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SRE improved its portfolio last year, resolving situations with 35 environment-degrading structures


In 2023, SJSC ‘State Real Estate’ (SRE) resolved the situation with 35 structures at 24 addresses that had the status of category A and B environment-degrading structures. During the same year, according to the company’s board member Andris Vārna, SRE took over 81 such buildings at 44 addresses.

‘Dealing with buildings that degrade the urban environment and that are in an emergency technical condition is critical for making sure that SRE’s real property portfolio is sustainable and high-quality. Every year, we take over dozens of such buildings: we assess their condition and decide on their future use for the purposes of state administration. Typically, the most effective solution is to sell or demolish the dilapidated structure. We use the generated funds to maintain and develop other properties that we manage,’ Vārna explained.

Last year saw 24 structures in poor technical condition sold, including the buildings of the Ērgļi Vocational Secondary School and the Īle resort complex, as well as buildings at Merķeļa iela 11, Audēju iela 7, and environment-degrading office buildings in a number of parishes in Latvia. Eight environment-degrading structures were demolished, including several category A ones in Bēne Parish, Dobele Municipality, at a Jaunpils iela address in Riga, and one category B structure (warehouse) at a Zaķusala krastmala address in Riga.

Also in 2023, three structures were renovated or underwent activities that eliminated hazards within them, after which their status as category B environment-degrading structures was withdrawn.

As of the beginning of 2023, SRE’s portfolio contained 101 structures at 66 addresses that were category A or B environment-degrading structures, while at the end of the year, there were 147 such structures at 87 addresses. Of these, almost four-fifths (83%), were category B structures, deemed to be in pre-failure technical condition, with the level of technical wear ranging from 61 to 80%. The total floor area of the category B buildings was 58.45 thousand square metres.

The number of properties managed by SRE fluctuates as the company continuously takes them over from ministries, local governments, and other state institutions, sells them, hands them over to local governments, and takes other actions to ensure the efficient management of state property and to improve the quality the state property portfolio. In accordance with the company’s strategy, whenever a property is taken over by SRE, it undergoes an assessment to determine its condition, and a study of government institutions takes place to identify the possibility of using the property for their needs, reviewing scenarios for the possible sustainable development of the property.

In order to correctly distinguish between properties that have long-term potential and properties that need to be sold, the property portfolio managed by SRE is divided into three primary portfolios: the core, asset, and sell-off portfolio. The sell-off portfolio includes some 15% of the total area of the buildings and structures: these are properties that public institutions will not need in the long run and that are generating losses for the state. They are sold through public auctions or transferred to other owners, as required by law, enabling new uses for them.

SRE provides professional real estate management and administration for 419 building and structure properties, comprising 1049 buildings with a total area of 0.98 million square metres, as well as land beneath structures with a total area of 585 hectares, and 3385 land properties with a total area of 937 hectares. SRE is one of 17 Latvian companies that received the highest platinum award in the Institute for Corporate Responsibility and Sustainability's Sustainability Index 2023, demonstrating good governance and sustainability of its operations. The company was founded in 1996 and the Ministry of Finance is its sole shareholder.