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2007

Arco Vara Supervisory Board has 2 new members


Arco Vara AS Supervisory board has two new members

The shareholders general meeting of Arco Vara AS has elected attorney at law Aare Tark and entrepreneur Kalev Tanner new members of the company’s Supervisory Board, prior to the company announcing the initial public offering of its shares and the application to list on the Tallinn Stock Exchange.

Arti Arakas, Richard Tomingas and Hillar-Peeter Luitsalu will continue as members of the Arco Vara Supervisory Board. The Supervisory Board elected Arti Arakas the chairman of the Supervisory Board.

Attorney at law Aare Tark (born in 1959) has been a senior partner at law firm Tark & Co since 1991; he was the chairman of the Estonian Bar Association from 1994 to 2001 and is currently a member of the Ethics and Methodology Commission of the Estonian Bar Association. He is a recipient of the 3rd Class Order of the White Star.

Kalev Tanner (born in 1965) is the chairman of the Supervisory Board of AS E-Kindlustus Kindlustusmaakler, which is the largest insurance broker in Estonia. Kalev Tanner has also been a leading partner of Balti Cresco Investeerimisgrupi AS and the chairman of the Supervisory Board of Tallinn Stock Exchange.From 1994 to 1998 he was an investment banker at Goldman Sachs in New York and London. In 1994, Tanner acquired an MBA from the J L Kellogg Graduate School of Management, Northwestern University.

Arti Arakas (born in 1968) founded Arco Vara and was chairman of the management board of the company from 1992 to 1996. He graduated from Tallinn Polytechnical University in 1987 and continued his studies at Tallinn Technical University, where he specialised in automatic equipment and telemechanics. From 1988 to 1992 he managed the economics department of the Harju KEK. He is currently studying psychology at the University of Tartu. Arti Arakas is also a member of the management board of the Estonian Ski Association and a recipient of the 5th Class Order of the White Star.

Richard Tomingas (born in 1969) was a member of the Arco Vara Management Board from 1993 to 1997 and has been a member of the Arco Vara Supervisory Board since 1997. Tomingas graduated from the Estonian Business School with a degree in business administration. He is a recipient of the 5th Class Order of the White Star and the Vice-President of the Estonian Volleyball Association.

Hillar-Peeter Luitsalu (born in 1959) joined the group in 1993 and has been a member of different management bodies in group companies. Luitsalu graduated from the University of Tartu with a degree in law. He is also the chairman of the Management Board of the non-profit association English College Foundation, which was established by the parents of students.

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 offices in 25 cities in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and Romania. At the end of Quarter 1 of 2007, the group and its joint ventures employed a total of 546 people. The audited consolidated turnover of Arco Vara AS in 2006 was 484 million kroons and net profit amounted to 217 million kroons.

Arco Vara AS 2007 IQ results


Financial results of Arco Vara AS in the first quarter of 2007

According to the consolidated and un-audited financial data of Arco Vara, the consolidated sales revenue of the group in the first quarter of 2007 was 291.2 million kroons and net profit amounted to 69.1 million kroons.

The sales revenue of Arco Vara in the same period of the previous year was 100.7 million kroons, which means that sales revenue almost trebled (an increase of 189%). The net profit of the company increased more than twice from 27.1 million in the same period of 2006 to 69.1 million kroons (an increase of 155%).

The company published its financial results of the first quarter alongside the notice of the first public offer of shares and the application to have its shares listed on the Tallinn Stock Exchange.

When commenting on the results, the Financial Manager of Arco Vara Sulev Luiga said that as announced in earlier announcements, some of the sales planned for 2006 were realized in the first quarter of 2007, which is why sales revenue in 2006 as a whole remained stable and a remarkable rise occurred in the first quarter of the current year. “Regardless of the shift in sales revenue bringing about the major increase, the quarter was a successful one for the company, and as a result of our chosen strategy, the general stabilisation of the sector has not had an adverse effect on the financial results of Arco Vara Group; rather the opposite,” said Luiga.

