Business area Project Development 2023

Housing market stymied

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

2023 2022
2023 2022
Net sales, MSEK Nettoomsättning, Mkr 5,722 8,661
of which Property Development varav Fastighetsutveckling 534 494
of which Housing Development varav Bostadsutveckling 5,188 8,167
Operating profit, MSEK Rörelseresultat, Mkr 304 1,127
of which Property Development varav Fastighetsutveckling 107 187
of which Housing Development varav Bostadsutveckling 197 940
Operating margin, % Rörelsemarginal, % 5.3 13.0
of which Property Development varav Fastighetsutveckling 20.0 37.9
of which Housing Development varav Bostadsutveckling 3.8 11.5
Capital employed at the end of the period, MSEK
Sysselsatt kapital vid periodens utgång, Mkr
 18,093 15,632
Orders received, MSEK Orderingång, Mkr 136 6,019
Order backlog, MSEK Orderstock, Mkr 1,620 5,447
Operating cash flow, MSEK Operativt kassaflöde, Mkr -2,254 -690
Average number of employees Medeltal antal anställda 222 243

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 means striving to create safe neighborhoods that are alive with places for people to meet, climate and environmentally adapted buildings and sustainable communications, everything to improve and simplify everyday life where people live and work. Our new, own developed apartment buildings in Sweden are certified according to the Swan ecolabel. In Finland and Norway 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 in Project De­vel­op­ment con­tract­ed dur­ing the year by 34 per­cent and were SEK 5,722 mil­lion (8,661). The re­duc­tion was due to the weak de­mand for hous­ing through­out the Nordic re­gion, which af­fect­ed net sales in Hous­ing De­vel­op­ment. Op­er­at­ing prof­it amount­ed to SEK 304 mil­lion (1,127) and op­er­at­ing mar­gin amount­ed to 5.3 per­cent (13.0).

Cap­i­tal em­ployed in Project De­vel­op­ment at the end of the year amount­ed to SEK 18,093 mil­lion (15,632). The in­crease pri­mar­i­ly refers to high­er in­vest­ments in de­vel­op­ment rights, in rental apart­ment projects and in un­sold homes in our own hous­ing de­vel­op­ments.

Cap­i­tal em­ployed

MSEK Dec 31
2023		 Dec 31
2022
Mkr 31 dec
2023		 31 dec
2022
Operations property Driftsfastigheter 146 83
Investment property Förvaltningsfastigheter 36 36
Project and development property
Projekt- och exploateringsfastigheter
 14,603 12,943
of which housing development rights varav bostadsbyggrätter 7,981 7,246
of which commercial development rights varav kommersiella byggrätter 901 739
of which unsold part of ongoing housing projects varav osåld del av pågående bostadsprojekt  2,461 2,493
of which ongoing rental projects
varav pågående hyresrättsprojekt 
 1,712 1,422
of which ongoing commercial projects 
varav pågående kommersiella projekt 
 489 462
of which completed property varav färdigställda fastigheter 165 173
of which other varav övrigt 894 408
Participation in joint ventures Andelar i joint ventures 2,820 2,573
Loans to joint ventures Utlåning till joint ventures 1,498 1,494
Working capital and other Rörelsekapital och övrigt -1,010 -1,497
Total Summa 18,093 15,632
of which Property Development varav Fastighetsutveckling 5,034 4,585
of which Housing Development varav Bostadsutveckling 13,059 11,047

Net sales

Per geographic market, 2023

Housing Development

Peab offers a broad range of housing forms including apartment buildings with tenant-owner apartments, condominiums and apartments for rent. Uncertainty due to inflation and higher interest rates is behind the dramatic drop in the housing market. High construction costs have also brought down demand on the market. Sales levels of homes to consumers and investors have been low during the year in every region and country.

There is still a substantial need for homes throughout the Nordic region but high interest rates and inflation make it harder to make calculations come out ahead. We see continued interest in our own housing developments but the high cost of construction, interest rate hikes and concern about the economy in general make it difficult to assess future developments, especially in projects with a long time before occupancy.

