Dear ladies and gentlemen, welcome to the conference call of alstria office REIT-AG regarding the full- year results 2021. At our customer's 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. If any participant has difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. I will now hand you over to Olivier Elamine, who will start today's conference. Please go ahead. 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 Alexander Dexne, Ralf Dibbern, and Julius, which is from our IR team, to walk you through the financial results. Before we start, just a short look at the usual disclaimer on the forward-looking statement and the duty to update. As it is our habit, before the annual result 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-19 pandemic. One of the things I think which was kind of interesting and have, I think, answered a number of questions that we had about the office market prior to COVID-19 is this kind of dichotomy where on one hand you can argue that no one actually really needs an office. I think we went into that pandemic and when there was the 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. 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. 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 have done, it has highlighted basically why tenants are paying rent in an office. What is the added value that the office have, and why should tenant pay, and what should they expect? The reality is they're not paying for the four walls and the roof and the desks that you're gonna put in there, but they are paying for something different. You could call it creativity, you could call it teamwork, you can call it culture building. There's a number of things that can be structured or called around that. But this added value of the office, I think has been made very much apparent in the pandemic. I assume that tenants which are looking for office space today are trying to value whether or not the office they're gonna rent is gonna be able to deliver that. 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 gonna add value to your business. This is really as alstria something we've been working on 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 the 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. One of the points which actually has been, I think, the major innovation in the last few years has been the introduction of the EU Taxonomy. Unfortunately, this is really my point of view. Please disagree if you want to. The Taxonomy might be a very good idea in terms of sector, and real estate is missing the point by a margin. What the taxonomy does and what it's gonna do is very likely that it's gonna be pushing capital in a place with limited supply and where there's actually little ESG benefits. It's gonna starve capital in a place where there's actually a need for capital and where there's huge supply. If you look at how the different regulation are set up, if you look how the SFDR is set up, the reporting obligation of investors, you would realize that in actual fact, in order to be taxonomy compliant, 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, unlikely to be taxonomy compliant. And this, we believe, is gonna create a tremendous market opportunity. You... For people who are gonna be able to walk next to the Taxonomy and bypass the needs of being compliant or the urge of being compliant, the market of buildings to be refurbished, which is vast with a lot of supply is gonna be starved for capital, and therefore, there are gonna be a lot of interest or opportunity to invest in that market. It's not yet the case, but it's coming. The market where those buildings when they are refurbished you would be able to sell them to, which is a market with very limited supply, is gonna be where there is all the capital flowing and little assets that actually ticks the box on offer. We think that the ability of a company like alstria to take this contrarian view, while still sticking to its ESG targets, is gonna be a unique market opportunity that we can take with us. T hat we have been very much leading the way on ESG and on the thought process around that. We believe that, we can still fulfill our purpose and transition buildings from the old world to the new world, taking into consideration not only the ESG but also the new work concept that we've discussed a bit before. That's what I think is gonna generate a substantial opportunity. This need... I mean the reason why I'm kind of highlighting that is because it need also to be put in the context of the transaction that we just executed with Brookfield. Our view and rightly or wrongly, 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. We're very grateful for everything that happened. We came to the conclusion that in the current market, the public equity would be relatively inefficient, because the changes that are happening are too radical for the public equity to take a view and to take a strong conviction of what's gonna happen. If you speak to individual investors, they have, for a lot of them, strong conviction. The market as a whole is not in a position to take conviction. My belief is that public equities in the office side, I don't know for other parts of real estate, but the office side, are gonna be struggling to try to convince, the concern about ESG and the concern around the future of office are gonna weigh heavily 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. In that sense is gonna 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. We believe that at least for the coming years or so, the private market are gonna be more efficient because they are able to take stronger conviction than what the public market will be able to do going forward. What changed for us is not fundamentally the business we're doing. Our purpose doesn't change. For that matter, the fact that the change