Business area Project Development 2024

Weak demand on the Nordic housing 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

2024 2023
2024 2023
Net sales, MSEK Nettoomsättning, Mkr 4,270 5,722
of which Property Development varav Fastighetsutveckling 686 534
of which Housing Development varav Bostadsutveckling 3,584 5,188
Operating profit, MSEK Rörelseresultat, Mkr 728 304
of which Property Development varav Fastighetsutveckling 823 107
of which Housing Development varav Bostadsutveckling -95 197
Operating margin, % Rörelsemarginal, % 17.0 5.3
of which Property Development varav Fastighetsutveckling 120.0 20.0
of which Housing Development varav Bostadsutveckling -2.7 3.8
Capital employed at the end of the period, MSEK
Sysselsatt kapital vid periodens utgång, Mkr
 19,767 18,093
Orders received, MSEK Orderingång, Mkr 2,213 136
Order backlog, MSEK Orderstock, Mkr 1,536 1,620
Operating cash flow, MSEK Operativt kassaflöde, Mkr 422 -2,254
Average number of employees Medeltal antal anställda 155 222

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 focusing on safe neighborhoods, climate and environmentally adapted buildings, sustainable communications and nurturing places where people can meet in residential areas. We strive to simplify everyday life where people live and work by making it easy to live sustainably. Our new, own developed apartment buildings in Sweden are certified according to the Swan ecolabel, in Finland according to EU’s Taxonomy Directive and in Norway measures are 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 2024 and amounted to SEK 4,270 million (5,722). The decrease is attributable to Housing Development. Operating profit amounted to SEK 728 million (304) and the operating margin was 17.0 percent (5.3).

Capital employed in Project Development at the end of the year amounted to SEK 19,767 million (18,093).

Cap­i­tal em­ployed

MSEK Dec 31
2024		 Dec 31
2023
Mkr 31 dec
2024		 31 dec
2023
Operations property Driftsfastigheter 34 146
Investment property Förvaltningsfastigheter 36 36
Project and development property
Projekt- och exploateringsfastigheter
 17,017 14,603
of which housing development rights varav bostadsbyggrätter 9,344 7,981
of which commercial development rights varav kommersiella byggrätter 1,671 901
of which unsold part of ongoing housing projects varav osåld del av pågående bostadsprojekt  1,979 2,461
of which ongoing rental projects
varav pågående hyresrättsprojekt 
 761 1,712
of which ongoing commercial projects 
varav pågående kommersiella projekt 
 115 489
of which completed property varav färdigställda fastigheter 2,212 165
of which other varav övrigt 935 894
Participation in joint ventures Andelar i joint ventures 2,880 2,820
Loans to joint ventures Utlåning till joint ventures 484 1,498
Working capital and other Rörelsekapital och övrigt -684 -1,010
Total Summa 19,767 18,093
of which Property Development varav Fastighetsutveckling 6,165 5,034
of which Housing Development varav Bostadsutveckling 13,602 13,059

Net sales

Per geographic market, 2024

Housing Development

Peab offers a broad range of housing forms including apartment buildings with tenant-owner apartments, condominiums and apartments for rent.

The housing market was marked by continued low activity and uncertainty due to high construction costs and interest rate development. Sales levels of homes to consumers and investors have been low in every region and country, although they maintained an even rate and we noted an increase in interest during the year. There were few production starts in housing in 2024. Some examples are a project in Finnish Turku and in Norwegian Sandefjord. In Sweden we started production of Brf Havtornet on Tjörn, which is a 14 story tower in the middle of the archipelago environment and a new housing project in Lund.

A substantial portion of our large housing projects are part of urban development projects. In Malmö we continue to develop Varvstaden where Peab is sole owner of properties and development rights after acquiring them from the partly owned company Fastighets AB Centur in November 2024. The acquisition included development properies with approximately 280,000 square meters of planned building rights, which meant that the number of development rights in our own balance sheet increased by around 1,700. Peab will be operating in this area for many years to come since around 2,500 new homes along with offices and service centers are planned for construction. Development is done in close cooperation with Malmö City and the projects in Varvstaden have a clear sustainability and climate profile. Among other things, we are reusing material and sections of buildings from the old shipyard are being widely preserved. In our latest housing project, Brf Västra Vakten, in the frame we used concrete with an alternative binder and a new technique in casting that resulted in almost 70 percent less carbon emissions per square meter.

Peab has been developing homes on Kvarnholmen in Nacka since 2013. In January 2024 we closed the acquisition of Folksam’s shares in Sicklaön Bygg Invest AB which meant that Peab increased its ownership from 50 to 100 percent. The acquisition included more than 270 zoned development rights on 26,000 square meters gross area. Also included were 50 percent of the shares in Kvarnholmen Utveckling AB which has an ongoing zoning process for more than 120,000 square meters housing development rights and half of them will belong to Peab. In January 2025 105 homes were production started in the project Kvarnholmshöjden.

