Business area Project Development

Investments in a stable market

Business area Project Development, which comprises Housing Development and Property Development, creates sustainable and vibrant urban environments with residential, commercial and public property.

Key ratios

2021 2020
2021 2020
Net sales, MSEK Nettoomsättning, Mkr 9,497 7,500
of which Property Development varav Fastighetsutveckling 521 375
of which Housing Development varav Bostadsutveckling 8,976 7,125
Operating profit, MSEK Rörelseresultat, Mkr 1,237 1,669
of which Property Development varav Fastighetsutveckling 231 982
of which Housing Development varav Bostadsutveckling 1,006 687
Operating margin, % Rörelsemarginal, % 13.0 22.3
of which Property Development varav Fastighetsutveckling 44.3 261.9
of which Housing Development varav Bostadsutveckling 11.2 9.6
Capital employed on 31 December, MSEK
Sysselsatt kapital per 31 december, Mkr
 13,523 12,189
Orders received, MSEK Orderingång, Mkr 9,981 6,940
Order backlog on 31 December, MSEK Orderstock per 31 december, Mkr 6,555 5,151
Average number of employees
Genomsnittligt antal anställda
 242 290

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’s ambition is to be a forerunner in sustainable urban development which entails investing in safe neighborhoods that are alive with places for people to meet, climate and environmentally adapted buildings and sustainable communications. Our new, own developed apartment buildings in Sweden and Norway are certified according to the Swan ecolabel. In Finland similar measures are being taken to increase energy efficiency and reduce climate impact. In addition, the Group is working on developments in energy, construction material and construction tech solutions so that we can offer products and services that reduce our climate impact.

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 knowledge about the different market conditions in Sweden. 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 2021 in Project Development increased by 27 percent to SEK 9,497 million (7,500). The increase is primarily due to Housing Development. Operating profit was SEK 1,237 million (1,669). The effect of distributing Annehem Fastigheter was included in operating profit 2020 by SEK 896 million. The operating margin amounted to 13.0 percent (22.3). Excluding the effect of distributing Annehem Fastigheter the operating margin in 2020 was 10.3 percent.

Capital employed in Project Development at the end of the year amounted to SEK 13,523 million (12,189). The increase is primarily due to investments in project and development property and an increase in the value of the shares in joint ventures.

Capital employed

MSEK Dec 31
2021		 Dec 31
2020
Mkr 31 dec
2021		 31 dec
2020
Operations property Driftsfastigheter 52 161
Investment property Förvaltningsfastigheter 36 112
Project and development property
Projekt- och exploateringsfastigheter
 10,628 9,060
of which housing development rights varav bostadsbyggrätter 6,629 4,819
of which commercial development rights varav kommersiella byggrätter 613 585
of which unsold part of ongoing housing projects varav osåld del av pågående bostadsprojekt  1,549 1,730
of which ongoing rental projects in Sweden
varav pågående hyresrättsprojekt i Sverige
 727 1,100
of which ongoing commercial projects 
varav pågående kommersiella projekt 
 483 226
of which completed property varav färdigställda fastigheter 123 311
of which other varav övrigt 504 289
Participation in joint ventures Andelar i joint ventures 2,371 1,873
Loans to joint ventures Utlåning till joint ventures 1,177 1,213
Working capital and other Rörelsekapital och övrigt -741 -230
Total Summa 13,523 12,189
of which Property Development varav Fastighetsutveckling 4,265 3,766
of which Housing Development varav Bostadsutveckling 9,258 8,423

Net sales

Per geographic market, 2021

Housing Development

Peab offers a broad range of housing forms including apartment buildings with tenant-owner apartments, condominiums and apartments for rent. Demand during 2021 was good in all three Nordic countries and housing and property markets have developed positively. In the latter part of the year, however, rising construction costs began to make their presence felt.

Peab’s development rights portfolio is well spread geographically and every year Peab starts new projects all over the Nordic region. Several major housing projects in Sweden are part of urban development projects where collaboration between many partners is an important success factor.

