Obligation Alstria Office REIT 1.5% ( XS2191013171 ) en EUR

Alstria Office REIT

79.78 % ▼

Allemagne

XS2191013171 ( en EUR )

1.5% par an ( paiement annuel )

23/06/2026

Prospectus brochure de l'obligation Alstria Office REIT XS2191013171 en EUR 1.5%, échéance 23/06/2026

100 000 EUR

350 000 000 EUR

23/06/2024 ( Dans 37 jours )

L'Obligation émise par Alstria Office REIT ( Allemagne ) , en EUR, avec le code ISIN XS2191013171, paye un coupon de 1.5% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 23/06/2026

19 June 2020
Not for distribution in the United States of America

ALSTRIA OFFICE REIT-AG
(incorporated in Germany as a stock corporation)
EUR 350,000,000 1.500 per cent. Fixed Rate Notes due 2026
alstria office REIT-AG, Hamburg, Germany (the "Issuer" or the "Company", and together with its fully consolidated subsidiaries,
the "Group", "alstria" or the "alstria Group") will issue on 23 June 2020 EUR 350,000,000 1.500 per cent. Fixed Rate Notes due
2026, ISIN XS2191013171, Common Code 219101317, WKN A3E44Q (the "Notes").
The Notes will bear interest at a rate of 1.500 per cent. per annum, payable annually in arrears on 23 June and commencing on
23 June 2021. The Notes are governed by the laws of the Federal Republic of Germany ("Germany") and will be issued in a
denomination of EUR 100,000.
Unless previously redeemed or purchased and cancelled in accordance with the terms and conditions of the Notes (the "Terms and
Conditions"), the Notes will be redeemed at par on 23 June 2026 (the "Maturity Date").
The Notes will initially be represented by a temporary global bearer note (the "Temporary Global Note"), without interest coupons.
The Notes are issued in new global note ("NGN") form and will be delivered on or around the issue date (the "Issue Date") to a
common safekeeper (the "Common Safekeeper") for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking S.A.,
Luxembourg ("CBL", and together with Euroclear, the "Clearing System"). The Temporary Global Note will be exchangeable in
whole or in part for a permanent global bearer note (together with the Temporary Global Note, the "Global Notes") without interest
coupons, not earlier than 40 days after the Issue Date, upon certification as to non-U.S. beneficial ownership. The Global Notes are
intended to be eligible collateral for Eurosystem monetary policy and intra-day credit operations. Whether NGNs are recognisable as
eligible collateral for Eurosystem monetary policy and intra-day credit operations will depend upon satisfaction of the Eurosystem
eligibility criteria.
This prospectus (the "Prospectus") constitutes a prospectus within the meaning of Article 6.3 of Regulation (EU) No 2017/1129 of
the European Parliament and of the Council of 14 June 2017 (as amended, the "Prospectus Regulation"). This Prospectus will be
published in electronic form on the website of the Luxembourg Stock Exchange (https://www.bourse.lu) and the website of the Issuer
(https://www.alstria.com/investor/#bonds).
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier, Luxembourg (the "CSSF"), which is
the Luxembourg competent authority under the Prospectus Regulation. The CSSF only approves this Prospectus as meeting the
standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval should neither
be considered as an endorsement of the Issuer that is the subject of this Prospectus nor of the quality of the Notes that are the subject
of this Prospectus. Further, by approving this Prospectus, the CSSF gives no undertaking as to the economic and financial soundness
of the transaction or the quality or solvency of the Issuer pursuant to Article 6(4) of Luxembourg Law of 16 July 2019 on Prospectuses
for securities (the "Prospectus Law").
Application has been made to the Luxembourg Stock Exchange for the Notes to be listed on the official list of the Luxembourg Stock
Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's Regulated Market. The
Luxembourg Stock Exchange's Regulated Market is a regulated market for the purposes of Directive 2014/65/EU
(as amended, "MiFID II").
This Prospectus will be valid for a period of 12 months after its approval for admission to trading of the Notes on a regulated market,
i.e. until 19 June 2021. In case of a significant new factor, material mistake or material inaccuracy relating to the information included
in this Prospectus which may affect the assessment of the Notes and which arises or is noted between the time when this Prospectus
is approved and the time when trading of the Notes begins on the regulated market of the Luxembourg Stock Exchange, the Issuer
will prepare and publish a supplement to this Prospectus without undue delay in accordance with Article 23 of the Prospectus
Regulation. The obligation of the Issuer to supplement this Prospectus will cease to apply once the Notes have been admitted to trading
on the regulated market of the Luxembourg Stock Exchange and at the latest upon expiry of the validity period of this Prospectus.
Investors should make their own assessment as to the suitability of investing in such Notes.
Joint Bookrunners
BNP PARIBAS
Morgan Stanley
UniCredit Bank

