Nanette Real Estate Group NV

"Nanette" or "the Group"

Strategic entry of new investment partner

Nanette is very pleased to announce that following the announcement made on April 27th 2008, it has sold 50% of its holding in Taltoring Ingatlanforgalmazo Kft ("Taltoring") (representing a 45% stake in total) to AI Property Holdings LP (Hungary) ("Access"), a limited partnership based in Delaware USA.

Taltoring is a special purpose vehicle that purchased a 151,000 Sqm plot in Budapest during April 2008.

Access will both invest in equity and provide shareholders loans in a total consideration of Euro 16.25 million.  

The land currently has a military designation, however Taltoring is currently in a process of changing the zoning to commercial, retail and residential.  

Taltoring intends to sell a portion of the land once the zoning change had been approved.

Nanette will recognise a profit of Euro 750 000 from the transaction. In addition Nanette will be entitled for 30% of Access' share in total profits, once several conditions have been fulfilled, including an IRR above 25%.

The deal is subject to the approval of the local municipality, Nanette's original partner in the special purpose vehicle (10%).

Nanette is in negotiations with additional potential partners regarding further investment in Taltoring 

Shaul Lotan, Chairman of Nanette and Oscar Kazanelson, Chief Executive, comment: 

"Once again, we have proven that in spite of the difficult global financial situation, our capable management and quality projects provide an excellent investment case. 

We are pleased to be able to recognise an immediate profit of Euro 750 000 and we believe we will gain significant future profits from this transaction

We are delighted to have an additional reputable US based fund invested in our Company which we see as a further sign of confidence from the international investor community. 

Nanette remains capable of executing value enhancing deals, which in the current complex environment provides a vital differentiator. 

23 June 2008

• News Channel