On 31 July 2015, Bulgarian Commercial Registry registered Arco Real Estate Fund REIT (hereinafter Arco REIT) with paid-up initial capital in the amount of 256 thousand EUR. Arco REIT will apply for a management company licence and authorisation for listing the shares on Bulgarian Stock Exchange - Sofia from Bulgarian Financial Supervision Authority. After receiving the authorisation Arco REIT is planning to make an initial public offer in 2016. Arco Vara AS owns 70% of the shares of Arco REIT and 30% of the shares are owned by a local financial institution. The management company of Arco REIT is a 100% subsidiary of the group - Arco Invest EOOD.
Arco Vara AS management’s commentary:
Our real estate developments in Sofia during last 2 years have been visible to everyone, high quality, sold out and successful for the shareholders. At the same time the ability and interest of different Bulgarian funds to invest in various real estate sectors through the instruments of local securities market has been growing. Just as Bulgaria sometimes seems too far away from Estonia, looking from Bulgaria’s side Estonia seems just as far away. This is why with Arco REIT we want to provide an opportunity for Bulgarian capital to invest directly to Arco Vara’s forthcoming big real estate developments in Sofia in residential sector and our previous experience in Bulgaria and our brand in this sector. Arco Vara’s interest is to participate in the operation of the fund as a shareholder as well as the fund manager. Arco REIT’s focus is on developments in Sofia in the volume that at the moment, taking into consideration Arco Vara’s current equity capital, we are not able to carry out alone, i.e. projects which require self-financing in the amount of 5 million EUR or more. Parallelly with Arco REIT we will continue independently with our smaller developments.
In Bulgaria there are 60 registered real estate investment trusts with the market capitalisation of ca 380 million EUR. The market capitalisation of 10 biggest trusts make up ca 300 million EUR and at the end of 2014 the volume of their assets made up ca 350 million EUR. The net profit of 10 biggest trusts at the end of 2014 was ca 16 million EUR. Bulgarian biggest trusts have mostly concentrated on agricultural or commercial real estate.
Evelin Kanter
Head of Legal Department
Arco Vara AS
Tel: +372 614 4594
evelin.kanter@arcovara.ee
http://www.arcorealestate.com