Italian-rooted company Pro Kapital Grupp, which has already poured over €60 million into Latvian real estate, is now planning to at least double that figure. This summer, construction will begin on Blue Marine, a luxury residential project in Riga’s Klīversala district. In the lead-up to this development, m2 magazine and varianti.lv sat down with Edoardo Axel Preatoni, Chairman of the Board at Pro Kapital Grupp, to discuss the company’s Baltic ventures, his take on Riga’s high-end property market, and his personal journey. According to Preatoni, Riga is currently facing an unusual market situation - but he’s confident it won’t last long.

 

 

- Pro Kapital Grupp, a company operating in the Baltic States, marked its 30th anniversary last year. The business was founded by your father, and today you’re continuing it as CEO. I assume you witnessed the company’s evolution firsthand, or perhaps your father shared those early stories with you. What made him choose the Baltics? What was it about this region that appealed to an Italian entrepreneur?

- Thank you for giving me the opportunity to share the captivating story of Pro Kapital Grupp. In the post-Soviet era, most of the people in Western Europe didn’t realise how different the countries that gravitated in the Soviet orbit were. My father always implemented a pioneeristic approach (as shown by the fact that he was the first to open a resor tin Sharm El Sheikh in 1992), and some viewed this as a high-risk type of approach. His reasoning was simple: he realised that the Baltic populations were very much similar from an education standpoint to their Western counterparts, and after the collapse of the Soviet Union it was only a matter of time that the living standards were going to converge to the ones seen in Finland, Germany, or other similar countries. The market still didn’t realise this, and it created an anomaly, where there was a possibility to buy prime pieces of land in beautiful cities such as Riga, Tallinn and Vilnius at extremely favourable prices.

- Italy has a strong tradition of family businesses. Was real estate always your expected career path? Tell us a bit about your education and where your professional journey began. What experience have you gained along the way?

There definitely was a certain degree of pressure to follow my father’s footsteps, however, when you have such a strong presence in your education, it is only normal to consider other paths in life to affirm your own personality. That is why I studied political sciences in the University of Milan, but quickly realised that it was not for me. I then started working in our group, but being a self-made man my father realises the dangers of handing out positions of power to his kin. Therefore, when I asked about a possibility to work within the group, he was happy with it, but only if I started from the bottom. In my early twenties, I have worked as a porter in one of our hotels, then I moved to the front office, welcoming guests and seeing the operations from the ground, and eventually I moved to Egypt where I worked for two years as a dealer in the Aladdin Casino, located in our resort (Domina Coral Bay in Sharm El Sheikh). Only after these experiences I was given the opportunity to work in an entrepreneurial and managerial position, and I have done so in Dubai where I founded Preatoni Real Estate, a company with which  we developed a 45 stories skyscraper, the Preatoni Tower JLT. The project consists of 554 units (offices and residential), all of which are sold and is still the location of our headquarters in Dubai. The fact that I got to see various perspectives in my career definitely helped me mature, and I like to think that thanks to it I understand better the dynamics of managing my employees.

You’ve worked in different real estate markets. Which one would you describe as the most favorable for developers? And how does Latvia compare in terms of construction quality and architectural innovation?

There are pros and cons to each market. As I said, I have a good degree of experience in Dubai, which is a phenomenal and dynamic market. However, it is still a relatively young market, so the legal framework can sometimes get confusing, despite the great improvements that have been happening in the last decade or so. On the other hand, in most “old” markets, and here I am thinking mainly about my home country (Italy), the legal framework is more evolved, but the bureaucracy and overregulation is extremely frustrating for people who want to have an actual impact on the landscape of the city.

I think the Baltic countries are positioned in a sweet spot, where the state of law is highly respected but people are still motivated to improve their standards of living. From an architectural standpoint, I am absolutely in love with Riga. The old town is magnificent, with some of the most impressive Art Nouveau buildings I have seen in my life. Furthermore, from a developer’s perspective it has the big advantage of having the Daugava river crossing it, creating an immense opportunity to develop beautiful waterfront properties. We have already started doing so with our award winning River Breeze Residence project in the Kliversala district, which is sold out, but luckily we still own plenty of land there, where we intend to develop some great high-end residential properties for our clients. We have already invested more than 60 million euros in Latvia and plan to continue development by investing at least twice as much.

At one point, Latvia appeared to be Pro Kapital’s key market in the Baltics. Yet for many years now, the group’s headquarters have been based in Estonia. Would you say the Estonian market has gained an edge in the past decade? Is it more dynamic or attractive? What are the main differences between working in Estonia and Latvia?

We have offices in Tallinn, Riga and Vilnius. While it’s true that we have developed less in Riga than in Tallinn lately, that is not necessarily due to an internal strategy, but more as a reaction to macroeconimic forces. The trend in prices has been accelerating at a faster pace in Tallinn, and as developers we obviously want to get the most value for our offerings, given the amount of effort and quality of work that we put in. However, the fact that Latvia’s prices are still low when compared to their other Baltic counterparts is a great opportunity for investors, who could benefit in the long term from the compressed potential of Latvia’s real estate, which is definitely an anomaly. Lately, we are seeing a good deal of interest from international investors, confirming our bullish outlook on the local real estate segment.

How would you assess the current state of the Estonian real estate market? And what projects are you currently working on there, as well as in Lithuania?

