Riga eyes public-private partnerships to unlock development potential

As Riga prepares to showcase its investment opportunities at Mipim 2025, the city is highlighting key sectors that are primed for growth, including affordable housing, tourism infrastructure and tech-driven industries.

Fredis Bikovs, director of the Riga Investment and Tourism Agency, shared insights into the city’s priorities and its evolving investment climate.

One of Riga’s biggest challenges – and Latvia as a whole – is the shortage of affordable and sustainable housing. Latvia has one of the lowest levels of social housing stock, with less than 2% of total housing inventory available for rent, compared the OECD average of 7%. To tackle this issue, the Latvian government, the Ministry of Finance, the European Investment Bank (EIB), and 18 municipalities – including Riga – have partnered to launch the Rental Housing for Latvian Professionals programme.

This initiative aims to develop 2,260 energy-efficient, affordable apartments by 2030, with 1,000 located in Riga. The project will follow a public-private partnership (PPP) model, under which the municipalities will provide land, co-finance rental subsidies, and offer incentives to private investors.

The approach will be to bundle the units, with each bundle procured under an availability payment- based PPP framework. The target is approximately 1,000 units and €100-€125 million capex for each bundle.

“We are looking for partners ready to work with the government and the city to make this vision a reality,” Bikovs told Real FDI, highlighting that the early-stage financial modelling and business case development are underway with the EIB.

Riga’s tourism sector is rebounding strongly post-pandemic, with a 15.8% increase in visitor numbers in 2024. To support this growth, the city is prioritising two major investment opportunities. One is the development of a new Ro-Pax terminal. The city is working with private landowners and the port authority to establish a ferry terminal connecting the city with Stockholm and potentially Helsinki. Discussions with operators and Stockholm city officials are ongoing.

Another is expansion of quality hotels in the city. Despite a strong hospitality sector, Riga lacks international five-star hotel brands beyond Kempinski. The city is engaging investors to develop more high-end accommodation.

The upcoming Rail Baltica project – an ambitious high-speed rail network connecting the Baltic states with Poland and the rest of Europe – is set to reshape Riga’s urban landscape. The Central Station area, long underdeveloped, is now attracting significant investor interest, with land acquisitions already underway. Opportunities in this district span residential, hotel, and commercial real estate development, making it one of Riga’s most dynamic investment prospects over the next 10-15 years.

Riga’s economy is increasingly driven by tech-based industries. The city is seeing strong growth in ICT and shared service centres, with large global companies establishing operations in recent years. Riga is also investing in its startup ecosystem, including a Startup House that will support education, incubators and accelerators.

Life sciences is another focal point, given Latvia’s rich heritage in pharmaceutical research and production. The government is encouraging investment in biotech and medical research.

Finally, the geopolitical climate has prompted increased interest in defence and military-related industries. Riga is looking at opportunities in defence manufacturing, dual-use technologies and software solutions that support both military and commercial applications.

In conclusion, Bikovs says: “Real estate is at the heart of everything – whether we’re bringing in new companies or growing our startup ecosystem, we need to provide spaces for people to live and work. As Riga’s investment landscape evolves, partnerships between the public and private sectors will be key to unlocking the city’s full potential.”