Building a new house of rental apartments built in the centre of Riga required an investment of 25 million euros
Rental apartments’ market in Riga have expanded considerably – a new house with 176 apartments was built at the very centre of the capital, apartments are intended for rent only. Construction costs of a modern and energy-efficient residential building at Tērbatas street 72 amounted to 25 million euros, and it offers 1-3 room apartments with a total area from 50 to 65 square meters. The project was carried out by the real estate developer «YIT LATVIJA» and BTA Baltic Insurance Company AAS (hereinafter – BTA), and «Lumi Capital» was appointed as real estate manager.
“Typically, in Latvia, people are inclined to buy an apartment, and therefore, rental apartments market is underdeveloped, the largest share of it is in “the grey area”. There are very few intuitional developers here. It should be noted that rental apartments market actually experienced significant changes during the past three years,” according to Andris Božē, Member of the Board of «YIT LATVIJA». He mentioned that rental apartments in Riga have good prospects – popularity of rental will soar. High interbank loan rates also contributed to its popularity, which resulted in increased mortgage payments. Therefore, there is a share of prospective buyers, who currently prefer to rent an apartment.
According to the Board Member of «YIT LATVIJA», residents with a stable income, young people, who have not yet decided where they want to live, present the target audience for rental apartments. Perhaps they already have a job located in the centre with a good office, and therefore tenants would like to live as close as possible to their workplace. There might be some prospective clients, who are currently unwilling to burden themselves with property rights.
BTA, being one of the leading insurers in the Baltics, has also invested in developing an energy-efficient building. Wolfgang Stockmeyer, Chairman of the Board, anticipates new investment opportunities: “BTA enjoys its exciting experience while taking part in such kind of investment project, which is carried out simultaneously in all the three Baltic States. We are aware that nevertheless BTA is carrying out its operations mainly in the financial area, we find it prudent to think outside the box and look for more promising areas to invest our assets in. Riga’s project is especially interesting because it is an innovation in the real estate market, it was launched aimed at satisfying the ever-growing demand for housing. We believe that rental apartments area is underdeveloped, and we seek to provide tenants with high-quality apartments. We are looking forward to sectoral development and for the progress of the project, as well as we continue to make our contributions.”
Besides the building at Tērbatas street 72, BTA owns 3 more apartment buildings in the centre of Riga. They were purchased in 2020. There is high demand for rental apartments in new houses – basically, apartments are rarely available.
About BTA
BTA Baltic Insurance Company is one of the leading insurance companies in the Baltics, offering the broadest range of non-life insurance services in Latvia, Lithuania and Estonia. BTA employs more than 1,000 employees in the Baltics. The sole shareholder of BTA is Vienna Insurance Group AG (VIG), the leading insurance group both in Austria and in the entire Central and Eastern European (CEE) region. Around 50 insurance companies in 30 countries form a Group with a long-standing tradition, strong brands and close customer relations. The more than 25,000 employees in the VIG take care of the day-to-day needs of more than 22 million customers. VIG shares have been listed on the Vienna Stock Exchange since 1994. The VIG Group has an A+ rating with stable outlook by the internationally recognised rating agency Standard & Poor's. VIG cooperates closely with the Erste Group, the largest retail bank in Central and Eastern Europe.
About YIT
“YIT” is the largest construction company in Sweden and one of the key city environment developers in Northern Europe. We are creating sustainable city environment: functional housing, public and commercial buildings that comply with progressive requirements, infrastructure intended for a more balanced public mobility, as well as renewable energy solutions aimed at climate improvement. Altogether, there are about 5000 professionals employed in the company in nine states: in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Czech Republic, Slovakia and Poland. Company’s turnover in 2022 reached 2.4 billion euros. Shares of YIT Corporation are listed on Nasdaq Helsinki Stock Exchange.
Additional information:
Elīna Zvejniece
Marketing and Public Relations Department Director
BTA Baltic Insurance Company AAS
e-mail elina.zvejniece@bta.lv
mobile: +371 29374827