RESPONSIBILITY STATEMENT
The Issuer, alstria office REIT-AG, with its seat in Steinstraße 7, 20095 Hamburg, Germany, registered in
the commercial register of the Local Court of Hamburg under HRB 99204, is solely responsible for the
information given in this Prospectus. The Issuer declares that the information contained in this Prospectus
is, to the best of its knowledge, in accordance with the facts and makes no omissions likely to affect the
import of this Prospectus.
NOTICES
This Prospectus should be read and construed with any supplement thereto and with any documents
incorporated by reference herein in relation to the Notes. Any website referred to in this Prospectus is
referred to for information purposes only, does not form part of this Prospectus and has not been scrutinised
or approved by the CSSF.
This Prospectus is being furnished by BNP Paribas ("BNP Paribas"), Morgan Stanley & Co. International
plc ("Morgan Stanley") and UniCredit Bank AG ("UniCredit") (together, the "Joint Bookrunners")
solely for the purpose of enabling prospective investors to consider the purchase of the Notes described
herein. The information contained in this Prospectus has been provided by alstria and other sources
identified herein. To the fullest extent permitted by law, no representation or warranty is made or implied
by the Joint Bookrunners or any of their affiliates, and neither the Joint Bookrunners nor any of their
affiliates make any representation or warranty or accept any responsibility, as to the accuracy or
completeness of the information contained in this Prospectus or for any statement purported to be made by
or on behalf of the Joint Bookrunners. Investors in the Notes must rely only on the information contained
in this Prospectus.
No person has been authorised to give any information or to make any representation concerning alstria or
the Notes (other than as contained in this Prospectus) and, if given or made, any such other information or
representation should not be relied upon as having been authorised by alstria or the Joint Bookrunners. In
making an investment decision, investors must rely on their own examination of the Issuer, and the terms
of the offering, including the merits and risks involved. Any decision to purchase Notes should be based
solely on this Prospectus.
To the fullest extent permitted by law, the Joint Bookrunners do not accept any responsibility for the
contents of this Prospectus or for any other statements made or purported to be made by the Joint
Bookrunners or on their behalf in connection with the Issuer or the Notes. The Joint Bookrunners
accordingly disclaim all and any liability whether arising in tort or contract or otherwise which they might
otherwise have in respect of this Prospectus or any such statement.
The Joint Bookrunners are acting exclusively for the Issuer and no one else in connection with the offering
of the Notes. The Joint Bookrunners will not regard any other person (whether or not a recipient of this
Prospectus) as their client in relation to the offering of the Notes and will not be responsible to anyone other
than the Issuer for providing the protections afforded to their client or for giving advice in relation to the
offering or any transaction or arrangement referred to herein.
Neither the delivery of this Prospectus nor the offering, sale or delivery of the Notes shall, in any
circumstances, create any implication that the information contained in this Prospectus is true subsequent
to the date upon which this Prospectus has been published or most recently supplemented or that there has
been no adverse change in the financial position of the Issuer since the date hereof or, as the case may be,
the date upon which this Prospectus has been most recently supplemented or the balance sheet date of the
most recent financial statements which are deemed to be incorporated into this Prospectus by reference or
that any other information supplied in connection with the Notes is correct at any time subsequent to the
date on which it is supplied or, if different, the date indicated in the document containing the same.
None of the Issuer or the Joint Bookrunners, or any of their respective representatives, is making any
representation to any offeree or purchaser of the Notes regarding the legality of an investment in the Notes
by such offeree or purchaser under the laws applicable to such offeree or purchaser. Prospective investors
should not construe anything in this Prospectus as legal, tax, business or financial advice. Each investor
should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a
purchase of the Notes.
- ii -

