Alony Hetz Properties & Investments : IMMEDIATE REPORT

Ramat Gan, August 29, 2016

For the attention of	For the attention of
The Securities Authority	The Tel-Aviv Stock Exchange Ltd.
www.isa.gov.il	www.tase.co.il

Re: Immediate Report

The Company is honored to announce hereby that it intends to examine the possibility of recruiting bonds by way of the expansion of Series I, including the issuance of options that are exercisable into bonds of Series I.

Subject to such a recruitment, the Company intends to perform the early repayment of the full amount of the loans that have been taken from foreign banks, in an overall amount of 250 million Swiss Francs (NIS 970 million), which are repayable in the course of the years 2018 - 2019, over the course of the upcoming months, in order to achieve three main objectives:

1. To extend the average lifetime of the Company's debt (the average lifetime of the foreign loans is two and a half years, as compared with the average lifetime of the bonds (Series I), which is six and a half years).

2. To be released from a collateral lien that has been provided to the foreign banks, in an overall amount of NIS 2.3 billion.

3. To increase the Company's overall financial flexibility.

If and insofar as the Company completes the aforesaid, 90% of the Company's assets, in an amount of NIS 8.5 billion will be free from any lien whatsoever.

The Company's abovementioned intention constitutes forward-looking information in accordance with Section 32A of the Securities Law, 5278-1968.

Further to aforesaid, the Company intends to hold a tender for qualified investors tomorrow (August 30, 2016).

The offering to the public, if and insofar as it is held, will be subject to the Company's decision in accordance with the results of the tender for qualified investors and the receipt of the approvals that are required under the law, which have not yet been received as of the date of this report, and which include the approval of the Tel-Aviv Stock Exchange Ltd. and the approval of the Company's Board of Directors.

The Company will publish an immediate report on the results of the tender for the qualified investors and on the continuation of the offering process in due course.

There is nothing in the publication of this immediate report and/or in the execution of the tender as aforesaid, that binds the Company to execute the issue. Insofar as the Company may decide to execute the issue, the Company will publish a shelf offer report under the law.

Yours sincerely

Alony Hetz Properties & Investments Ltd. By: Nathan Hetz, Chief Executive Officer

And Moti Barzilay, Executive Vice President, Business Development