The biggest share of consolidated sales revenue, 244.4 million kroons, came from the development division, the sales revenue of the building division amounting to 18.2 million kroons and the service division achieving a revenue of 28.5 million kroons. The biggest share of the revenue of the development division came from the sale of the Keres commercial centre in Narva, the Kolde and Kase development projects in Tallinn and the sale of the Ulmana Gatves property in Riga.

The full report of the results of Arco Vara AS in the first quarter of 2007 is available in the offer circular that can be viewed on the website of the Financial Inspectorate ( www.fi.ee) and the company's website http://www.arcorealestate.com/.

Arco Vara appoints Mr.Heigo Metsoja as IR manager


Arco Vara AS has appointed head of asset management of the firm, Mr Heigo
Metsoja to be investor relations' manager effective from July 1st 2007.

Mr Metsoja has been head of asset management of the group since 2005 and also
serves as member of the supervisory boards of Arco Investeeringute AS and AS
Tallinna Olümpiapurjespordikeskus. Before joining the group he worked as a
financial analyst for Fortum Energia AS from 1999-2001, as a credit analyst for
AS Hansapank from 2001-2003, and was CEO of AS Eesti Eine from 2003 to 2005.
Mr. Metsoja graduated from the Estonian Business School in 1999, where he
obtained a BBA degree, specializing in Money and Banking. He is continuing his
studies at the Estonian Business School to obtain an Executive MBA degree with
specialization in Accounting and Finance.

Arco Vara announced the initial public offering of its shares on June 4th, with
the offer period lasting until 4PM on June 14th. Trading with Arco Vara shares
on the Tallinn Stock Exchange will presumably commence on June 21st.

Arco Vara AS, founded in Estonia in 1992, is the leading property company in
the Baltic States whose activities cover property brokerage, development and
construction. The company is present in 25 cities in Estonia, Latvia,
Lithuania, Ukraine, Bulgaria and Romania. At the end of Quarter 1 of 2007, the
group and its joint ventures employed a total of 546 people. The audited
consolidated turnover of Arco Vara AS in 2006 was 484 million kroons and net
profit amounted to 217 million kroons.


Further information:
Heigo Metsoja
Arco Vara AS investor relations' manager
This email address is being protected from spambots. You need JavaScript enabled to view it.
tel:+372 6144 654

Increase of share capital


ARCO VARA AS
ANNOUNCEMENT, 15.06.2007

On 15 June 2007 the shareholders of Arco Vara AS decided to increase the share capital of Arco Vara AS as follows:

1. To increase the share capital of Arco Vara AS with supplementary contributions by 275 000 000 kroons by issuing 27 500 000 new shares with the nominal value of 10 kroons each share. The new amount of the share capital of Arco Vara AS will be 952 841 500 kroons.

2. To exclude the pre-emptive right of existing shareholders to subscribe for new shares in the course of share capital increase. To grant the right to subscribe for all new shares to AS SEB Eesti Ühispank for the purpose of conducting the initial public offering of shares of Arco Vara AS.

3. The subscription for the new shares by AS SEB Eesti Ühispank shall take place on 20 June 2007 in Tallinn.

4. The new shares shall be issued at a premium which amount shall be 28 kroons per share.

5. The new shares shall be paid for by monetary contributions only. Thedate of payment shall be 20 June 2007. The new shares shall be paid for by wire transfer to the Company's bank account at ASSEB Eesti Ühispank in such way that the money is received on the above-referred bank account by the above-referred due date.

6. The Management Board of the Company shall have the right to extend the period of subscription for the new shares or cancel the new shares that have not been subscribed for during the period of subscription. The Management Board may exercise such rights within 15 days as of the end of the subscription period.

7. The new shares to be issued in the course of the share capital increase will be eligible for dividends declared in respect of the financial year commencing on 1 January 2007.

For additional information:

Heigo Metsoja
Investor Relations Manager, Arco Vara AS
This email address is being protected from spambots. You need JavaScript enabled to view it.
tel:+372 6144 654

Results of the initial public offering of shares of Arco Vara AS


ARCO VARA AS
ANNOUNCEMENT, 15.06.2007

The initial public offering (the “Combined Offering”) of shares of Arco Vara AS (the “Company”) ended on 14 June 2007.