On issue, the Notes are expected to be rated BBB by S&P Global Ratings Europe Limited ("S&P"). At the
date of this Prospectus, the Issuer has a long-term corporate rating of BBB (outlook positive) assigned by
S&P. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension,
change or withdrawal at any time by the assigning rating agency. At the date of this Prospectus, S&P is
established in the European Union, registered under Regulation (EC) No 1060/2009 of the European
Parliament and of the Council dated 16 September 2009 on credit rating agencies, as amended (the "CRA
Regulation") and included in the list of registered credit rating agencies published by the European
Securities and Markets Authority on its website (www.esma.europa.eu/supervision/credit-rating-
agencies/risk) in accordance with the CRA Regulation.
Prospective investors should be aware that an investment in the Notes involves risks and that if
certain risks, in particular those described under "Risk Factors", occur, the investors may lose all or
a very substantial part of their investment.
This Prospectus has been prepared on the basis that all offers of the Notes will be made pursuant to an
exemption under the Prospectus Regulation, from the requirement to produce a prospectus in connection
with offers of the Notes and is thus, for the purposes of the offering of the Notes, not a prospectus within
the meaning of the Prospectus Regulation. Accordingly, any person making or intending to make any offer
within the European Economic Area ("EEA") or the United Kingdom ("UK") of the Notes which are the
subject of the offering contemplated in this Prospectus should only do so in circumstances in which no
obligation arises for the Issuer or the Joint Bookrunners to produce a prospectus for such offers. None of
the Issuer or the Joint Bookrunners has authorised, nor does it or do they authorise, the making of any offer
of the Notes through any financial intermediary, other than offers made by the Joint Bookrunners which
constitute the final placement of the Notes contemplated in this Prospectus.
Solely for the purposes of each manufacturer's product approval process, the target market assessment in
respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible
counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for
distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person
subsequently offering, selling or recommending the Notes (a "distributor") should take into consideration
the manufacturers' target market assessment; however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the Notes (by either adopting or refining the
manufacturers' target market assessment) and determining appropriate distribution channels.
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA or in the UK. For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1)
of MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "Insurance
Distribution Directive"), where that customer would not qualify as a professional client as defined in point
(10) of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU)
No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise
making them available to retail investors in the EEA or in the UK has been prepared and therefore offering
or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may
be unlawful under the PRIIPs Regulation.
This Prospectus does not constitute an offer or an invitation to subscribe for or purchase the Notes and
should not be considered as a recommendation by the Issuer or the Joint Bookrunners that any recipient of
this Prospectus should subscribe for or purchase Notes. Each recipient of this Prospectus shall be taken to
have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer.
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy Notes in any
jurisdiction where such offer or solicitation is unlawful.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act") and are being offered and sold in transactions outside the United States of
America ("United States") to non-U.S. persons (as defined in Regulation S under the Securities Act
("Regulation S")) in reliance on Regulation S.
The Notes are subject to U.S. tax law requirements and may, subject to certain exceptions, not be offered,
sold or delivered within the United States or to U.S. persons.
- iii -

