• Strategy

    Pro Kapital focuses on development of large-scale residential and commercial real estate projects in prime locations of the capitals of the Baltic States.

    Pro Kapital follows a conservative policy in financing the projects – a high proportion of equity and low leverage compared to the industry average enables the company to develop the most profitable sales.

    RESIDENTIAL REAL ESTATE

    Most of the population in the capitals of the Baltic States still live in the old Soviet-era apartment blocks that are rapidly deteriorating. The amount of living space per capita is considerably smaller than the European average and the development of new apartments is in decline after the recent real estate correction. Meanwhile, the prices have levelled out, mortgage loan and salary terms have improved and families wish to upgrade their living standards.

    Pro Kapital focuses on the premium market segment, which is less exposed to economic volatility, creating new communities and city blocks in central locations of the Baltic capitals. Consequently, Pro Kapital does not need to comply with the pricing levels set for certain city districts by the current real estate market.

    In the second half of the 1990s, Pro Kapital aquired several unique properties in its portfolio, including two attractive coastal sites in Tallinn and Riga. These properties will be developed according to the highest industry standards.

    COMMERCIAL

    Although the purchasing power and confidence of consumers have grown, especially in Tallinn, there is still considerably less commercial space per capita in the Baltic States than in Nordic countries and the vacancy rate in the existing shopping centres is low.

    The success of shopping centres is determined by the amount of the population shopping there and frequency of their purchases (regardless of the price of a purchase) and by whether it is an active connection point for social communication. Therefore, the location and size of a shopping centre are the main factors in providing customers with a wide range of necessary goods, services and entertainment.

    Pro Kapital has a long term expertise in launching successful shopping centre projects such as Domina Shopping in Riga and Kristiine Shopping Centre in Tallinn, the latter was sold to the leading Nordic shopping centre developer Citycon in 2011. Pro Kapital’s sales team has tight connections with the Baltic commercial property and retail sector, with a vast experience in commercial real estate marketing.

    HOTELS

    Pro Kapital has developed and sold hotels in prime locations as cash-flow projects. Currently, Pro Kapital holds three hotels, one in Tallinn, one in Riga and one in Bad Kreuznach Germany. Each of the hotels is located in historic buildings and in prime locations. These are four-star hotels primarily targeted at leisure customers.

    Pro Kapital does not foresee development of new hotels in the coming years. The company sees such potential from a long term perspective, especially in Riga, the largest city in the Baltic States.