The Chairmen of Arco Vara Management and Supervisory Boards resign from their current positions.

The Chairman of the Management Board of Arco Vara, Mr. Viljar Arakas, submitted
an appeal for withdrawal to the Supervisory Board of the company due to
different views on the strategic developments of the company. The Chairman of
Supervisory Board, Mr.Arti Arakas, will also resign from current position and
will continue as the Member of the Supervisory Board of AS Arco Vara. 

As the company announced, the new Chairman of Supervisory Board will be Richard
Tomingas, Aare Tammemäe, currently the Member of Management Board and CFO of
the company will continue as the deputy of the Chairman of Management Board.
All changes concerning managerial aspects will take affect as of January 21st
2008. Until then the company's management continues on their current positions. 

The leaving Chairman of Management Board Viljar Arakas commented the event with
the differences with the company's major shareholders. „I felt lack of
credentials to move on in this difficult market situation. The overall inner
climate in Arco Vara is good and the differences come in only in the level of
choices in strategy and understandings of the company's management. The major
shareholders are experienced men and their will to interfere in operative
management is understandable, but I find it unjustified“, said Mr. Viljar
Arakas. He expressed his gratitude to company's shareholders as well as
employees for the trust provided. „My heart will stay with Arco Vara“, he said. 

The new Chairman of Supervisory Board Mr. Richard Tomingas commented that the
company expected more aggressive contribution on new markets. „We see that the
market situation in the Baltic's has been more unstable than expected. As to
the Supervisory Board, the management should see more the potential growth in
the Balkans and Ukraine, markets where rapid growth is still ongoing for some
time. I agree that the Supervisory Board of the company is active, we give our
input to daily business processes, because the situation claims it“, adds Mr.
Tomingas. As he marks, the deputy for the company's Chairman of Management
Board will be current Member of the Board and CFO, Mr. Aare Tammemäe. 

Hillar-Peeter Luitsalu, Member of the Supervisory Board claims that Arco Vara
is in a very good condition. „Under Viljar´s management Arco Vara has grown to
an international and successful company, being the leader in the sphere on many
of its domestic markets. The Supervisory Board acknowledges Viljar´s work. As
to Aare Tammemäe, I have no doubt that he represents not only the consistency
in the implementation of the company's strategy but brings also new energy and
ideas how to develop in the changing market conditions“, says Luitsalu. 

The Chairman of Supervisory Board Mr. Arti Arakas said that he trusts the
current management of the company and finds it impossible to continue on the
current position.  „Irrespective of affinity I believe that Viljar has been the
best possible leader for Arco Vara both on operative management level as well
as representing the company internationally. Experts are aware that the IPO
realized in June 2007 just before the market fall was successful precisely due
to the team managed by Viljar and cooperation with consultants from SEB
Enskilda which gave Arco Vara the best platform in becoming an international
company“, said Arti Arakas. As to Mr. Arti Arakas there are no personal tension
or dissention within the Supervisory Board. „Our different views are not
value-based but on tactical level. Therefore I make a preventive step to avoid
intensification in the different views“, adds Arti Arakas. As to Arti Arakas,
Mr. Aare Tammemäe is a highly competent and refinely experienced in the field.
„I invited Aare to our team 6 months ago and I am confident that he will manage
the challenges set. In the Supervisory meeting I voted for Aare“, he comments. 

„I have worked with Viljar for only 6 months but can assure that he is a very
inspiring and strong manager. The financial position of Arco Vara today is
powerful, we are liquid and ready to actively search for new possibilities for
developing in the Balkans and Ukraine,“ said Aare Tammemäe, the new deputy of
Chairman of Management Board. 

Mr. Viljar Arakas joined Arco Vara in 2002. He has acted as the Chairman of
Management Board of the parent company Arco Vara AS since March 9th 2004. Since
that time Viljar has been and is currently the Member of Supervisory Boards of
various essential associated and subsidiary companies of Arco Vara in Estonia
as well as other domestic markets incl. services-, development- and
construction division parent companies´ supervisory boards as well as AVEC
Asset Management AS and Explorer Property Fund - Baltic States AB supervisory
boards. Since 2007 Viljar is also a Member of the Supervisory Board of AS
Tallinna Lennujaam (Tallinn Airport Ltd.). Currently Viljar is continuing his
MBA studies in Estonian Business School (EBS). He is married and has 2
daughters. 

Mr. Aare Tammemäe, born in 1971, is a Member of the Management Board and CFO of
the group as of July 2007. Since 2005 Mr. Tammemäe worked as the Head of
Corporate Banking and Member of the Management Board of Nordea Bank Finland,
Estonian branch. From 2001-2005, he served as the CFO of AS Tallinna Sadam (the
Port of Tallinn). Before he served on different managerial positions in
investment management services field. As part of his MBA program, Mr.Tammemäe
worked in specialist position in State Street Bank in United States of America.
He is married and has 2 children. 

Arco Vara started in 1992 as a real estate agency in Estonia and has become a
leading real estate group in the Baltic States undergoing a CEE expansion with
presence in Bulgaria, Romania and Ukraine. The company is operating in
brokerage, development and construction sectors, and has offices in 29 cities
across the Baltic's as well as Ukraine, Bulgaria and Romania. The group
employees over 600 people. The consolidated turnover of Arco Vara AS in 9
months of 2007 was 43,9mln EUR and net profit 16,9mln EUR. AS Arco Vara is a
public company, listed on Tallinn Stock Exchange. 
For further information about the company please visit www.arcorealestate.com.


Additional information: 

Kadri Mätik
marketing/PR manager

Arco Vara group
Jõe 2B, Tallinn, 10151
+372 6144 590
+372 505 1239
Kadri.Matik@arcovara.ee
www.arcorealestate.com