In November 2017, Arco Vara AS entered into an agreement for the acquisition of a development project in the suburbs of Sofia, near the village of Lozen. The first stage of the real estate acquisition transaction, with a total area of 5.3 ha, was completed in January 2018. The second stage, with a total area of 6.8 ha, was to be completed in December 2020.
Due to the freezing of the first development stage and the health care crisis, Arco Vara AS decided not to increase the land bank in Bulgaria. Upon cancellation of the transaction, Arco Vara AS paid a withdrawal fee of 250,000 euros in agreement with the seller. The seller of the property has no additional claims against Arco Vara AS.
“We consider it necessary to increase the growth of Arco Vara’s development volumes in Bulgaria in the long term and in a linear manner. Completing this transaction in today’s world would have meant an exponential growth in the Bulgarian market and a significant increase in the group’s business risk in the light of what happened to the Iztok project. Upon abandonment of the transaction, the distribution of Arco Vara’s equity will remain approximately 50/50 between Estonia and Bulgaria”.