This document may only be communicated or caused to be communicated in circumstances in which
Section 21 para 1 of the Financial Services and Markets Act 2000, as amended ("FSMA") does not apply.
The distribution of this Prospectus as well as the offering, sale, and delivery of the Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required
by the Issuer and the Joint Bookrunners to inform themselves about and to observe any such restrictions.
None of the Issuer or the Joint Bookrunners accepts any legal responsibility for any violation by any person,
whether or not a prospective investor, of any such restrictions.
This Prospectus may not be used for the purpose of an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is
unlawful to make such an offer or solicitation.
For a further description of certain restrictions on the offering and sale of the Notes and on the distribution
of this Prospectus, see "Subscription and Sale--Selling Restrictions" below.
IN CONNECTION WITH THE ISSUE OF THE NOTES, THE JOINT BOOKRUNNERS (OR
PERSONS ACTING ON BEHALF OF THE JOINT BOOKRUNNERS) MAY OVER-ALLOT THE
NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET
PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE
PREVAIL. HOWEVER, STABILISATION MAY NOT NECESSARILY OCCUR. ANY
STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE
PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF
BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE
EARLIER OF 30 DAYS AFTER THE ISSUE DATE AND 60 DAYS AFTER THE DATE OF THE
ALLOTMENT OF THE NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT
MUST BE CONDUCTED BY THE JOINT BOOKRUNNERS (OR PERSON(S) ACTING ON
BEHALF OF THE JOINT BOOKRUNNERS) IN ACCORDANCE WITH ALL APPLICABLE
LAWS AND RULES.
This Prospectus contains assessments of market data and information derived therefrom which could not
be obtained from any independent sources. Such information is based on the Issuer's own internal
assessments and may therefore deviate from the assessments of competitors of alstria or future statistics by
independent sources. As regards the market positions of alstria, alstria's own estimations are mainly based
on company data which is either derived from information by competitors or from data provided by
independent research companies.
The language of this Prospectus is English. The German text of the Terms and Conditions is controlling
and binding; the English text of the Terms and Conditions is a non-binding translation. The financial
statements listed in the section "Documents Incorporated by Reference" under (1) to (3) are non-binding
translations of the respective German-language financial statements. The auditor's reports listed in this
section under (1) to (3) are non-binding translations of the respective German language auditor's reports
issued on the respective German-language financial statements and refer to the respective financial
statements and the corresponding management report as a whole in each case.
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements. A forward-looking statement is a statement
that does not relate to historical facts and events. They are based on analyses or forecasts of future results
and estimates of amounts not yet determinable or foreseeable. These forward-looking statements are
identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "intend",
"plan", "predict", "project" and similar terms and phrases, including references and assumptions.
Forward-looking statements in this Prospectus are based on current estimates and assumptions that the
Issuer makes to the best of its present knowledge. These forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results, including alstria's financial condition and
results of operations, to differ materially from and be worse than results that have expressly or implicitly
been assumed or described in these forward-looking statements. alstria's business is also subject to a number
of risks and uncertainties that could cause a forward-looking statement, estimate or prediction in this
Prospectus to become inaccurate.
- iv -

In this Prospectus, forward-looking statements include, in particular, statements relating to:
·
the development of aspects of alstria's results of operations;
·
certain financial targets alstria has set for itself;
·
alstria's expectations of the impact of risks that affect its business, including those set forth in the
section "Risk Factors";
·
the Company's "pipeline" regarding future acquisitions of real estate and interests in real estate
investment vehicles;
·
alstria's business plan and outlook;
·
other statements relating to alstria's future business development and economic performance and
general economic trends and developments as well as the regulatory environment.
In addition, forecasts and estimates contained in this Prospectus that have been derived from third- party
reports may prove inaccurate. Accordingly, investors are strongly advised to read the sections "Risk
Factors" and "Issuer Related Information". These sections include more detailed descriptions of factors
that might have an impact on alstria's business and the markets in which it operates.
The Issuer bases these forward-looking statements on its current plans, estimates, projections and
expectations after careful examination. These statements are based on certain assumptions that, although
considered reasonable at the date of publication of this Prospectus, may prove to be erroneous. Investors
should not place undue reliance on these forward-looking statements. Many factors could cause alstria's
actual results, performance or achievements to be materially different from any future results, performance
or achievements that may be expressed or implied by such forward-looking statements contained in all
sections of this Prospectus. These factors include, in particular:
·
changes in general economic and business conditions;
·
demographic changes, in particular in Germany;
·
changes in the international, national and local real estate markets;
·
alstria's ability to comply with the requirements under the REITG in order to maintain the G-REIT
status;
·
alstria's ability to meet its financial obligations;
·
alstria's ability to acquire and sell new property portfolios;
·
the success of alstria's acquisitions;
·
alstria's ability to lease the properties in its portfolio or those acquired in the future;
·
changes affecting interest rate levels;
·
changes in the competitive environment;
·
changes in the taxation regime for companies, in particular changes of the real estate transfer tax
(Grunderwerbsteuer) or land tax (Grundsteuer);
·
changes in governmental policy and the regulatory framework, in particular changes of laws and
regulations relating to leases and the environment, as well as in political and social conditions;
·
other factors that are discussed in more detail in the section "Risk Factors", and
·
factors that are not known to alstria at the date of this Prospectus.
- v -

