previous image button
next image button
close fullscreen container

In the 1st quarter of 2021, SRE sold 23 properties for 4.4 million euros


The turnover of SJSC “State Real Estate” (SRE) in the 1st quarter of 2021 reached 11.53 million euros, which is 15% or 1.52 million more than in the same period of 2020, mainly due to the proceeds from the alienation of properties. 23 properties have been sold for 4.4 million euros, including 8 environmentally degrading buildings at 5 addresses. The most significant sales transactions are properties in the centre of Riga, on the canal bank at Raiņa bulvāris 7 (2.3 million euros) and Tērbatas iela 75 (1,205,000 euros), in Riga, informs Renārs Griškevičs, Chairman of the Board of SRE.

As a result of successful sales transactions, EBITDA and net profit also increased in the first quarter of 2021 compared to the first three months of 2020 - EBITDA increased by 1.78 million euros, providing a net profit of 2.95 million euros, compared to 1.32 million euros in the first quarter of 2020. SRE uses the proceeds from the sale of real estate in arranging the properties necessary for the state and establishing sustainable offices.

At the same time, SRE continues to provide support to tenants during the pandemic restriction period, releasing or reducing rent fees to 213 out of 630 commercial tenants of the company, providing discounts of 1.56 million euros in total since March 2020.

Overall the company's operations in 2021 are carried out in accordance with the SRE medium-term operation strategy for 2018–2022 and operational plans. “One of the biggest challenges for SRE is maintaining a high-quality public real estate portfolio, preserving and restoring valuable state properties, separating them from unsuitable and loss-making ones, as every year a number of different properties are transferred to SRE for management, in most cases they are in poor technical condition and not suitable for public administration, therefore we purposefully alienate them. We are taking rapid steps towards digitalisation in the implementation of state construction projects important to the state and the more efficient management of buildings. It helps to simplify processes, allowing all parties to cooperate more conveniently, faster and more efficiently and it creates cost savings in the long term,” indicates R. Griškevičs.

The implementation of BIM or building information modeling requirements, developed by SRE in 2019, is actively underway in construction procurements. The company is currently already implementing fourteen projects featuring BIM components, including the reconstruction of the Riga Castle Kastel part, the renovation of the historic building of New Riga Theatre, development of the Great Guild renovation project, renovation of the historic building in Ventspils at Kuldīgas iela 2 and its adaptation for the use of state and municipal institutions, upgrading of the Latvia-Belarus border crossing point “Silene–Pāternieki” and others. Digital technologies allow one to record the actual condition of the building with high accuracy. SRE experience of recent years in using digital tools in the renovation of cultural and historical buildings has convinced us that we can overcome such challenges much more effectively, allowing all parties involved in construction to cooperate more conveniently, faster and more flexibly, and to identify problems in time and eliminate them parallel to the construction works.

Supplementing the BIM design and construction requirements developed in 2019, SRE has developed the next step in the 1st quarter of 2021 - “asset information requirements” - an assistant for building owners to use BIM in the building management and maintenance process. This is the next step, so in the future it will be possible to use the building information modeling (BIM) technologies throughout the life cycle of a building. The guidelines developed by the SRE are intended for public use. In order to update and adapt them to the needs of the industry, SRE has invited industry professionals to evaluate them, make suggestions and ask questions. Opportunity to get acquainted with the current information on the SRE website.

Digitisation also affects the real estate business and auctioning processes. “We continue electronic auctions for the sale of real estate, which have become a common practice since the beginning of 2019; in June it is planned to launch e-auctions for the lease of state property, mostly offering premises for business in Riga and elsewhere in Latvia. Evaluating the two-year experience of e-auctions, we see that the digitisation of auctions has been the right step - the public availability and efficiency of state property auctions has been significantly increased by conducting real estate transactions in the form most accessible to the public. By next year, we plan to gradually move to e-auctions of rental, consigning the experience of face-to-face auctions to history. In order to implement it, appropriate changes must be made in the legislation that determines the procedure for leasing the property of a public person,” R. Griškevičs reveals.

In the conditions of the pandemic, work on 43 different construction sites of national importance with a total project budget of 156 million euros continues under the leadership of SRE. The most important of them are the reconstruction of the Museum of the Occupation of Latvia, including the new extension “The Building for the Future”, construction of the monument for victims of the Soviet occupation and remediation of Strēlnieku Square in cooperation with Riga City Council, reconstruction of the historic building of the New Riga Theatre at Lāčplēša iela 25 in Riga, improvement of infrastructure at the border crossing points “Terehova”, “Pāternieki” and “Silene”, as well as energy efficiency improvement projects at buildings of public importance – Dailes Theatre at Brīvības iela 75 in Riga, the building of the Latvian Puppet Theatre at K. Barona iela 16/18 in Riga, the building of Valmiera Drama Theatre at Lāčplēša iela 4 in Valmiera and the Latvian State Archives building at Skandu iela 14 in Riga. Procurements for the development of 3 creative quarters are nearing completion - for the establishment of a prototyping workshop complex at A.Briāna iela 13, Riga, the interdisciplinary cultural centre at Miera iela 58a and the Latvian National Opera and Ballet Decoration centre near Šķirotava, as well as a procurement for the renovation of the future home of the Literature and Music Museum at Mārstaļu iela 6 - construction works for these projects are planned to start soon. Work also continues on the development of the Large Guild renovation project, which is expected to be completed in late 2021.

The company provides professional real estate management and administration for approximately 450 real estate properties with 1400 buildings of 1.1 million square metres and more than 4000 land properties with an area of 10 million square metres. As a testimony to good governance and sustainable operations, the company has received a Gold award in the Sustainability Index by the Institute of Corporate Responsibility and Sustainability. SRE was founded in 1996 and its sole (100%) shareholder is the Ministry of Finance of the Republic of Latvia.