Olivier Elamine, alstria

alstria office REIT-AG is an internally managed Real Estate Investment Trust (REIT) solely focused on acquiring, owning and managing office real estate in Germany. It was founded in January 2006 and was converted into the first German REIT in October 2007. alstria’s CEO Olivier Elamine spoke to Leon Goldwater about the company and explained the opportunities in today’s German real estate market.

Who is alstria?

alstria is the largest office property company listed in Germany today. It has a portfolio of around 90 assets valued at €1.6 billion, slightly less than 1 million m² of office space. Almost half of our portfolio is located in Hamburg and then we have a strong concentration in the area of Düsseldorf, Essen and their surroundings which represent another 25% of the portfolio; Stuttgart represents another 15% of our portfolio and the balance of the assets is located across Germany.

We only invest in offices. We are not property traders, so we basically buy assets with the intention to manage them for the long term. Having said that, over the last four years we sold around €500 million and we bought around €350 million worth of assets.

What is your definition of ‘long term’?

Long term is forever, so whenever we buy an asset the idea is that potentially we are going to keep it forever. We usually don’t have plans to sell our assets; when we sell we usually react to external inquiries about specific assets.

alstria is fully integrated; today we have around 50 people working for the company out of two offices, one in Hamburg and one in Düsseldorf. We do all our development, asset management and property management in-house (we call it all Real estate operations). it is very important for us to be as close to the assets as possible.

We are one of the few REITs in Germany today. From our perspective the REIT is really a tax status, it has the benefit that we don’t have to deal with German taxes, but also we were able to benefit from the trademark of the REIT in the international markets. However, it doesn’t affect the way we see our business.

And looking forward, what are your plans for the future?

Our ultimate plan is to continue to grow the company to almost double the size of the portfolio. The market conditions were not very supportive to fast growth lately but our ultimate aim is to be the German leader that could compete from a visibility perspective with other European property companies.

We feel that today there is no company in the office sector in Germany with a size that makes it attractive enough for international investors. I think four or five years down the road alstria will be part of a bigger entity, whether this entity is called alstria or something else.

I’m a big believer in the fact that the German market requires consolidation, because there are too many too small players around. I think there’s a need for a bigger platform in the German real estate market.

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