of shareholder doesn't change the market in which we operate. What changes is our ability to allocate capital differently, to be able to make use of the market opportunity that we're seeing. I think the best illustration of that is the fact that, you know, we're gonna pay a minimum dividend, or we're proposing to the AGM to pay a minimum dividend this year of EUR 0.04 per share compared to EUR 0.52. So there's gonna be a retained earnings year. Moving forward, the ability of the company to do more of and invest more in its portfolio is gonna allow us to tap into the refurbishment opportunity, and try to benefit as much as we can of that change and transformation in the market. We're really looking forward for the next chapter of the company in that respect. Finally, just to spend a few word on that, we have published today, or yesterday actually, next to our annual result presentation, our carbon accounts. I would encourage you to look at them if you're interested. What the carbon account shows is that the balance sheet, our carbon balance sheet have doubled in size. That's really related to the increase in price of carbon in the course of 2021, which increased by almost 150% in 2021. From my perspective, the main lesson that we learn 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. That highlights if 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 emissions in operation, but it is in the embedded carbon discussion, which I'm glad is taking predominant space today in the conversation about real estate ESG. This has been our belief through the years, and now it's showing relatively strongly in numbers. The challenge for real estate company is in managing the embedded carbon and not so much into, or not anymore, into the operational emissions, 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 savings that we have made relate to changes, which are unrelated to us. This is basically the decarbonization of the grid. And that also highlights 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 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 is very welcome and I think underlines the strength of the portfolio with our revenue up around 3.7% year-over-year, a strong growth in the FFO at around 7.2%, and also a nice leasing result, and I'm gonna come back to those number in a bit in more details. We ended up the year almost balanced from a sale and an acquisition perspective, and we have invested EUR 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 EUR 90, which compared to the EUR 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 EUR 4.8 billion. We do like relatively small assets in terms of 5,000 to 13,000 square meters on average. Per asset, total value at EUR 3,400 per square meter, which offer ample opportunity to spend money on refurbishment and improve the rental income. We have a contractual rent of EUR 205 million on 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's clearly more momentum in the letting market. The letting volume at 155,000 square meter is nothing I think we need to be shy of. The average rent per sq m on the portfolio has continued its trend upward. We have secured EUR 120 million of future income through the different leasing that we have executed across the year. All of this 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 basically gonna have a material impact on the way the revenue of the company are gonna 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 Heerlen, 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 Deutsche Office together with the company in 2015. We're done with that process. On the acquisition side, we've been, again, very consistent with the view of acquiring buildings that require repositioning. Acquiring two properties in Berlin, in Mehringdamm, and the other one in Frankfurt in Heerlener Straße, 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 gonna go very briefly through them. Investment property is up year-on-year by around 5%, and that's essentially reflecting the market. Both the CapEx that we have spent on the property, and the OMV gain. Our equity is up slightly. Again, here, we're gonna go back to the NAV bridge in a minute. 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's gonna 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, both being disposal gains being realized gains and revaluation unrealized gains. What... I mean, if you were likely to look at the same bridge next year, well, the dividends will not be there anymore, and the rest. I'm not giving any guidance on the revaluation. The rest would be probably looking in a similar way. Retaining the dividend is just gonna 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 Global Ratings has confirmed our investment grade rating at BB B-. We still were downgraded following the transaction, but we remain at the investment grade level. The current debt structure, which is shown on this slide, is gonna 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. You have on that slide the structure with the 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. 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 a 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. Thank you. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question has answered before it is your turn to speak, you can dial zero and two to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question is from Kai Klose. Your line is now open. Please go ahead. Yes. Hello, good afternoon. I've got three questions to make. The first one is on page 31 of the company report. Just to understand the amount of maintenance CapEx, which is deduct from the FFO to the AFFO, was materially lower compared to 2020. What was the reason for that? 