Arco Vara: 2021 Annual Report of Arco Vara


In the field of real estate that became volatile in 2021, Arco Vara’s collective was able to secure more than 40,000 m2 of new development volumes which will provide the Company with a solid foundation for the next five years. We also met the set targets with issuing new shares and ongoing project’s sales volumes. In addition, in light of the war-related threats, Arco Vara has not suspended any development projects which means that we will continue to provide and build homes, seeing that there is less supply than demand, regardless of the military activity in Ukraine.

The most substantial change in the Arco Vara Group is the establishment of the construction company Arco Tarc of which team commenced the Kodulahe Rannakalda project in January this year. The main reason for the establishment of the construction company was the long-term foundation mentioned above, where we wish to be the managers of the time frame of our construction processes to achieve a successful development. The sale process on the Rannakalda area has started at the time of publishing the annual report and 30% of the total number of apartments have already been pre-sold or booked.

In Kodulahe Quarter, which is the largest on-sale project by Arco Vara, in 2021 it was possible to pre-sell 100% of homes at Pagi 3 and Pagi 5. The construction partner of the project has managed to secure important deliveries, thanks to which the completion of the buildings is on schedule and the delivery of the houses commences already within two months.

The main tasks of the Bulgarian team so far are the design of the Botanica Lozen Residences project and securing the rental yield of Madrid BLVD. Madrid BLVD as of today has a single office space of approximately 800 m2 available for lease. The most important task in Bulgaria is to achieve 100% occupancy with the tenants of Madrid BLVD which is the main challenge in the cooled commercial space market. The Bulgarian team is also looking for new properties in order to create a lasting foundation for development in Sofia. As the commercial real estate rental market is not Arco Vara’s core business, the Group is ready to sell the Madrid BLVD building and use the vacated equity to acquire new land upon reaching a suitable agreement.

The Botanica Lozen Residences project has attracted strong local interest, the materials of which can be found at The sale process started with making pre-reservations as plans to reach pre-sale agreements are after signing the construction contract in order to avoid selling houses at a loss. The start of construction is planned for the Q3 of this year.

Challenges in 2022 are the risk of construction price and inflation. The first of these we can control in the form of effective action by the Arco Tarc team which is chiefly affected by achieving favourable agreements with material suppliers. In order to mitigate the risk of inflation, we apply the right to slightly increase the sale price of real estate when reaching certain HICP values in the case of homes that have been sold long in advance.

The impact of the war in Ukraine on the construction materials and labour markets cannot be reliably predicted. For the first time in decades, the supply difficulty of materials is perceived as one of the developer’s greatest entrepreneurial risks. We have purchased majority of steel in advance for our ongoing projects, and we also keep the prices and availability of other materials in focus.

Fighting macroeconomic impacts is the battlefield of 2022 of Arco Vara, where our motivated team sees new but exceedable challenges.


In 2021, the Group’s revenue was 11,613 thousand euros, which is 17% less than the revenue of 14,056 thousand euros in 2020.

In 2021, the Group’s operating profit (=EBIT) was 2,569 thousand euros and net profit 2,071 thousand euros. In 2020, the Group made operating profit of 1,449 thousand and net profit of 1,012 thousand euros.

In 2021, 63 apartments and two commercial spaces were sold in the development projects of the Group (in 2020: 81 apartments and one land plot in Latvia).

In 2021, the Group’s debt burden (net loans) increased by 822 euros up to the level of 9,321 thousand euros as of 31 December 2021. As of 31 December 2021, the weighted average annual interest rate of interest-bearing liabilities was 5.2%, which is 0.4% higher than on 31 December 2020.


The revenue of the Group totalled 11,613 thousand euros in 2021 (in 2020: 14,056 thousand euros), including revenue from the sale of properties in the Group’s own development projects in the amount of 10,478 thousand euros (in 2020: 13,129 thousand euros).

Most of the other revenue consists of rental income from commercial and office premises in Madrid Blvd building in Sofia, amounting to 810 thousand euros in 2021 (in 2020: 614 thousand euros). In 2020, Covid-19 brought changes in the economic situation of tenants. By the time of publishing the present report, one office space was vacant, but all commercial spaces, together with parking places, were rented out. The free office space makes 11.7% of the rented office and retail area.