In Sweden one such housing development project is Varvstaden in Malmö that Peab owns together with Balder in the company Centur. Around 2,500 new homes are under construction in close cooperation with Malmö City. This type of urban development gives Peab the opportunity to offer the market new homes in attractive areas over the course of several years. Projects in Varvstaden have a clear sustainability and climate profile and reusing material from the old shipyard is an important component.  Among the project start-ups in 2021 is Brf Varvsporten with 116 apartments in total. The strong housing market in southern Sweden has led to several start-ups in other places such as Brf Alba in Lund with 85 apartments and Brf Cubo with 113 apartments.

In the past year Housing Development has advanced its position in the Stockholm region, in part through more project start-ups and in part through strategic property acquisitions. Under the umbrella of the urban development project Kvarnholmen in Nacka we started up Brf Solhatten with 66 apartments. In Järfälla we acquired development rights for around 700 apartments and on Lilla Essingen in Stockholm we acquired development rights of over 40,000 GFA (gross area) for developing a new city borough. We have also started several other housing projects in the Stockholm area to meet the growing demand.

Even in other parts of the country developments have been positive during the year. We made several major rental apartment deals such as the one in Borås for 110 apartments. The rental apartments are built on our own balance sheet and will be recognized when turned over. Other major project starts are the tenant-owner projects Brf Gamlestadens Plaza with 75 apartments in Gothenburg and Brf Panorama with 63 apartments in Hudiksvall.

The Finnish housing market also developed positively during the year. Focusing on the big city regions we started projects in Vanda with 72 apartments, in central Helsinki with 69 apartments and in Tampere with 74 apartments to name a few. All the housing projects are being built with green electricity and their carbon footprint is measured.

The housing market in Norway developed well in 2021 with continued good price development, especially in the Oslo area. Peab started up many new housing projects, among them two in Tromsø, Norheim Trinn 2 with 84 apartments and Inga Sparboe Street with 111 apartments. We also work in projects with partners in joint ventures. For example, we started construction on Osebakken Park in Porsgrunn with the first 46 Swan ecolabeled apartments in a total of 155. Half the project is owned by Porsgrund Boligbyggerlag. In Olso we started construction on the third stage of Tunkvartalet with 93 apartments in a total of 405, which Peab owns together with USBL and in Skien we started construction on Herkules Park with 39 apartments in a total of 84. The project is owned together with Citycon.

Net sales and profit

Net sales increased by 26 percent to SEK 8,976 million (7,125) and the increase is mainly related to Sweden and Finland. Operating profit increased and amounted to SEK 1,006 million (687) and the operating margin improved to 11.2 percent (9.6). The operating margin improved in every country compared to last year.

The number of start-​ups of our own developed homes amounted to 3,020 units (2,291), of which 426 (228) were converted from rentals. The start-​ups are well spread geographically. The number of sold homes was 3,047 (2,682). 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 4,702 (4,014). The level of sold homes in production was 76 percent (73). The number of repurchased homes per December 31, 2021 has decreased and was 144 (222) most of which were in Sweden. During the year 676 homes (502) were production-started on our own balance sheet and 91 homes (4) were sold. There were 922 (763) homes in rental apartment projects in production at the end of the year, of which 638 are sold to investors and will be recognized in profit/loss when turned over.

Capital employed has grown and at the end of the year amounted to SEK 9,258 million (8,432). The increase is largely due to investments in housing development rights. For instance, in 2021 Peab acquired the property Stockholm Primus 1 on Lilla Essingen in Stockholm with an underlying property value of SEK 1,167 million.

Housing development rights

Number, approx. Dec 31
2021		 Dec 31
2020
Antal, cirka 31 dec
2021		 31 dec
2020
Development rights on our own balance sheet Byggrätter i egen balansräkning 19,500 18,900
Development rights via joint ventures Byggrätter via joint ventures 4,600 4,400
Development rights via options etc. Byggrätter via optioner m.m. 10,500 9,700
Total Totalt 34,600 33,000

