Arco Vara to launch a public bond offer with an annual interest rate of 8.8%

Real estate developer Arco Vara will launch a public bond offer tomorrow, providing investors with the opportunity to participate in the large-scale development of the Luther Quarter in the centre of Tallinn. The nominal value of each bond is 100 euros, with an annual interest rate of 8.8%, payable quarterly.

According to Kristina Mustonen, CEO of Arco Vara, the bond offering provides investors with a chance to take part in the growth of a local real estate company. “The public bond issue gives Arco Vara an opportunity to raise capital directly from people who believe in our vision and want to be part of our next growth phase,” Mustonen said.

Darja Bolšakova, CFO of Arco Vara, highlighted that the bonds allow investors to support the development of Luther Quarter while also earning stable income at a fixed interest rate. “Since the nominal value of one bond is 100 euros, investors can invest smaller amounts or exactly the sums they find suitable. We have made sure the bond is accessible to as many people as possible, and the interest will be paid four times a year,” she explained.

The total volume of Arco Vara’s bond issue is 10 million euros, with the possibility to increase up to 15 million euros in case of oversubscription. The subscription period runs from 10 September until 19 September 2025. The bonds will mature on 24 September 2028, and subscription orders can be placed through all banks in Estonia that provide investment services. The securities will be listed on the Nasdaq Tallinn Stock Exchange’s Baltic Bond List, enabling secondary market trading.

According to Mustonen, the Luther Quarter development, which will be financed through the bond issuance, is a prime example of how high-quality urban environment, architecture, and sustainability come together. “With the Luther Quarter, we now have a rare opportunity to transform a key area in central Tallinn that has been awaiting a solution for years,” she said. Scheduled to begin next year, the development will cover 15 plots, integrating homes, office and retail spaces, and a food street into a unified urban quarter. It will feature 454 apartments, nearly 18,500 square metres of commercial space, an underground car park with 615 spaces, and a park.

The total investment in the Luther Quarter is estimated at 200 million euros. The project will be constructed by Arco Vara’s subsidiary, Arco Tarc.

Ahead of the public bond issuance, Arco Vara, in cooperation with Investeerimisklubi, will host an investor event on 10 September at the Luther Quarter. The event will discuss real estate market trends, the role of bonds in retail investors’ portfolios, and provide insight into Arco Vara’s future plans. According to Mustonen, the investor event will be a suitable place to ask questions about the upcoming bond issuance and the company’s long-term growth.

Participation in the investor event requires prior registration at the following link: https://forms.gle/FsHyWTocEQbiBVgX7