If one or more of these risks or uncertainties materialize, or underlying assumptions prove to be incorrect,
then events described in this Prospectus might not occur or actual results may deviate materially from those
described in this Prospectus as anticipated, believed, estimated or expected, and alstria may not be able to
achieve its financial targets and strategic objectives.
Accordingly, the Company cannot assume responsibility for the future accuracy of the forward-looking
statements expressed in this Prospectus or as to the actual occurrence of any predicted developments. In
addition, except as required by law, the Company does not intend or assume any obligation to update
forward-looking statements set forth in this Prospectus or to conform them to future events or
developments.
- vi -

CONTENTS

Page
RESPONSIBILITY STATEMENT ............................................................................................................. ii
NOTICES ..................................................................................................................................................... ii
FORWARD-LOOKING STATEMENTS ................................................................................................... iv
RISK FACTORS .......................................................................................................................................... 1
TERMS AND CONDITIONS .................................................................................................................... 19
ISSUER RELATED INFORMATION ...................................................................................................... 63
TAXATION ............................................................................................................................................... 98
SUBSCRIPTION AND SALE ................................................................................................................. 102
GENERAL INFORMATION .................................................................................................................. 104
DOCUMENTS INCORPORATED BY REFERENCE ........................................................................... 108

- vii -

RISK FACTORS
In addition to the other information set out in this Prospectus, prospective investors should consider
carefully the information set out below before making an investment in the Notes. If any of these risks
materialize, individually or together with other circumstances, they may materially impair the business of
alstria office REIT-AG and/or of its consolidated subsidiaries or the ability of the Company to fulfil its
obligations under the Notes and may have material adverse effects on alstria's business, assets and
liabilities, as well as on its financial condition and results of operations. Additionally, the realisation of
any of these risks may also negatively affect the market price of the Notes and cause losses for investors in
the Notes. The risks described below do not purport to be exhaustive, and these risks do not constitute the
only risks to which an investor in the Notes is exposed. Furthermore, other risks may be of significance of
which alstria is currently unaware but which may also have material adverse effects on alstria's business
and business prospects, the ability of the Company to fulfil its obligations under the Notes or on alstria's
assets and liabilities, financial condition and results of operation or the market price of the Notes. The
Company may be unable to pay interest, principal or other amounts on or in connection with the Notes and
the market price of the Notes may decline if any of these or other risks materialize, and investors could lose
all or part of their investment.
alstria as a Real Estate Investment Trust under German law ("REIT" or "G-REIT") engaged in the real
estate business is exposed to a variety of risks. The risk factors set out below are divided into the following
seven categories, each indicated by a title (in bold font), according to their nature: (i) Risks related to the
real estate industry, (ii) Risks associated with alstria's business; (iii) Risks associated with the acquisition
and disposal of real estate, (iv) Financing risks, (v) Legal risks, (vi) Risks related to the Company's status
as a G-REIT, and (vii) Risks related to the Notes. Within these different categories, each individual risk
factor is indicated by a sub-heading (in bold italic font) with the most material risk being listed first in each
category. The risks set out after the most material risk are not further ranked by the Issuer in accordance
with their respective degree of materiality. The assessment of materiality was made based on the probability
of occurrence of each risk factor and the expected extent of its negative impact on the Holder.
1. Risks Related to the Real Estate Industry
1.1 Because the German real estate market depends on the macroeconomic development in Germany,
alstria may be adversely affected by adverse macroeconomic developments.
alstria's business success is dependent on the performance of the German real estate market, which in turn
is dependent on the macroeconomic development in Germany. Significant factors affecting the
macroeconomic development are the condition of the global economy, the development of rental rates, the
inflation rate, levels of public debt and interest rates as well as uncertainties about the continuing low
interest rates of the European Central Bank and the future of the Eurozone more generally. At the date of
the Prospectus, there also exists considerable uncertainty regarding the macroeconomic developments
affecting the German and European economy as a result of the ongoing COVID-19 pandemic (see section
1.2 alstria faces significant risks related to the COVID-19 pandemic, which could have material and
adverse impacts on its business, financial condition, liquidity and results of operations. below for further
details). All of these factors are beyond alstria's control. These factors may have a negative impact on the
European economy as a whole, which may affect even economically sound countries like Germany, and
may have a negative impact on the German financial sector and the German office real estate market.
Because of the currently uncertain macroeconomic situation in Germany and Europe, it is possible that the
real estate market in Germany will evolve unfavorably for alstria. This could result in declining revenues
from rents, lower rent increases than expected and declining market values of real estate assets.
1.2 alstria faces significant risks related to the COVID-19 pandemic, which could have material and
adverse impacts on its business, financial condition, liquidity and results of operations.
In early March 2020, COVID-19, a disease caused by a novel strain of the coronavirus SARS-CoV-2, was
characterized as a pandemic by the World Health Organization. Since December 2019, COVID-19 has
spread rapidly, with most countries and territories worldwide having confirmed cases of the disease. rapid
spread has resulted in governmental authorities implementing numerous measures to contain the virus, such
as travel restrictions and bans, quarantines, social-distancing and stringent hygiene/sanitation requirements,
and mandated business closures. The COVID-19 pandemic and these containment measures have had, and
are expected to continue to have, a substantial negative impact on economies globally, including the
German economy.
- 1 -

