Prelios: Two important transactions closed

Dec 30 2010
THE 13.6% INTEREST IN CLOE, A REAL ESTATE FUND MANAGED BY PRELIOS SGR,SOLD TO GIC (GOVERNMENT OF SINGAPORE INVESTMENT CORPORATION)

DISPOSAL OF THE EQUITY INVESTMENT IN “PROGETTO PENTAGRAMMA”, ARECONVERSION PROJECT INVOLVING 4 ASSETS IN ROME, INCLUDING THEFORMER “POLIGRAFICO DELLO STATO” (STATE MINT)

THE TWO TRANSACTIONS WILL HAVE A POSITIVE IMPACT ON PRELIOS’ NET FINANCIALPOSITION OF APPROX €47 MILLION


Milan, December 30th, 2010 – The Prelios Group has closed two important transactions, in linewith the Company’s strategic repositioning which foresees a gradual reduction of the netinvested capital in real estate investments and focuses more on its activities as a “pure assetmanagement company”, increasing the assets managed for third parties.

The two transactions have a positive impact on Prelios’ net financial position of approximately€47 million.

13.6% of the Cloe Fund sold to GIC

The first transaction involves the sale to an affiliate of GIC Real Estate, the real estate arm ofGovernment of Singapore Investment Corporation – of the 13.6% interest in Cloe, a real estatefund managed by Prelios SGR.

The transaction, closed in line with Prelios’ carrying amount and at an approx 20% discount tothe fund’s NAV, improves Prelios’ net financial position by approximately €26.9 million.

Fondo Cloe, a “core” closed-end real estate fund placed and founded by Prelios SGR (formerlyPirelli RE SGR) in 2004, holds 11 properties valued at approximately €550 million Its otherquotaholders include primary Italian and international institutional investors. Cloe was recentlyawarded “Best Italian Specialist Fund” for the highest total return over the last three years at theprestigious “IPD European Property Investment Awards 2010”.

Disposal of the equity investment in “Progetto Pentagramma”

The second transaction relates to the sale of the 35% interest held by Prelios in Finprema, acompany which entered into a 50/50 joint venture with Fintecna named “Residenze Immobiliari2004” which is responsible for “Progetto Pentragramma”.

The transaction, which closed largely in line with book value, and the improvement of Prelios’net financial position, are about €20 million.

Progetto Pentagramma is a project, undertaken in 2007, in order to enhance 4 real estateassets found in Rome – with a total book value of approximately €406 million – which calls forsignificant development and reconversion.

The most important of these assets is the Istituto Poligrafico e Zecca dello Stato (the formerstate mint) which is to be converted into a prestigious luxury hotel and brand residence. Theportfolio also includes the former Istituto Geologico and the real estate complex at Scalo SanLorenzo, both of which are to be converted into tertiary facilities, and the Valcannuta area whereresidential development will take place.