IMMOFINANZ AG offers convertible bonds with an offering size of EUR 650 million and an additional increase option of up to Euro 100 million. The company is making use of the authorisation at the general meeting on 28 September 2006. The convertible bonds, which convey the right to subscribe for a maximum of approximately 50 million underlying shares of IMMOFINANZ, will have a maturity of 7 years. The shareholders’ pre-emptive rights are excluded. The coupon and yield to maturity is expected to be in a range of 2.75 and 3.25 per cent annually, the conversion premium between 27 and 32 per cent over the reference share price. The final conversion premium, coupon and yield to maturity will be determined at pricing. IMMOFINANZ will use the proceeds from this issue to finance further expansion and growth opportunities.

During the conversion period, investors will be able to convert into ordinary shares of IMMOFINANZ AG. The convertible bonds cannot be called by IMMOFINANZ during the first  4 years, and thereafter only if the IMMOFINANZ share price exceeds the conversion price by more than 30 per cent for a certain period of time. Investors will have the right to put the bonds back to IMMOFINANZ at 100% of their par value 5 years after the issue date. IMMOFINANZ will apply for the convertible bonds to be admitted to listing on the Third Market of the Vienna Stock Exchange. Settlement and listing of the convertible bonds are planned shortly after pricing on or around 19 January 2007.

The convertible bonds will be offered solely to institutional investors outside the United States, Canada, Australia, Italy or Japan and sales will not be made to U.S., Canadian, Australian, Italian or Japanese persons. There will be no public offering of the convertible bonds. J.P. Morgan Securities Ltd. acts as sole bookrunner of the issue. Co-Lead Managers are Constantia Privatbank Aktiengesellschaft and Credit Suisse.

In connection with this offering, J.P. Morgan Securities Ltd., acting as stabilisation manager, may, from the announcement of final terms of the offering, effect transactions with a view to supporting the market price of the bonds at a level higher than that which might otherwise prevail for a limited period after the issue date. However, there may be no obligation on J.P. Morgan Securities Ltd. to do this. Such stabilising, if commenced, may be discontinued at any time, and will end no later than 19 February 2007, and will be executed in accordance with Regulation (EU) No. 2273/2003, FSA and Austrian Law.

IMMOFINANZ is a property investment company domiciled in Vienna, Austria, with a diversified real property portfolio the value of which more than doubled from the prior year to equal EUR 11.7 billion as of December 2006. The geographic focus of the company is on the exponentially growing markets in Central and Eastern Europe through its 50.5 per cent subsidiary IMMOEAST AG as well as on the more mature markets of Western Europe, in particular Austria, Germany and Italy. With a market capitalisation of EUR 5.3 billion and 100 per cent free-float, Immofinanz offers a liquid option to invest in those attractive property markets.

Additional information relating to the underlying shares:

Disclaimer / important note

This press release is for information purposes only and is not an offer to sell, or the solicitation of an offer to buy, any securities. In connection with this transaction there has not been, nor will there be, any public offering of the convertible bonds of the Issuer or the shares of IMMOFINANZ. The distribution of this press release and the offer and sale of the convertible bonds or the shares in certain jurisdictions may be restricted by law. Any persons reading this press release should inform themselves of and observe any such restrictions. A prospectus in accordance with the Prospectus Directive will not be prepared.

This press release does not constitute an offer to sell or a solicitation of an offer to purchase any securities in the United States. The securities referred to herein (including the convertible bonds and the shares of IMMOFINANZ AG) have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States or to or for the account of benefit of U.S. persons, except in a transaction not subject to or pursuant to an applicable exemption from the registration requirements of the Securities Act. This press release and the information contained herein may not be distributed or sent into the United States of America and should not be distributed to U.S. persons or publications with a general circulation in the United States. No offering of the convertible bonds is being made in the United States.

This announcement is directed only at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments or to whom this announcement may otherwise be directed without contravention of Section 21 of the Financial Services and Markets Act 2000 or other qualified investors as defined in the Prospectus Directive (all such persons together being referred to as "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. This press release contains forward-looking statements based on assumptions and estimations by the Management Board of IMMOFINANZ AG. Even though the Management Board is of the opinion that those assumptions and estimations are realistic, the actual future development and results may deviate substantially from these forward-looking statements due to various factors, such as changes in the macro-economic situation, in the exchange rates, in the interest rates and in the industry. IMMOFINANZ AG gives no warranty and does not assume liability for any damages in case the future development and the projected results do not correspond with the forward-looking statements contained in this press release.