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Creating homes in a
smart way

...directly tapping the market’s pulse


Arco Vara established a joint venture with Riga municipality

Arco Real Estate SIA, a 80% subsidiary of Arco Group, and Rīgas Pilsētbūvnieks
LLC, a company belonging to Riga municipality, established a 50%/50% joint
venture for residential development project.

The project is in the Plavnieku district. Land plot size is 12 255 m2 and
construction right 36 765 m2. Statutory capital of the company is 2,2 mLVL
(mEUR 3,1). Rīgas Pilsētbūvnieks LLC contributes the necessary land in amount
of 1,1 mLVL (mEUR1,55) and Arco Real Estate SIA cash in the same amount.

“Co-operation with the municipality enables to move on fast and better consider
the needs of the municipality and citizens of Riga”, said Arco's CFO Aare

1 EUR=0,7028 LVL
1 EUR=15,6466 EEK
1 LVL= 22,1313 EEK

Additional information:
Heigo Metsoja
Head of Investor Relations
+372 6144 654
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Explorer Property Fund – Baltic States is fully invested

Explorer Property Fund – Baltic States has within its two year investment period successfully invested the EUR 55.1m that was raised during the summer 2005. The fund will be fully invested following its three latest acquisitions, bringing the total number of properties in the fund to 18. The newly acquired properties are:

Duntes Nami, a 8,700m2 new office building in a business district in Riga, Latvia. The building has already received several architectural awards.

Papiniidu Commercial Centre, a retail building under construction in Pärnu, Estonia, to be completed by March 2008. The total area will be 22,508m2 with the anchor tenant EhitusService.

Jin-Jan Office Centre, a 9,600m2 office facility situated near the business centre of Vilnius, Lithuania. The centre is under construction and will be completed in 2008.

As per August 27, 2007 the total value of the fund’s 18 properties amounted to EUR 202m. Of the fund’s committed capital, 60% has been invested in Estonia, 26% in Latvia and 14% in Lithuania. The fund portfolio consists of 43% in offices, 32% in retail, 15% in hotel and 10% in production and logistics properties.

“We are very pleased to be fully invested within our investment period. The fund has a well-balanced portfolio of attractive properties across the Baltic States, which will deliver good returns for our investors,” says Gert Tiivas, Chairman of the Board, Explorer Property Fund – Baltic States.

Explorer Property Fund – Baltic States
Explorer Property Fund – Baltic States is one of the most active investors on the Baltic property market, after the fund closed in the summer of 2005 with EUR 55.1m in available capital. The portfolio of the fund as of today comprises 18 objects in total, 12 in Estonia, 3 in Latvia and 3 in Lithuania. The fund is managed by AVEC Asset Management, a management company based in Tallinn with regional offices in Riga and Vilnius. AVEC Asset Management is jointly owned by Arco Vara and East Capital.

Contact information:

AVEC Asset Management
Kristjan Kivipalu
+372 6144 658
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Arco refinanced commercial papers

On 21.09.2007 Arco Vara AS issued 9 month discounted commercial papers in
nominal value of 31,0 mEEK (mEUR 1,98) with interest of 6,250% per annum.

Proceeds were used to refinance existing papers matured on 21.09.2007 that
carried an interest of 6,462% per annum.

“It's good to know that the market evaluates Arco's risk lower than 8 months
ago”, said Arco's CFO Aare Tammemäe.

1 EUR=15,6466 EEK

Additional information:
Heigo Metsoja
Head of Investor Relations
+372 6144 654
This email address is being protected from spambots. You need JavaScript enabled to view it.


Arco Vara launches Property Advisory service

Arco Vara group is set to provide Property Advisory services. The service will be aimed at its corporate clients and incorporate complete solutions according to the client’s needs: Market Research, Due Diligence, Highest and Best Use Analysis, Property Concept Development and Investment Feasibility Study, Property Valuation.

The real estate consultation service team is comprised of top-level consultants from the field, many of them with backgrounds in appraisal and analysis and more than three years’ experience at Arco Vara. The service will also be able to bring together a multi-discipline and international team meeting the requirements of the solution in question. Momentum generated from the three areas of operations of the Arco Vara group – service, development and construction – and know-how will form the basis for finding solutions in the best possible way, also involving outside experts where required in the subcontracting procedure.

