Business area Project Development
Strong development despite uncertain circumstances
Project Development, which comprises Housing Development and Property Development, creates sustainable and vibrant urban environments with residential, commercial and public property.
Key ratios
| 2020 | 2019 | ||
| 2020 | 2019 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 7,500 | 9,125 |
| of which Property Development | varav Fastighetsutveckling | 375 | 786 |
| of which Housing Development | varav Bostadsutveckling | 7,125 | 8,339 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 1,669 | 1,015 |
| of which Property Development | varav Fastighetsutveckling | 982 | 300 |
| of which Housing Development | varav Bostadsutveckling | 687 | 715 |
| Operating margin, % | Rörelsemarginal, % | 22.3 | 11.1 |
| of which Property Development | varav Fastighetsutveckling | 261.9 | 38.2 |
| of which Housing Development | varav Bostadsutveckling | 9.6 | 8.6 |
| Capital employed on 31 December, MSEK | Sysselsatt kapital per 31 december, Mkr | 12,189 | 16,679 |
| Orders received, MSEK | Orderingång, Mkr | 6,940 | 6,164 |
| Order backlog on 31 December, MSEK | Orderstock per 31 december, Mkr | 5,151 | 5,027 |
| Number of employees on 31 December | Antal anställda per 31 december | 248 | 343 |
Project Development is responsible for the Group’s property acquisitions and divestitures as well as project development which generates contract work for the other business areas. Project Development works through wholly owned projects or in collaboration with other partners in joint ventures.
Peab is one of the largest housing developers in Sweden and has a strong position on the market. Operations are spread throughout the country which provides good local and regional understanding about the various local market conditions. In Finland Peab is represented in Helsinki and a number of other large regional cities. In Norway operations are located in the Oslo area, Tromsø and Ålesund.
Property Development develops offices, premises and sometimes whole city boroughs in collaboration with municipalities and other partners. The business is primarily focused on the big city areas throughout the Nordic region.
Net sales and profit
Net sales for the year 2020 in business area Project Development decreased to SEK 7,500 million (9,125). The decrease is primarily due to lower net sales in Housing Development. Operating profit was SEK 1,669 million (1,015), of which the effect of distributing Annehem Fastigheter was SEK 896 million. Last year included an income contribution of SEK 170 million from the divestiture of property in the partially owned company Acturum.
Capital employed in Project Development decreased and amounted to SEK 12,189 million (16,679) at the end of the year. Capital employed contracted in Housing Development as a consequence of more homes being sold than started production on. Annehem Fastigheter was included by SEK 1,927 million in Property Development at the end of last year.
Capital employed
| MSEK | Dec 31‚ 2020 | Dec 31‚ 2019 | |
| Mkr | 31 dec 2020 | 31 dec 2019 | |
| Operations property | Driftsfastigheter | 161 | 1,226 |
| Investment property | Förvaltningsfastigheter | 112 | 500 |
| Project and development property | Projekt- och exploateringsfastigheter | 9,060 | 11,850 |
| of which housing development rights | varav bostadsbyggrätter | 4,819 | 5,674 |
| of which commercial development rights | varav kommersiella byggrätter | 585 | 556 |
| of which unsold part of ongoing housing projects | varav osåld del pågående bostadsprojekt | 1,730 | 3,520 |
| of which ongoing rental projects in Sweden | varav pågående hyresrättsprojekt i Sverige | 1,100 | 846 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 226 | 445 |
| of which completed property | varav färdigställda fastigheter | 311 | 391 |
| of which other | varav övrigt | 289 | 418 |
| Participation in joint ventures | Andelar i joint ventures | 1,873 | 2,019 |
| Loans to joint ventures | Utlåning till joint ventures | 1,213 | 1,106 |
| Working capital and other | Rörelsekapital och övrigt | -230 | -22 |
| Total | Summa | 12,189 | 16,679 |
Net sales
Brf Fyrskeppet in Malmö will be one of Peab’s most climate smart residential blocks so far, aided by the Peab Group’s own ECO-products.
Housing Development
There is still a housing shortage on the markets we are active in. Peab’s range of housing forms on the Nordic market is broad; apartment buildings with tenant-owner apartments, condominiums and apartments for rent as well as homeowner or tenant-owner single homes.
Demand during 2020 was initially high in all three Nordic countries. When COVID-19 broke out the markets shutdown but have recovered during the summer and in the end development was good in all three countries.
Peab strives to be a forerunner in sustainable urban development which includes focusing on vibrant and safe neighborhoods with meeting places. Our new, own developed apartment buildings in Sweden are certified according to the Swan ecolabel with Bra Miljöval (Good Environmental Choice) ecolabeled electricity. In 2020 operations in Norway decided to certify their new productions according to the Swan ecolabel and in Finland similar measures are being taken to increase energy efficiency and reduce climate impact.
