ARCO VARA AS - NASDAQ OMX Baltic

HISTORY
The Group was founded in 1992 in Estonia with the establishment of its first real estate agency. With
an operating history exceeding 15 years, the Group is one of the oldest companies of its kind in
Estonia. Mr. Arti Arakas was the founder of the Company, and Mr. Richard Tomingas and Mr. Hillar-
Peeter Luitsalu joined the team shortly after. All of these three individuals have maintained their
shareholding in the Group through its 15 years of operations and currently act as members of the
Supervisory Council of the Company.
Concurrent with the expansion of its offices in Estonia, the Group also established a real estate
development company, Arco Investeeringud, which in 1996 launched the Group’s first large-scale
residential development project Veskimöldre in Estonia.
The following years marked a substantial development in the Group’s Estonian operations. The Group
grew into one of country’s leading real estate groups which encouraged it to move its experience,
know-how, business concept and trademark into other Baltic markets in order to satisfy the Group’s
growth aspirations, which otherwise would have been restricted to the relatively limited Estonian
market. Expansion to neighbouring markets commenced in 1997 with the establishment of a real estate
agency office in Riga, Latvia, followed by the launch of the Vilnius office in Lithuania in 2000.
During the following years, Arco Vara identified the possibility of adding more value by incorporating
construction services to the Group to support its growing development activities. In 2001, Arco Vara
complemented its service portfolio with construction services in Estonia. The Group acquired the
construction supervision company Tallinna Linnaehituse AS (founded in 1957), followed by the
acquisition of the construction company Deena Ehituse OÜ (current business name Arco Ehitus OÜ)
in 2003.
The Group launched its first Latvian residential development project in the Baltezers suburbs of Riga,
Latvia in 2002, though more active development activities in Latvia did not begin until 2003.
In 2003, the Group began providing management service for Arco Balti Kinnisvarafond AS (whose
business name is proposed to be changed to Arco Balti Kinnisvaraportfell AS), a company with
EUR 19.8 million of assets under management as of 31 March 2007. Followed by the successful
launch of the first investment vehicle, the Group joined forces with East Capital to initiate and manage
the Explorer Property Fund – Baltic States in 2005 to invest in cash-flow generating Baltic properties,
the latter having EUR 65.7 million of assets under management as of 31 March 2007.
After extensive market research, sight visits and finding local partners, the Group expanded its real
estate agency activities, supported by the management systems and back-office in Estonia, to Kiev,
Ukraine in 2005, followed by Sofia, Bulgaria in 2006 and Bucharest, Romania at the beginning of
2007.
At the beginning of 2007, the Group acquired a majority shareholding in a construction company in
Latvia, SIA Arco Construction, thus having all three of its operational divisions present also in Latvia.
Having more than 15 years of operating history and currently employing more than 500 employees,
the Group has developed into a leading real estate group operating in all Baltic countries with an
additional presence in Ukraine, Bulgaria and Romania. In Estonia and Latvia the Group combines the
activities of property services, property development and construction. In the other countries of
operations it has established property services and aims to undertake property development activities
once suitable projects have been found.
The Company is the founding member of the Association of Estonian Real Estate Companies,
the Latvian Association of Real Estate Transactions, the Estonian Association of Appraisers and
the Latvian Association of Property Appraisers.
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