- Revenues of EUR 192.0 million and FFO of EUR 88.0 million
- EPRA NTA per share at EUR 9.10
- 133,400 sqm letting volume, contractual rent of EUR 199.6 million
- Continuous investments into the portfolio, with EUR 137.3 million invested in the course of 2023
- FY23 Carbon Accounts published (unaudited)
Hamburg, March 10, 2024 – alstria office REIT-AG (symbol: AOX, ISIN: DE000A0LD2U1) (“alstria”) announces its result for the financial year 2023.
Revenues at EUR 192.0 million and FFO at EUR 88.0 million
In the reporting period, revenues totalled EUR 192.0 million (compared to EUR 182.8 million in 2022). The increase of 5.0% is primarily attributable to additional revenues from the indexation of existing rental agreements and the signing of new leases. Planned expiry of leases partially offset the increase in rental income. Overall, revenues were higher than the forecast of EUR 190 million published at the beginning of the year.
FFO after minority interests amounted to EUR 88.0 million and was therefore above the forecast of EUR 79 million published at the beginning of 2023. The FFO forecast was raised to EUR 84 million during the year as operating costs developed better than planned. This trend also continued over the rest of 2023. Despite the positive development of the FFO in the course of 2023, the full year FFO remained well below the previous year’s figure of EUR 106.6 million. The year-on-year difference is mainly due to the increased financing costs, which resulted from both, the increase in interest rates in the market, as well as the higher company leverage. The FFO margin (revenues/FFO) fell to 45.8% in 2023 (2022: 58.3%).
Portfolio value of EUR 4.0 bn
The external valuation process for the overall portfolio resulted in a market value of the portfolio of EUR 4.0 billion as per December 31, 2023, compared to a value of EUR 4.7 billion on December 31, 2022. The mark-down compared to the previous year reflects in particular the weak transaction market following the higher interest rate level. The new market value of EUR 4.0 billion represents an average value per sqm of EUR 2,860 and a portfolio yield of 5.0% (contractual rent/market value).
Letting result of 133,400 sqm
In 2023 alstria signed leases for a lettable area of 133,400 sqm (previous year: 107,300 sqm). This represents signed new leases for 23,400 sqm and lease extensions of around 110,000 sqm. As per December 31, 2023 the EPRA vacancy rate stood at 8.0% (December 31, 2022: 7.2%).
Real estate transactions
As the transaction market for office properties came to a virtual standstill in 2023, alstria’s disposal volume was only EUR 2.8 million (2022: EUR 116.0 million).
EPRA NTA at EUR 9.10 per share
As per December 31, 2023, alstria’s equity decreased significantly by EUR 953.9 million compared to December 31, 2022 to EUR 1,617.5 million. This decrease is the combined result of the net loss of EUR 653.4 million for the year, which is mainly driven by the negative non-cash revaluation result of the portfolio and the dividend payments (ordinary and special dividend) of EUR 262.5 million.
The decrease in equity was also reflected in the EPRA NTA, which amounted to EUR 9.10 per share as of December 31, 2023 (EUR 14.47 per share as of December 31, 2022).
Net LTV in line with covenants
Mainly as a consequence of the portfolio devaluation alstria’s asset net LTV (Investment properties/Net debt) increased to 58.3% as per the reporting date (December 31, 2022: 43.7%). The balance sheet net LTV based on total assets amounted to 56.4%. In the course of the year alstria repaid maturing debt (bond and Schuldschein) in the amount of EUR 362 million and took up new mortgage debt amounting to EUR 431 million. Furthermore, the company bought bonds worth EUR 22 million in the market at an average discount of 29% to par. alstria remained compliant with all its covenant obligations in its loan agreements and / or the terms and conditions of the bonds and Schuldschein in 2023.
REIT
alstria’s G-REIT equity ratio amounted to 43.0% as per December 31, 2023, which is 2%-points below the legal requirement of 45%. It has therefore entered into the three-years grace period of the REIT law to restore the G-REIT equity ratio.
alstria’s free float currently stands at 4.6% and has been below the required 15% under the REIT law. If the free float is not restored by December 31, 2024, alstria will lose its tax exemption under the REIT law. The company is currently in discussion to address the free float requirement with its main shareholder.
Refurbishment pipeline
alstria’s current refurbishment pipeline comprises 20 projects with a total lettable area of 154,300 sqm (11% of the total portfolio). alstria continued to invest in its assets in the course of 2023 to transition the assets into the new office paradigm. Capex spent on the portfolio amounted to EUR 137.3 million in 2023 (compared to EUR 113.1 million in the prior year period).
Carbon accounting report 2023 published (Unaudited)
In 2023 the total Carbon balance sheet has increased to EUR 91.7 million (FY22: EUR 80.5 million). Since the inception of the carbon accounting in 2020, alstria’s carbon balance sheet has increased by 262%, mainly reflecting the price of carbon in the market.
As per December 31, 2023 carbon equity equals to EUR 12.7 million, compared to EUR -18.8 million in the prior year period. For the first time since alstria’s first carbon account release, the carbon equity of the company has turned positive. This reflects the impact of alstria’s approach to refurbishment, limiting new emissions and improving energy efficiency, which is yielding positive value for the company. For more on the accounting principle supporting this analysis, see www.recap.wiki.
In 2023 alstria’s operations generated a total carbon expense of EUR 4.2 million. This represents the cost of carbon that was used by the company, but for which no expense was accounted for under IFRS.
alstria’s carbon accounts can be found on the company’s website www.alstria.com
Dividend
In the absence of balance sheet profit and legal requirement to pay a dividend, the Management Board, in agreement with the Supervisory Board, and in line with the company’s dividend policy, does not intend to propose to the Annual General Meeting the payment of a dividend.
Outlook
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 macroeconomic development. By contrast, FFO is expected to fall to EUR 71 million. This development reflects in particular higher financing costs as a result of higher interest rates combined with a higher level of debt.
Invitation to the webcast on March 11, 2024
alstria’s CEO Olivier Elamine will present the 2023 financial results and the outlook for 2024 in a telephone conference at 2:00 p.m. (CET), which will also be webcasted on alstria’s website (www.alstria.com). The full annual report will also be available for download on the website.
To participate in the webcast please use the following link
Dial in only link
Please note that you can watch the management’s presentation live via webcast on our website www.alstria.com. As soon as the conference call begins, the presentation slides will be available for download.
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