We have a well-​dimensioned development rights portfolio in attractive locations. We start up several projects every year all around the Nordic region, even though the market practically came to standstill last year. While we wait for a more stable market we are further developing and preparing new projects.

A substantial portion of our large housing projects are part of urban development projects where collaboration between different partners is key to success and creates added value involving our other business areas. In Sweden one such housing development project is Varvstaden in Malmö that Peab owns together with Balder in the company Fastighets AB 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.

In Järfälla we are developing Veddesta, a complex project with various housing forms and commercial space in a compact area at a location that will also be a mass transit hub.

During the year most production starts have been in the form of rental apartment projects where Peab is building on our own balance sheet. The homes are built with environmental and climate requirements and a clear focus on making it easier for residents to live sustainably. Peab is building a property in Bergahöjden in Österåker with 121 apartments which will be Swan ecolabeled and have roof solar panels, a bicycle pool with box bikes and a carpool with electric cars. In Umeå Peab is building a Swan ecolabeled property with 64 apartments. The whole project is focused on energy efficiency, environmentally labeled electricity, solar panels and sustainable material choices. The base plate will be cast in Peab’s ECO-Betong (ECO-Concrete). Production started on 40 homes in Gothenburg that will be Swan ecolabeled. The buildings will be built with ECO-Prefab where the reinforcement is made from recycled steel and with green electricity.

An example of a production-start in Norway is the fifth stage of Tunkvartalet in Oslo that Peab owns together with USBL, launched with 72 apartments out of a total of 405 homes. In recent years we have started a number of our own housing developments with a high rate of production in Finland but none were started in 2023. In 2022 we established a joint venture in Finland with Slättö to develop and manage newly produced green housing properties. The first housing projects were completed and turned over in Vanda and Turku.

Peab Bostad continues to have a high level of customer satisfaction when the trade organization Prognoscentret asked homebuyers who have recently moved in about the developer, home and area. The survey for 2023 also showed that Peab Bostad is ranked above the industry benchmark of 73 with its 77 in the overall index.

In December Peab signed a contract to acquire Folksam’s shares in Sicklaön Bygginvest AB that partly and wholly owns development rights in Kvarnholmen in Nacka. The acquisition was concluded in January 2024. Peab thereby increases its ownership from 50 to 100 percent. Peab has developed homes on Kvarnholmen since 2013. Sicklaön Bygginvest AB has more than 270 zoning approved, wholly owned development rights for a gross area of 26,000 m2. In addition, the company owns 50 percent of the shares in Kvarnholmen Utveckling AB that has an ongoing zoning process for more than 120,000 m2 housing development rights. Half of them will be turned over to Peab.

Net sales and profit

The weak demand for homes in the entire Nordic region contributed to fewer sold homes and production starts of our own housing developments during the year. Net sales contracted and amounted to SEK 5,188 million (8,167). The decline stemmed from all our countries. Operating profit amounted to SEK 197 million (940) and the operating margin was 3.8 percent (11.5).

In total, the number of start-​​​ups of our own developed homes amounted to 727 (2,336). Of the start-​ups, 121 (1,810) were tenant-​​owner apartments/condominiums where 36 (1,607) were new production and 85 (203) were conversions from previously started-​​up rental apartments, and 606 (526) were homes in rental apartment projects on our own balance sheet. Total number of sold homes was 934 (1,709), of which 542 (1,643) were tenant-​​owner apartments/condominiums and 392 (66) were homes in rental apartments projects.

The total number of own developed homes in production at the end of the year was 3,694 (5,718), of which 2,392 (4,539) were tenant-​​owner apartments/condominiums and 1,302 (1,179) were homes in rental apartment projects. The portion of sold tenant-​​owner apartments/condominiums in ongoing production amounted to 68 percent (69). The number of repurchased homes per December 31, 2023 was 252 (105) and they were mainly in Finland.