Own housing development construction

Jan-Dec
2021		 Jan-Dec
2020
Jan-dec
2021		 Jan-dec
2020
Tenant-​owner associations, ownership and residential limited companies Bostadsrätter, ägarlägenheter och bostadsaktiebolag
Number of production-started homes during the period
Antal under perioden produktionsstartade bostäder
 3,020 1) 2,291 1)
Number of sold homes during the period
Antal under perioden sålda bostäder
 3,047 2,682
Total number of homes under production, at the end of the period
Totalt antal bostäder i produktion, vid periodens slut
 4,702 4,014
Portion of sold homes under production, at the end of the period
Andel sålda bostäder i produktion, vid periodens slut
 76% 73%
Number of repurchased homes on our balance sheet, at the end of the period
Antal återköpta bostäder i egen balansräkning, vid periodens slut
 144 222
Rentals Hyresrätter
Number of production-started homes during the period
Antal under perioden produktionsstartade bostäder
 676 502
Number of sold homes during the period
Antal under perioden sålda bostäder
 91 4
Number converted to tenant-owner associations during the period
Antal under perioden konverterade till bostadsrätter
 426 228
Total number of homes in production, at the end of the period
Totalt antal bostäder i produktion, vid periodens slut
 922 2) 763

1) Includes 426 (228) homes which have been converted from rentals

2) Of which 638, corresponding to 69 percent, are contracted to be sold upon completion

Timepoint for completion of ongoing own housing development projects 1)

1) Refers to Swedish tenant-owner associations and own single homes, Norwegian condominiums and share housing and Finnish residential limited companies.

According to Prognoscentret in 2021 Peab had the most satisfied homebuyers in Sweden. A compilation of 65 surveyed housing developers also showed that Peab has Sweden’s best housing project, Hamnutsikten (View of the Harbor) on Hammarö. The project topped the Satisfied Customer Index (SCI) at 91 out of 100. The industry average was 76.

Property Development

Property Development refines and develops locations and land for commercial building. 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.

Despite COVID-19 the leasing market for office buildings in Nordic big city regions was relatively stable during the year. The growing trend is that offices beeing more flexibel and a place where people meet and exchange ideas. Rent levels have more or less remained on the same level as in 2020.

At the beginning of the year the market for developing office buildings continued to be cautious. During the year this successively moved in a positive direction. The leasing rate, inquiries and interest in planned projects accelerated during the latter part of the year. Nonetheless, because of the lingering uncertainty it is important to carefully monitor the signals sent by the market.

During the year we acquired the centrally located property Magasin 113 in Gothenburg. The property will be turned into a destination for creative businesses together with the concept developer A house, which has already successfully established this concept in Stockholm. Peab also started up the office building project Gamlestads Smedja in Gothenburg. The property is located close to communications in an area under development. The building will be environmentally certified according to BREEAM Excellent and equipped with solar panels in combination with an energy storage system. Peab started the office building The Corner in Hyllie in Malmö during the year, which will be certified according to Miljöbyggnad and WELL. In Malmö work also continues on the project Gjuteriet in Varvstaden through the company Centur which Peab owns together with Balder.

At the end of 2021 Peab signed a contract for the acquisition of the mall Knallerian with four properties in the commercial area Knalleland in Borås. Peab will continue to run the mall parallel with developing the area. The acquisition took place on February 1, 2022.

Furthermore Peab continues to develop property in Swedish and Norwegian mountainside regions with SkiStar. During the year three jointly owned lodges were gathered together in the half-owned company Skiab Invest AB. In addition, the company acquired three new lodges including the development rights for around 60,000 GFA for future development. In conjuncture with the transaction SkiStar signed new leases on both the newly acquired properties and the previously jointly owned property. These are triple net leases that run between 12-25 years with an average longevity of 17 years.

Net sales and profit

During 2021 net sales increased to SEK 521 million (375) and operating profit was SEK 231 million (982). Last year operating profit included the effect of distributing Annehem Fastigheter by SEK 896 million. Capital gains from property sales were SEK 218 million (51) which included the sales of office buildings in Helsingborg and Solna to Annehem Fastigheter. Profit contributions from partially owned companies was slightly lower than in 2020. Some operations connected to air travel and tourism have been negatively affected by the corona pandemic which charged operating profit in Property Development by SEK -20 million (-64). The comparable period included SEK -44 million related to Ängelholm Helsingborg Airport where SEK -20 million was a write-​down of goodwill.

