Arco Vara AS gave its 80% holding in construction supervisory company Tallinna Linnaehituse AS to OÜ ISA Group. OÜ ISA Group gave its 11% holding in real estate development project “Kolde” and 17% holding in OÜ Kerberon to Arco Investeeringute AS. After the transactions OÜ Kerberon and Kolde AS are in full ownership of Arco Investeeringute AS and AS Tallinna Linnaehitus is in full ownership of OÜ ISA Group. The deal constitutes a transaction with related parties but is not financially important enough within the meaning of the Tallinn Stock Exchange Rules. OÜ ISA Group belongs fully to the CEO of AS Tallinna Linnaehitus, Mr. Vladimir Issakov. Arco Vara management assures that the deal was made on market terms. As a result of the deal Arco Vara didn't made any significant loss or gain. As of year end 2007 the book values of 100% equities were following: Tallinna Linnaehituse AS 12,4 mln kroons (0,8 mln euros), Kolde AS 27,9 mln kroons (1,8 mln euros) and OÜ Kerberon 61,4 mln kroons (3,9 mln euros). “The purpose of the deal was to gain full control over two important projects”, says Arco's head of development division Mr. Veiko Taevere. Arco Vara is a leading real estate developer in the Baltic's, undergoing a CEE expansion with presence established already in Ukraine, Bulgaria and Romania. The operations involve real estate development, brokerage, construction and investment management arm. The company has offices in 30 cities and has in total 649 employees. According to 2007 unaudited consolidated results net sales was 727,2 mln kroons (46,5 mln euros), net profit before minorities 235,5 mln kroons (15,1 mln euros) and assets 3 564,0 mln kroons (227,8 mln euros). Arco Vara is listed on Tallinn Stock Exchange. 1 EUR=15,6466 EEK Heigo Metsoja Head of Investor Relations +372 6144 654 heigo.metsoja@arcovara.ee http://www.arcorealestate.com