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alstria office REIT-AG

Quarterly Report • Aug 19, 2008

31_ip_2008-08-19_528b7ad9-5bf2-47b7-8845-851df35ce566.pdf

Quarterly Report

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SECOND QUARTER 2008

INTERIM REPORT HAMBURG, AUGUST 19th, 2008

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, general economic conditions, including in particular economic conditions in the alstria's core business and core markets, general competitive factors, the impact of acquisitions, including related integration issues, and reorganization measures. Furthermore, the development of financial markets, interest rate levels, currency exchange rates, as well as national and international changes in laws and regulations, in particular regarding tax matters, can have a corresponding impact. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

No duty to update

The company assumes no obligation to update any information contained herein.

Half year highlights

  • Strong operating financials
  • Full external valuation of portfolio
  • Refinancing agreement for EUR 95 m of debt
  • Sale of assets above last appraised values
  • Guidance 2008 confirmed

Operating performance - market performance

  • Financials
  • Financing strategy
  • Disposals
  • Outlook

Tenant relation creates value

Win–win situation

BENEFITS FOR OHNSORG THEATER

  • Propose long-term relocation solution
  • Optimize the usage of space
  • Increase cross sales with the Hamburg Deutsche Schauspielhaus

BENEFITS FOR ALSTRIA

  • Swap low potential vacancy vs. high potential vacancy
  • Release the potential of the Grosse Bleichen asset, position alstria as responsible investor in Hamburg
  • 20 years lease secured with Ohnsorg Theater in new location

FINANCIALS

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alstria portfolio

ALSTRIA PORTFOLIO

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1

1 Incl. two assets classified as held for sale

2 Monthly gross rental income as of 31 January 2008 multiplied by 12

3 Calculated as Passing Rent divided by OMV

PASSING RENT INCREASE

Lease up of more than 7,000 sqm

Revaluation of the portfolio

  • Revaluation of the total portfolio by an external appraiser
  • Yield expansion of 32 bps across the portfolio
  • Indexation and active asset management lowered the negative impacts
  • The result is a decrease of EUR 29.8 m of the portfolio

Active asset management reduced the revaluation impacts

Strong operating performance in H1 2008

Operating performance - market performance

Financials

Financing strategy

Disposals

Outlook

Net profit impacted by valuation results

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Key components of the balance sheet

Key numbers reflect sound financial position of alstria

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Operating performance - market performance

Financials

Financing strategy

Disposals

Current loan facility is of substantial value to alstria

  • EUR 1.1 bn syndicated loan facility arranged by JP Morgan, Natixis and HSH Nordbank
  • 100% secured
  • Spread: 65 bps over 3-months-EURIBOR
  • Mixed "corporate and asset backed loan"
  • Covenants includes: LTV <60%, ICR >160%
  • Maturity: Nov 2011

Towards a new debt structure while protecting the existing facility

  • Objective: increased volume and flexibility
  • Split between capital markted and bank financing
  • Rating compliant
  • Efficient mix of secured and unsecured financing
  • Synchronise assets business plan and financing maturity

Refinancing two assets as a first step

  • Assets are rented to the City of Hamburg with an OMV of EUR 130 m
  • Transaction generates additional free cash of EUR 16.5 m
  • Consolidated net debt unchanged
  • Terms of the new loan
  • Amount: EUR 95 m
  • LTV Covenant: 80%
  • ICR Covenant: 100%
  • Spread: 115 bps
  • Maturity: 7 years
  • Overall cost of debt +9 bps
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Operating performance - market performance

Financials

Financing strategy

Disposals

Asset disposals

  • Two properties and a plot of land have been sold*
  • For all transactions, alstria achieved higher sales prices than the fair values
O
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0

* The plot of Vahrenwalder Str. does not influcene the fair value of the property

Asset overview Duesternstrasse 10

KEY FACTS – DUESTERNSTRASSE 10

L
b
l
t
t
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a
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a
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a:		 2,
1
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7
8
%

Asset overview Osterbekstrasse 96

L
b
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t
t
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a
e
a
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a:		 3
9
3
7,
s
q
m
V
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:		 %
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t:
a
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5
5
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8
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0
0
%
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Bu
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%
4.
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O
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t
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t:
s
m
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4.
4
9

Asset overview Vahrenwalder Str.

1 Source: Jones Lang LaSalle, Key Market Indicators

2007 FINANCIAL RESULTSFINANCIAL RESULTS H1 2008 2 April 2008 Aug 19th, 2008 25

Real estate is not a liquid asset

Sale of the Duesternstrasse asset for EUR 4.95 m

  • Five weeks sale process generated 5 letters of interest
  • Two weeks competitive due diligence generated 5 offers
  • Difference between the highest offer and the lowest offer: 30%
  • Difference between the first and the second best offer: 4%

Operating performance - market performance

Financials

Financing strategy

Disposals

Outlook

Guidance confirmed

  • Guidance for 2008:
  • Revenue guidance remains at EUR 101 m for 2008
  • Funds From Operations (FFO) remains at EUR 40 m for 2008
  • 90% of FFO as basis for dividend pay-out ratio

Strong investment case

  • Strong cash flow generation
  • Clear visibility on NAV based on full external valuation
  • All debt and G-REIT covenants comfortably met
  • First steps of new financing strategy implemented
  • Guidance confirmed

Questions & Answers

Clear and focused strategy

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