OREANDA-NEWS. February 12, 2014. The year 2013 was marked by growth of Latvian real estate sector. Real estate development and trading group Pillar achieved great results in 2013, having its sales increased 2.5 times, i.e., by 141%. According to different estimates, the overall market growth is said to be 30%.

In 2013, the company made the total of 613 property sale transactions, amounting to EUR 38.6 million. Whereas during the whole 2012, Pillar sold 254 properties for EUR 15.7 million.

The customers' activity has considerably grown in respect of all residential property segments – premium class, new projects, and especially existing homes. Among sold properties, 134 were the apartments in new and renovated projects, including 14 premium class apartments in Elizabetes Park House project. There were 476 apartments in existing homes sold (in 2012 – 125 apartments), as well as 2 commercial property sale transactions and one private house sale transaction made. Last year the number of transactions in apartments in existing homes increased by 280%, whereas price growth in this sector was approximately up to 10%.

Pillar Chief Executive Officer Ieva Valtere noted, “Last year development of the real estate sector was especially fast. It was facilitated by Latvian economy growth, increase of the people’s financial soundness, and also return of credit resources to this sector. Foreign customers demonstrated even greater interest in property acquisition, which is due to successful implementation of Latvian programme of granting residence permits. Nevertheless, the major part of our property sale transactions was made with residents, which indicates the wish to improve living conditions.”

We have made 61 real estate acquisition transactions with foreign customers, the overall amount of those transactions being EUR 8 million (21% of the total amount of transactions).

"According to our forecasts, current sales trend might be continued this year. We do not expect substantial price increase, although tax burden, which has become 3 to 7 (!!!) times higher for each property after the 1st of January, will impact the price. For example, the real estate tax rate was increased to equal 1.5% of the cadastral value, and the state fee for ownership registration was tripled! Although tax increase will contribute to revenues of local and state budget, this will not solve the problem of growing debts under utility payments. Pillar, being a responsible property manager, timely pays all bills, and similar companies also pay for the services accurately, thus giving the chance to survive to utility service providers. However, it seems that in return we get higher taxes, unfortunately. It is also unclear why successful programme of granting residence permits, which ensures significant contribution to the economy in general, should be terminated or considerably reduced. Foreign customers spend money here, not just acquiring properties, but also spending on repairs, improvements, interior design, and other needs. These are great amounts that flow into state economy every day! Last year, the employment increase in the construction area was the largest one in the country – according to statistics, 3900 new jobs were created. And there are many other related sectors which are not short of work! We all should understand that although adopted and planned law amendments sometimes are “applauded” by public, people will have to pay for all eventually,” Ieva Valtere summarized.

It should be noted that during 2013 Pillar group companies have paid state taxes, including real estate tax, amounting to EUR 1.2 million.

Pillar real estate development and renovation line of business continues to advance. Taking over and performing complete renovation of apartment blocks, private houses, and individual apartments, Pillar ensures their high-quality interior finishing, and since the beginning of its operations Pillar has invested the total of EUR 14 million in property renovation. Our renovated real estate development portfolio includes such special projects highly appreciated by customers as Elizabetes Park House, Saules Rasa, Pine Breeze, Martina Nams 2, Liesmas Apartment House, Darza Apartment House, Lielezeres Apartment House, etc. The quality of our work is evidenced by fact that most of those have already been sold off. More information about Pillar and offered properties can be found on our home page www.pillar.lv.

We will move forward, and therefore our plans for this year include renovation of premium class apartment block Miera Park House in Riga, at Miera Street. This property was bought in April 2013 with the intention of renovating the building to develop new premium class apartment block, using modern technologies and meeting high living standards. Active development of the project important both for Pillar and the whole ABLV Group – financial and business centre New Hanza City (NHC) – will be continued. At the beginning of 2013, first construction works were started at the project territory in Riga, at 28a Pulkveza Brieza Street, and already in February this year Pillar will be able to move to its new office building at the project territory.

Pillar Holding Company, KS, established in 2008, is owned by the largest private bank in Latvia – ABLV Bank, AS, and it includes ABLV Group companies that operate in the field of real estate development, management, and trade. Pillar holds one of the largest real estate portfolios in Latvia, which comprises apartment blocks, apartments, private houses, land, and commercial properties. In total, Pillar supervises 1170 properties worth about EUR 76.8 million. So far the company has invested the total of EUR 14 million in renovation of properties.