In conjunction with the public offering of shares of the Company (the “Shares”) in Estonia and Latvia (the“Retail Offering”) Shares were offered to institutional investors in and outside Estonia and Latvia and to certain employees of the Company and its subsidiaries and joint ventures (the “Group”) in Lithuania, Romania and Bulgaria (the “International Offering”). In addition, a private placement of Shares was made to certain key managers of the Group in connection with their incentive scheme (the“Management Incentive Offering”).

After the offer period the Company and its shareholders Osaühing Toletum and Osaühing HM Investeeringud (the “Selling Shareholders”) fixed the offer price at EEK 38. For investors in Latvia, theoffer price was established at LVL 1.6909, calculated on the basis of the official daily exchange rate published on the web page of Eesti Pank (the Central Bank of Estonia) on 14 June 2007.

The total demand in the International Offering and Retail Offering was 69,235,119 Shares, which is approximately 2.1 times higher than 32,900,000 Shares which is the base number of Shares in the International Offering and Retail Offering (i.e. the total number of Shares in the Combined Offering excluding the Management Incentive Offering and Shares allocated in the course of over-allotments). Thetotal demand in the International Offering was 67,131,069 Shares, while the total demand in the Retail Offering was 2,104,050 Shares.

A total of 39,850,000 Shares were allocated in the Combined Offering (including the Shares allocated in the Management Incentive Offering and over-allotments), of which 27,500,000 were new Shares issued by the Company, 6,950,000 were existing Shares sold by the Selling Shareholders and 5,400,000 were Shares allocated in the course of over-allotments.

37,296,752 Shares (approximately 93.6% of the Combined Offering) were allocated in the International Offering and 1,034,248 Shares (approximately 2.6% of the Combined Offering) were allocated in the Retail Offering, of which 148,601 Shares were allocated to the employees and managers of the Group who were entitled to preferred allocation in the Retail Offering (the“Preferred Managers and Employees”).

Of the Shares offered in the Management Incentive Offering, 1,519,000 shares (approximately 3.8% of the Combined Offering) were sold to the key managers of the Group and the remaining 31,000 shares were allocated to investors in the Retail Offering and International Offering.

After the Combined Offering, the share capital of the Company will be EEK 952,841,500. The Shares allocated in the Combined Offering represent approximately 41.82 per cent of the share capital of the Company after the Combined Offering, assuming that the Global Coordinator of the Combined Offering, Skandinaviska Enskilda Banken AB (publ), exercises its option to purchase from the Selling Shareholders 5,400,000 additional Shares to cover over-allotments (“Over-Allotment Option”). After the Combined Offering Osaühing Toletum will control approximately 38.79 per cent of the votes and Osaühing HM Investeeringud approximately 19.39 per cent of the votes that can be cast in the General Meeting of Shareholders of the Company, assuming that the Over-Allotment Option is exercised in full.

In whole, 1,834 retail investors participated in the Retail Offering. In the Retail Offering, the Shares were allocated as follows.

The purchase orders from one to 750 shares (included) were accepted in full. The part of the purchase orders, which exceeded 750 shares, was rejected.

The Preferred Managers and Employees were granted a preferential allocation. All their purchase orders were fully accepted.

The Shares allocated in the Retail Offering will be transferred to the securities accounts of the investors on or about 20 June 2007. An investor may obtain information about the number of Shares allocated to it/him/her after thesettlement has been completed by submitting an inquiry to the custodian operating its/his/her respective securities account in accordance with the terms and conditions applied by that custodian. The amount in excess of what the investor is required to pay for the Shares will be released to the investor by its/his/her custodian on or about 20 June 2007.

Trading in the Shares is expected to commence on the Tallinn Stock Exchange on or about 21 June 2007.

