Correction: INTERIM REPORT FOR THE THIRD QUARTER OF 2025 (UNAUDITED)

Core Insights - The Estonian real estate market showed stable and moderately recovering activity in Q3 2025, with transaction levels comparable to the previous quarter and a slight upward trend in average prices per square meter, particularly in Tallinn [2][3] - Arco Vara successfully completed its first public bond offering, which was oversubscribed more than twofold, marking the largest single bond issue among Baltic real estate developers [4] - The company initiated a strategic exit from the Bulgarian market to focus on development projects in Estonia, enhancing operational efficiency and value creation [11] Market Overview - The Estonian real estate market is influenced by high interest rates and buyer caution, but improved confidence and stabilized economic expectations have supported steady demand [3] - The market appears to have reached a phase of balance, with both prices and transaction volumes stabilizing after previous fluctuations [3] Company Developments - Arco Vara's bond issue aims to finance the Luther Quarter project, transforming a historic industrial area into a modern urban environment [5] - The company is focused on creating a "city within a city" in the Luther Quarter, integrating residential, commercial, and public spaces [6] - Ongoing developments include Rannakalda, Soodi 6, and Spordi, with significant sales activity and construction progress reported [7][8][9] Financial Performance - For the first nine months of 2025, Arco Vara reported sales revenue of EUR 5,624 thousand, an increase of EUR 1,537 thousand compared to the same period in 2024 [15] - The company achieved an operating profit of EUR 622 thousand and a net profit of EUR 214 thousand, a significant turnaround from the losses reported in the previous year [15][19] - As of September 30, 2025, total assets had more than doubled compared to the previous year, primarily due to new development project acquisitions [17] Sales and Inventory - In Q3 2025, Arco Vara sold a total of 25 apartments, with a total of 35 apartments sold in the first nine months of the year, showing a strong increase compared to the same period in 2024 [16] - The inventory as of September 30, 2025, included 12 completed apartments, down from 37 completed apartments a year earlier [17] Strategic Focus - The main objectives for Q4 2025 include active sales efforts, completing the sale of remaining units in ongoing projects, and preparing for the presale of the Luther development [13] - The approval of the detailed spatial plan for the Arcojärve development is expected to lay the groundwork for further investments in inner-city projects [10]