Peab’s position on the Swedish housing market is strong. The development rights portfolio is well spread geographically and every year Peab starts new projects all over the country. Several major housing projects in Sweden are urban development projects where collaboration between a number of partners is an important success factor.
The development rights portfolio is well spread geographically and every year Peab starts new projects all over the country.
In city development project Varvstaden in Malmö, which Peab owns together with Balder, around 2,500 new homes will be constructed. Peab is working closely with Malmö City on the project which has a clear sustainability and climate profile and reusing material is an important component. Among the project start-ups is Swan ecolabeled Brf Varvskajen with 128 apartments in total. Another housing project is Swan ecolabeled Vélo at Dockan in Malmö with 81 apartments where planning is based on bicyclists’ perspective in order to promote the environment and wellbeing.
During the year we have noted a growing demand for housing in the Stockholm area and one of the larger project start-ups is Teleterassen in Farsta on the outskirts of Stockholm where 186 apartments are being built in three stages. Solvända and Solhatten with 143 apartments are being built in the centrally located Kvarnholmen in Nacka, close to the water and nature. All the projects are Swan ecolabeled and Trygg BRF labeled.
The Finnish housing market developed positively despite rather bleak forecasts, and the number of homes sold was almost on par with 2019. However, the total number of construction start-ups contracted somewhat in Finland. Peab sold more homes than ever in 2020. Construction on the development project Stuiveri in Tikkurila in Vantaa began and project Spinnu continued in Tampere. Other project start-ups during the year were Sumppari, Avalon and Jousenportti in the Helsinki region, all in all 240 apartments. All the housing projects are being built with green electricity and their carbon dioxide footprint is measured.
The housing market in Norway developed well in 2020 with a good price development, especially in the Oslo area. Peab started up many new housing projects and a number were completed during the year. Environmental and sustainable aspects are prioritized when developing and carrying out these projects. One example is Carl Berner Square in Oslo with 111 homes and commercial premises that was completed and turned over during 2020. The entire project will be environmentally certified according to BREEAM Very Good. In 2020 Peab also developed the new city block Sandefjord Hageby where a total of 800 homes are planned with the ambition to create a forward-looking and environmentally friendly borough. In Tromsø Peab is building 180 apartments in the Skir project with focus on local input goods, local employees and local suppliers.
Housing development rights
| Number, approx. | 31 Dec‚ 2020 | 31 Dec‚ 2019 | |
| Antal, cirka | 31 dec 2020 | 31 dec 2019 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 18,900 | 20,300 |
| Development rights via joint ventures | Byggrätter via joint ventures | 4,400 | 4,600 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 9,700 | 9,500 |
| Total | Totalt | 33,000 | 34,400 |
Own housing development construction
| 2020 | 2019 | ||
| 2020 | 2019 | ||
| Number of housing starts during the year | Antal under året produktionsstartade bostäder | 2,291 | 2,067 |
| Number of sold homes during the year | Antal under året sålda bostäder | 2,682 | 2,709 |
| Total number of homes under construction, at year-end | Totalt antal bostäder i produktion vid årets slut | 4,014 | 4,616 |
| Share of sold homes under construction, at year-end | Andel sålda bostäder i produktion vid årets slut | 73% | 69% |
| Number of repurchased homes on the balance sheet, at year-end | Återköpta bostäder i egen balansräkning vid årets slut | 222 | 253 |
Net sales and profit
Net sales decreased to SEK 7,125 million (8,339). The reduction is mainly related to Sweden. Operating profit amounted to SEK 687 million (715) and the operating margin improved to 9.6 percent (8.6).
The number of start-ups of our own developed homes amounted to 2,291 units (2,067), most of which were in Sweden. The start-ups are spread geographically in Sweden, Norway and Finland. The number of sold homes was 2,682 (2,709). Sales of homes were high during the beginning of the year but slowed down when the corona pandemic broke out in the spring. During the summer and in the beginning of autumn demand for our housing has grown and all together sales have been good during the year in all three countries. The number of own developed homes in production at the end of the year was 4,014 (4,616). The level of sold homes in production was 73 percent (69). The number of repurchased homes per December 31, 2020 was 222 (253) of which two thirds were in Sweden, a few were in Norway and the rest in Finland. Peab develops and builds housing all over Sweden and in large parts of Norway and Finland. Our housing is primarily in the medium price segment and we see that there continues to be a considerable need for new production of housing in this range.
