Arco Vara moves towards completion of larger developments by year-end

Real estate developer Arco Vara focused in the first quarter on advancing its ongoing development projects and preparing for larger completions in the second half of the year.

“In the first months of the year, the real estate market was influenced by positive signs of improvement in Estonia’s economic growth environment. At the same time, the market was negatively affected by high electricity prices in January and February, rising interest rates, and geopolitical tensions in the Middle East that escalated in March,” commented Rait Riim, CEO of Arco Vara. He added that homebuyers are increasingly adapting to the surrounding economic uncertainty. “More and more buyers are willing to enter into contracts for homes that will be completed in the future.”

Arco Vara’s revenue for the first quarter of 2026 amounted to EUR 390,000, while net loss totalled EUR 578,000. Riim explained that the results reflect the cyclical nature of real estate development. “Development projects generate losses during the planning and construction phases, and profits are realised only upon completion of the buildings,” he said, adding that Arco Vara has by now sold almost all completed homes in its portfolio. As of the end of the quarter, Arco Vara had 122 apartments and commercial units under construction in Tallinn, all scheduled for completion in the fourth quarter of 2026.

Currently, Arco Vara has two projects under active construction – Soodi 6 and Spordi 3a/3b – both expected to be completed by the end of 2026. By the end of the first quarter, 28 out of 66 units in the Soodi development in the Kodulahe district had been sold under preliminary agreements, and 17 out of 56 apartments in the Spordi development in Kristiine. Sales of the remaining available units continue in the Rannakalda development in Kodulahe and in the exclusive Kuldlehe residential building in Pirita.

In Arco Vara’s flagship development, the Luther Quarter, design works for the first construction phase are ongoing alongside mapping of buyer interest. The development will include 454 homes and approximately 18,500 m² of commercial space. Preparatory works are also ongoing for the Arcojärve development near Lake Harku. “Arcojärve is a strategically important project for Arco Vara, creating the foundation for further investments in new inner-city developments,” the CEO added.

In March, Arco Vara announced the involvement of a strategic partner in the Botanica Lozen residential development project in Bulgaria. Under the agreement, the partner Kamaleo Invest OOD will acquire a 25% stake in the company developing the project. The completion and handover of the first phase buildings are planned for the coming quarters.

“The main objectives for the next quarter are to continue construction and sales activities in the Spordi 3a/3b and Soodi 6 developments, as well as the design works for the Luther Quarter,” said the CEO.