Kardan N.V. — M&A Activity 2011

Jun 9, 2011

KARDAN SELLS 50% STAKE IN CHINESE SHOPPING CENTER

The Transaction reflects a value of RMB 1.1billion (EUR 116 million) for Galleria Chengdu.

Amsterdam, June 9, 2011 - Kardan N.V. ("Kardan"), active in Real Estate, Water Infrastructure and Financial Services in emerging markets announces that GTC Real Estate China Ltd ("GTC China"), Kardan's fully owned real estate developer in China, has signed an agreement to sell a 50% stake in Galleria Chengdu to MGPA, a private equity real estate investment advisory company ("MGPA") for a net cash consideration of approximately RMB 425 million (EUR 45 Million) ("the Transaction").

Galleria Chengdu is a prime shopping center located in the Chinese city of Chengdu. The property, developed by GTC China, opened to the public in November 2010. The shopping mall comprises 53,619 sqm of gross rentable retail space and includes among its tenants well known international retailers including Zara, Mango, H&M, Sephora, and Uniqlo.

"This transaction demonstrates GTC China's ability to develop quality assets and to create value. In line with the stated strategy of Kardan to expand its real estate activities in Asia, the proceeds from the sale will be used to fuel the growth of our activities especially in the retail sector" said Alon Shlank, Chairman of GTC China's Supervisory Board.

MGPA is a USD 11 billion private equity real estate investment advisory company, focused on real estate investments in Europe and Asia.

Following the completion of the Transaction, GTC China will retain a 50% stake in Galleria Chengdu and will continue to manage and operate the shopping center. The shareholders agreement, executed as part of the sale transaction, includes customary joint control provisions. Completion of the Transaction is subject to standard closing conditions and is expected to take place by August of this year.

GTC China (and Kardan)'s profit from this Transaction is estimated to total approximately EUR 13 million. Till March 31 2011, GTC China already recorded for Galleria Chengdu revaluation profits net of tax of EUR 27 million.

GTC China started its operations in 2005. It is now focused on mixed-use projects comprising of both residential and retail areas, in Tier two and Tier three cities. Next to Galleria Chengdu, it currently has five projects under various development stages including Shenyang, Xian, Changzhou and Dalian. The projects encompass a total Gross Floor Area (GFA) of approx 2.5 million sqm in various stages of planning and development. GTC China's share in these projects is approx 1.4 million sqm.

For the next five to ten years, GTC China plans to continue developing its existing pool of mixeduse projects already under development, as well as to pursue approximately 10 commercial centers. Among these projects are the following retail centers (size is expressed in GFA): Galleria Dalian with approx 100,000 sqm at the heart of the city of Dalian, Olympic Garden with approx 21,500 sqm in Xianyang, Suzy, with approx 24,000 sqm in Shenyang and City Dream with approx 16,000 sqm in Changzhou.

All in all the projects GTC China is involved comprise of more than 200,000sqm.

This strategy to expand in the retail activity is based upon the major demographic and economic changes expected in China in the next years.

The five year plan (2011 – 2016) of the Chinese government aims to keep unrest at bay by improving wealth for all through industrialization. This entails that the urbanization in China continues to be robust. More than one hundred cities in China already count over one million residents. Expectations are that between 2011 and 2020 China's urban population will increase by approximately 160 million people. Consequently Tier 2 and Tier 3 cities, in which GTC China operates, will grow in prominence. In addition, the five year plan targets an increase in domestic consumption in order to reduce the Chinese economy's dependency on exports. Chinese domestic consumption currently accounts for 36% of GDP and is expected to increase to 50% of GDP by 2025.

To encourage these developments, the government has allowed some financial institutions to invest in real estate.

Furthermore, to support the growth in purchasing power, substantial effort is being put in setting up social systems such as pensions, insurance and health care.

All these measures should result in increasing economic attraction for shopping centers, a key strategic focus of GTC China.

Lately, GTC China was awarded the "highly recommended Mixed-use Development in China in 2011" by The International Property Awards in association with Bloomberg, recognizing its excellence and quality development in the Galleria Dalian project.

As of March 31, 2011 GTC China assets totaled EUR 464 million and its equity totaled EUR 150 million.

DISCLAIMER

This press release contains forward-looking statements and information, for example concerning the financial condition, results of operations, businesses and potential exposure to market risks of Kardan N.V. and its group companies ("Kardan Group").All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements (including "forward looking statements" as defined in the Israeli Securities Law).. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. These forward-looking statements are identified by the use of terms and phrases such as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'', ''intend'', ''may'', ''plan'', ''objectives'', ''outlook'', ''probably'', ''project'', ''will'', ''seek'', ''target'', ''risks'', ''goals'', ''should'' and similar terms and phrases. A variety of factors, many of which are beyond Kardan Group's control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Kardan Group to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For Kardan Group, particular uncertainties arise, amongst others but not limited to and not in any order of importance, (i) from dependence on external financing with the risk that insufficient access to capital threatens its capacity to grow, execute its business model, and generate future financial returns (ii) from concentration of its business in Central Eastern Europe and China as a result of which Kardan Group is strongly exposed to these particular markets (iii) from risks related to the financial markets as a result of Kardan's listings and (iv) from it being a decentralized organization with a large number of separate entities spread over different geographic areas in emerging markets, so that Kardan Group is exposed to the risk of fraudulent activities or illegal acts perpetrated by managers, employees, customers, suppliers or third parties which expose the organization to fines, sanctions and loss of customers, profits and reputation etc. and may adversely impact Kardan's ability to achieve its objectives and (v) from any of the risk factors specified in Kardan's Annual Report 2010 and in the "Periodic Report for 2010"published by Kardan N.V. in Israel on March 31, 2011 and which is also available at the Kardan website. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Kardan N.V. does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

About Kardan

Kardan identifies and develops assets in promising emerging markets, mainly in Central and Eastern Europe, China and CIS. Its activities are mainly focused on three sectors that benefit from the rising middle class: Real Estate, Water Infrastructure and Retail Lending. In addition, the company has some investment activities in Israel. Company headquarters are in the Netherlands. Kardan aims at holding controlling interests in its investments and, through the development of local business platforms, is actively involved in the definition and implementation of their strategy. Total assets as of March 31, 2011 amounted to EUR 5.6 billion; revenues totaled EUR 181 million in the first quarter of 2011. Kardan is listed on NYSE Euronext Amsterdam and the Tel-Aviv Stock Exchange.

For further information please contact:

Caroline Vogelzang Director Investor Relations +31 (0) 6 10 949 161 vogelzang@kardan.nl

Jan Slootweg Managing Director + 31 (0) 6 25 026 797 jan@kardan.nl

www.kardan.nl

"This press release contains regulated information (gereglementeerde informatie) as defined in the Dutch Act on Financial Supervision (Wet op het financieel toezicht)"