Arco Vara begins construction in two developments and adds Luther Quarter to its portfolio

Real estate developer Arco Vara earned 3.1 million euros in revenue in the first half of 2025, launched construction works in two developments, and expanded its portfolio with the acquisition of Luther Quarter in the heart of Tallinn.

“The second quarter of 2025 marked a continuation of the cautious yet gradual recovery in the real estate market. Market stability, the slow decline in interest rates, and the downward trend of Euribor continue to provide a favorable backdrop for development activities and growing buyer interest,” said Kristina Mustonen, CEO of Arco Vara. “Throughout the quarter, Arco Vara remained focused on sales activities in Estonia while making several important strides in strengthening its development portfolio and implementing strategic adjustments.”

As of the end of the quarter, Arco Vara’s balance sheet included 17 completed apartments and one commercial unit, with the group’s total assets reaching 62 million euros. In the first six months of the year, the company earned 3.1 million euros in revenue. The net loss amounted to 43 thousand euros, compared to a loss of 687 thousand euros in the same period last year.

The second quarter marked several key milestones for Arco Vara. According to Mustonen, the most significant achievement of the three-moth period was the acquisition of land plots in Luther Quarte in central Tallinn. “The acquisition of the Luther site has doubled the company’s asset base and strengthened equity while maintaining a balanced capital structure. Preparatory work is ongoing, with construction scheduled to begin in the second quarter of 2026,” Mustonen explained. The development will span 15 plots and include homes, office and retail spaces, a food street, and a park.

In addition, the company launched construction on the Soodi 6 property in the Kodulahe Quarter and on the Spordi 3a and 3b developments in Kristiine. As of the end of the quarter, 5 and 6 homes had been reserved in these developments, respectively, and sales continue in the third quarter. Both projects are scheduled for completion at the end of 2026.

In the Rannakalda project, 5 homes were sold during the quarter, and only two final apartments remain available in the Kuldlehe development in Merivälja. Arco Vara expects the detailed plan for the Arcojärve area by Lake Harku to be approved by the end of summer. “The Arcojärve project plays a key role in Arco Vara’s long-term strategy, laying the groundwork for future urban developments,” Mustonen noted.

“Our key focus areas for the third quarter include completion of sales for the remaining apartments in Kuldlehe, the sale of at least six additional units in the Rannakalda project, continued design and planning for the Luther development, ongoing construction activities in both the Spordi and Soodi 6 projects,” said Mustonen.