Prime Minister Kristen Michal said on the ETV program "Esimene stuudio" that when reviewing the privatization list as part of reducing state institutions, it may be worth considering whether the state actually needs public real estate manager Riigi Kinnisvara Aktsiaselts (RKAS). Coalition partner and Eesti 200 leader Kristina Kallas noted that an assessment of the company's business model is already set to be on the government cabinet's agenda soon.

"In several areas, we also recognize that similar services could be obtained more cheaply from the private sector, whether in property services or property management. This means RKAS' business model needs to be reassessed. Whether it should necessarily be privatized — I think we're getting ahead of ourselves. If we are required to cut school operating costs as part of the state budget savings plan, while at the same time RKAS is expected to generate a profit, then this business model doesn't add up," Kallas said.

With a portfolio of nearly 1.7 million square meters, RKAS is Estonia's largest real estate company. It was established a couple of decades ago to improve the efficiency of state property construction and management. According to RKAS CEO Tarmo Leppoja, the company remains effective.

"Riigi Kinnisvara is not a more expensive solution for the state compared to outsourcing these services from the market. In 2024, our real estate portfolio has shrunk by about 30,000 square meters, which has helped the state save €4 million in costs. We are continuing our work to ensure that the state has the necessary facilities to provide public services in a cost-efficient and energy-efficient manner," said Leppoja.

At the same time, the Health Insurance Fund rented office space at the end of last year in Arter, Tallinn's newest office building. Jaanus Otsa, founder of Astlanda Ehitus, believes that RKAS should be liquidated, as it has moved far beyond its original purpose of property management and development.

"At the same time, Riigi Kinnisvara wants to provide all real estate services to various state enterprises and institutions while also being geared toward making a profit. This creates a very peculiar situation — the state is making a profit at the expense of the state. When a client needs to rent a space, they request quotes from three or four providers to get the best offer. Riigi Kinnisvara, however, provides its service without competing with anyone," Otsa said.

Leppoja stated that if the state wishes to change RKAS' business model, it should first conduct a thorough analysis.

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