the

reason

for

that?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Hi,

Kai.

It's

nice

actually

to

speak

to

you.

Well,

the

main

reason

is,

I

think

we've

discussed

that

in

the

Q3

numbers

and

because

of

the

pandemic,

obviously,

there

was

a

slowdown

in

the –

in

the

amount

of

work

we

were

doing

in

the

buildings,

and

that's

basically

what

you

see

reflecting

in

the

number

here.

So,

we

expect

that

there's going to

be

a

catch-up

of

that

in

the

course

of

the

year

2022.

[Kai Klose]

And

the

slowdown

was

so

significant

that

it's

more

than

half

–

less

than

half

compared

to

the

2020

numbers?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Yeah.

But

that's

exactly

it.

[Kai Klose]

Okay.

And

the

second

question

would

be

on

the

refurbishment

pipeline,

which

you

show

also

in

the

report.

Just

to understand,

the

number, so

there

are

more

properties

included,

but

the

– there's

a

completion

date.

It's

only

[indiscernible]



(00:21:45)

precise

for

a

few

numbers.

Could

you

explain

why?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Why

we don't

provide

the

more

specific

date

for

full

completion?

[Kai Klose]

Yes,

I

think

we

have

about 20

stocks –

20

properties

on

page

25

in

that

tables,

but

only

for

about

half

of

that,

you

mentioned

the

expected

completion

date,

just

on

[ph]



the

third point (00:22:07)?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Well,

so

I

think

what

you

would

notice

if

you

read

through

our

report

is

that

there

is

probably

much

less

information

that

we

use

to

put

in

the

past

and

I

think

that

also

reflects

the

fact

that

we're

slowly

moving

to

a

place

where

we

have

a

single

shareholder,

and

therefore

we're

not

necessarily

providing

as

much

information

as

we

used –

we

used

to

do

previously.

So,

I

mean,

there's

a

number

of

things

that

you

would

not

find

in

the

report

this

year,

and

I

can

highlight

them.

So

you

will

not

find

the

list

of

the

properties

with

OMVs,

et

cetera.

And

that

really

highlights,

I

think,

the

change

that

we

had

from

a

shareholder

structure,

which

then

have

an

impact

on

the

way

we're

reporting

and

the

way

– and

the

transparency

of

the

company

going

forward.

So,

I

think

you

need

to

expect

probably

a

bit

less

information

from

us

going

forward.

So

– I

mean,

I

appreciate

it's

bit

weird

looking

at

it

from

today's

perspective,

but

this

is

something

that

we

will

– you

will

continue

to

see

going

forward.

There's

less

need

for

us

to

basically

allow

the

market

to

have

a

better

view

of

what

we're

doing

and

how

we're

doing

it.

[Kai Klose]

Okay,

and

then,

the

last

question,

maybe,

as

you

mentioned

the

downgrade

to

BBB minus,

what

can

we

expect

regarding

financing

costs

regardless

of

the higher

interest

rate

levels

in

general,

as

they

are

now

being

listed investment

grade

weighted

but

slightly

lower.

And

how

this

could

affect

the

targeted

yield

on

cost,

you

mentioned

of

5.5%

for

the

development

project?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

So,

our

yield

on

cost

is

not going

to

be

impacted

by

that

because

it's

an

unlevered.

As

you

know,

we

always

underwrite

our

asset

from

an

unlevered

perspective.

So,

our

cost

of

financing

doesn't

have

an

impact

on

the

way

we're

looking

at

life.

I

think

if

you

look

at

the

– at

the

spread

on

the –

where

our

bonds

are

currently

trading,

they're

obviously

trading

wider

than

where we

were,

BBB plus,

which

is

kind

of

an

obvious

statement

to

make.

So, the –

I

would

expect

that

the

cost

of

financing

–

I

mean

our

marginal

cost

of

financing

would

be

probably

somewhere

around

50 basis

points

wider

from

where

we

currently

is.

Having

said

that,

the –

I

mean,

there

is

also

a

bit

of

technicalities

in

where

our

bonds

are

currently

trading.

You

know,

a

number

of

investor

have

assumed

that

we

would

be

downgraded

beyond

investment

grade

and

so,

one

of

the

arbitrage

that

was

possible

was

to

buy

the

bonds

and

then

put

them

back

to

the

[indiscernible]



(00:24:46), which

– which

didn't

work.