The diagram below shows when in time our own housing development projects will be completed and will be handed over to the end customers.
Ongoing own housing development projects 1)
Capital employed has decreased at the end of the year compared to the corresponding point in time in 2019. The reduction is largely due to less capital tied up in unsold homes. In recent years we have completed more homes than production started which is why the amount has contracted. At the same time we have had a good rate of sales, which has reduced the amount of capital tied up in unsold homes. Capital employed also includes apartments for rent projects in Sweden that can be converted to tenant-owner homes or be sold on the investment market.
In October 2020 Peab signed contracts for the sales of three tenancy projects and an assisted living facility, all in all 280 apartments, which will be on Peab’s balance sheet under construction and turned over during 2022-2024. The sales value is SEK 775 million. One apartment building project in Malmö and one in Partille are sold to Annehem Fastigheter, one apartment building project in Örebro is sold to a local actor and an assisted living facility is sold to SPP Fastigheter (publ). The projects will be recognized in profit/loss when they are turned over.
In December 2020 Peab signed contracts to sell four tenancy projects with a total of 312 apartments for a total value of SEK 824 million. The four projects consist of apartments in Botkyrka, Västerås, Eskilstuna and Trollhättan. The project Flottiljen in Botkyrka is sold to Niam, the project Poseidon in Västerås and Fristaden in Eskilstuna are sold to Podium Fastigheter AB and the project Traversen in Trollhättan is sold to Fortinova Fastigheter AB. All the tenancy projects will be on Peab’s own balance sheet under construction and will be recognized in profit/loss when turned over in 2023.
In Tromsø Peab developed the project Norheim with a total of 122 homes. Environmental aspects are an important parameter in the project, which will be Swan ecolabeled. Construction began in 2020 and the whole project will be completed in 2023.
As Oy Vantaas Stuiveris’ twelve floors provide a magnificent view and it is directly linked to the renovated sections of the city. The project consists of 72 apartments.
Brf Ängen in Vänersborg consists of 32 homes in small scale apartment buildings and townhouses. Construction began in August 2020 and take over will in the autumn of 2021.
Property Development
Property Development refines and develops locations and land for commercial properties.
It is primarily geared to run development projects based on development rights on our own balance sheet. Collaboration with partners via joint ventures may occur at different times during a project or encompass long-term development of an area.
In 2020 the leasing market for office buildings in Swedish big city regions was despite COVID-19 relatively stable during the year. Rent levels have more or less remained on the same level as in 2019.
Development of the city borough Hyllie in Malmö continues and the year began by inaugurating the office building project The Point. In Hyllie the first of a total of five office buildings, where Peab has an office, in the project The Gate was completed. In Varvstaden in Malmö the project for rebuilding the 4,600 m2 historic building Gjuteriet, which Oatly will lease, started up during the year. The facades and steel construction will be preserved in the new design for the building, which is good for the environment. Ledvolten is ongoing in Solna, a 4,500 m2 office building project that is contracted to be sold to Annehem Fastigheter in 2021.
During the year Peab decided to distribute and list Annehem Fastigheter which was previously part of Project Development. The property portfolio consisted mainly of modern, environmentally friendly office buildings located in Nordic big city regions that Peab had developed and constructed in recent years.
Net sales and profit
During the year 2020 net sales were SEK 375 million (786) and operating profit was SEK 982 million (300), of which the effect of distributing Annehem Fastigheter was SEK 896 million. Some operations connected to air travel and tourism have been negatively affected by the corona pandemic which has lowered operating profit by SEK -64 million, of which SEK -44 million is related to Ängelholm Helsingborg Airport. The amount includes a SEK -20 million write-down of goodwill. Ängelholm Helsingborg Airport was divested during the year. During the year Property Development divested its 50 percent ownership in Nya Bara Utvecklings AB to Brinova with a positive effect on profit of SEK 30 million. Last year included an income contribution of SEK 170 million from the sales of property in the partially owned company Acturum.
At the end of the year capital employed in Property Development has contracted due to the transfer of fully developed properties to Annehem Fastigheter. At the same time last year Annehem Fastigheter was included by SEK 1,927 million.
Capital employed in Property Development includes as of 2020 primarily commercial development rights, ongoing property projects, shares in partially owned companies as well as loans to partially owned companies.
During the second quarter 2020 property containing offices and parking space in Solna was divested to Annehem Fastigheter and in the fourth quarter another property was divested in Oslo. Peab has signed a contract with Annehem Fastigheter to divest two more property projects located in Solna and Helsingborg respectively during 2021. The table below presents the larger ongoing property projects per December 31, 2020.
