Real estate developers commit to attract at least 600 million euros in investment per year for the sector

The investment environment and regulations in the real estate sector in Latvia will be improved in the next couple of years thus improving the sector’s competitiveness at Baltic level. Representatives of the sector have committed to doubling annual investments in new real estate properties by 2020, ensuring that investments are at least 600 million euros per year – this was agreed upon today in a memorandum of cooperation signed by the Ministry of Economics (ME), the Ministry of Environmental Protection and Regional Development (MEPRD) and industry representatives.
 


“The Doing Business index shows that we are significantly lagging behind our neighbouring countries in terms of new real estate development. As regards obtaining construction permits, we see that Latvia is only 23rd in the Doing Business assessment, while Lithuania is 16th and Estonia – 9th. As regards property registration, Latvia is again 23rd, while Estonia is 6th and Lithuania – even 2nd. This international data shows that Latvia is in dire need of new regulations for the construction and territorial planning process, as well as improved solutions for document processing and submission. This is exactly why we have drafted a memorandum of cooperation together with the ME and MEPRD, in the framework of which it is planned to double the annual investments in new real estate,” Mārtiņš Vanags, Chairman of the Board of the National Alliance of Real Estate Developers (NARED), explains the necessity for the memorandum.
 
Vanags also points out that with the signing of the memorandum, it is planned that in the 2020 Doing Business assessment Latvia will be among the top three European Union member states in terms of obtaining construction permits, with the time needed for approving a construction project having been reduced by at least half.
 
Furthermore, NARED has committed to promote the increase of planned investment by 2020. Guidelines on best practices for purchasing a new apartment will be drafted very soon, as well as an annual real estate market assessment, studies on sector development and, in collaboration with the Ministry of Economics, an overview of the Latvian real estate market trends will be published. NARED members will also ensure that newly built residential buildings are split into apartment properties prior to selling the apartments, and the practice of selling as apartments groups of rooms in hotels and other non-residential buildings will be stopped.
          “The real estate development sector provides significant input in the development of the Latvian economy, therefore with the implementation of the measures set out in the memorandum, we can expect a significant increase in investments in real estate, which will boost national economic growth. In terms of attracting investments in real estate development, Latvia is lagging behind its neighbours in all segments, however, we have a lot of potential due to our geographical location and developed infrastructure. Complex solutions are need in order to attract investments – simplification of the construction process is crucial. With the signing of the memorandum today, the government commits to actively work on digitalisation of the construction process and ensuring its quality, safety and sustainability,” Arvils Ašeradens, Minister of Economics and Deputy Prime Minister, remarks.
 
The ME has committed to introduce the tacit approval principle for the approval of construction ideas and projects, facilitate that the term of taking a decision on the approval of a construction project is not extended, as well as ensure the development of the Construction Information System by 30 June 2018 by setting up an easy-to-use electronic platform for the transition to an electronic administration process in construction.
 
Furthermore, the ME commits to draft regulatory amendments by 1 January 2019 to simplify and improve the procedure for amending a construction process during the planning and construction phase, including providing third parties the right to contest a construction permit insofar as it pertains to amendments made to it. The ME has committed to submit to the Conference of State Secretaries by 1 July 2017 a draft law “On Rent of Residential Premises”, which will establish a modern regulation on the rights of renters and tenants, as well as facilitate the reduction of the duration of the administrative process for appealing a construction permit and promote investments in new commercial real estate.
 
“Latvian people and national development – these are the two main priorities for the Ministry of Environmental Protection and Regional Development in the framework of this memorandum. We support this initiative to promote attracting investments, which would provide Latvia with new jobs and growth, as well as promote quality in real estate construction and the development of the sector in Latvia through reduction of bureaucracy. The Ministry of Environmental Protection and Regional Development has already done a lot to improve the territorial development planning system and simplify the planning procedures. The results of these efforts are demonstrated by the fact that the number of cases where it has been necessary to draft a detailed plan has reduced. By signing the memorandum, we attest our willingness to remove all obstacles to attracting investments, which also means creating jobs in the cities and regions of Latvia,” says Kaspars Gerhards, Minister of Environmental Protection and Regional Development.



The memorandum of cooperation on improving the investment environment for real estate development was signed by:
Arvils Ašeradens, Minister of Economics and Deputy Prime Minister
Kaspars Gerhards, Minister of Environmental Protection and Regional Development
Mārtiņš Vanags, Chairman of the Board of the National Alliance of Real Estate Developers
Members of the Board of the National Alliance of Real Estate Developers:
Ieva Valtere, Chair of the Board at SIA “Pillar Management”
Oskars Ozoliņš, Chairman of the Board at SIA “Merks”
Sanda Meinarte, Member of the Board at SIA “Alfa Construction”
Nils Sidorovičs, Member of the Board at SIA “Domuss”
Pēteris Antonovs, Chairman of the Board at AS “MCITY Holdings”
Mikus Freimanis, Head of Development Projects at SIA “Bonava Latvija”
Ivars Rudzītis, Member of the Board at SIA “Ordo Group”
Andris Božē, Chairman of the Board at SIA “YIT Celtniecība”
Elita Moiseja, Chair of the Board at SIA “NP Properties”
Ilona Striga, authorised representative of SIA “AFI Management”
Ruslans Miroņenko, Director of Business Development at SIA “Saliena”
Ivars Pommers, Head of Group for Real Estate Practice at legal office “Ellex Kļaviņš”
Dmitrijs Kačalovs, authorised representative of SIA “Colliers International advisors”
 
Additional information:
Zane Ieviņa
„P.R.A.E. Public Relations”
Tel.:+371 287 14 968
E-mail: zane.ievina@prae.lv