Investment & Asset Management - Co-investment activities
I. Asset Under Management
The information reported below, relating to portfolios owned by the Group at December 31st, 2007, is taken from
valuations performed by CB Richard Ellis for the entire portfolio, with the exception of:
– the Armilla Fund and the assets of DGAG and BauBeCon, all valued by Reag;
– the Progetti Uffici Fund (not invested in by the Group), valued by Cushman & Wakefield;
– the Immobiliare Pubblico Regione Siciliana Fund (FIPRS), valued by Scenari Immobiliari;
– the land portfolio owned by Nowe Ogrody 4, valued by Knight Frank.
The following chart presents assets under management by product type in both 2007 and 2006, with the real estate
component stated at market value.
(*) Net Book Value.
(**) The total amount of the principated vehicles and fund was approximately 14.4 billion euro in 2007 compared with 12.5 billion euro of 2006.
The following chart compares the geographical breakdown of real estate assets, stated at market value, in 2006
and 2007.
Development projects account for 1.1 billion euro out of the total of 12.6 billion euro and have a finished product value of 4.2 billion euro, of which 3,2 billion euro in Italy, 0.2
billion euro in Germany and 0.8 billion euro in Poland. Poland’s share of total AUM would therefore rise to 5%.
Assets under management (16) amounted to 15.0 billion euro at the end of 2007, up 3% from 14.5 billion euro in
December 2006, ranking Pirelli RE as one of the principal asset managers in Continental Europe. The assets
under management comprise 12.6 billion euro in real estate and development projects and 2.4 billion euro in non
performing loans. Total participated assets under management amounted to around 14.4 billion euro compared
with 12.5 billion euro at the end of 2006. The development projects, valued as part of the real estate portfolio at
1.1 billion euro by the independent appraisers, have an estimated finished product value of over 4 billion euro.
Approximately 29% of the real estate assets managed are in Germany and Poland, while 8.9 billion euro in assets
are managed in Italy, of which almost 80% through funds.
Sales of real estate under management amounted to 1,804.9 million euro in 2007 compared with 2,805.7 million euro in 2006. A total of 541 million euro in NPLs were collected during the year compared with 470 million euro in the prior year.
Real estate and non performing loan purchases amounted to some 3.3 billion euro (3.6 billion euro in the prior
year), on top of which there were around 500 million euro in binding purchase commitments at year end.
16) Assets under management are stated at market value as estimated by independent appraisers, except for non performing loans which are reported at book value.
II. Net Asset Value immobiliare
The Net Asset Value of Pirelli RE’s co-investments excluding NPLs (17) is estimated at about 1 billion euro by the
independent appraisers. This amount consists of the difference between the Pirelli RE share of the assets’ market
value (3.5 billion euro) and its share of the related net financial position (2.5 billion euro) as reported in the following
table.
(17) Non performing loans are reported at book value.
| (in milioni di Euro) | 100% |
Pro quota |
||||||
| Book Value |
Market Value |
Net Financial Position |
Net Asset Value |
Book Value |
Market Value |
Net Financial Position |
Net Asset Value |
|
| TOTAL ASSET UNDER MANAGEMENT | 13.7 | 15.0 | 10.0 | – | 3.9 | 4.2 | 3.2 | – |
| of which non-participated funds | 0.5 | 0.6 | – | – | – | – | – | |
| TOTAL REAL ESTATE ASSETS UNDER MANAGEMENT |
13.2 |
14.4 |
10.0 |
– |
3.9 |
4.2 |
3.2 |
– |
| of which non performing loans (book value) | 2.4 | 2.4 | 2.0 | – | 0.7 | 0.7 | 0.6 | - |
| of which Real Estate ASSETS UNDER MANAGEMENT in participated companies and funds |
10.8 |
12.0 |
8.0 |
4.0 |
3.2 |
3.5 |
2.5 |
1.0 (*) |
| (*) The item includes 50 million euro of consolidated net financial position. | ||||||||
As regards the difference between book value and market value, the core-core plus portfolio is stated at fair value
(under IAS 40) while the trading portfolio reports an unrealized capital gain of 316 million euro (Pirelli RE share),
or 294 million euro excluding the newly-acquired residential portfolios of DGAG and BauBeCon, with a margin of
16%, as shown in the following table.