Ultimes Business Garden II in Helsinki is a seven story office building with 7,900 m2 office space for rent and 150 parking places. The property was completed and acquired by Annehem Fastigheter in 2020.
The Nest graces Ulriksdal in Solna with its innovative architecture and decisive presence. It contains the gym chain Actic’s headquarters and a top modern gym. The property was completed and acquired by Annehem Fastigheter in 2020.
In Varvstaden in Malmö the iconic building Gjuteriet, where parts for ships were previously cast, is being turned into a modern and sustainable meeting place. The project will be completed in 2023 through Centur, a company jointly owned with Balder.
Property projects
| Type of project | Location | Area in m2 | Degree rented, % | Recognized value, MSEK | Total investment at completion, MSEK | Timepoint of completion | Level of completion, % | ||
| Typ av projekt | Ort | Uthyrningsbar yta, m2 | Uthyrningsgrad, % | Bokfört värde, Mkr | Beslutad investering, Mkr | Tidpunkt färdigställande | Färdigställande-grad, % | ||
| Office building | Helsingborg | Kontor | Helsingborg | 2,900 | 88 | 92 | 106 | Q2-2021 | 87 |
| Office building | Solna | Kontor | Solna | 4,300 | 89 | 111 | 194 | Q3-2021 | 57 |
| Sports hall | Sundsvall | Idrottshall | Sundsvall | 14,700 | 100 | 78 | 212 | Q2-2022 | 37 |
| Total | Summa | 281 | |||||||
| of which operations property | varav driftsfastigheter | 92 | |||||||
| of which project and development property | varav projekt- och exploateringsfastigheter | 189 | |||||||
Significant joint ventures
Peab’s significant joint venture companies Fastighets AB Centur, Tornet Bostadsproduktion AB, Fastighets AB ML4 and Point Hyllie Holding AB are developing well and via them Peab has built up considerable indirect holdings in investment property and development property for both commercial and residential purposes. Ongoing returns are in the form of shares in the profit from joint ventures recognized in operating profit and interest income on lending. Changes in market values that effect booked values in joint venture companies are not included in Peab’s accounts.
Tornet Bostadsproduktion AB
Develop, own and manage attractive and environmentally friendly rentals in larger cities in Sweden.
Peab’s share: 33 percent
Partner: Folksam and Balder
Location: Stockholm, the Mälardalen region, Gothenburg and the Öresund region
Recognized value on properties December 31, 2020 1): SEK 5,019 million (4,300)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 357 million (260)
Major ongoing projects: LP Parken, Gothenburg rentable area 15,000 m2, Tallbohov, Järfälla rentable area 10,500 m2 and two other apartment building projects in Helsingborg
Fastighets AB Centur
Own, manage and develop commercial property and housing.
Peab’s share: 50 percent
Partner: Balder
Location: Stockholm, the Mälardalen region, Gothenburg and the Öresund region
Recognized value on properties December 31, 2020 1): SEK 7,103 million (6,621)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 427 million (421)
Major ongoing projects: Gjuteriet Varvsstaden, Malmö, renovation of around 4,600 m2 (tenant Oatley)
Fastighets AB ML4
Own and manage the research facility Max IV. The facility is rented to Lund University.
Peab’s share: 50 percent
Partner: Wihlborgs
Location: Lund
Recognized value on properties December 31, 2020: SEK 1,956 million (1,870)
Major ongoing projects: Research building 6,400 m2
Point Hyllie Holding AB
Own and manage the office property The Point as well as the hotel property Värdshuset 5 (Operator Quality Hotel View).
Peab’s share: 50 percent
Partner: Volito
Location: Hyllie, Malmö
Recognized value of properties December 31, 2020: SEK 1,356 million (1,279)
Major ongoing projects: No major ongoing projects
Key ratios 2020 significant joint ventures 1)
| MSEK | Fastighets AB Centur | Tornet Bostadsproduktion AB | Fastighets AB ML4 | Point Hyllie Holding AB | |
| Mkr | Fastighets AB Centur | Tornet Bostadsproduktion AB | Fastighets AB ML4 | Point Hyllie Holding AB | |
| Net sales | Nettoomsättning | 408 | 188 | 101 | 43 |
| Profit for the year | Årets resultat | 179 | 282 | 16 | -23 |
| Total assets | Balansomslutning | 7,332 | 5,163 | 2,180 | 1,426 |
| – of which recognized value of properties | – varav bokfört värde fastigheter | 7,103 | 5,019 | 1,956 | 1,356 |
| Peab’s portion of unrecognized fair value exclusive tax | Peabs del av oredovisade verkliga värden exklusive skatt | 427 | 357 |