Education ministry looking for savings in real estate portfolio
The Ministry of Education has sold real estate in its portfolio this year as part of a cost-saving policy. By the end of the year, the Kloogaranna camp complex had new owners, and the ministry itself, along with the Education and Youth Board (Harno), is relocating to more affordable premises.
The Ministry of Education held its first auction to sell the Kloogaranna camp complex in February. The complex was offered for sale in three parts, with starting prices of €540,000, €150,000 and €42,000, respectively.
Due to a lack of interest, the auction failed, and new buyers were sought in May, during which the middle-priced plot was successfully sold.
At a third auction held in September, buyers were found for the remaining two plots, with starting prices reduced by 10 percent.
According to Henry Kattago, deputy secretary general for asset management at the Ministry of Education and Research, the ministry is reviewing its portfolio of approximately 470 buildings and properties as part of its overall cost-saving policy. "We are assessing which of these are not essential for our core activities and trying to sell or consolidate their use. This includes properties that would be unreasonably expensive to renovate or for which alternative premises are available," Kattago told ERR.
Regarding the Kloogaranna youth camp, Kattago explained that providing a modern camp service there would have required the state to invest nearly €7.5 million, a resource the ministry does not have.
Initially, the ministry considered repurposing or leasing the camp complex, but ultimately decided on auctioning it.
Kattago noted that owning real estate is not essential for organizing camps, as there are many locations across Estonia suitable for such activities.
The ministry also moving to reduce costs
This year, the Ministry of Education and Research has sold or transferred seven properties to local governments to reduce real estate costs. These include a boiler house in Luua and a cafeteria building in Särevere. Kattago added that the ministry will continue streamlining its property portfolio.
For the past five years, the ministry's Tallinn office has been located at Tõnismäe 5a, a building owned by State Real Estate Ltd (Riigi Kinnisvara AS) and previously used by the Ministry of Justice. Meanwhile, the Education and Youth Board operates out of the ministry-owned building at Tõnismägi 11.
Now, Harno (the Education and Youth Board) will relocate to new premises in the Tammsaare Business Center, and the ministry will move back to its building at Tõnismägi 11.
Kattago stated that the ministry's move is expected to save approximately €400,000 annually, while Harno's move to Tammsaare tee will save about €130,000.
However, the working conditions at the new locations will not be as favorable as before. Moving to smaller premises means the introduction of shared workstations, and personal desks may no longer be available for everyone each morning, Kattago noted.
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Editor: Marcus Turovski