Arco Vara’s second-quarter results show expectation for sales of completed properties

The projects under construction by Arco Vara, the developer of the integrated areas, are in the construction or preparation phase, and the main sales are planned for the end of the year. There were no apartment buildings completed in the second quarter of this year, which resulted in a group turnover of EUR 254 000.

According to Miko Niinemäe, CEO of Arco Vara, the cyclical nature of the workflow is illustrated by a comparison with the second quarter of last year, when the handover of completed homes to buyers took place and sales revenue was 7.6 million euros. “As our apartment buildings were not yet due for completion last quarter, the group’s sales revenue for the quarter was 97% lower compared to the same period last year,” he explains. Arco’s net loss for the second quarter was 347 thousand euros and for the first half of the year 638 thousand euros. In the second quarter, the company made another instalment payment of EUR 1.6 million for the land purchase of the Arcojärve project. “This is a residential and commercial property being developed on the shores of Lake Harku with an expected development period of six years. As of the end of the quarter, we have made advance payments totalling nearly EUR 5 million and the construction of the first phase of the project is scheduled to start next year,” said Niinemäe. Arco Vara Estonia’s main development activity is related to Kodulahe Quarter, the Rannakalda phase of which will be completed in the fourth quarter. As of now, 51 well-planned homes with low maintenance costs and three commercial premises have been pre-sold. Pre-contracts amount to approximately €14.4 million. “Based on our clients’ interest in the Kodulahe Quarter, we have also launched the architectural competition for the next phase, for which we hope to have the detailed planning approved this year. The property, which will be launched next year at Soodi tn 6, will comprise approximately 68 homes and 250 m² of commercial space,” said the head of Arco Vara. Arco also continued its construction and development activities in Bulgaria’s Botanica Lozen, where two of the 16 homes in the first phase have found buyers. The Bulgarian team is also in the process of designing the development’s next project of 24 detached houses, which is also scheduled to start construction next year. According to Miko Niinemäe, from Arco Vara’s point of view, the real estate market breathed easier in the second quarter. “The European Central Bank’s base rate decisions continue to be a key driver for the real estate and construction sector. The slowing inflation rate is gradually injecting confidence into home buyers, as evidenced by a roughly threefold increase in the number of enquiries over the quarter,” he said. “During the volatile period, we have been successful in the sales process of the Home Quarter and Madrid BLVD, which are significantly reducing the company’s financing risks in the current ‘cash is king’ period where raising capital is costly. With the support of the freed-up capital, we plan to increase Arco Vara’s development volumes in the second half of the year with new properties and deliver approximately 65 new homes in Kodulahe in the fourth quarter,” he added.