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1/8/2006 GTC Wins News Real Estate Project in Xianyang

Amsterdam, 1 August 2006 – Kardan N.V. (Kardan) announces that its real estate subsidiary, GTC Real Estate N.V. (GTC RE), has won a governmental tender for the acquisition of a 42.3 hectare land site in Xianyang to be developed into approximately 800,000 sq.m of residential and commercial space and a hotel.

GTC RE has won the tender together with the Lucky Hope Group, GTC RE´s partner in another residential project in the city of Shenyang. The acquisition is subject to signing final agreements with the local government. Construction is planned to start at the end of 2006 and the project is expected to be developed over a period of 6 years.

The purchase price of the site amounts to USD 41 million, out of which USD 11.25 million are payable immediately and the balance will be paid in 4 instalments, until October 2007.
GTC RE and Lucky Hope will each have a 50% stake in the new project. Each partner will contribute USD 6 million to finance the project, and in addition GTC RE will grant a USD 12 million loan to the project company. The balance of the payment for the purchase price will be funded by sales revenues from the project and external financing.

GTC RE made the strategic decision to become active in the Chinese market by starting a first development in October last year. GTC RE, with its extensive expertise in emerging markets, forms a strong team with its partner, which has been active in the Chinese real estate market for the last 10 years. The Chinese real estate market is attractive given the strong economy, the increasing purchasing power, the urbanization trend and government reforms of the housing policy.

Xianyang city, with a population of close to 5 million people, is located in the North-Central part of China, close to Xi´an, one of the most important secondary cities in China and the capital of Shaanxi province, with a population of 7.5 million people. The new project is located midway between the two cities and will benefit from their probable unification in the near future. Xi´an has seen a tremendous growth in tourism over the last decades (top 3 cities in China) as a result of the uncovering of the Terracotta Soldiers in the late seventies, one of the most important archaeological discoveries of the last century.

GTC Real Estate N.V. (GTC RE), the real estate division of the Kardan Group, holds a 46.6% stake in GTC SA, one of the largest real estate developers in CEE. GTC RE´s shares are listed on the Tel Aviv Stock Exchange and are included in several of its major indices. GTC RE is active in Europe through GTC SA and GTC Investments B.V., and in China through GTC Real Estate China Ltd. Kardan currently holds (directly and indirectly) a 62.6% stake in GTC RE.