Pirelli Real Estate

Pirelli RE acquires, adds value to and manages high quality property portfolios by taking minority stakes in partnerships with leading international investors.

The strategic objectives are:

• to create innovative real estate products and services which provide quality solutions to the needs of investors, users and the community;
• to become an aggregator in real estate management, through its specialist know-how;
• to create a sophisticated culture, thus contributing to the real estate sector's structural evolution.

Pirelli RE has local platforms for asset management and specialized services in Italy and Germany/Poland, where real estate markets feature limited volatility and offer attractive medium to long-term growth prospects.

The Group manages a real estate portfolio at the end of 2008 of 7.6 billion euro in Italy (of which 5.8 billion euro in 19 real estate funds) through its subsidiary Pirelli RE SGR, domestic market leader.

Of these funds, two are listed in the Italian Stock Exchange's MTF segment – Tecla Fondo Uffici and Olinda Fondo Shops – and one, Spazio Industriale, is managed on behalf of Spazio Investment NV, a company listed on the London AIM.

The commercial sector (retail, offices, industrial) represents most of the portfolio under management (over 70%), while the residential sector mainly involves development projects. The portfolio is characterized by the location of properties in major cities (80% are in Milan and Rome), high occupancy rates and long-term partnerships with primary tenants (eg. La Rinascente, Gruppo Editoriale L’Espresso, ENI, CISCO, Prime Minister's Office).

Pirelli RE stands out for its industry know-how: an example of this is its specialization in eco-sustainability (EcobuildingTM), both for new developments (eg. the new headquarters of 3M and RCS) and for enhancing the value of existing properties.

Germany (www.pirellire.de)

In less than two years Pirelli RE has become a leading player in the German real estate market, both in the commercial sector (two-thirds of assets managed), and in the residential sector. Total assets under management amount to 7.6 billion euro (market value as at 31 dec 2008).

Having acquired several major property companies, Pirelli RE now manages over 75,000 residential units in Germany, housing over 150,000 people. These properties are located in the region between Kiel and the capital Berlin, home to particularly important properties such as the Carl Legien Estate, declared a UNESCO world heritage site in 2008.

The commercial sector was entered after acquiring DGAG, in partnership with Morgan Stanley, and the retail portfolio of Highstreet, in partnership with the real estate funds of Deutsche Bank and Generali, the Borletti Group and the joint venture with Goldman Sachs. The Highstreet portfolio comprises around 160 properties occupied by the Karstadt retail chain and located in cities such as Hamburg, Munich and Berlin: one of these, the KaDeWe, is one of continental Europe’s most prestigious department stores.

Poland (www.pirellipekaore.com)

Pirelli RE operates through Pirelli Pekao Real Estate (75% Pirelli RE, 25% Bank Pekao SA - Unicredit Group), one of the principal asset managers and service providers in Poland.
Assets under management amount to 0.2 billion euro in development projects, mainly in the residential sector in the cities of Warsaw and Gdansk. The estimated finished product value of these developments is approximately 1.7 billion euro.

The company Milano Centrale, a historic Group brand, is born – merging the businesses and personnel of IACI (Iniziative Agricole Commerciali Italiane) with those of Vitruvio.

Work on MIlano Bicocca area is begun, one of the most important urban requalification projects to be completed in Europe in the last thirty years.

Partnership with Morgan Stanley Real Estate Funds to develop and exploit real estate portfolios designated for Office use

PTB launched on Unim, the most important real estate company listed on the Italian Stock Exchange

Milano Centrale is renamed Pirelli & C. Real Estate.

Pirelli RE debuts on the Italian Stock Exchange.

Launch of Pirelli RE franchising network

Pirelli RE SGR obtained authorization from Banca d’Italia

The first private seeded real estate investments funds are placed with retail and institutional investors

Activity in the NPL – non performing loans – investment sector is begun through agreements with top international investors.

P&K Real Estate, joint venture between Pirelli RE and Kronberg, is born in order to invest in Germany.

The first speculative funds in the real estate sector are launched.

Operations in Poland are begun through Pirelli Pekao Real Estate (75% Pirelli RE - 25% Bank Pekao).

DGAG, one of the primary German real estate companies, is acquired.

Spazio Investment is listed on the London Stock Exchange’s Alternative Investment Market (AIM).

Ecobuilding, the first integrated program for environmentally friendly construction to be developed by a real estate player, is launched.

BauBeCon, one of the most important German real estate groups in the residential sector, is acquired.

Completion announced of acquisition of 49% stake in Highstreet with primary partners

Pirelli Opportunities SGR merged into Pirelli RE SGR