Tõnu Luts, manager of Property Advisory setvice of Arco Vara’s, admits that there has been a need for such a service for many years and that is has been offered to clients on and off for some time. “We have been offering our business clients a form of consultation service for years, but now we have taken it to its fullest extent. We have trained professionals, a strong partner network and momentous support from the group in terms of its operating areas and geographically. The independence of the service and the experience we have will undoubtedly ensure clear and objective market vision.”

Avo Rõõmussaar, the development manager of the Service Division of Arco Vara, says that the company is always looking to update the services it offers and take them further than before. “We find out what our clients need and offer them solutions based on them. In all six countries we operate in. Good consultation services for corporate clients with local know-how are sure to breathe new life into the market.”

The corporate consultation services are set to be launched initially in the Baltic States. The service will gradually be expanded in the same way to Arco Vara’s other home markets in Ukraine, Bulgaria and Romania.

Arco Vara is a leading property company in the Baltic States that was founded in Estonia in 1992 and whose activities cover property brokerage, development and construction. The company has agencies in 29 cities in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and Romania. As of the end of the first quarter of 2007, the group and its companies employed a total of 546 people. The audited consolidated turnover of Arco Vara AS in 2006 was 484 million kroons with a net profit of 217 million kroons. Arco Vara’s shares are listed on the Tallinn Stock Exchange.

Please also look at the brochure of Property Advisroy on our web-page HERE

Further information:

Tõnu Luts
Manager of Property Advisory service
Telephone: +372 6144 622
Mobile: + 372 51 59 000
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Arco Balti Kinnisvaraportfell AS, managed by AVEC Asset Management AS, concluded a share issue in amount of 55,5 million kroons (3,55 million euros).

AS Arco Balti Kinnisvaraportfell is a real estate investment company that
acquires only cash flow generating property and current portfolio includes 11
AVEC Asset Management AS is a joint venture of Arco Vara and East Capital. It
has a management agreement with two companies: AS Arco Balti Kinnisvaraportfell
with assets over 350 million kroons (22,4 million euros) and Explorer Property
Fund - Baltic States AB with assets over 3 160 million kroons (202 million
Additional information:
Heigo Metsoja
Head of Investor Relations
+372 6144 654
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Arco Vara launches international real estate brokerage service

In October Arco Vara starts providing cross-brokerage service, enabling customers to conveniently buy real estate abroad.

In the first stage, the focus is set on the Bulgarian real estate, in the future; however, the brokerage service is to be expanded to the rest of Arco Vara markets in the Baltic States, Ukraine and Romania, the company reported.

The new service package has been developed for people taking a broader look at the possibilities of acquiring real estate and looking for interesting opportunities abroad. The service covers consultation, presentation of offers, full organisation of the sales process as well as arranging financing solutions and presentation trips, if required.

The need for developing an international cross-brokerage service came as an increasing number of our customers showed interest in the real estate markets in the Balkans, said Mark Shein, Arco Vara Cross-Brokerage Manager. According to Shein, the full service will be provided in Bulgaria for the time being. Shein highlights the recent access to EU, a rising market, a good location and a favourable climate as the strengths of Bulgaria. „We will continue developing the international service. We want to make the process of acquiring real estate abroad as smooth as possible for all of our customers. I believe that an important advantage for the customers is that the initial consultation is organised quickly and comfortably at an Arco Vara office in their home country and in their mother tongue, and that the sales process is taken care of according to customer’s wishes,” Shein said.

The Cross-brokerage team is striving towards being ready to offer the service to all Arco Vara home market customers in the 29 locations in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and Romania, but also in other European countries that the customers are interested in. The Service Division of the Group employs nearly 380 people.

Avo Rõõmussaar, Arco Vara Board Member predicts a good outlook for the service. „I believe that we can offer our customers a completely new level of service. We have a very active sales team and thus the possibility to expand customers’ choices in acquiring real estate either for a residence, vacation or as an investment. Besides that, the service offers good possibilities for developers intending to present their offers to a broader audience,” Rõõmussaar said.

Arco Vara started in 1992 as a real estate agency and has become a leading real estate company in the Baltic States. The company is operating in brokerage, development and construction sectors, and has representations in 29 cities in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and Romania. As of second quarter 2007, the Group employed 574 people. The consolidated turnover of Arco Vara AS in the first six month in 2007 was 487.6 mio. kroons and the net profit of the Group was 227.1 mio. kroons. Arco Vara shares are listed on the Tallinn Stock Exchange.

See more detailed info on our webpage HERE

Additional information:

Mark Shein

Head of cross-selling service in Arco Vara group
+372 6144 502
+372 517 6505

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