As of the date of this Prospectus, it is impossible to predict the overall impact of the COVID-19 pandemic
on alstria's business, financial condition, liquidity and results of operations. On 27 March, 2020 the German
parliament adopted a legal framework to mitigate the consequences of the COVID-19 pandemic. These
legislative amendments provide, inter alia, that the ability of the landlord to terminate a lease due to rent
arrears for the period from 1 April to 30 June 2020 is temporarily suspended, if the non-payment is caused
by the effects of the COVID-19 pandemic. If the COVID-19 pandemic continues to cause significant
adverse effects, the period for which the restriction on termination applies may be extended by statutory
order beyond 30 June 2020. However, under the new law the rent remains due and payable and all unpaid
rent would have to be paid by 30 June 2022 at the latest. The extent to which the COVID-19 pandemic will
continue to impact alstria's business and rental income going forward will be dependent on future
developments such as the length and severity of the pandemic, the potential resurgence of the crisis, future
government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the
global economy and capital markets, among many other factors, all of which remain highly uncertainand
unpredictable.
The ongoing COVID-19 pandemic, as well as intensified governmental measures undertaken to contain the
spread of the coronavirus SARS-CoV-2, could adversely affect demand for real estate, lead to an increase
in late or suspended payments, thereby reducing alstria's income streams, alstria could fail to renew,
terminate, or renegotiate their contracts with tenants, all of which could adversely affect alstria's business,
financial condition, liquidity and results of operations.
The COVID-19 pandemic, the measures imposed by authorities to mitigate the health risk posed by it and
the resulting economic implications could have material negative effects on the valuation of real estate
properties and therefore on the assets of the Group. Due to the occurrence of a larger number of defaults of
their customers, banks may have reduced available liquidity, which could make it harder for the alstria
Group to obtain the financing it may require to pursue its acquisition and development strategies or even to
continue its regular operations. Further, refurbishment projects and maintenance works might see
temporarily delays due to lockdown measures and certain constraints, such as delays of required permits
from state authorities, delays of and difficulties with the supply of raw materials as well as possible
limitations of construction workers permitted on site.
In addition, the COVID-19 pandemic could impact the health of alstria's management team and employees.
Any of these negative impacts, alone or in combination with others, could also exacerbate many of the other
risk factors discussed elsewhere in this section "Risk Factors".
1.3 The COVID-19 pandemic could severely affect companies operating in the commercial real estate
sector
The impact and duration of the COVID-19 pandemic is expected to have negative repercussions across
economies and financial markets in Germany and Europe. One of the sectors that could be severely affected
is the commercial real estate sector. Lockdowns, quarantines, restrictions on travel, social distancing rules
and restrictions on types of business that may be allowed to operate are having a significant impact on
tenants of commercial property space and property companies, such as the alstria Group.
This includes the following factors:
·
difficulty in collecting rent payments, on time or at all, from certain tenants that were and/or
continue to be unable to operate due to the lockdown measures and other restrictions imposed by
governmental authorities;
·
cashflow difficulties and deterioration in credit and financing conditions which may affect tenants'
ability to access capital necessary to fund business operations, which, in turn, may affect their
ability to pay rent on time or at all or may lead to such tenants becoming insolvent;
·
tenants' ability to continue their operations in compliance with new health and safety rules,
regulations and recommendations, such as restrictions on, or changes made by businesses for
socialdistancing and hygiene/sanitation reasons;
·
a downward trend in property values and rent levels or tenants' requests for payment holidays, rent
reductions and rent cancellations; and
- 2 -