In 2020, construction finished in Merimetsa area in Stage III of Kodulahe project, a residential building with 50 apartments at Soodi 4. All apartments were sold in 2021 and the house has the usage permit.

The construction of buildings in Stages IV-V of Kodulahe is nearing completion. Two 36-apartment residential buildings at Pagi 3 and Pagi 5 in Merimetsa are under construction. Construction has progressed according to plan. The apartment buildings will reach the stage of final sales in summer 2022. All 72 apartments have been presold.

The construction of the Stage VI of Kodulahe project at Lammi 8 started in February 2022 by Arco Vara’s own construction company Arco Tarc OÜ. The plan is to build a pavilion, 4 commercial areas and 108 apartments, out of which many have sea view. The apartment buildings will become ready in about 2 years after the construction begins. Apartment sales also commenced in February 2022. As at the date of publishing the annual report, 24 apartments out of the 108 had been presold. The company is limiting the number of apartments to be presold, in order to respond to the effects of inflation in the course of the development as necessary.

A subsidiary of Arco Vara, Aktsiaselts Kolde, signed an agreement for land acquisition beside Lake Harku, address Paldiski road 124b, Tallinn. More than 35,000 m2 of residential and commercial real estate (GBA) is planned for development. The expected development period is 6 years with the start of construction planned for 2023. The detailed planning is in process.

In Q2 2021, sales on the apartments of Oa street in Tartu ended, where 4 smaller apartment buildings with a total of 30 apartments were built under the Kodukalda project name. In 2021, Kodukalda houses also received a usage permit.

In Iztok Parkside project in Sofia, the majority of final sales of apartments started in December 2020, after receiving a usage permit. The last apartment was sold in April 2021. As the apartments were handed over a year later than promised due to bureaucratic obstacles, 2 clients want compensation in the total amount of 21 thousand euros. A provision has been prepared for the claim.

The last vision of the Botanica Lozen project foresees construction of 54 homes (houses) in three stages. The expected start time of construction is the autumn of 2022, when the construction of the first 16 buildings will start. Minimum construction period is 2 years.

As of 31 December 2021, 4 Marsili residential plots remained unsold in Latvia, one of which has found an owner as at the date of publishing the report. One plot was also sold in Latvia in 2020.



In thousands of euros 2021 2020
Revenue from sale of own real estate 10,478 13,129
Revenue from rendering of services 1,135 927
Total revenue 11,613 14,056
Cost of sales -8,578 -11,313
Gross profit 3,035 2,743
Other income 258 10
Marketing and distribution expenses -200 -89
Administrative expenses -1,106 -922
Other expenses -76 -273
Gain/loss on investment property 658 -20
Operating profit 2,569 1,449
Financial income and costs -390 -437
Profit before tax 2,179 1,012
Income tax -108 0

Net profit for the period

2,071 1,012
attributable to owners of the parent 2,071 1,012

Total comprehensive income for the period

2,071 1,012
attributable to owners of the parent 2,071 1,012
Earnings per share (in euros)
– basic 0.22 0.11
– diluted 0.22 0.11



In thousands of euros 31 December 2021 31 December 2020
Cash and cash equivalents 1,863 2,200
Receivables and prepayments 3,701 1,344
Inventories 15,761 14,960
Total current assets 21,325 18,504
Receivables and prepayments 5 5
Investment property 9,943 9,564
Property, plant and equipment 154 22
Intangible assets 87 136
Total non-current assets 10,189 9,727
TOTAL ASSETS 31,514 28,231
Loans and borrowings 6,043 3,482
Payables and deferred income 2,368 3,308
Total current liabilities 8,411 6,790
Loans and borrowings 5,141 7,217
Total non-current liabilities 5,141 7,217
Share capital 7,272 6,299
Unregistered share capital 0 273
Share premium 3,835 2,285
Statutory capital reserve 2,011 2,011
Retained earnings 4,844 3,356
Total equity attributable to owners of the parent 17,962 14,224
TOTAL EQUITY 17,962 14,224


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