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18/10/2006 GTC acquires new Real Estate Project in Shenyang

Amsterdam, 18 October 2006, Kardan N.V. (Kardan) announces that its real estate subsidiary GTC Real Estate N.V (GTC RE) has won, together with its local partner Lucky Hope, a tender for the acquisition of a site for a new project in Shenyang (“Palm Garden Project”) to be developed into approximately 378,500 sq.m of residential and commercial area.

The purchase price for the site amounts to USD 38 million, payable in 3 equal installments, starting immediately and ending in December 2007. GTC RE and Lucky Hope plan to cooperate in the project on a 50%-50% basis. Each party will contribute USD 6 million in equity. Construction is planned to start in November 2006 and the project is expected to be developed over a period of 4 years. The acquisition is subject to final agreements with the local government.

The Palm Garden Project will be GTC RE´s third project in China and the second in Shenyang. All three projects are being developed in corporation with the Lucky Hope Group. The total built area of the projects will reach approximately 1.36 million sq.m upon completion with a total investment of USD 400 million.

The Palm Garden Project is located in the high tech Huishan development zone, a suburb of Shenyang, which is a central city in the Northeast of China. It is located next to GTC RE´s other residential project in the area. The Palm Garden Project units will be built and marketed as middle to higher quality residence units. The project will benefit from public utilities, which already exist in the area. In addition, the area is linked to 3 major towns, all necessary infrastructure is provided, good commercial and educational facilities are available and several large businesses are located nearby.

GTC RE started construction of its first residential project in Shenyang in August 2005. The project will include 180,000 sq.m built area. To date, GTC RE already sold 793 residential units out of 975 units offered. The second project, in the city of Xianyang, will be developed into 800,000 sq.m of residential and commercial space and a hotel. Xianyang city is located close to Xi´an, one of the most important secondary cities in China and the capital of Shaanxi province.

GTC Real Estate N.V. (GTC RE), the real estate division of the Kardan Group, holds a 46.4% stake in GTC SA, one of the largest real estate developers in CEE. GTC RE is active in Europe through GTC SA and GTC investments B.V., and in China through GTC Real Estate China Ltd. GTC RE´S shares are listed on the Tel Aviv Stock Exchange and are included in several of its major indices. Kardan currently holds (directly and indirectly) a 61.9% stake in GTC RE.