| (euro/billion) | Book Value PRE share December 2007 |
Market Value PRE share December 2007 |
Unrealized Capital Gain December 2007 |
Residential |
|||
| Hold portfolio | – | – | – |
| Trading portfolio | 1.28 | 1.38 | 0.10 |
| Development | 0.17 | 0.20 | 0.03 |
| Total | 1.45 | 1.58 | 0.13 |
| Commercial | |||
| Hold portfolio | 0.70 | 0.70 | 0.00 |
| Trading portfolio | 0.71 | 0.85 | 0.14 |
| Development | 0.15 | 0.18 | 0.02 |
| Total | 1.57 | 1.73 | 0.16 |
| Other | 0.19 | 0.22 | 0.03 |
| TOTAL NET ASSET VALUE IMMOBILIARE | 3.21 | 3.52 | 0.32 |
| Of which total trading portfolio excluding German residential portfolio |
1.53 |
1.83 |
0.29 16% (*) |
| (*) % margin calculated as ratio between UCG and PRE share Market Value. | |||
| (euro/million) | INVESTMENT & ASSET MANAGEMENT - ATTIVITÀ DI COINVESTIMENTO |
|||||
December 2007 |
December 2006 |
|||||
| Real Estate | NPL | Totale | Real Estate | NPL | Totale | |
| Pro-rata aggregate revenues | 798.2 | 4.4 | 802.6 | 994.1 | 3.8 | 997.9 |
| EBIT | 26.1 | 0.6 | 26.8 | 34.4 | 2.2 | 36.6 |
| Net income from investments | 102.1 | 14.2 | 116.3 | 98.5 | 7.0 | 105.4 |
| EBIT including net income from investments |
128.3 |
14.8 |
143.1 |
132.8 |
9.2 |
142.0 |
| of which fair value adjustment (IAS 40) (*) | 70.5 | 11.0 | ||||
| Real estate and loan portfolio purchases (Book Value) (**) |
2,452.5 |
844.5 |
3,297.0 |
2,607.7 |
977.3 |
3,585.0 |
| (*) Pro-rata IAS 40 revaluations in 2006 amounted to 33.5 million euro of which 22.5 million euro realized from third parties through the tender of Spazio Industriale fund. (**) The 2007 figure excludes 503 million euro in binding purchase commitments. while the 2006 figure includes 1.406 million euro for the acquisition value of the DGAG platform. |
||||||
Pro-rata aggregate revenues from capital (co-investment) activities came to 802.6 million euro compared with
997.9 million euro in 2006 due to the smaller volume of sales.
EBIT including net income from investments generated by capital (co-investment) activities (18) amounted to 143.1 million euro, a 1% increase on the prior year figure of 142.0 million euro: 15.4 million euro from the residential portfolio (40.4 million euro in 2006); 112.9 million euro from the commercial portfolio (92.4 million euro in 2006) and 14.8 million euro from non performing loans (9.2 million euro in 2006). EBIT including net income from investments includes 70.5 million euro in fair value adjustments (under IAS 40) to assets in core-core plus funds compared with 11.0 million euro in 2006.
EBIT including net income from investments generated by capital activities indicated above consists of 26.8 million
euro in consolidated activities and 116.3 million euro for the Group’s share of income from vehicle companies/
funds in which it has invested, as shown in the following table.
(18) This means net income from rents, capital gains on sales of real estate and/or companies and fair value adjustments and includes 21.2 million euro arising from the
temporary 100% consolidation of DGAG.
