One of the Biggest Real Estate Investors in Bulgaria Sells its Brokerage Business
Arco Vara AS will sell 100% of its subsidiaries Arco Vara Kinnisvarabüroo AS (Estonia) and Arco Real EOOD (Bulgaria) to the management teams in the two countries, according to a release on the company's website. The two companies will continue to work under Arco's trademarks as well as use databases and other intellectual property under an agreement signed for 5 years. As of January 1, 2019, the two companies will not be part of the Arco group, but they will pay a license to the Estonian company and will continue to contribute to its revenue, reports money.bg
The transaction price has not been announced. Head of the company in Bulgaria is Evgeni Vasilev. He has been in office since 2008. Since 2016 he has been a member of the Managing Board of the National Real Estate Association, he received another mandate.
It is clear from the announcement that two other Bulgarian companies related to the Estonian company will be suspended. This is Arco Projects, which offers accommodation services, as well as Arco Facility Management, which offers management services in the building of Madrid Boulevard. The service group within the group will also stop working. So far, it has had 2.5m euros (13.6%) of turnover in 2017 and 2.3m euros (43%) in the first six months of 2018. The net result, however, was close to zero. In addition, Arco Vara will start selling the 15 apartments in the building of Madrid Boulevard in Sofia, which were available for rent. Revenues will be used to reduce the debt drawn to build the building to levels that will allow it to be refinanced at significantly lower interest rates. The plan for the sale of apartments is also part of the larger program to reduce the share of rental income that is transferred to the bank to repay the interest.
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