Real estate developer Arco Vara released an audited report of last year’s financial results, which was previously published in February. Compared to 2021, the revenue increased by 16%, with a business profit of over one million euros and a net profit of nearly 700,000 euros.
According to the CEO of the company, Miko Niinemäe, the real estate market was like a rollercoaster last year. At the beginning of the year, there was more capital flowing into real estate than expected, but in the second half of the year, it was the opposite. “The increasing number of inquiries and loan applications for home mortgages from banks show positive signs, which could potentially be reflected in Arco Vara’s pre-sales for 2023,” he added.
At the beginning of 2022, the company established a construction company, Arco Tarc OÜ, which created a new business segment by offering general contracting services. The company’s first project was the Kodulahe Rannakalda residential development located by the Stroomi beach. According to Niinemäe, pre-sales contracts worth nearly 13 million euros had already been signed by the date of the annual report. Construction of the IV-V phase buildings in the same development area was completed in the first half of last year, with 72 new homes handed over to customers.
In the Bulgarian market, the CEO of Arco Vara considers the decision to sell the Madrid BLVD office building as the most significant event. “After several efforts, the group was not satisfied with the rental yield of the building, so a pre-sale agreement was signed in the fourth quarter,” he explained. The transaction for the sale of the building, which releases 4.1 million euros of equity, is expected to be completed in June of this year. The company plans to invest this equity in new projects that offer an annual return on equity of at least 20%.
This year, Arco Vara’s team will continue its development activities in all stages of the Kodulahe, Botanica Lozen, and Arcojärve projects, with plans to complete at least 100 new homes. The first phase of the Botanica Lozen project, which started in Bulgaria last year and includes the construction of 16 buildings, is proceeding as expected. The company expects to receive a construction permit for the next phase of the project this year. A construction contract for the Pirita Kuldlehe development was also signed this year, and an exclusive five-home cluster house is planned to be completed within the year.
According to the CEO of Arco Vara, the risks of war and healthcare are currently marginal. However, he believes that they should be kept in mind due to their potential, though unpredictable, impact. The company forecasts sales of 14.2 million euros and a profit of 1.5 million euros for this year.
According to the audited annual report, the real estate developer earned 13.5 million euros in revenue last year. The group’s business profit was 1,062,000 euros, and its net profit was 695,000 euros.