Arco Vara prepares for the completion of two major development projects

Real estate developer Arco Vara generated revenue of €5.3 million in the first nine months of 2026, recording a net loss of €1.5 million. According to the company’s CEO, Kert Keskpaik, the main factor affecting this year’s financial results is that two major development projects are currently under construction, with the associated sales revenue set to be recognised in the final quarter of the year, following the handover of completed homes to buyers.

“In the third quarter, we focused on selling existing apartments while continuing pre-sales and construction activities at the Kodulahe Iili and Kristiine Spordi developments. Both projects are nearing completion, and we plan to hand over the first homes to customers in the coming months,” said Kert Keskpaik, CEO of Arco Vara.

In the first nine months of 2026, Arco Vara generated revenue of €5.3 million, representing a decrease of €308,000 compared to the same period last year. The company recorded a net loss of €1.5 million for the nine-month period, compared to a net profit of €214,000 a year earlier. Third-quarter revenue amounted to nearly €1 million, while the quarterly net loss stood at €380,000.

According to Keskpaik, the third-quarter loss was primarily attributable to the timing of development project completions and revenue recognition. “In real estate development, revenue largely depends on when completed homes are handed over to buyers. We currently have two major developments under construction, and revenue from their pre-sales will be recognised in our financial results once the final property transfer agreements have been signed. We therefore expect both revenue and profit to increase in the final quarter of the year,” he explained.

During the third quarter, a total of 12 apartment sales transactions were concluded across Arco Vara’s development projects, comprising nine preliminary sales agreements and three final property transfer agreements. By the publication date of the report, 42 apartments and four commercial units had been sold in the Kodulahe Iili development, with handovers scheduled to begin in November. At the Spordi development in Kristiine, 27 of the 56 apartments had been sold, with handovers planned for December. Only one apartment remains available for sale in each of the previously completed Rannakalda and Kuldlehe developments.

In the Luther Quarter, located in central Tallinn, design work and a review of the business plan are ongoing to align the project with shareholders’ return expectations. According to Keskpaik, the objective is to find a solution that meets the return expectations of the company’s shareholders. “It is important to us that every new development project is financially justified and creates the value expected by our shareholders. The analysis of the Luther Quarter business plan is ongoing, and the next steps for the project will become clear over the coming quarters,” he said.

For the Arcojärve development, located by Lake Harku, the company expects the detailed spatial plan to be approved in the final quarter of this year. In the Botanica Lozen development in Bulgaria, a preliminary agreement was signed during the third quarter for the sale of a 75% ownership stake.

Following the end of the third quarter, changes were made to Arco Vara’s management, including the appointment of a new CEO and changes to the composition of the Supervisory Board. The aim of these changes is to strengthen shareholders’ oversight of the company’s management and place greater emphasis on project profitability and returns on capital.

“Our plan is to introduce a cultural shift at Arco Vara, placing a clearer focus on results and the efficient use of capital. When evaluating new projects, we will assess whether their expected return on equity meets shareholders’ expectations. At the same time, our firm priority is to complete ongoing developments and hand over homes to customers in accordance with the agreed schedules,” Keskpaik confirmed.

In the final quarter of the year, Arco Vara will focus on completing the Iili and Spordi developments and handing over homes to customers, selling the remaining available units in its existing developments, and further refining the development strategy for the Luther Quarter.