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SRE turnover in 2021 has increased by 10%


“The net turnover of SJSC State Real Estate (SRE) in the twelve months of 2021 has reached 41.78 million euro, which is 3.79 million euro or 10% more than in the twelve months of 2020, mainly due to the revenue of the public function from the lease and sale of real estate,” informs Renārs Griškevičs, chairman of the board of SRE.

EBITDA and net profit also increased in the 12 months of 2021 compared to the twelve months of 2020 – EBITDA increased by 0.45 million euro, providing a net profit of 3.41 million euro, compared to 2.99 million euro during the 12 months of 2020. In 2021, SRE signed 100 sales agreements for 5.64 million euro, giving the properties new development opportunities, including the sale of 35 degraded buildings. The largest objects sold are the historical building at Raiņa bulvāris 27, Riga (2.3 million euro) and the former building of the Literature and Music Museum at Tērbatas iela 75, Riga (1.2 million euro), where administrative premises and a reading room were located. In 2022, it is planned to dispose of 60 state-owned properties with a total value of 4 million euro. Revenues from the public function of SRE, rental and sale of real estate, are invested in the maintenance and renovation of real estate required by the state.

The overall financial performance was influenced by the state support provided to tenants during the pandemic-related restrictions, waiving or reducing the rent for 143 of the commercial tenants of the enterprise, amounting to a total of 794 997.6 euros in discounts.

“In general, the activities of SRE in 2021 have been stable, focusing on development, paying special attention to various aspects of sustainability, introducing them into the company's core business. We have developed sustainability requirements, the application of which in the renovation of buildings will start in the near future. In addition to the existing regulatory requirements, SRE will set requirements for designers that will reduce the full life cycle costs and negative environmental impact of renovated buildings. The efforts were recognised by the Institute of Corporate Sustainability and Responsibility – we are among 23 Latvian companies that received the platinum award in 2021. This is recognition for determined, purposeful and long-term work – streamlining the company's internal processes, making them understandable, transparent both to the public and the supervisory authorities,” R. Griškevičs points out.

At the same time, SRE is actively working to promote changes in the field of work environment in the Latvian public sector, offering institutions an activity-based office concept. The global trend is that office space per employee is declining. For example, the British office standard provides for 6–9 m2 per employee in new buildings and 8–12 m2 in refurbished buildings. Both in the world and in the practice of SRE, it has been proven that no more than 70% of full-time employees are on the premises at the same time, which is a good justification for creating activity-based offices. Thus, in the public sector, it is possible to reduce the area of premises used by institutions by about 30–40%, which also means significant public savings for the state in the long run.
In 2021, SRE, in cooperation with the State Chancellery and the British Government Property Agency, developed “Guidelines for the Establishment of a Public Sector Office” with detailed steps for setting up a modern office (available on the SRE website). Whereas at the end of the year, an international forum was organised together with the State Chancellery – practical training for the executives of the public sector, emphasising that public authorities, like everyone else, will have to adapt to the new situation as expectations of employees regarding the working environment have changed.

At the same time, strengthening the overall safety and construction supervision of the company and the industry in general is also a priority for SRE. In two years, knowledge and resources in this area have been significantly expanded. In the most complex projects with a larger construction volume or cultural heritage, SRE also performs internal construction supervision. The company's team is currently working on construction supervision guidelines for the industry to enhance the quality of the industry's expertise. The guidelines are scheduled to be released to the public in mid-2022.

In 2021, construction works were completed in the development of 29 objects of national importance for 38.77 million euro. Last August, the reconstruction works of the building of the Museum of the Occupation of Latvia were put into operation, including the construction of a new extension “House of the Future” and a POUP memorial. The building has been handed over to the Museum of the Occupation of Latvia for the installation of the new exposition. Renovated facades of six buildings of state significance – home of the Internal Security Bureau, at K. Valdemāra iela 1A; Ministry of Economics building at Brīvības iela 55, Riga; the historical “Sakta” building at Brīvības iela 32, Riga; Ministry of Health building at Brīvības iela 72, Riga; KNAB building at Citadeles iela 1, Riga; K. Valdemāra 26, which is home to the Riga 2nd Division of the Office of Citizenship and Migration Affairs.

By building cooperative relations with the neighbours of the Talejas 1 office, the local community of Čiekurkalns SRE, donating expert knowledge, labour and providing the necessary technical equipment, in cooperation with the association "Čiekurkalns Development Society" and Riga Central Library Čiekurkalns branch, helped to create the cultural space of the Čiekurkalns area "Library Garden”. The project has also been funded by the Riga City Council Education, Culture and Sports Department within the framework of the Society Integration Program.

SRE currently continues works on 54 different construction sites of national importance, with a total project budget of 223 million euro. The company provides professional real estate management and administration for approximately 400 real estate properties with 1100 buildings of 1.02 million square metres and more than 3600 land properties of 9.6 million square metres. The company was founded in 1996 and is 100% owned by the Ministry of Finance.