·
a decrease in demand for commercial property as a result of a general slowdown of the economy
or a change in established working patterns through a sustained shift to "working from home" and
"remote working / meeting" arrangements on an extended or permanent basis. Any of the above
could have a material adverse effect on alstria Group's business, financial condition, results of
operations and prospects and the value of its real estate.
1.4 alstria is exposed to the risk of revaluation losses of real estate properties.
In accordance with statutory requirements, alstria must conduct, and has conducted in the past, annual
revaluations of its real estate. Real estate assets held by alstria are recorded as assets based on the fair value
method pursuant to International Accounting Standard ("IAS") 40. The fair value of the real estate assets
owned by alstria reflecting the market value is determined by an independent appraiser and might be subject
to change. The market value of real estate assets depends on a variety of factors, some of which are
exogenous and not under alstria's control, such as declining market rent levels, decreasing demand, supply
volatility or increasing occupiers demand. In addition, many factors are decisive in the valuation of a
property, including a property's expected rental income, its condition and its location. After initial
recognition, an entity such as alstria that chooses the fair value method has to measure all of its investment
property at fair value and any gain or loss arising from a change in the fair value of investment property
has to be recognized in profit or loss for the year in which it arises. This could result in significant future
revaluation losses of alstria's real estate assets.
1.5 The present macroeconomic environment in Germany is characterized by low interest rates. Any
rise in interest rates could have adverse effects on the German real estate market and on alstria.
The present macroeconomic environment in Germany is characterized by low interest rates, which has
resulted in relatively high valuations of property portfolios. A rise in interest rates could reverse these
developments. Should the economic conditions lead to a rise in interest rates, investors may take a stronger
interest in investments with a higher risk profile, while investments in real estate would appear less
attractive.
A rise in interest rates could also lead to an increase in alstria's funding costs, including costs for hedging
instruments. When negotiating or renewing financing agreements, alstria depends on its ability to negotiate
interest rates that do not impair its targeted earnings levels and repayment schedules that allow for
distribution of the envisaged dividends. Moreover, alstria may not be able to acquire the hedging
instruments needed in the case of variable interest rates, or may be able to acquire them only at considerable
additional expense.
Additionally, in an environment of rising interest rates, the discounting rate which, in accordance with IAS
40 in conjunction with International Financial Reporting Standard ("IFRS") 13, is used for calculating the
value of alstria's real estate recorded in the balance sheet of the Company ("Fair Value"), in most cases
rises, too, which in turn could reduce the Fair Value of alstria's real estate.
1.6 Real estate valuations are based on assumptions and considerations that are not only subject to
change but are inherently subjective and uncertain, and valuation reports may not accurately reflect
the value of the real estate to which the reports relate.
Due to the illiquid nature of real estate, the valuation of real estate is inherently subjective and thus subject
to uncertainty. A property's reported valuation depends on the factors considered during the valuation and
on the valuation method used. In addition to considering expected rental income in relation to a particular
property, the property's condition as well as its historical vacancy level, a property appraiser may consider
other factors such as land tax rates, operating expenses, potential claims for environmental liabilities and
the risks associated with certain construction materials. Property valuations are made on the basis of
assumptions which may not be correct. An adverse change in one of the assumptions used or factors
considered in valuing a property can considerably decrease the assessed value of the property. Moreover, a
change in the factors considered may cause valuation results to differ significantly. There is no guarantee
that the valuations of the interests in the properties of alstria will reflect actual sale or market prices (even
where any such sales occur shortly after the relevant valuation date) or that the estimated rental yield and
annual rental income of any property will actually be attained. In particular, during times of limited
transactions in the real estate market in general or in particular market segments thereof, market prices for
properties may be especially difficult to assess. The particular assessment of the mandated external
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