The district Riksten in Botkyrka is being developed on the old Air Force Base F18 Tullinge together with Botkyrka Municipality. The district currently has around 3,000 inhabitants and when construction in the area is completed it will have between 12,000 and 14,000 inhabitants. This kind of urban development project allows Peab to offer new homes in attractive locations over many years. The environment and climate are essential considerations in the projects in Riksten and several of Peab’s ECO-products are being used such as ECO-Betong (ECO-Concrete) and ECO-Ballast (ECO-Mineral aggregates).

In Lilla Essinge in Stockholm Peab is developing the city block Primus. The target is to build around 275 apartments, a nursing home and other community service facilities for residents in the coming years.

In Sweden Riksbanken lowering interest rates improved conditions for selling and production starting new homes even though recovery is expected take time. During the fourth quarter, we both started new projects and converted rental apartment projects from our own balance sheet to tenant-​owner apartments/condominiums. This illustrates the continuing trend that sales opportunities increase as the project approaches completion. For this reason we are further developing the strategy of starting projects on our own balance sheet to then convert them into tenant-​​owner apartments. This entails more tied-​up capital and deferred effects on profits compared with our traditional method of advance sales before production starts of our own developments.

There is an underlying need for new housing although aspects like high construction costs and downward revised forecasts regarding population growth make it harder to assess demand in the medium-​​term. As far as Peab is concerned we have a well-​dimensioned development rights portfolio in attractive locations and in anticipation of market recovery we are further developing and preparing projects for start-​ups in the future.

Net sales and profit

Continued weak demand on the housing market throughout the Nordic region is clearly noticeable in Housing Development. Net sales decreased to SEK 3,584 million (5,188). Operating profit amounted to SEK -95 million (197) and the operating margin was -2.7 percent (3.8).

A total of 615 (727) own developed homes were started during the year, all of them tenant-​owner apartments/condominiums, of which 167 were converted from rental apartments. Last year production started on 121 tenant-​owner apartments/condominiums, of which 85 were converted from rental apartments and 606 were homes in rental apartment projects on our own balance sheet. The number of sold homes was 1,008 (934), of which 710 (542) were tenant-​​owner apartments/condominiums and 298 (392) were homes in rental apartment projects.

The total number of homes in production at the end of the year was 1,550 (3,694), of which 1,056 (2,392) were tenant-​​​owner apartments/condominiums and 494 (1,302) were homes in rental apartment projects. The portion of sold tenant-​​​owner apartments/condominiums in ongoing production was 45 percent (68). The number of repurchased homes per December 31, 2024 was 224 (252) and approximately half of them were in Finland.

Capital employed increased and amounted to SEK 13,602 million (13,059) at the end of the year. The increase is primarily due to investments in development rights in, among other places, Kvarnholmen in Nacka and Varvsstaden in Malmö.

Own housing development construction

Jan-Dec
2024		 Jan-Dec
2023
Jan-dec
2024		 Jan-dec
2023
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
 615 1) 121 1)
Number of sold homes during the year
Antal under året sålda bostäder
 710 542
Total number of homes under production, at the end of the year
Totalt antal bostäder i produktion, vid årets slut
 1,056 2,392
Portion of sold homes under production, at the end of the year
Andel sålda bostäder i produktion, vid årets slut
 45% 68%
Number of repurchased homes on our balance sheet, at the end of the year
Antal återköpta bostäder i egen balansräkning, vid årets slut
 224 252
Rentals Hyresrätter
Number of production-started homes during the year
Antal under året produktionsstartade bostäder
 – 606
Number of sold homes during the year
Antal under året sålda bostäder
 298 392
Number converted to tenant-owner associations during the year
Antal under året konverterade till bostadsrätter
 167 85
Total number of homes in production, at the end of the year
Totalt antal bostäder i produktion, vid årets slut
 494 2) 1,302 2)
Number of homes completed, at the end of the year Antal färdigställda bostäder, vid årets slut 306 –

1) Includes 167 (85) homes that have been converted from rentals

2) Of which 80 (365), respectively 16 (28) percent, are under contract to be sold upon completion

Housing development rights

Number, approx. Dec 31
2024		 Dec 31
2023
Antal, cirka 31 dec
2024		 31 dec
2023
Development rights on our own balance sheet Byggrätter i egen balansräkning 24,000 22,000
Development rights via joint ventures Byggrätter via joint ventures 3,700 4,700
Development rights via options etc. Byggrätter via optioner m.m. 7,400 7,400
Total Totalt 35,100 34,100

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 or private.

The rental market for office buildings in Nordic big city regions has been cautious due to uncertainty on many markets and higher interest rates. Nonetheless there is still a demand for highly flexible office space in the right locations. For example, in Gothenburg the office building Gamlestads Smedja is emerging and will become part of the new city district Gamlestan. The project encompasses 13,000 square meters and during the year leases have been signed and some companies have moved in.

In January 2024 Peab divested its share of 33.3 percent in Tornet Bostadsproduktion to the other two owners, Folksam and Fastighets AB Balder. Peab has been part owner of 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 Swedish cities.

