In 2021, SJSC “State Real Estate” (SRE) purposefully reduced the number of degraded buildings in its portfolio by 43 buildings – 35 were sold, giving them new development opportunities, 2 were transferred to local governments for development, 2 buildings were dismantled (in Riga, 5 Rūdolfa Street and Rauziņas Launkalne Parish, Smiltene region), 3 buildings were renovated, eliminating the signs of their degradation and preserving the cultural and historical heritage, one was deleted from the State Land Service cadastre. At the same time, last year, SRE took over several dozen properties under its supervision, which include 32 degraded buildings, says Andris Vārna, a Member of the SRE Board.
One of the challenges for SRE is a high-quality public real estate portfolio in the future – the preservation and development of valuable public property, which would allow the establishment of sustainable offices for public administration. “Most of the properties unsuitable for public administration are being sold for an economically reasonable price, some are being transferred to other possessors, and some of the cultural and historical objects that the public administration needs in the long run are being restored. Last year, among them was Saktas House at 32 Brīvības Boulevard, Riga, the home of the Internal Security Bureau at 1A K. Valdemāra Street, Riga, and the building of Staņislavs Broks Daugavpils Music Secondary School in Daugavpils. Proceeds from the sale are used to arrange the property necessary for the state – to create modern and sustainable offices for public institutions, which creates long-term savings in public costs and promotes the efficiency of public administration,” indicates A. Vārna.
The number of properties managed by SRE is variable – a number of properties owned by ministries that have not been used to provide public functions, liquidated educational institutions in regions that have ceased operations, property of orphaned enterprises and liquidated companies are placed under the supervision of SRE every year. In most cases, these properties include buildings in poor technical condition, including partially and completely collapsed buildings. In accordance with the company's strategy, when the properties come under the management of the SRE, the condition of each property is assessed, a survey of institutions is carried out, the possibilities of using it for public administration purposes are identified, and scenarios for sustainable development of the property are considered.
As a result of purposeful operation of SRE, since the beginning of 2018, when the SRE portfolio included about 200 degraded buildings (category A and B degraded buildings) transferred to the capital company, the number of degraded properties has more than halved – out of 13% of Latvian state property currently managed by SRE, 96 are currently degraded (with the status of A and B category degraded buildings), of which – 14 in Riga, i.e., out of all 1169 degraded buildings in Riga (objects included in the Grausti.Riga.lv website), SRE manages about 1.2%.
In the long run, the maintenance of unused property is expensive for the state. It is rational and economically justified to invest in buildings when the purpose and content of their use is clear. SRE manages the buildings, but the use of these buildings is decided by the users of the industry; therefore, the company manages several buildings intended for the provision of public functions, which are still awaiting their use, the most visible examples of which are Tetera nams at 61 Brīvības Street, and the building at 2 Pils laukums in Riga reserved for cultural function, and also Mežotne Palace. While awaiting a decision by the industry on their future use, SRE continues to maintain them in order to prevent deterioration.
Under the supervision of SRE, in 2021 construction works were completed in the development of 29 objects of national importance for 38.77 million euros. Currently work continues on 54 different construction sites of national importance, with a total project budget of 223 million euros. SRE provides professional real estate management and administration for approximately 400 real estate properties with 1100 buildings and 1.02 million square metres of space 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.
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