During the said period of time, the real estate company Baltic Sotheby’s International Realty has managed to strengthen the public conviction that the Sotheby’s brand is not only associated with art and historical artefacts. In the Baltic states, this world-famous brand is now also known as a real estate company – a leader in the premium estate market, which has embodied synonyms of the Sotheby’s brand in this area: refinement, luxury, quality, and professionalism.
Baltic Sotheby’s International Realty looks into the future with cautious optimism, as the particular segment is less prone to be affected by crises and the demand in it is rather stable.
It is acknowledged by Vestards Rozenbergs, Chairman of the Board of Baltic Sotheby’s International Realty, and Ilze Mazurenko, Member of the Board.
Sotheby’s: from book auctions to luxurious apartments
The idea to establish Baltic Sotheby’s International Realty came during the last global financial crisis – in 2009, the real estate company Immostate, which operated in Latvia, sensing the impact of the crisis on the real estate market in our country, decided to take the next step in their development and operate on a larger scale, believing that this will allow achieving more stability. Therefore, negotiations with Sotheby’s International Realty were initiated on the possibility to represent this brand in the Baltic states.
Sotheby’s is one of the world’s most recognized and oldest business brands. This world-famous auction house, which is a recognized leader in the field of auctioning, was founded in 1744 in London, and, initially, its main branch of activity was book auctions. Nowadays, it has become known for its main branch of activity – auctions of the world’s best works of art. The brand has become synonymous with refinement, luxury, quality, and professionalism. Customers of the auction house increasingly expressed a desire to buy exquisite real estate, where they could exhibit their purchased works of art, so in addition to selling artwork, in 1976, the famous auction house created an international network of real estate agencies – Sotheby’s International Realty – that continues the brand tradition. Since 2005, agencies of the said network have been operating on a franchise* basis and members of the agency network get an opportunity to exclusively represent the Sotheby’s brand in the particular market. Interestingly, the right to represent the world-famous brand is only granted to extensively and carefully evaluated real estate companies and individual brokers who meet strict requirements for the selection, including an impeccable reputation and high quality and professionalism standards. Currently, the Sotheby’s brand in the field of real estate is represented by 760 offices in 60 countries with more than 16,500 real estate sales professionals. The aim of Sotheby’s International Realty is to achieve a global agency network coverage so that their representatives would be able to provide comprehensive service to their clients from any region and so that their clients could receive high-quality advice at their local Sotheby’s branch in their home country and buy real estate anywhere in the world according to their requirements.
Baltic Sotheby’s International Realty is represents Sotheby’s International Realty in the Baltic states and opened its central office in Riga in 2010. Later on, offices in Tallinn and Vilnius were opened. The Latvian office, that was recently moved to spacious and beautiful premises in the quiet centre of Riga, Strelnieku Street 1A, acts as headquarters for 10 people, but there are a total of 25 people employed in all three Baltic offices.
“Microsurgeons” of real estate
Baltic Sotheby’s International Realty differs from other real estate companies with its brand recognition, high-quality ambitions, and an extensive worldwide agency network, which enables customer service on a global scale. The main focus of Baltic Sotheby’s International Realty activity is to be the leading broker in the so-called premium (or top class) residential property segment. The real estate offered to the customers of Baltic Sotheby’s International Realty differs from other estates available on the market with its excellent location, special quality, unique design and style, as well as a wide range of available services.
These include more than 5 thousand exquisite apartments, such as renovated Art Nouveau buildings in the heart of Riga, exquisite apartments in the Old Town, and new modern projects in the active centre or other picturesque places, as well as private houses in Mezaparks, Baltezers, and the resort town of Jurmala or elsewhere near the seashore, mansions and historic buildings (castles, manor houses) in beautiful regions of Latvia. Baltic Sotheby’s International Realty also focuses on offering of similar estates in Latvia’s neighbouring countries – Lithuania and Estonia.
The uniqueness of Baltic Sotheby’s International Realty lies in its franchise and the opportunities it provides: from marketing tools to the culture of customer service. It is globally tested know-how of Sotheby’s that we use. We have created a system for estate sales, attracting customers and carrying out transactions on the condition that the estate is in line with market prices, as we do not sell overpriced estate. Speaking in parables, there is surgery, and then there is microsurgery. We are the microsurgeons of real estate, – V. Rozenbergs explains.
“We specialize in our niche and concentrate on it. We deal in quality rather than quantity, therefore we offer a comprehensive international service in our field: the widest range of exclusive estate offerings, ensuring world-class quality both in the range of products that we offer and the level of service we provide,” I. Mazurenko adds.
As explained by the partners of Baltic Sotheby’s International Realty, if a customer wants to either sell or buy not only residential property, but also estate of other segments, such as land plots with a good location, or to invest in a housing fund, restaurants, hotels, etc., the company can help this customer, but even in such exceptional cases Baltic Sotheby’s International Realty operates according to its operational guidelines: consistently high product quality, style and sophistication.
A leader in the global and local exclusive estate market
Thanks to the possibilities provided by the franchise, Baltic Sotheby’s International Realty guarantees its customers the best and widest range of real estate not only in the Baltic states, but also worldwide, achieved in cooperation with the international Sotheby’s International Realty network of agencies. Our customer and partner base includes the customers of Sotheby’s auction house, representatives of foreign embassies, financial institutions, and private banking customers.
In 2015, Baltic Sotheby’s International Realty presented its improved website: http://balticsothebysrealty.com, which contains an extensive database of real estate, information about the real estate market in the Baltic states, information on the legal basis and the range of services offered by Baltic Sotheby’s International Realty.
