Arco Vara: Acquisition of new subsidiary in Sofia

As first part of the Lozen deal signed in November 2017, on 30 January 2018,
Arco Vara AS acquired 100% of the shares of Arco Lozen EOOD, a company
registered in Sofia, Bulgaria. Arco Lozen EOOD owns 6 land plots in the
outskirts of Sofia, close to Lozen village, of which 3 are intended for
construction and the remaining 3 for street infrastructure. Total area of the
land plots is 52 780 m2 (5.3 ha), of which 47 450 m2 (4.7 ha) is the area of
the 3 construction land plots, on which the Group plans to develop a high-class
residential project with apartment blocks, houses, and commercial units like
supermarket, kindergarten, sports facilities, and other similar amenities.
Detail plan for the area has been enacted and is in force since 2009;
currently, the Group is awaiting results from ongoing design bidding. Technical
design will commence and finish within 2018, by the end of which the Group also
expects to obtain a construction permit for Stage 1 of the project. 

As second part of the Lozen deal, by December 2020, Arco Vara AS shall acquire
one more Bulgarian company, owner of 9 more land plots, of which 5 are intended
for construction and the remaining for street infrastructure, with total area
of 67 620 m2 (6.8 ha). On these plots, the next stages of Lozen project will be
developed. 

Arco Vara Group CEO's comment: "Arco Vara is on the track of long-term growth
and sustainable annual profitability which is based on cash. With the
acquisition of Lozen development project in Sofia, and with the acquisition of
Paldiski 74 land plot in Tallinn shortly before that, we have taken another
important step in our long-term strategy. We have created a suitable land
reserve with construction rights, which will allow us to create more than 1000
residential units in Sofia and in Tallinn in the next five years. This enables
us to maintain a continuous real estate development and sale process both in
Tallinn and in Sofia. Our development pipeline is focused on residential
customers. We have chosen projects, where we can create whole living
environments and provide our customers experiences beyond expectations. Arco
Vara team will pursue the development and sale of Kodulahe and Lozen to
customers according to current demand and at the pace that we consider suitable
for maintaining good margins. The next objective is to improve the equity
turnover and therefore also the profitability of the Group." 

         Evelin Kanter
         Head of Legal Department
         Arco Vara AS
         Tel: [phone]
         [e-mail]