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. Last Updated: 07/27/2016

Pirelli Seeks Partners to Enter Russia

MILAN, Italy -- Pirelli Real Estate, Italy's biggest property manager, may form partnerships to buy land and develop housing in Turkey and Russia, where the company expects returns to exceed those in Western Europe, the company's CEO Carlo Puri Negri said Friday in an interview.

"We're beginning our evaluations now so that if we have to do something in 2008, we'll do it," Negri said "These are countries in which you don't buy existing assets. It's all developments."

Pirelli Real Estate, whose main business is renting and managing office and storage space, has already set up joint ventures in Poland, Romania and Bulgaria and last Tuesday agreed to buy 27,000 German apartments with a partner to increase its managed assets in the country to 3 billion euros ($4.2 billion). The company plans to combine its businesses in Germany and will consider further investment in the country, Puri Negri said.

"We have an interesting pipeline both in retail and in offices," Puri Negri said. "Germany is also interesting for its commercial property."

Pirelli Real Estate started a partnership in October to develop residential property in Poland, through which it plans to have managed assets of more than 1.5 billion euros. On July 18, it agreed to set up a joint venture with UniCredit to invest in Romania and Bulgaria. The company generally invests a portion of the cash needed to buy properties and gets the rest from partners.

"It's already late to enter the western part of Europe," Puri Negri said. The company won't consider investments in Spain, Austria and the Czech Republic, he added.

Pirelli Real Estate, whose Berenice Fondo Uffici is the object of a takeover battle between Goldman Sachs Group and Merrill Lynch, may receive a payment of as much as 35 million euros if the fund's eventual buyer fires the company as its manager, Puri Negri said. Goldman on July 18 raised its bid to 771 euros per Berenice unit, 1 euro per share more than Merrill's offer on July 12.