Despite the geopolitical situation, which created some tension especially in the months after the war in Ukraine, we are still moving our inventory at a satisfying rate. We are happy that our clients are satisfied with what we deliver, and luckily this created a good word of mouth effect where we attract buyers with the best form of marketing, which is the testimony of other happy clients who invested their money with us and gave us their trust. Currently, we have 3 ongoing sites in Tallinn: one is the last phase of the Kalaranna project, our luxury seaside development. This phase consist of four buildings for a total of 147 apartments, and you can consider it our top of the line offering, as confirmed by the fact that we have achieved the highest ever recorded prices per square meter in the history of Tallinn’s real estate market. The project is nearly completed, as we are working on internal finishes and have already started the handover process with some clients.

 The other are two buildings in our Kristiine city district, branded under the Kindrali name. Here we will develop 180 apartments, and despite being more affordable than Kalaranna, our target is still very much focused on a high end type of offering. Given the nature of our land portfolio, we believe that in the future we will focus more and more on this type of product, as our locations are prime and are not fit for economy offerings. The first building will be handed over by end of 2025, whereas the second will be done by end of 2026.

In Vilnius, we are proceeding with the construction of the Villas project, a luxury development in our already developed Saltiniu Namai district. The project is made of 45 high end units, with stunning views of Vilnius old town, and is set to be delivered in Q1 of 2026. However, we are actually ahead of the construction schedule, so we hope to make our clients happy by delivering ahead of time by end of this year.

At the beginning of 2025, your group announced a new project in Latvia after a long break — Blue Marine in Klīversala. Could you share more details? When is construction expected to begin, and what will be the project’s key features? What price levels are anticipated? And when might the first residents move in?

We are happy to be back on the market in Riga, as the Blue Marine is one of the most anticipated projects in our portfolio, with 96 high end apartments to be offered. The location is a great one, with beautiful views of Riga Old Town on the other side of the Daugava river. The project will be elegant and quiet, aiming at those clients who want a peaceful and sophisticated lifestyle. The construction will start in summer 2025. The combination of a concrete monolith with glass balconies and windows will reflect the landscaped surroundings and beautiful water panoramas, which gives this project its uniqueness. The location itself in the historical center of Riga, so accessible to various public places, ensures maximum comfort for its residents.

The pre-construction prices for apartments with full high class finishing start from EUR 125`000 until EUR 745`000 incl. VAT.  We hope to welcome the first owners of the apartments, carefully designed in Scandinavian elegance, in the spring of 2027.

The broader Klīversala development plan was first introduced almost 20 years ago and has gone through many changes. What is the current vision for the area? Are there concrete deadlines now, or will progress still depend on market dynamics?

We have an internal vision for the various phases of the developmet of the area, however we continously revise and update it based on the market dynamics. In general, we can say that we view this area to be the destination of families and individuals who want to live in a quiet and beautiful location, without giving up the benefits of being close to the action packed lifestyle of the city center.

What’s your view on the premium residential segment in Riga? Do affluent clients in Latvia, Estonia, and Lithuania differ significantly in terms of purchasing behavior?

As I mentioned earlier, Riga has some catching up on premium real estate when compared to Tallinn and Vilnius, and that is why I see it as an exciting opportunity not only for end users (who are our core clients and to whom we try to offer a product which we would buy ourselves), but also for investors who need a solid alternative to other types of investments in these turbulent times. In Tallinn and Vilnius, we have already concluded several transaction in the 10.000/12.000 euros per square meter range, which is way ahead of the prices we see in Riga. However, I again restate that this is an anomaly, and I don’t see any reason why Riga’s real estate market shouldn’t perform in a similar way.

Klīversala is located by the Daugava River and the Āgenskalns Bay. Just across the water, about three kilometers away, another ambitious project — Riga Waterfront — is currently in development. How do you feel about having such a large-scale competitor nearby? Do you see it as a positive sign for the market?

I must admit that some of my coworkers initially saw this as a threat. I don’t agree with this at all: what has been missing in Riga in the past years has been traction and a general feeling of ease when investing in high end properties in this market. To this, I can only say that the fact that we are seeing other players in the market having the same degree of confidence that we have in making big investments in Riga is a great sign, and I wish the best of luck to Riga Waterfront.

Pro Kapital’s strategy focuses on developing large-scale residential and commercial projects in top Baltic locations. When it comes to Riga, what other land plots does the company currently own? Are there any development plans or timelines for them?

We are focused on the Klīversala district, where we aim to develop hundreds of units in the upcoming decade. However, this is not our only project in the pipeline: we own a beautiful piece of land on the other side of the river, in Tallinas street, which in our vision should become another high end community. It is a challenging project, as it should be developed in one single phase not to disturb any of the buyers of previous phases, and it consists of 330 units. We are done with the projecting and are excited about the next steps, however our current focus is on Blue Marine in Klīversala. You will definitely be hearing from us once we decide to start the works in Tallinas street.

Aside from our Brivibas project, we currently don’t aim at increasing our commercial portfolio. Of course, this can change if the right opportunity presents itself.

I am a big believer in this market. I strongly feel like there is still so much value here, and we just need a gradual improvement in the perception of the market from investors. Aside from this, all the fundamentals are in place, so I see no reason why Latvia should not become a major investment destination in the upcoming years.