At the end of the year capital employed in Property Development was SEK 4,265 million (3,766). Most of the capital employed consists of shares in partially owned companies and loans to partially owned companies.

The table below presents the larger ongoing property projects per December 31, 2021. During the year a contract was signed for the sales of the logistics facility in Almnäs, Södertälje to Annehem Fastigheter with an underlying property value of SEK 96 million. The property will be certified according to Miljöbyggnad Silver. Divestment of the completed property is planned for the second quarter 2022.

Property projects

Type of project Location Rentable 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, %
Sports hall Sundsvall Idrottshall Sundsvall 14,700 100 195 223 Q2-2022 88
Logistic facility Södertälje Logistikanläggning Södertälje 2,200 100 60 67 Q2-2022 90
Padel hall Trollhättan Padelhall Trollhättan 3,900 100 16 52 Q4-2022 31
Office building Malmö Kontor Malmö 7,100 28 98 296 Q1-2023 33
Office building Gothenburg Kontor Göteborg 13,100 25 101 516 Q1-2024 20
Other ongoing projects Övriga pågående projekt 13
Total Summa 483

Significant joint ventures

Peab’s significant joint venture companies Fastighets AB Centur, Fastighets AB ML4, Point Hyllie Holding AB, Skiab Invest AB and Tornet Bostadsproduktion 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. Regular 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 affect booked values in the joint venture companies are not included in Peab’s accounts.

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, 2021 1): SEK 7,497 million (7,103)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 573 million (427)
Major ongoing projects: Gjuteriet Varvsstaden, Malmö, renovation of around 4,600 m2 (tenant Oatly)

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, 2021: SEK 1,991 million (1,956)
Major ongoing projects: No major ongoing projects

Point Hyllie Holding AB

Own and manage the office property The Point as well as own and manage the hotel property Värdshuset 5 (Operator Quality Hotel View).

Peab’s share: 50 percent
Partner: Volito
Location: Hyllie, Malmö
Recognized value on properties December 31, 2021: SEK 1,385 million (1,356)
Major ongoing projects: No major ongoing projects

Skiab Invest AB

Develop, own and manage commercial property and housing in the Scandinavian mountains.

Peab’s share: 50 percent
Partner: SkiStar
Location: Scandinavian mountains
Recognized value on properties December 31, 2021 1): SEK 2,093 million (41)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 16 million (–)
Major ongoing projects: Sadelbyn 7 with 42 tenant-owner apartments in Åre, Concept Store with 2,500 m2 in Lindvallen, Sälen which is rented out to Skistar.

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, 2021 1): SEK 5,649 million (5,019)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 417 million (357)
Major ongoing projects: LP Parken, Gothenburg 15,000 m2 rentable area , Tallbohov, Järfälla 10,500 m2 rentable area  and other apartment building projects in Helsingborg, Lund and Umeå

1) Valued at market price in joint venture companies. The market prices on properties that affect the recognized values in the joint venture companies are not included in Peab’s accounts.

Key ratios 2021 significant joint ventures 1)

MSEK Fastighets AB Centur Fastighets AB ML4 Point Hyllie Holding AB Skiab Invest AB Tornet Bostadsproduktion AB
Mkr Fastighets AB Centur Fastighets AB ML4 Point Hyllie Holding AB Skiab Invest AB Tornet Bostadsproduktion AB
Net sales Nettoomsättning 406 97 59 42 220
Profit for the year Årets resultat 396 12 -10 68 202
Total assets Balansomslutning 7,722 2,276 1,431 2,349 5,859
– of which recognized value of properties – varav bokfört värde fastigheter 7,497 1,991 1,385 2,093 5,649
Peab’s portion of unrecognized fair value exclusive tax Peabs del av oredovisade verkliga värden exklusive skatt 573 16 417

1) Refers to the recognized value of joint venture companies for January – December 2021 and per December 31, 2021. Since Fastighets AB Centur, Skiab Invest AB and Tornet Bostadsproduktion AB apply the market value of properties, the values in the table above differ from the values presented in the Peab Group for joint venture companies in note 18.