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Creating homes in a
smart way

...directly tapping the market’s pulse

2007

AVEC Asset Management AS strengthens management


The Board of Directors of AVEC Asset Management has appointed three new members to the management board. Madis Raidma – today CEO of IT Group in Estonia – will become AVEC’s CEO as of January 2008. Martin Otsa - currently Head of Investment Management in Arco Vara Kinnisvarabüroo AS in Estonia – will start as member of the management board as of December 2007. Tõnu Uustalu has been appointed to the management board and has been acting CEO of the company since previous CEO Kristjan Kivipalu left his position in late September.

“Given our position as one of the largest professional real estate investors in the Baltics, as well as our ambitious plans for the future, it is very important to have a strong, professional management team”, says Gert Tiivas, Chairman of the Board of Directors of AVEC Asset Management AS.

AVEC Asset Management AS is a joint venture between Arco Vara and East Capital with regional offices in Tallinn, Riga and Vilnius. The company manages real estate investment portfolios in the Baltics currently valued at approximately 220 m EUR and is actively developing into new markets.

Arco Vara is a leading real estate group operating in brokerage, development and construction sectors. The company has offices in 29 cities in the Baltics, Ukraine, Bulgaria and Romania and employs 600 people. The consolidated turnover for H1 2007 was 31.2 million EUR with a net profit 14.5 million EUR. Arco Vara is listed on the Tallinn Stock Exchange.

About East Capital
Founded in 1997, East Capital is a leading, independent asset manager specialising in Eastern European financial markets. The company, which is headquartered in Stockholm, with offices in Paris, Tallinn, Moscow, Oslo, Hong Kong and Milan, actively manages over EUR 5.1bn, basing its investment strategy on thorough knowledge of the markets, fundamental analysis and frequent company visits by fund managers and analysts.

Contact information:
AVEC Asset Management AS
Tõnu Uustalu
+ 372 6144 597
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East Capital Private Equity
Torbjörn Odenhagen
+ +46 8 505 88 516
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The Chairmen of Arco Vara Management and Supervisory Boards resign from their current positions


The Chairman of the Management Board of Arco Vara, Mr. Viljar Arakas, submitted an appeal for withdrawal to the Supervisory Board of the company due to different views on the strategic developments of the company. The Chairman of Supervisory Board, Mr.Arti Arakas, will also resign from current position and will continue as the Member of the Supervisory Board of AS Arco Vara.

As the company announced, the new Chairman of Supervisory Board will be Richard Tomingas. Aare Tammemäe, currently the Member of Management Board and CFO of the company will continue as the deputy of the Chairman of Management Board. All changes concerning managerial aspects will take affect as of January 21st 2008. Until then the company’s management continues on their current positions.

The leaving Chairman of Management Board Viljar Arakas commented the event with the differences with the company’s major shareholders. „I felt lack of credentials to move forward in this difficult market situation. The overall inner climate in Arco Vara is good and the differences come in only in the level of choices in strategy and views on the company’s strategic management. The major shareholders are experienced men and their desire to take more active role in day-to-day management is understandable, but I find it unjustified“, said Mr. Viljar Arakas. He expressed his gratitude to company’s shareholders as well as employees for the trust provided. „My heart will stay with Arco Vara“, he said.

The new Chairman of Supervisory Board Mr. Richard Tomingas commented that the company expected more aggressive expansion in new markets. „We see that the market situation in the Baltic’s has been more unstable than expected. As to the Supervisory Board, the management should see more the potential growth in the Balkans and Ukraine, markets where rapid growth is still ongoing for some time. I agree that the Supervisory Board of the company is active, we give our input to daily business processes, because the situation demands it“, adds Mr. Tomingas. As he marks, the deputy for the company’s Chairman of Management Board will be current Member of the Board and CFO, Mr. Aare Tammemäe.

Hillar-Peeter Luitsalu, Member of the Supervisory Board claims that Arco Vara is in a very good condition. „Under Viljar´s management Arco Vara has grown to an international and successful company, being the leader in the sphere on many of its domestic markets. The Supervisory Board acknowledges Viljar´s work. As to Aare Tammemäe, I have no doubt that he represents not only the consistency in the implementation of the company’s strategy but brings also new energy and ideas how to develop in the changing market conditions“, says Luitsalu.

