InCity Capital: The Art of Compact Living in High-Demand Locations

Today, the company’s portfolio includes nearly 22,000 square metres of real estate and more than 300 apartments in Riga and Jurmala. In recent years, InCity Capital’s investment volume has increased almost tenfold, rising from €2.8 million to nearly €27 million.

The company’s primary focus is to create high-quality housing in strong urban locations while maintaining an affordable purchase price and a sense of long-term value for homeowners. Over the next four years, the potential value of the company’s development pipeline is estimated at approximately €40 million.

Latgales iela 261

For many homebuyers, the key consideration is no longer the number of square metres, but the overall purchase price and ongoing maintenance costs. As a result, compact housing is no longer a niche product; it has become a response to the changing needs of the market.

The philosophy of InCity Capital is built around the principle of smart sufficiency.

“Our guiding principle is from people, through people, for people. Our target buyers are Latvian families and young professionals who want to live comfortably in a well-developed urban environment but are looking for a purchase option that remains financially attainable,” says Mihails Petrišins.

This is precisely the market segment that InCity Capital chose to focus on, concentrating on projects with smaller apartment layouts and the revitalisation of existing buildings.

One of the company’s first projects of this kind was located in Kengarags at Latgales iela 261 — a former dormitory of the historic Kuznetsov Porcelain Factory that was reimagined as a modern residential complex comprising 65 apartments.

The development introduced studio apartments of approximately 18 square metres and one-bedroom apartments of around 25 square metres — a format that was still considered unconventional in Riga at the time.

“We offered an alternative. Instead of buying an apartment in an ageing housing stock with high utility costs, buyers could purchase a renovated home in a fully refurbished building for a similar price, while benefiting from significantly lower maintenance expenses,” recalls Mihails Petrišins.

The strong interest in the project demonstrated that demand for compact, functional housing formats in Riga was far greater than many market observers had expected.

Blaumaņa iela 9

For InCity Capital, redevelopment and renovation became a natural direction. In a city like Riga, with its rich architectural heritage and large number of undervalued historic buildings in the city centre, it was an obvious path for growth.

One such project was the historic apartment building owned by the heirs of the Benjamiņš family at Blaumaņa iela 9.

“Traditionally, Riga’s city centre has been associated with housing that is beyond the reach of most buyers. Even when the price per square metre was reasonable, the large apartment sizes automatically placed these properties outside the budget of the average middle-class buyer,” explains Mihails Petrišins.

InCity Capital introduced a different model. Instead of preserving oversized apartments, the building was adapted into smaller, more functional residential units while retaining its architectural value and historic character.

The company provided comprehensive technical and legal support, including the renovation of the façade, roof, elevators, and engineering systems. It also established the legal framework required to divide large apartments into compact and functional homes. At the same time, some buyers entered the project at an early stage and took responsibility for interior finishing works, as well as the physical and legal subdivision of the apartments.

“This approach allowed us to lower the entry price for buyers while simultaneously testing a collective real estate investment model for the Latvian market. Apartments that were worth around €2,000 per square metre after renovation were initially offered at approximately €1,300 per square metre,” says Mihails Petrišins.

The Blaumaņa iela 9 project became one of the first successful examples in Latvia of applying crowdfunding and group-purchase mechanisms to residential real estate development, generating returns of approximately 20–25% ROI for participating co-investors.

Reimagining Residential Living in Jurmala

Dubultu prospekts 101

The Jūras skati project at Dubultu prospekts 101 in Jurmala is another example of InCity Capital’s approach to revitalising existing buildings. The property, formerly known as the Liesma Sanatorium, was originally built according to a German architectural design and incorporated advanced engineering solutions for its time, including elements of a suspended façade system. Today, it is notable not only as an architectural landmark but also for its scale — a type of development that would be considerably more difficult to approve in present-day Jurmala.

The project partially addresses the shortage of high-quality housing in Jurmala for both local residents and business-class buyers.

According to Mihails Petrišins, the key idea was not to make the location itself less expensive, but rather to rethink the housing format. This approach created a more affordable entry point into the seaside property market — a segment that has traditionally been associated with a high purchase budget in Jurmala.

To implement the project, InCity Capital secured €5.2 million in financing from Signet Bank. The investment made it possible to integrate premium-level infrastructure into the development, including a hotel-style lobby, parking facilities that fully meet residents’ needs, and a shared rooftop terrace on the tenth floor offering panoramic views of the surrounding pine forest and the Baltic Sea coastline.

Hospitāļu iela 49

In recent years, the renovation segment has become increasingly competitive. Large market players have entered the sector, development costs have risen, and the gap between renovation projects and new construction has gradually narrowed from an investor’s perspective.

Against this backdrop, InCity Capital expanded its business model by adding new-build developments to its renovation portfolio. However, the company’s core approach has remained unchanged: understanding the needs of its target audience and focusing on locations with strong growth potential.

One example is SkansteHof, a project at Hospitāļu iela 49 — an eight-storey residential building comprising 33 energy-efficient apartments, located at the intersection of Riga’s historic centre and the rapidly developing Skanste district.

Today, Skanste is undergoing one of the most significant urban transformations in Riga. Former industrial areas are gradually being converted into a modern mixed-use urban cluster that combines residential, business, and public functions.

Efficient and ergonomic layouts allow buyers to gain more functional living space within a fixed budget. According to InCity Capital, a three-room apartment in SkansteHof is comparable in total purchase price to an average two-room apartment elsewhere in the same neighbourhood.

This approach enables young families to obtain an additional private room without significantly increasing their financial commitments or mortgage burden. The apartments are scheduled for completion in 2027.

The project is being developed in partnership with the alternative investment fund Merito Partners. Representatives of Merito also note that demand for high-quality, energy-efficient housing with well-designed layouts close to Riga’s city centre continues to exceed supply.

Old Riga

For InCity Capital, the value of a project lies not only in its investment potential but also in the uniqueness of the property itself. A significant share of the buildings the company works with have historical, architectural, or cultural importance within the urban landscape. In this context, renovation is viewed not merely as a process of upgrading real estate, but as an opportunity to preserve and reinterpret heritage, giving it a new form that remains relevant to the modern city.

One of the projects currently undergoing the approval process involves the redevelopment of a historic building in Old Riga. Over the years, the property has housed a women’s atelier, a light manufacturing facility, and later various Soviet-era institutions. As part of the redevelopment requirements, several architectural features of both the façade and interior spaces will be preserved.

Following reconstruction, the building will be transformed into a residential development comprising 53 apartments, complemented by professionally managed short-term rental services inspired by the Airbnb and Booking.com model.

The project reflects another important market trend: growing demand for hybrid housing formats that bridge the gap between traditional apartments and hotel-style accommodation. In central Riga, where historic surroundings coexist with tourism and short-term rental demand, such models may become one of the key directions for future development. This trend is further supported by the increasing presence of professional market participants and investment funds focusing on this part of the city.