Capital employed increased at the end of the year compared to 2022 and amounted to SEK 13,059 million (11,047). The increase primarily refers to higher investments in development rights, construction of more rental apartment projects as well as an in unsold homes in our own housing developments.

Housing development rights

Number, approx. Dec 31
2023		 Dec 31
2022
Antal, cirka 31 dec
2023		 31 dec
2022
Development rights on our own balance sheet Byggrätter i egen balansräkning 22,000 21,800
Development rights via joint ventures Byggrätter via joint ventures 4,700 4,700
Development rights via options etc. Byggrätter via optioner m.m. 7,400 8,900
Total Totalt 34,100 35,400

Own housing development construction

Jan-Dec
2023		 Jan-Dec
2022
Jan-dec
2023		 Jan-dec
2022
Tenant-​owner associations, ownership and residential limited companies Bostadsrätter, ägarlägenheter och bostadsaktiebolag
Number of production-started homes during the year
Antal under året produktionsstartade bostäder
 121 1) 1,810 1)
Number of sold homes during the year
Antal under året sålda bostäder
 542 1,643
Total number of homes under production, at the end of the year
Totalt antal bostäder i produktion, vid årets slut
 2,392 4,539
Portion of sold homes under production, at the end of the year
Andel sålda bostäder i produktion, vid årets slut
 68% 69%
Number of repurchased homes on our balance sheet, at the end of the year
Antal återköpta bostäder i egen balansräkning, vid årets slut
 252 105
Rentals Hyresrätter
Number of production-started homes during the year
Antal under året produktionsstartade bostäder
 606 526
Number of sold homes during the year
Antal under året sålda bostäder
 392 66
Number converted to tenant-owner associations during the year
Antal under året konverterade till bostadsrätter
 85 203
Total number of homes in production, at the end of the year
Totalt antal bostäder i produktion, vid årets slut
 1,302 2) 1,179 2)

1) Includes 85 (203) homes which have been converted from rentals

2) Of which 365 (866), corresponding to 28 percent (73), are contracted to be sold upon completion

Timepoint for completion of ongoing own housing development projects

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

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. Property Development also develops various public buildings independent of whether the investor is public, private or an association (as in sports facilities for instance).

The rental market for office buildings in Nordic big city regions has been weak due to uncertainty on many markets and higher interest rates. Nonetheless there is still a demand for highly flexible office space that is a place where people meet, exchange ideas and work together.

During the year several property development projects were started up and concluded among them, The Corner in Malmö. The office building is slightly more than 7,400 m2 and was sold to Annehem Fastigheter. Peab continued to develop the 13,000 m2 office building Gamlestads Smedja in Gothenburg where contracts have already been signed with Nordic Wellness and Swedbank among others. We project-started a nursing home with 80 apartments in Karlskoga that will be rented out to Karlskoga Municipality. Logistic facilities focused on “the last mile” continue to be a strong market and construction on a logistic unit in Almnäs, Södertälje was started in the segment. During the year logistic facilities were sold to the international logistic investor URBZ Capital.

Furthermore Peab continues to develop property in Swedish and Norwegian mountainside regions with SkiStar where we jointly own properties together with the company Skiab Invest AB. Construction on Sadelbyn 7 in Åre with 42 apartments and Timmerbyn in Sälen with 20 apartments was completed during the year.

In December Peab signed a contract to divest its 33.3 percent ownership in Tornet Bostadsproduktion to the other owners Folksam and Fastighets AB Balder. Peab has been a part owner in Tornet Bostadsproduktion since 2009. The company owns and manages around 2,200 rental apartments and has some 650 rental apartments in production in a number of cities in Sweden. The deal was closed in January 2024, entailing capital gains of SEK 220 million.

Net sales and profit

During the year net sales were SEK 534 million (494) and operating profit was SEK 107 million (187). The operating margin was 20,0 percent (37.9). Net sales and operating profit were positively affected by the divestment of an office building in Malmö to Annehem Fastigheter during the fourth quarter. Capital gains from property divestitures in total amounted to SEK 96 million (85). Profit contributions from partly owned companies contracted and amounted to SEK 77 million compared to SEK 134 million last year. The reduction is mainly due to higher interest costs in the partly owned companies.