The Chairman of Supervisory Board Mr. Arti Arakas said that he trusts the current management of the company and finds it impossible to continue on the current position. „Irrespective of affinity with him I believe that Viljar has been the best possible leader for Arco Vara both on operative management level as well as representing the company internationally. Experts are aware that the IPO executed in June 2007 just before the market fall was successful precisely due to the team managed by Viljar and cooperation with consultants from SEB Enskilda which gave Arco Vara the best platform in becoming an international company“, said Arti Arakas. As to Mr. Arti Arakas there are no personal tension or dissention within the Supervisory Board. „Our different views are not value-based but on tactical level. Therefore I make a preventive step to avoid escalation in the different views“, adds Arti Arakas. As to Arti Arakas, Mr. Aare Tammemäe is a highly competent and experienced in the management field. „I invited Aare to our team 6 months ago and I am confident that he will manage the challenges set. In the Supervisory meeting I voted for Aare“, he comments.

„I have worked with Viljar for only 6 months but can assure that he is a very inspiring and strong manager. The financial position of Arco Vara today is strong, we are very liquid and ready to actively search for new possibilities for developing in the Balkans and Ukraine,“ said Aare Tammemäe, the new deputy of Chairman of Management Board.

Mr. Viljar Arakas joined Arco Vara in 2002. He has acted as the Chairman of Management Board of the parent company Arco Vara AS since March 9th 2004. Since that time Viljar has been and is currently the Member of Supervisory Boards of various essential associated and subsidiary companies of Arco Vara in Estonia as well as other domestic markets incl. services-, development- and construction division parent companies´ supervisory boards as well as AVEC Asset Management AS and Explorer Property Fund – Baltic States AB supervisory boards. Since 2007 Viljar is also a Member of the Supervisory Board of AS Tallinna Lennujaam (Tallinn Airport Ltd.). Currently Viljar is continuing his MBA studies in Estonian Business School (EBS). He is married and has 2 daughters.

Mr. Aare Tammemäe, born in 1971, is a Member of the Management Board and CFO of the group as of July 2007. Since 2005 Mr. Tammemäe worked as the Head of Corporate Banking and Member of the Management Board of Nordea Bank Finland, Estonian branch. From 2001-2005, he served as the CFO of AS Tallinna Sadam (the Port of Tallinn). Before he served on different managerial positions in investment management services field. As part of his MBA program, Mr.Tammemäe worked in specialist position in State Street Bank in United States of America. He is married and has 2 children.

Arco Vara started in 1992 as a real estate agency in Estonia and has become a leading real estate group in the Baltic States undergoing a CEE expansion with presence in Bulgaria, Romania and Ukraine. The company is operating in brokerage, development and construction sectors, and has offices in 29 cities across the Baltic’s as well as Ukraine, Bulgaria and Romania. The group employees over 600 people. The consolidated turnover of Arco Vara AS in 9 months of 2007 was 43,9mln EUR and net profit 16,9mln EUR. AS Arco Vara is a public company, listed on Tallinn Stock Exchange.

For further information about the company please visit http://www.arcorealestate.com/.

Additional information:

Kadri Mätik
marketing/PR manager
Arco Vara group

+372 6144 590
+372 505 1239
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.arcorealestate.com

 

Construction contract in Latvia


Arco Construction SIA and Lic Gotus SIA  signed a construction contract to built a warehouse and office complex in Riga on Ulbrokas street.

The value of the contract is 76 million kroons (4,9 million euros) +VAT.
Deadline January 2009.

Arco Construction SIA is a construction company of which 55% belongs to Arco Group.

1 EUR=15,6466 EEK

Heigo Metsoja                                                                  
Head of investor relations
+372 6144 654                                                                  
This email address is being protected from spambots. You need JavaScript enabled to view it.                                                      
http://www.arcorealestate.com

Arco Vara expands its activities in Romania


Arco Vara opens in January 2008 its new branch in Romania, Cluj, which is 30th office for the company operating over 6 countries in Eastern Europe.

“Cluj has one of the most dynamic economical developments in Romania, with total inhabitants of approx. 310 000 people,” says the Member of Management Board and Head of Services Division of the group, Avo Rõõmussaar. “Within the last few years the local real estate sector has also been in active development with overall annual price increase approx. 30%.”

Arco Vara expanded to Romania in the beginning of 2007 and is today operating in 4 regions of the country – besides the new Cluj office also in Bucharest, Timisoara and Arad. The activities in Romania are operated by Arco Real Estate Consulting SRL, a subsidiary of Arco Vara group.

In 2007 Arco Vara group opened 6 new offices on its domestic markets.