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. Because of the pandemic, obviously there was a slowdown in the amount of work we were doing in the buildings. That's basically what you see reflecting in the number here. We expect that they're gonna be a catch up in the course of the year 2022. The slowdown was so significant that it more than half or less than half compared to the 2020 numbers? Yeah. That's exactly it. Okay. The second question would be on the refurbishment pipeline, which you show also in the report. Just to understand, the number where there are more properties included, but the, let's say, completion date is only relatively precise for a few numbers. Could you explain why? Why we don't provide a more specific date for completion? Yes. I think we have about 20 properties here on Page 25 in that table, but only for about half of that, you mentioned the expected completion date. Just to understand why? Well, I think what you would notice if you read through our report is that there is probably much less information that we used to put in the past. 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 to do previously. I mean, there's a number of things that you would not find in the report this year, and I can highlight them. You will not find the list of the properties with OMV, et cetera. 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 the transparency of the company going forward. I think you need to expect probably a bit less information from us going forward. I mean, I appreciate it's a bit weird looking at it from today's perspective, but this is something that we will. I mean, 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. Okay. The last question maybe, as you mentioned the downgrade to triple B minus, can we expect regarding financing costs regardless of the higher interest rate levels in general with as they are now being still investment grade rated but slightly lower, and how this could affect the targeted yield on costs you mentioned of 5.5% for the development project? Our yield on cost is not gonna be impacted by that because it's an unlevered. As you know, we always underwrite our assets from an unlevered perspective. Our cost of financing doesn't have an impact on the way we're looking at it. I think if you look at the spread on where our bonds are currently trading, they are obviously trading wider than when we were at BBB+, which is kind of an obvious statement to make. I would expect that the cost of financing our I mean, our marginal cost of financing would be probably somewhere around 50 basis points wider from where we currently are. Having said that, I mean, there is also a bit of technicalities in where our bonds are currently trading. You know, a number of investors have assumed that we would be downgraded beyond investment grade. One of the arbitrage that was possible was to buy the bonds and then put them back to the CoC at 101, which didn't work. There was a bit of downward pressure on our bonds in the few weeks after the announcement of S&P that we would remain investment grade. I would expect overall, and I think this is what you would see if you take the average of the curve of our where our bonds are trading, to be around 50% higher than what we are. What we will clearly also do a bit more now than we were doing in the past is mortgage financing. From that perspective, this would probably be pretty much in line with the cost of financing that we have. Understood. Many thanks. Thanks, Kai Klose. Before we go on to the next question, just a brief reminder, if you would like to ask a question, please press zero and one on your telephone keypad now. The next question is from Manuel Martin of Warburg-HIH Invest. Your line is now open. Please go ahead. 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 will keep the minimum dividend payment for the next, let's say, near-term future, given the financing needs that you have with your investment program? I mean, that's really key, what was in the offer documents and what we've been guiding the market towards, I mean, in the communication around the Brookfield transaction, and that's also what's reflected in our proposal to the AGM this year. 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 REIT legislation. I think it's a fair assumption to assume that the operating profit is gonna be distributed to the minimum extent legally required. Okay. Okay. Understood. My second and final question is about future plans. I mean, if I understand that correctly, Brookfield holds more or less 95% in alstria. Is there any scenario of a delisting possible of alstria given the situation? Well, I think, again, if you look into what Brookfield has announced in the offer documents, they have not ruled out the delisting, but they have also not mentioned that they would do a delisting. I mean, given that they have now 95%, there might be some speculation about a potential squeeze-out, which actually is not possible, because, I mean, technically, it's a different entity which owns the 95%. If there is conversation about the delisting, it's clearly not gonna be through a squeeze-out process. At this stage, at least as far as I know, as far as I'm involved, there is no discussion about or no decision made about the delisting. The option, I mean, clearly has been on the table 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. Okay. Okay, I see. Thank you very much. There are currently no further questions. As a final reminder, if you would like to ask a question, please press zero and one on your telephone keypad now. We haven't received any further questions, so I hand back to the speakers for closing remarks. Well, thank you very much, everybody, for joining us today. I'm looking forward to the next quarterly result presentation that we're gonna make. Thank you very much for your interest in the company and yeah, looking forward for the next time. Cheers. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.