Alstria Office REIT hits investment target for 2007

Hamburg-based Alstria office REIT has signed an agreement to acquire an office building in Berlin for EUR 55 mln. Located in Berlin-Charlottenburg, the property has a total lettable area of 22,500 m² and is fully let to Deutsche Rentenversicherung, Europe's largest state pension insurer, until mid-2012.

The purchase brings the company's acquisition total for the year to more than EUR 520 mln with an average vacancy rate of 12.5% and a gross yield of 6.4%. According to Olivier Elamine, CEO of Alstria, 'We have been able to adapt rapidly to the changing market environment and refrained from buying in the overheated markets this summer. Since our conversion to a G-REIT, we have fully exploited the unique competitive advantage of the REIT regime. From an operational standpoint, the business plan of the company is delivered in full.'

The building in Berlin will generate a passing rent of approximately EUR 3.25 mln per annum. The deal is expected to close in 2008 and will be financed through the company's existing credit facility at a 55% to 60 % loan-to-value ratio. The acquisition marks a successful end to the company's 2007 acquisition programme which has allowed Alstria to win major German corporations and public entities as new tenants, including Rheinmetall AG, Siemens, Bilfinger Berger, HUK-COBURG and MFI AG.

Alstria's CFO Alexander Dexne added: 'Alstria will go into 2008 with a very solid capital structure, with more than EUR 1.9 bn of assets on its balance sheet and a conservative leverage lower than 60 % LTV secured and hedged for the next four years. In this very volatile market environment the recent acquisitions confirmed that throughout the year we have been consistently able to lock in an attractive positive spread between our overall cost of financing and our running yield.'