Arco Vara started in 1992 as a real estate agency in Estonia and has become a leading real estate group in the Baltic States undergoing a CEE expansion with presence in Bulgaria, Romania and Ukraine. The company is operating in brokerage, development and construction sectors, and has offices in 29 cities across the Baltic’s as well as Ukraine, Bulgaria and Romania. The group employees over 600 people. The consolidated turnover of Arco Vara AS in 9 months of 2007 was 43,9mln EUR and net profit 16,9mln EUR. AS Arco Vara is a public company, listed on Tallinn Stock Exchange.
For further information about the company please visit http://www.arcorealestate.com/.

Additional information:
Kadri Mätik
marketing/PR manager
Arco Vara group
+372 6144 590
+372 505 1239
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.arcorealestate.com

 

Arco Vara concluded a construction contract in Bulgaria


A subsidiary of Arco Investeeringute AS, Arco Invest EOOD and construction
company GBS-Sofia Jsc. (Glavbolgarstroy), concluded a construction contract for
the construction of second stage of the project “Madrid”.

Second stage includes the interior of the building. The value of the contract
is 48,5 mln kroons (3,1 mln euros).

The project was acquired on 02.08.2007 with construction right already in
place. The land plot is located in the city center and includes in total 24 700
m2 of residential and commercial spaces. The project is completed in the autumn
in 2009.

Please, find the visuals of the project attached to this announcement.

Arco Vara is a leading real estate developer in the Baltic's, undergoing a CEE
expansion with  presence established in Ukraine, Bulgaria and Romania. The
operations involve real estate  development, brokerage, construction and
investment management arm. The company is located in 30 cities and has in total
649 employees. According to 9 months results 2007 consolidated revenues were
687 mln kroons (44 mln euros), net profit 264 mln kroons (17 mln euros) and
assets 3 536 mln kroons (226 mln euros). Arco Vara is listed on Tallinn Stock
Exchange.

Additional information:
Heigo Metsoja
IRO
+372 6144 654
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com

 

Veiko Taevere becomes member of the board of Arco Vara


Starting in February 2008 former member of the board of Arco Investeeringute AS
Mr Veiko Taevere assumes the role of member of the board of the parent company,
Arco Vara AS, where he will be in charge of development.                       

Former member of the board of Arco Vara AS, Mr Veiko Pedosk will focus on the  
new markets for the Group. “Initially the goal is to activate Arco Vara's      
development activities in Ukraine, but at the same time we are also constantly 
exploring new opportunities in Eastern Europe,” said Pedosk.                   

CEO of Arco Vara, Mr Aare Tammemäe said that Mr Taevere has been the member of 
board of the parent company of Arco Vara's development division, Mr Taevere has
already played an important role in all ongoing development projects, and hence
is the most capable person for the position. Mr Tammemäe mentioned that while  
maintaining the company's liquidity it should also take an advantage of        
opportunities available in the current market situation.                       

Mr Veiko Pedosk, prior to joining Arco Vara, was Chairman of the Management   
Board of AS Sampo Liising from 1997 to 2002 and Member and Chairman of the     
Management Board of Estonian Leasing Association from 1998 to 2002. In 1994    
-1996 he worked for the Estonian Innovation Bank at different positions and    
until 1994 he worked for the car-company Baltmotors Mr. Pedosk graduated from  
Tallinn University of Technology, where he specialized in Business             
Administration and has gone through additional training including Euromoney    
courses.                                                                       

Mr Veiko Taevere, prior to joining the parent company of Arco Vara's development
division, Arco Investeeringute AS, was chief financial officer of Arco Transport
between 1999-2006 and head of the leasing department of Tallinna Pank in       
1996-1999.                                                                     

Arco Vara is a leading real estate developer in the Baltic's, established in   
1992. The operations involve real estate development, brokerage, construction  
and investment management arm. The company is located in 30 cities in the      
Baltic's, Ukraine, Bulgaria and Romania and has in total 649 employees.        
According to 9 months results 2007 consolidated revenues were 687 mln kroons (44
mln euros), net profit 264 mln kroons (17 mln euros) and assets 3 536 mln kroons
(226 mln euros). Arco Vara is listed on Tallinn Stock Exchange.                

Additional information:                                                        
Heigo Metsoja                                                                  
IRO                                                                            
+372 6144 654                                                                  
This email address is being protected from spambots. You need JavaScript enabled to view it.                                                      
http://www.arcorealestate.com