Note 22 Project and development properties
Accounting principle
Project and development property is recognized under current assets and consists of undeveloped land and redeveloped tracts for future development, developed investment properties for project development, improvement and subsequent sale, ongoing work attributable to our own housing development projects as well as indirect holdings. The property is expected to be realized during our normal operational cycle. Valuation is made in accordance with IAS 2, Inventories, at the lowest of either acquisition value or net sales value.
Loan costs
Loan costs that are directly referable to purchases, construction or production of an asset and that requires a significant amount of time to complete for the intended purpose or sale are included in the asset’s acquisition value. Loan costs are included in the acquisition value of Peab’s own developed property.
Important estimates and assessments
The most important sources of uncertainty in estimates
The recognized value of owned assets has been assessed at the lowest value of the acquisition value and net sales value based on current price levels per geography. Changes in supply and demand can change recognized values and the need for write-downs. Peab tests the value of project and development property based on an internal valuation model. As a complement to this valuation annual external market valuations are obtained for a number of objects. Peab believes that there is no significant risk for a material write-down of property values during the coming financial years.
Project and development properties consist of owned and leased assets.
| MSEK | Note | 2024 | 2023 | ||
| Mkr | Not | 2024 | 2023 | ||
| Project and development properties – owned | Projekt- och exploateringsfastigheter – ägda | 18,037 | 17,892 | ||
| Rights of use – leased with | Nyttjanderätter – leasade | 28 | 28 | 305 | 169 |
| Total | Summa | 18,342 | 18,061 |
| MSEK | 2024 | 2023 | |
| Mkr | 2024 | 2023 | |
| Housing development rights | Bostadsbyggrätter | 9,284 | 7,900 |
| Commercial development rights | Kommersiella byggrätter | 1,670 | 901 |
| On going housing projects | Pågående bostadsprojekt | 3,502 | 6,147 |
| On going rental projects | Pågående hyresrättsprojekt | 630 | 1,544 |
| On going commercial projects | Pågående kommersiella projekt | 115 | 435 |
| Completed property | Färdigställda fastigheter | 1,901 | 71 |
| Other | Övrigt | 935 | 894 |
| Total | Summa | 18,037 | 17,892 |
Project and development properties were written down during the year for a total of SEK 39 million (21). Loan interest of SEK 383 million (521) has been activated during the year. The interest rate on the activated loan costs is 4.98 percent (5.00).
Cost of goods sold during the year amounts to SEK 6,108 million (7,290).
Recovery
Of the recognized value of project and development property of SEK 18,037 million (17,892) some SEK 11,100 million (approximately 11,300) is expected to be recovered through sales more than 12 months after the balance sheet day. The remaining part is expected to be recovered within 12 months after the balance sheet day.