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Management Presentation

February, 2009

Real estate market overview 2008Estonia

www.arcorealestate.com

• Founded in 1992• Integrated property developer, constructor and agent in the Baltic

countries undergoing a SEE expansion with presence already established in Ukraine and Bulgaria

• Employs ca. 400 people in 5 countries

• Since 21.06.2007 listed on Tallinn Stock Exchange. Ticker “ARC1T”

• Services: brokerage, valuation, facility management, property advisory, environmental and civil construction, real estate development, facility and property management

Arco Vara in profile

www.arcorealestate.com

Real Estate market in Estonia

Trends 2007 2008 Domination in investment Vendors' market Buyers' market Domination in leasing Landlord's market Tenants' market

Occupiers' behavior Keeping assets Intention/willingness for Sale-Lease-Back

Developers' behavior Keeping assets Exiting assets Debt financing Conservative Almost absent Yields Compressing->Stabilizing Rising Rents Growing->Stabilizing Decreasing Sales period 3-4 months 9-12 months

Source: Colliers international

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Residential: Transactions of apartments in Tallinn (source: National Land Board)

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Sale offers of private houses and sales in Tallinn, 2006-2008 (source: National Land Board, web database City24.ee)

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Sale periods of apartments and private houses in Tallinn (months), 2001-2008

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Changes in average transaction value in a year(apartments, EUR)

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New apartments 2003-21.10.2008, building permits, pieces

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Business premises: Average rental prices (net) of office spaces (EUR/m2/month), 2008

City A B

Tallinn 10-18 7-10

Tartu 11-16 5-11

Pärnu 7-12 4-6

Rakvere 6-16 5-7

Jõhvi, Narva 7-10 70-7

Haapsalu 9-13 6-10

Kuressaare 7 5

Viljandi 4-6 2.5-4

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Changes in the highest rental prices and in vacancy rates of office spaces in Tallinn

Average vacancy rate

The highest rental price

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Building permit of office buildings, 2005 - 2008 (I – III quarter), m2 (new buildings)

Building permit 2005-2008 (III Q)(county) 2005 2006 2007 2008 (I-III Q) Total

Harjumaa 51 788 141 662 234 941 79 017 507 408

Tartumaa 3 132 11 214 10 606 12 674 37 626

Pärnumaa 1 189 16 11 685 0 12 891

Lääne -Virumaa 1 954 160 0 5 821 7 934

Ida- Virumaa 0 1 770 15 275 5 763 22 809

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Building permits of shopping centres and service buildings, 2005-2008 (I – III quarter), m2 (new buildings)

Building permit 2005-2008 (III Q)(county) 2005 2006 2007 2008 (I-III Q) Total

Harjumaa 95 732 118 020 118 959 139 320 472 031

Tartumaa 18 230 20 097 20 375 8 982 67 684

Pärnumaa 13 539 20 536 55 734 26 725 116 533

Lääne -Virumaa 9 048 4 719 45 159 6 582 65 509

Ida -Virumaa 22 358 17 563 13 051 69 434 122 407

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Average rental prices (net) of industrial spaces (EUR/m2/month) 2008

City(city) Class A Class B and C

Tallinn4.4 – 6.4 1 - 5

Tartu 4.4 - 5 2.2 – 3.1

Pärnu 3.1 – 6.4 0.3 – 2.5

Rakvere - 1.6 - 4

Jõhvi, Narva 4-6 1.6 - 3.1

Haapsalu - 0.7 – 3.8

Viljandi 2.5-3.1 1.3-2

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Building permits of industrial spaces, 2005-2008 (I – III Q), m2 (new buildings)

Building permit, 2005-2008 (III Q)(county) 2005 2006 2007 2008 (I-III Q) Total

Harjumaa 145 237 189 559 214 346 112 839 661 981

Tartumaa 10 103 93 680 48 827 37 632 190 242

Pärnumaa 20 921 16 812 5 511 12 684 55 929

Lääne -Virumaa 10 231 20 169 5 001 3 737 39 137

Ida -Virumaa 1 446 4 354 2 664 7 970 16 433

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Thank You!

Management Presentation

February, 2009