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SJSC "State Real Estate" turnover increased by almost 11% last year, net profit - by a third


The turnover of SJSC "State Real Estate" (SRE) in 2022 has reached 46.28 million euro, while the unaudited net profit - 4.38 million euro, informs Renārs Griškevičs, the SRE Chairman of the Board.

The SRE’s turnover in 2022 of 46.28 million euro is 10.8% or 4.5 million euro higher than last year. EBIDTA achieved a net profit of 16.74 million euro and a net profit of 4.38 million euro. Net profit increased by 28.8% compared to the previous year.

"The past year was full of challenges for the SRE as the largest construction client in the public sector. Most importantly, the company managed, with only a few exceptions, to overcome the exceptional circumstances caused by the high cost of construction and materials. We sincerely hope that already this year we will be able to make available to users a number of objects of importance to Latvia's security and cultural sector. In addition, in 2022, the SRE started to put into practice the idea of modern offices, including co-working spaces for public sector employees," says Griškevičs.

In the first twelve months of 2022, revenues from the rental of real estate were 0.85 million euro higher than a year earlier, revenues from construction intermediation increased by 0.52 million euro and revenues from the disposal of state-owned real estate were 2.22 million euro higher than in 2021.

The SRE Chairman of the Board points out that the most important area of activity last year was the modernization and development of the infrastructure of the external border of Latvia and the European Union. In 2022, several reconstruction projects were completed at the Terehova and Grebņeva border crossing points (BCP). Modernization work on the Terehova BCP will continue this year. Last year, the first stage of the construction of an independent fence was launched on the Latvia-Belarus border. As of 27 February 2023, about half, or 46.3 km, of the 85.5 km of stand-alone fence planned in the first phase has already been built.

Last year the SRE completed a total of ten development projects worth 15.345 million euro and 25 maintenance projects worth 3.9 million euro. Among others, six cultural and historical buildings have been restored, including one of the few buildings in Valmiera included in the list of state-protected cultural monuments (at 40 Rīgas Street) and the facade of the "Sakta" house at 72 Brīvības Street. Historical windows and doors are restored in the Rainis Museum in “Jasmuiža”.

Last year also were completed design works on several major projects. Funding will be sought this year for the reconstruction of the building at 1 Torņa Street for the Latvian National Museum of Art and for the preparation of the building complex at 15 Gaujas Street for the State Police. The next phase of the development project to create new infrastructure for the control services at 42 Uriekstes Street could start soon.

Last year, a total of 84 purchase contracts were concluded for the sale of 89 properties for a total amount of 3.98 million euro. The most significant sales transactions last year were the sale of the building at 113 Dzirnavu Street, Riga, and the building at 26 Ganību dambis, Riga for 1.2 million euro and 0.91 million euro, respectively. Besides, 27 environmentally degrading structures were sold at 19 addresses.

Meanwhile, significant transactions with state land redemption are the early execution of the lease purchase agreement for the land at 17 Andrejostas Street concluded in May 2022 for 5.8 million euro (SRE revenue share - 2.9 million euro), the sale of the land plot at Lokomotīves Street for 95.4 thousand euro (SRE revenue share - 47.7 thousand euro), as well as execution of the five year 2021 lease purchase agreement Riga, 23 Turgeņeva Street, before the deadline for 87.1 thousand euro (SRE revenue share – 43.55 thousand euro). The SRE uses the proceeds from the sale of the properties for the improvement and development of the properties needed by the State.

In 2022, the SRE was actively involved in the development of the construction industry.  It has supported the work of the State Office for Building Control, alongside other experts in the field, in the development of construction supervision guidelines aimed at supporting construction promoters. 

Work is nearing completion on the Sustainable Construction Guidelines, which outline sustainability requirements for contractors that will reduce the life-cycle costs and environmental impacts of buildings. A pilot project for the development of sustainability guidelines could be the project for the reconstruction and adaptation of the historic building at 6 Kalpaka Boulevard.

Overall, the company's activities last year were in line with the SRE's medium-term operational strategy for 2018-2022 and operational plan for 2022.

As at 31 December 2022, the share capital of JSC “State Real Estate” was EUR 146 832 445, and the company's equity was EUR 286 098 247.