Peab and Fastighets AB Balder have jointly owned Fastighets AB Centur for a number of years. In November 2024 a division of assets was carried out in the joint venture company Fastighets AB Centur, where Peab and the other owner, Fastighets AB Balder, acquired the majority of the property portfolio. Peab acquired four investment properties in Varvstaden, Malmö with a net operating income of SEK 43 million for SEK 784 million and development properties with about 280,000 square meters of planned development rights for SEK 1,239 million. Also included was an ongoing development project, Hall 259 with 11,000 square meters leasable area and 550 parking spaces, which will be completed in 2027. Peab also acquired an investment property in the Kirseberg-​Östervärn area in Malmö for SEK 68 million. A zoning plan process is underway intended to enable development of around 55,000 square meters building rights for both residential and office space in the area. All in all the total value of the aquistions were SEK 2,091 million. At the same time Fastighets AB Centur divested investment property to Fastighets AB Balder for SEK 5,228 million. As noted in the section Housing Development, Peab will be operating in Varvsstaden for years to come.

During the year we completed and turned over an office building in Jönköping and a logistics facility in Södertälje.

Net sales and profit

Net sales were SEK 686 million (534) and operating profit was SEK 823 million (107) in 2024. Capital gains from property divestitures amounted to SEK 440 million (96) in total, of which the divestiture of the shares in Tornet Bostadsproduktion contributed by SEK 220 million. Profit contributions from joint venture companies amounted to SEK 441 million compared to SEK 77 million last year, of which profit contributions from Fastighets AB Centur amounted to SEK 417 million where SEK 367 million were related to the transaction in November 2024.

The transactions concerning Tornet Bostadsproduktion and Fastighets AB Centur had a major impact on profit in 2024. These are not transactions that reoccur annually but they exhibit our ability to build value over time in Property Development, both on our own balance sheet and together with partners in joint venture companies.

At the end of 2024 the capital employed in Property Development was SEK 6,165 million (5,034). The increase is due to the acquisition of properties from Fastighets AB Centur. A large part of the capital employed consists of shares in joint venture companies and loans to joint venture companies.

The table below presents larger property projects per December 31, 2024.

Property projects

Type of project Location Rentable
area in m2		 Degree rented, % Recognized
value, MSEK		 Adopted investment, MSEK Completion  time point
Completion
level, %
Typ av projekt Ort Uthyrningsbar
yta, m2		 Uthyrningsgrad, % Bokfört värde, Mkr Beslutad
investering, Mkr		 Tidpunkt färdigställande
Färdigställande-grad, %
Ongoing Pågående 
Retail, office building and parking Handel, kontor och parkering Malmö Malmö 11,000 13 79 592 Q3-2027 13
Completed Färdigställda
Office building Kontor Gothenburg Göteborg 12,900 40 532
Apartment hotel Lägenhetshotell Malmö Malmö 4,200 100 138
Office building Kontor Malmö Malmö 2,500 100 145
Office building Kontor Malmö Malmö 3,600 100 135
Office building Kontor Malmö Malmö 4,900 100 267
Total Totalt

 

Significant joint ventures

Peab’s significant joint venture companies Fastighets AB Centur, Fastighets AB ML4, Point Hyllie Holding AB and Skiab Invest 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. In November 2024 Peab and the other owner, Fastighets AB Balder, acquired most of the existing property portfolio from Centur. Only a few properties remain in Fastighets AB Centur. After the transactions Fastighets AB Centur is no longer classified as a significant joint venture in Peab. For more information, see Property Development above and the section Other information, Significant events during the year.

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, 2024: SEK 1,840 mil­lion (1,890)
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
Geography: Hyl­lie, Malmö
Rec­og­nized value on prop­er­ties De­cem­ber 31, 2024: SEK 1,344 mil­lion (1,379)
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, 2024 1): SEK 2,157 mil­lion (2,149)
Peab’s por­tion of un­rec­og­nized fair value ex­clu­sive tax 1): SEK 59 mil­lion (40)
Major on­go­ing projects: No major on­go­ing projects

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 2024 significant joint ventures 1)

MSEK Fastighets AB Centur Fastighets AB ML4 Point Hyllie Holding AB Skiab Invest AB
Mkr Fastighets AB Centur Fastighets AB ML4 Point Hyllie Holding AB Skiab Invest AB
Net sales Nettoomsättning 471 194 115 120
Profit for the year Årets resultat 278 33 -4 19
Total assets Balansomslutning 3,020 2,173 1,384 2,334
– of which recognized value of properties – varav bokfört värde fastigheter 495 1,840 1,344 2,157
Peab’s portion of unrecognized fair value exclusive tax Peabs del av oredovisade verkliga värden exklusive skatt 59

1) Refers to the recognized value of joint venture companies for January – December 2024 and per December 31, 2024. Since Fastighets AB Centur and Skiab Invest 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.