Pirelli & C Real Estate, the property arm of the tyres-to-telecoms conglomerate, has paved the way to a late summer flotation with a merger that centralises property assets from across the Pirelli group.

A portion of the property portfolio held by Pirelli Real Estate in a joint venture with Morgan Stanley Real Estate Funds, will merge with properties held by Telecom Italia, Olivetti, Seat Pagine Gialle and Pirelli (all owned by Pirelli Group) to create two separate funds, Telio 1 and Telio 2. They have a joint market value of €4bn ($3.7bn). The Pirelli Real Estate/Morgan Stanley joint venture will retain a controlling interest of around 51% in both funds.