Baltic Sotheby’s International Realty database includes almost 5000 entries with the total value of 2.29 billion euros. Most estate for sale is located in Latvia: 4065 entries with the total value of 1.583 billion euros, followed by Estonia (453 entries, 328 million euros) and Lithuania (435 entries, 376 million euros).
It should be noted that the website hosts high-quality real estate for a variety of tastes and situations also from the extensive Sotheby’s International Realty network.
Operating principle: quality, location, style
Sotheby’s International Realty does not have a single internationally applicable way to determine, which price category of estate to offer, therefore, the companies adapt to the specifics of each particular market. Each of the Baltic states has its own distinctive real estate market. “The main principle is that we must comply with Sotheby’s International Realty global standard and that is why we do not sell property in tract housing estate, Soviet-time panel buildings, and in new construction projects of questionable quality. In addition to quality, the location of the estate is important to us. Therefore, we will give preference to a studio apartment in the Old Town due to its great location, even if the apartment requires an investment and restoration work, because the liquidity of this real estate will be higher than that of a spacious apartment with Versace tiles in the bathroom on the outskirts of the city. We will be happy to offer our customers beautiful, well maintained properties in other parts of Latvia, as well. For example, small, interesting and stylish studio apartments with a good location for, say, 200 thousand euros,” V. Rozenbergs explains the principles of operation of Baltic Sotheby’s International Realty.
Premium segment trend – life style housing
Supply in the high-end estate segment follows the customers’ habits and, for some time now, the housing of exclusive segment not only fulfils the functions of living and recreation, but are also purchased according to the principles of one’s life style. Therefore, Sotheby’s International Realty databases include the so-called life style estate for people who are interested in housing, to which one can fly on a private plane, with a golf course nearby, people interested in rural life (including ecological rural lifestyle or estate with wineries etc.), people wishing for a more confined living space on a private island, etc. Even though the Latvian market has to compete with more popular places in the world: the richest regions of Western Europe or Latin America, Baltic Sotheby’s International Realty are able to offer interesting and competitive estate in our country, too.
Five-year trends and future challenges
In the five years since Baltic Sotheby’s International Realty has been operating in the Baltic market, we have observed a change in the demand for exclusive properties and kept an eye on the mood of investors.
The typical customer of Baltic Sotheby’s International Realty (both local and foreign) is a socio-economically active adult: a person with their own successful business or a high-level manager of a private or public entity. When buying high-end estate, the decision to be made is complex: both local and foreign customers think about improving their and their family’s living conditions. It is perceived as a good investment opportunity, and foreigners also assess the political and economic stability and prospects of the particular region (often the Baltic states are perceived as a bridge between Western Europe and the CIS countries). The accessibility of estate and other aspects are also definitely taken into account.
Knowing the specifics of Latvia, where all economic activity is concentrated in Riga or nearby, estate transactions most often take place in this part of the country. So far, premium estate was more often purchased by foreigners, many of them were from the former republics of the USSR and Russia, to whom this is a “well-known” region. The Latvian market of exclusive estates reached a high level of business activity also thanks to the temporary residency programme implemented five years ago, but now, when the conditions of the programme have changed, many “one-day” companies have disappeared from the market. Also, the proportion of customers is gradually changing. It is also influenced by political developments in Russia, Ukraine, the Eurozone crisis, and other global and local developments. The market is currently adjusting to the new demand, although the domestic market is a little slower. Baltic Sotheby’s International Realty‘s experts have noticed that, in Lithuania and Estonia, domestic markets have developed better so far, as there have been other specific features: the market in neighbouring countries has been less dependent on foreign “players”, there have been better credit conditions, etc.
“Since 2010, we have successfully grown: from a small company operating in its local market to a global agency with three offices in the Baltic states, transaction volumes – from a small range to a database of nearly five thousand units of estate. However, the main thing is that we have strengthened the public confidence in the meaning of Sotheby’s brand in the real estate market. Five years ago, this brand was more often associated with art and historical artefacts, but now it is also known as a seller of high-quality and sophisticated estate,” the partners of Baltic Sotheby’s International Realty underline.
Looking to the future, the company intends to further strengthen its position in the local market, while also strengthening the real estate sector as a whole, because it believes that it is essential for the purchasing power to grow in the local market and for our citizens to be able to buy high-quality estate in Latvia and abroad, and to have advantageous loans available to the people.
It is also planned to activate Baltic Sotheby’s International Realty operations in Lithuania and Estonia, as up to now the company has had the best results in Latvia. “Our vision includes Riga as a strong centre of Baltic Sotheby’s International Realty, and the company – as a powerful leader in the exclusive estate market in the Baltics, providing customers with high-quality offers,” the partners outline the future.
For your information:
The biggest and most interesting transactions of Baltic Sotheby’s International Realty in the last five years
In five years, Baltic Sotheby’s International Realty has made more than 500 transactions with real estate priced from 120 thousand euros.
Baltic Sotheby’s International Realty are happy that the demand for buildings in the centre of Riga, that can be repaired and renovated, is growing as investors buy and repair the said buildings, making Riga more appealing. In addition, investors perceive the buildings not only as objects of investment, creating apartments for rent, but also carry out high-quality reconstruction work, creating restaurants or hotels, as well as providing new jobs.
* The biggest transaction in the private sector – estate for 4.5 million euros in Jurmala was acquired.
* The biggest apartment transaction – several apartments were acquired in Riga that were combined, creating a single apartment worth 4 million euros.
* One of the biggest private house transactions in Pieriga – a mansion worth 1.3 million euros in Baltezers was sold.
* In August and September 2014, two buildings in Riga worth almost 5 million euros opposite to the National Theatre of Latvia (Z. Meierovica Street and Jekaba Street) were sold, as well as buildings on Lacplesa Street worth 3.65 million euros, where a block of high-end apartments will be constructed, were sold.