On Friday, June 30 the residential real estate developer Arco Vara concluded the sale of a commercial building in Sofia, the capital of Bulgaria. After fulfilling the obligations, Arco Vara will receive 4 million euros, which will be directed toward the development of new residential areas.
Madrid BLVD, a commercial and residential building developed by Arco Vara, was completed in 2010. The building with two underground and 9 above-ground floors includes a parking garage, apartments, a shopping center, and offices. All apartments in the building are sold, but Arco Vara was still involved in the lease of commercial and office spaces, amounting to nearly 7,500 square meters in total.
According to Miko Niinemäe, the CEO of Arco Vara, owning and managing a commercial building no longer fits the company’s strategy. “Arco Vara’s strategy for the next few years is the development of high-quality residential real estate. Dealing with commercial premises requires a separate team, and operating only one building makes the overall cost rather high,” he explained.
The transaction cost of the Madrid BLVD deal, located in the center of Sofia, was 9.1 million euros. The buyers of the building are three businesses investing in commercial real estate in Bulgaria. As a result of the transaction, 4 million euros remain with Arco Vara.
“The sale price turned out as expected,” confirmed Niinemäe. He said that Arco Vara will receive a part of the sale amount after the conclusion of the preliminary contract, and the rest now after finalizing the sale. Arco Vara plans to invest the funds from the transaction in the development of the next stages of the Kodulahe and Arcojärve residential area next to Lake Harku.
In Bulgaria, Arco Vara continues with developing residential real estate. The construction of the first phase of the Botanica Lozen quarter of private houses near Sofia is in progress. “We plan to build 16 houses each in both I and II phases, and 22 houses in phase III,” added Niinemäe. In total, Botanica Lozen would have the capacity of 54 large private houses, which also include a garden.