Nov 9, 2009

Quality rather than quantity

The debate about the need for more transparency in the real estate listed sector is back in the Germany. In principle there is nothing bad about the requirement for more transparency. I hope that alstria has in the past demonstrated many times its willingness to provide the market with the right set of information at the right time.

There is in my opinion a dangerous amalgam between transparency and throwing unsorted information to investors. I make a big difference between being transparent and publishing each and every data available in a company. Being transparent is not equivalent to ticking each box of a list of information that needs to be published by a company. Transparency is a dynamic and subjective notion. It is about disclosing the right information at the right time and in a way that is understandable by an investor. It is a judgment call.

Oct 5, 2009

The two fridges syndrome

BREEAM, LEED, HQE or DGNB. Real estate companies and real estate investors should get familiar with these logos and names, as these are the national trademarks for green building respectively in the UK (and international), US (and rest of the world), France, and Germany.

These standards will usually provide a certificate (which can be silver, gold or platinum…) by looking at the building conception and technique and compare it to a “best in class” technology in terms of, amongst others, resource consumption and greenhouse gas emissions.

Sep 4, 2009

Will Aristote save the real estate finance?

In the last 12 months we had numerous questions of investors on what is the Pfandbrief market (the German cover bond market) and how does this market works. I happened to run into an academic study that is a good introduction to the instrument. It is published on the web site of the VdP (Association of German Pfandbrief Banks). The study is dated February 2009, and is called “Refinancing Real Estate Loans – Lessons to be Learned from the Subprime Crisis” (full study can be downloaded following this link).

Jul 17, 2009

Unexpected growth

It is not unusual to use approximations for the total area of a real estate asset. Different countries use different measurement rules, and different real estate professionals measure different things (built area, lettable area, usable area...). I do not recall having ever seen a building where everyone agrees on the total area (although it might look odd, but this is also true in some instance for the number of parking spaces). It is not unusal in that respect that following a remeasurement of a property, the total area grows or shrinks by plus or minus 2 to 3% (that is the reason why real estate companies always says that their portfolio represents "around" x sqm).

Jun 12, 2009

Back to the Future

Michael J. Fox driving his DeLorean back and forth in the past and in the future, riding his skateboard, listening to Huey Lewis and the News singing the “Power of Love” was one of my favorite movies. I spent an awful lot of time looking at the VHS video (for those who are younger than 25, VHS tapes were big black boxes with movies of bad quality which you could watch on TV, and TVs at that time were also large boxes with a small screens).

May 18, 2009


Real Estate Investment Trust or REIT, is a global trademark which started in the US in the 1960’s, and is now spread across the globe. When a company define itself as a REIT, it mean that it adhere to a number of simple concept. Its is usually a listed company, its business must be real estate investment it is tax transparent, and it pays most of its profit as dividend. Although the local legislation differs here and there, those are the main characteristic of REIT worldwide.

May 14, 2009

Flat Lines

The new value of the IPD/alstria DMX index which measures the reversion potential of German office rents shows for the second consecutive year that, on average, there is little reversion to be expected in the German rental market. (Full IPD study and result can be found here).

This does not come as a surprise to me and hopefully will not surprise any of the investors we are used to speak to, as this is one of the base case assumptions we have been working on since inception.

Apr 28, 2009

Qui va piano va sano

A few weeks ago, following our annual press conference, we got this interesting question from a real estate equity sales desk: “I have one particular question on current disposal talks. If pricing is not very much of an issue and the buyers are mostly equity buyers and have little constraints regarding the debt financing, what is currently holding up the process?

Apr 17, 2009

Apples and bananas

For real estate listed companies like for other industries, March was the month of FY08 earning season and we did publish our numbers on the 31st of March (a replay of the webcast of alstria result presentation can be found here).

Apr 2, 2009

Kill the messenger

Kill the messenger. This is basicly what i thought when i read the news about relaxing fair value accounting rules by FASB in the US. Not looking at the problem is unlikely to make it goes away. And unlikely to help solving it too.

Mar 17, 2009

How sexy is Germany?

Some days ago some of the German press echoes a speaker (from the Senior Management of a leading european agent) who said the following about Germany: "For 15 years since reunification, Frankfurt and Munich have seen virtually no rental movement at all Germany is boring and was boring It will never be a sexy market". This comment stroke me as at the time of alstria's IPO, one of the main drawback we had was that alstria's portfolio was not sexy enough for Germany. Leases were too long, not enough vacancy, not enough short term reversion, in a nutshell not enough growth. Reading this new comment it seems that alstria's portfolio had exactly the characteristics of a German portfolio. Boring.

Mar 11, 2009

MIPIM 2009 - 20 years of real estate

The MIPIM in Cannes is 20 years old. I was having breakfast this morning with a French friend who was a participant at the first MIPIM back in 1989, and is invited tonight to join the "veteran" dinner that is offered by the MIPIM organizers.

During the years this real estate fair has grown in size, number of participant to a scale where a lot of first year participant felt that it was becoming too big to be really efficient. At breakfast this morning, we both agreed that this year MIPIM may not be the most joyful one, but will clearly be one of the most efficient in years. People who came are here for business. Not for fun.

Mar 8, 2009

Corporate blogging: Lesson one.

I must confess that I am surprised by the number of direct comments or emails that are arriving at alstria following the recent start of the blog. I would not have expected to have so many people reading it. So thanks for your time and your interest.

One of the issues of having this blog is reflected in the comment of Thomas on my previous post (see the comment here). I do realize that it is hard to make the difference between alstria specific situation and general market comments. I will need to break my oath to Isabelle (which is alstria General Counsel) and will from now on address Thomas concerns even if it means discussing from time to time alstria’s specific. After all he is right to say that I am still writing this as a management board member of a listed company.

Mar 5, 2009

In the credit crunch, the credit might have already left, but the crunch still has to come

In November 2008 a panelist at the ninth annual European Real Estate Opportunity & Private Fund Investing Forum had the following remark: “Is CMBS dead? It can't be dead--there's no other place to get [that money] from” I guess it is relatively fair to say that if CMBS is not clinically dead, it is in a very deep coma.

European real estate markets were less relying on the CMBS market than the US markets. Nevertheless the share of the CMBS market has been constantly growing and it is estimated that more than 20% of the commercial real estate financing was financed through these markets. That still leaves us with a significant number of billions of commercial real estate financed in the CMBS markets…

Feb 27, 2009

Being there is sometimes just enough

Yesterday, alstria was awarded the HASPAX newcomer award. For those of you who do not know what HASPAX is, you can have a look on their website ( It is basicaly an equity indice traded on the Hamburg stock exchange and sponsored by the local savings (and still in business) bank, HASPA.

Feb 21, 2009

Why would we start a corporate blog?

As a CEO or CFO of a listed company you have an enormous number of opportunities to express yourself publicly. Through press interviews, through the quarterly or annual analyst call, within the shareholders letters... communication tools at your disposal are numerous. Nevertheless, none of those give you the freedom to react to a specific matter at a specific moment in time. They are all codified, and therefore somehow restricted to what you can and cannot say.