New stage of development of New Hanza
For almost 10 years now, Pillar Capital has been developing the extensive New Hanza territory, encompassing about 25 hectares. Having first completed a series of infrastructure facilities, the company opened the cultural venue Hanzas Perons in 2019. And just recently, on September 22, the New Hanza office building at 1 Mihaila Tāla Street was officially opened for the public. The total investments in the area have already exceeded 45 million euros.
Pillar is shaping New Hanza into a significant part of the city, where people could previously relax and now can also work, and by around 2025, start living here as well. Later this year, the next stage of the territory’s development will be started – the construction of a residential complex between Gustava Kluča, Roberta Hirša, and Skanstes Streets.
Although the market has slowed down slightly, the New Hanza apartment project is not a small one, so we estimate that the construction process could take at least two years, and by that time we hope to offer approximately 270 new apartments at 10 Gustava Kluča Street, says Pillar Capital Chairman of the Board Edgars Miļūns.
The project (designed by PBR architects) has already been approved, Miļūns says: “We just need to work a little more on the estimates and the financing model, and we can start the construction. The plan is to start this year. We want to take advantage of the time when construction costs are rising at a reasonable level.” It should be noted that so far, the housing projects have been implemented in cooperation with other traders, including related companies, while no bank funds have been raised.
The company is not only developing New Hanza, but also continuing the implementation of new residential building projects in popular neighbourhoods in Riga. Pillar is focusing on the energy-efficient apartment segment, developing new projects in Mežciems, Dreiliņi, and Dārzciems. So far, the company has invested over 13 million euros in the development of the residential properties.
Pillar’s first multi-apartment building project on Eizenšteina Street next to Biķernieku Forest has recently been put into operation. The project offers 79 apartments. Another project, Pillar Dreiliņu Priedes, will soon reach its highest construction point, and the topping-out ceremony will take place. In 2024, 122 fully constructed apartments will be offered on the market. Construction for the Pillar Dārzciema Liepas project will begin in early October, featuring the development of 49 two, three, and four-room apartments.
Several residential buildings are currently in the design stage at Pillar, with a total of more than 400 apartments planned. Despite the slowdown on the market, Pillar continues its ongoing projects, believing that there will be demand for the new projects in the future and that financing will be available to apartment buyers.
“We believe that there is a future for apartments outside the city centre,” says Edgars Miļūns. The current projects have a total of around 250 apartments. “We have sold less than we expected in the finished project, but that’s no reason to lose our optimism,” he says, adding that overall things are much slower in the new housing market. “The number of transactions, the number of bookings, is down, but there is still activity. Developers are counting on it taking longer to sell. In the past, it was possible to sell off most of the apartments in a project when it was still just on paper. I think that a year after commissioning would be a normal cycle,” the developer’s representative adds.