Arco Vara AS’ 100% subsidiary in Bulgaria Arco Manastirski EOOD concluded on 11 February 2015 a Construction Contract for building the last, third phase (also named as Block D) of Manastirski Livadi residential complex. Block D development products consist of 7 commercial units, 80 apartments and 53 underground parking places. The gross sellable area (GSA) of the above-grade construction is ca 6.800 sqm. The underground section has been previously partially completed. The construction also entails completion of the access street in front of Block D.
The construction will begin on 16 February 2015 and the deadline for works completion is end of November 2015. The Construction Contract was concluded with Komfort OOD, the company which built also Manastirski Livadi Phase II. The price of Construction Contract remains below 2.4 million euros, excl VAT.
The whole construction will be financed by Unicredit Bulbank AD. The interest rate of the loan is 3-month Euribor plus 4.5%. The term of the Loan Contract will be 22 months.
As of the signing date of Construction Contract, more than 15% of the project is presold.
Comment by CEO of Arco Vara AS: “We must consider simultaneously both that our clients could always purchase a suitable product from us and so keep the supply- and sales chain uninterrupted, and also that our upcoming products should not cannibalize the existing apartments that are not sold out yet. The optimal moment to commence construction of Block D came after quick completion of construction works in Phase II, and because the actual sales tempo of Phase II exceeded our expectations. The apartments of Phase II and Phase III have been designed and priced for different target groups. While we construct and pre-sell Phase III, we will also continue selling out the last remaining apartments in Phase II. We will start earning revenue from Block D in first quarter 2016. Our target is to sell Block D out by end of 2016 for at least 4.5 million euros and to make at least 1 million euros net profit.“
Arco Vara also intends in the short term to buy back or redeem all Manastirski Bonds with total nominal value of 750 thousand euros.