For additional information:

Heigo Metsoja
Investor Relations Manager, Arco Vara AS
This email address is being protected from spambots. You need JavaScript enabled to view it.
tel:+372 6144 654

Arco Vara IPO was 2,1 times over-subscribed


Announcement,15.06.07
Arco Vara AS

The initial public offering of Arco Vara AS shares closed yesterday with the aggregate demand exceeding the basic number of shares offered 2,1 times. The price of the offer was set at EUR 2,43 (EEK 38) per share.

The base of the offering was 32.9 million shares, of which 27.5 million are new shares to be issued by the company. Additionally, the offer included an over-allocation option and a fixed number of shares were offered as part of the management incentive program. In total, the investors subscribed to 69 235 119 shares, which is approximately 2.1 times more than the basic offer size.

As a result, Arco Vara gains EUR 66.79 million (EEK 1.045 billion) to finance new projects.

Mr Viljar Arakas, CEO of Arco Vara, said the company is entirely pleased with the offering results and with the entire process.

“Over these past weeks I have heard and read hundreds of opinions and statements about Arco Vara both in Estonia and all around the world. There’s been discussion about the timing of the IPO, but the quality of Arco Vara as a company has been out of the question. I wish to thank our employees who constitute the success story that Arco Vara is and our new investors who have had faith in this team,” said Mr Arakas.

Head of corporate finance of the global coordinator of the offering, SEB Enskilda, Mr Henrik Igasta said that markets are full of real-estate offerings of Eastern Europe. “The fact that the management of Arco Vara successfully distinguished itself from the crowd is an achievement in the current climate, an achievement not to go unnoticed also on its home turf, since we saw a clear division of optimists and pessimists. Therefore the result clearly exceeds our expectations,” said Mr Igasta. “This is the third largest IPO in Estonia in ten years, after Eesti Telekom and Tallink Grupp, and it should be noted that the offering was conducted in a much more challenging environment.”

37 296 752 shares (approximately 93.6%) were allocated to institutional investors in Estonia and globally and to company employees outside Estonia and Latvia. 69 institutions from 15 countries participated in the international offering.

1 034 248 shares (approximately 2.6%) were allocated to retail investors through the public offering in Estonia and Latvia. 1 834 retail investors participated in the public offering. Of the latter, 148 601 shares were allocated to Arco Vara employees and management. 1 519 000 shares (approximately 3,8%) were sold within the management incentive program.

Each retail subscriber will receive up to 750 shares, meaning that subscriptions between 1 and 750 shares were accepted in full. Investors subscribing more than 750 shares were allocated 750 shares.

The average subscription of retail investors (except employees and management) was for 1094 shares.

The total shares allocated through the international and public offering were geographically distributed as follows: United States of America 31%, United Kingdom 26%, rest of Europe 19%, Scandinavia 13% and Baltic States 13%.

After the offering the equity of the company is EUR 60 897 671 (EEK 952 841 500). Shares offered constitute approximately 41,82% of company shares, on the condition that the global coordinator of the offering SEB Enskilda realizes in full the option to buy additionally 5,4 million shares for over-allocation from the majority owners of Arco Vara, OÜ Toletum controlled by Mr Arti Arakas and Mr Richard Tomingas and OÜ HM Investeeringud owned by Mr Hillar-Peeter Luitsalu. In the event, former shareholders will altogether control 58,18 percent of votes at the shareholders general meeting.

Shares allocated will be credited to the securities’ accounts of the investors presumably around June 20th, trading with the shares on the Tallinn Stock Exchange will commence presumably on June 21st.

Arco Vara was established in 1992 in Estonia and within 15 years has grown to become the leading real-estate company in the Baltic States, covering brokering, development and construction. The company has offices in 25 cities in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and Romania. At the conclusion of the first quarter the group and its joint ventures employed a total of 546 people. The audited consolidated revenues for 2006 totaled EUR 31m, with the net profit at EUR 13.9m.

Further information:
Heigo Metsoja
Arco Vara AS investor relations’ manager
This email address is being protected from spambots. You need JavaScript enabled to view it.
tel: +372 6144 654