On 13 May 2008 the General Meeting of Shareholders of AS Arco Vara (Arco Vara) authorized Arco Vara to buy back its own shares in five years, provided that such buy back shall not exceed 10.0% of the aggregate value of issued nominal share capital of Arco Vara. The authorized maximum number of shares which can be acquired is thereby 9 528 415. As of the date of this announcement, Arco Vara holds 450,000 own shares. On 7 October 2008 the Management Board of Arco Vara decided to initiate a new share buyback programme. The aggregate consideration under the new programme will be 10.0 million Estonian kroons (0.64 million euros) and maximum of 1 800 000 shares may be acquired. The programme will start on 8 October 2008 and will end on 31 December 2008. The purpose of the programme is to reduce the capital of Arco Vara or to use the acquired shares for planned employee share option scheme as the Management Board believes current share price level provides a favourable opportunity for this purpose. The share buyback programme is conducted in compliance with the provisions of the European Commission's regulation No. 2273/2003 of 22 December 2003, stating the exemptions for share buyback programs. Arco Vara has appointed SEB Pank as lead manager of the programme to buy the shares back on behalf of Arco Vara under separate agreement. SEB Pank will be independent on its trading decisions irrespective of and without influence from Arco Vara as to the timing of the purchases as well as carry out the buyback according to the regulations and within the framework of the programme. The share buyback will be initiated under the following framework: 1) The maximum amount of shares bought will not exceed 1 800 000 shares, which corresponds to 1.89% of the issued share capital of Arco Vara; 2) The maximum aggregate consideration for the Arco Vara shares bought will not exceed 10.0 million Estonian kroons (0.64 million euros); 3) In one single day the amount of shares bought will not exceed 25% of the average daily volume of Arco Vara shares traded in the 20 preceding trading days on the Tallinn Stock Exchange. In case of extreme low liquidity of the share the company may exceed the 25% limit in which case the amount of shares bought will not exceed 50% of the average daily volume traded in the 20 preceding trading days. 4) The purchase price: a) does not exceed the share price of the last independent trade; and b) does not exceed the highest current independent bid of Arco Vara share on Tallinn Stock Exchange; and c) is not less than half of the nominal value of the share, i.e. 5.0 Estonian kroons (0.32 euros) per share. At least every seven trading days from the start of this programme Arco Vara will give an update about the status of the programme by issuing an announcement in respect of the transactions made under the programme. Heigo Metsoja CFO +372 6144 654 heigo.metsoja@arcovara.ee http://www.arcorealestate.com