December 2007 |
December 2006 |
|||||
| Not consolidate initiatives | Consolidated initiatives |
Total | Not consolidate initiatives | Consolidated initiatives |
Total | |
| Real estate sales | 1,698.8 | 106.1 | 1,804.9 | 2,596.7 | 209.0 | 2,805.7 |
| Rental income | 477.8 | 57.8 | 535.7 | 421.5 | 2.9 | 424.4 |
| Revaluations | 213.2 | – | 213.2 | 98.5 | – | 95.8 |
| Other | 28.7 | 26.8 | 55.5 | 14.4 | 9.4 | 23.8 |
| Total revenues | 2,418.5 | 190.7 | 2,609.2 | 3,128.4 | 221.3 | 3,349.7 |
| Cost of sales | (1,335.4) | (74.5) | (1,410.0) | (1,932.3) | (155.2) | (2,087.5) |
| Selling fees | (29.0) | (1.1) | (30.1) | (57.5) | (1.5) | (59.0) |
| Other costs | (126.8) | (86.9) | (213.7) | (135.3) | (27.2) | (162.5) |
| Total costs | (1,491.2) | (162.5) | (1,653.7) | (2,125.2) | (183.9) | (2,309.1) |
| EBITDA | 927.3 | 28.2 | 955.5 | 1,003.2 | 37.4 | 1,040.6 |
| Depreciation | (50.3) | (1.4) | (51.7) | (42.0) | (0.8) | (42.8) |
| EBIT | 877.0 | 26.8 | 903.8 | 961.3 | 36.6 | 997.9 |
| Financial income and expenses | (391.1) | (323.3) | ||||
| PBT | 485.9 | 638.0 | ||||
| Income taxes | (44.8) | (252.6) | ||||
| Net Income 100% | 441.1 | 385.4 | ||||
| EBIT including net income from investments | 116.3 |
26.8 |
143.1 |
105.4 |
36.6 |
142.0 |
| % PRE | 26% | 27% | ||||
REAL ESTATE - December 2007 |
NPL - December 2007 |
Total | |||||
| Not consolidate initiatives | Consolidated initiatives |
Total | Not consolidate initiatives | Consolidated initiatives |
Total | ||
| Real estate sales | 1,696.4 | 105.8 | 1,802.3 | 2.4 | 0.2 | 2.6 | |
| Rental income | 477.8 | 57.8 | 535.7 | 0.0 | 0.0 | 0.0 | |
| Revaluations | 213.2 | 0.0 | 213.2 | 0.0 | 0.0 | 0.0 | |
| Other | 28.7 | 23.3 | 52.1 | 0.0 | 3.4 | 3.4 | |
| Total revenues | 2,416.2 | 187.0 | 2,603.2 | 2.4 | 3.7 | 6.0 | |
| Cost of sales | (1,333.4) | (74.3) | (1,407.8) | (2.0) | (0.2) | (2.2) | |
| Selling fees | (29.0) | (1.1) | (30.1) | 0.0 | 0.0 | 0.0 | |
| Other costs | (170.1) | (84.0) | (254.1) | 43.3 | (2.9) | 40.4 | |
| Total costs | (1,532.5) | (159.5) | (1,691.9) | 41.3 | (3.0) | 38.2 | |
| EBITDA | 883.7 | 27.5 | 911.2 | 43.7 | 0.6 | 44.3 | |
| Depreciation | (50.3) | (1.4) | (51.7) | 0.0 | (0.0) | (0.0) | |
| EBIT | 833.4 | 26.2 | 859.5 | 43.7 | 0.6 | 44.3 | |
| Financial income and expenses | (376.8) | (14.3) | |||||
| PBT | 456.5 | 29.4 | |||||
| Income taxes | (44.8) | (0.0) | |||||
| Net Income 100% | 441.1 | 29.3 | |||||
| EBIT including net income from investments | 102.1 |
26.2 |
128.3 |
14.2 |
0.6 |
14.8 |
143.1 |
| (*) For Non performing loans: net of recovery and positive effect of impairment ammortizzed cost. | |||||||
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