Latvian real estate: Selling off a state secret

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Latvian real estate: Selling off a state secret

In a country where the real estate markets have witnessed a spectacular boom followed by an equally spectacular bust – property prices at one point in 2009 were down as much as 75% from their 2007 peaks – it’s no surprise that vendors in Latvia have been pushed to the limits when it comes to trying to drum up much-needed cash.

The Latvian privatization agency arguably took things to a whole new level in February, though, when it put a ghost town under the hammer – and apparently sold it for 10 times the initial Lats150,000 ($285,000) asking price.

Winning bidder Aleksejevskoje-Serviss from Russia offered Lats1.5 million to take over a settlement known as Skrunda-1, a garrison town built in the 1960s around a once top-secret military base that was not on maps but at the height of the Cold War housed as many as 5,000 Russian service personnel and their families.

Located in southwestern Latvia the town was abandoned in 1998 after the last of the Russian military finally left Latvia following the collapse of the Soviet Union in 1991. In an ironic twist of fate the biggest of the town’s military buildings, a 60-metre tall structure that housed the Hen House radar system, which formed a key part of the USSR’s early warning system to guard against a US missile strike, was ceremoniously blown up in 1995 by a team of demolition experts from the US.

So what sort of real estate do you get for shelling out the equivalent of almost $3 million in post-credit crunch Latvia? A 45-hectare site with a 70-strong collection of dilapidated buildings including 10 apartment blocks, two nightclubs, a shopping centre, kindergarten, barracks, officers club and sauna.

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