Capital employed in Property Development was SEK 5,034 million (4,585) at the end of  2023. A large part of the capital employed is shares in partly owned companies and loans to partly owned companies.

The table below presents the ongoing property projects in wholly owned companies per December 31, 2023. We started production during the third quarter on a 23,900 m2 logistics facility in Södertälje. The property has been divested to an external party and will be turned over in the fourth quarter 2024.

Property projects

Type of project Location Kontor 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, %
Office building Kontor Jönköping Jönköping 3,200 100 104 106 Färdigställd Completed 98
Office building Kontor Gothenburg Göteborg 13,100 11 410 557 Q3-2024 Q3-2024 74
Logistic facility Logistikfastighet Södertälje Södertälje 23,900 0 77 372 Q4-2024 Q4-2024 21
Total Summa 591

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
Geography: Stock­holm, the Mälardalen re­gion, Gothen­burg and the Öre­sund re­gion
Rec­og­nized value on prop­er­ties De­cem­ber 31, 2023 1): SEK 7,889 mil­lion (7,872)
Peab’s por­tion of un­rec­og­nized fair value ex­clu­sive tax 1): SEK 519 mil­lion (653)
Major on­go­ing projects: Varvsstaden, Malmö, ren­o­va­tion of Snick­eri­et of around 2,500 m2 (ten­ant Lin­dahls)

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
Geography: Lund
Rec­og­nized value on prop­er­ties De­cem­ber 31, 2023: SEK 1,890 mil­lion (1,940)
Major on­go­ing projects: No major on­go­ing projects

Point Hyllie Holding AB

De­vel­op, 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
Geography: Hyl­lie, Malmö
Rec­og­nized value on prop­er­ties De­cem­ber 31, 2023: SEK 1,379 mil­lion (1,403)
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
Geography: Scan­di­na­vian moun­tains
Rec­og­nized value on prop­er­ties De­cem­ber 31, 2023 1): SEK 2,149 mil­lion (2,526)
Peab’s por­tion of un­rec­og­nized fair value ex­clu­sive tax 1): SEK 40 mil­lion (56)
Major on­go­ing projects: No major on­go­ing projects

Tornet Bostads­produktion AB

De­vel­op, own and man­age at­trac­tive and en­vi­ron­men­tal­ly friend­ly rentals in larg­er cities in Swe­den. In De­cem­ber Peab signed a con­tract to di­vest its 33.3 per­cent own­er­ship in Tor­net Bostad­spro­duk­tion to the other own­ers. The deal was closed in Jan­u­ary 2024.

Peab’s share: 33 per­cent
Part­ner: Folk­sam and Balder
Geography: Stock­holm, the Mälardalen re­gion, Gothen­burg and the Öre­sund re­gion
Rec­og­nized value on prop­er­ties De­cem­ber 31, 2023 1): SEK 6,258 mil­lion (5,748)
Peab’s por­tion of un­rec­og­nized fair value ex­clu­sive tax 1): SEK 365 mil­lion (350)
Major on­go­ing projects: Tamarinden, Örebro 11,000 m2 rentable area, Rödängs Trädgårdar, Umeå 12,600 m2 rentable area and other apart­ment build­ing projects in Hels­ing­borg and Lund

1) Valued at market price in joint venture companies. The time point when the market valuations take place can differ between the 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 2023 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 495 189 105 180 268
Profit for the year Årets resultat -93 32 -11 29 132
Total assets Balansomslutning 7,956 2,186 1,398 2,302 6,643
– of which recognized value of properties – varav bokfört värde fastigheter 7,889 1,890 1,379 2,149 6,258
Peab’s portion of unrecognized fair value exclusive tax Peabs del av oredovisade verkliga värden exklusive skatt 519 40 365

1) Refers to the recognized value of joint venture companies for January – December 2023 and per December 31, 2023. 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 19.