So,

there

was

a

bit

of

downward

pressure

on

our

bonds

in

the

– in

the

few

weeks

after

the

announcement

of

S&P

that

we

would

remain

investment

grade,

but

I

would

expect

overall,

and

I

think

this

is

what

you

would

see

if

you

take

the

average

of

our

– of

the

curve

of

our

– where

our

bond

was

trading,

to

be

around

50%

higher

than

what

we

are.

What

we

– what

we

will

clearly

also

do

a

bit

more

now

than

we

were

doing

in

the

past

is

mortgage

financing

and

from

that

perspective,

this

would

probably

be

pretty

much

in

line

with

the

cost

of

financing

that

we

have.

[Kai Klose]

Understood.

Many

thanks.

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Thanks, Kai.

[Operator Instructions]

[Operator]

And

the

next

question

is

from

Manuel

Martin,

ODDO

BHF.

Your

line

is

now

open.

Please

go

ahead.

[Manuel Martin, Analyst, ODDO BHF AG]

Thank

you

for

taking

my

question.

Just

two

questions

from

my

side.

One

is on

the

dividend

policy.

Is

it

fair

to

assume

that

alstria

would

keep

a

minimum

dividend

payment

for

the

next,

let's

say,

near-term

future,

giving

the

financing

with

your

investment

program?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

So, that's –

I

mean,

that's really

clear

what

I

think

we've

been –

I

think

what

was

in

the

offer

documents

and

what

we've

been

guiding.

As

a

market

toward

the

–

in

the

communication

around

the

Brookfield

transaction

and

that

also

what's

reflected

in

our

proposal

to

the

AGM

this

year.

So,

I

would

assume

that

the

operational

profit

that

we

will

generate

– we

have

to

pay,

we've

been

paying

much

more

than

the

90%

required

by

the

[ph]



re-legislation (00:26:35),

but

I

think

it's

a

fair

assumption

to

assume

that

the

operating

profit

is

going

to

be

distributed

to

the

minimum

extent

legally

required.

[Manuel Martin, Analyst, ODDO BHF AG]

Okay.

Okay.

Understood.

My

second

and

final

question, it's

about

future

plan. I

mean,

if

I

understand

that

correctly,

Brookfield

hold

more

or

less

95%

in

alstria.

Is

there

any

scenario

of

a

delisting

possible

of

alstria,

given

the

situation?

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Well,

I

think,

again,

if

you

look

into

what

Brookfield

has

announced

in

the

offer

document,

they

have

not

ruled

out

the

listing,

but

they

have

also

not

mentioned

that

we'll

be

doing

– they

would

do

a

listing.

I

mean,

one

thing

maybe

you

want to –

because,

I

mean,

given

that

they

have

now

95%,

there

might

be

some

speculation

about

a

potential

squeeze-out,

which

actually

is

not

possible,

because

the

– the

– I

mean

technically

it's

different

entity

which

owns

the

95%.

So,

if

there

is

conversation

about

the

delisting,

it's

really

not

going

to be

through

a

squeeze-out

process.

But

at

this

stage,

at

least

as

far

as

I

know,

as

far

as

I'm

involved,

there

is

no

discussion

about

–

I

mean

– or

no

decision

made

about

the

delisting

and

the

– but –

but

the

option

I

mean,

clearly

has

been

on

the

table

and

at

the

time

of

the

offer

and

as

far

as

I'm

concerned,

it's

probably

still

one

of

the

possible

option.

Looking

at

the

success

of

the

takeover.

[Manuel Martin, Analyst, ODDO BHF AG]

Okay.

Okay.

I

see.

Thank

you very

much.

[Operator]

And

there

are

currently

no

further

questions.

[Operator Instructions]



And

we haven't

received

any

further

questions.

I

hand

back

to

the

speakers

for

closing

remarks.

[Olivier Elamine, Chief Executive Officer, alstria office REIT-AG]

Well, thank

you

very

much,

everybody,

for

joining

us

today

and

I'm

looking

forward

to

the

next

quarterly

result

presentation that

we're

going to

make.

Thank

you

very much

for your

interest

in

the

company

and,

yeah,

looking

forward

for

the

next

time.

Cheers.

[Operator]

Ladies

and

gentlemen,

thank

you

for

your

attendance.

This

call

has

been

concluded.

You

may

disconnect.