Business area Project Development
Project Development, which comprises Housing Development and Property Development, creates sustainable and vibrant urban environments with residential, commercial and public property. 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.
Housing Development develops all kinds of homes on the Nordic market such as apartment buildings in tenancy ownership, ownership and rental form as well as single homes. Property Development develops offices, premises and sometimes entire city boroughs in collaboration with municipalities and other partners. Operations are focused on the big city areas throughout the Nordic region.
Peab’s primary ambition is to work with development projects on our own balance sheet. Collaboration with other partners via joint ventures may take place from time to time during a project. The goal is to create capital efficient developments with partners that boost the business and thereby profitability.
Net sales and profit
Net sales for the first quarter 2021 in business area Project Development decreased to SEK 1,710 million (1,969). The decrease is primarily due to lower net sales in Housing Development. Operating profit was SEK 213 million (174) and the operating margin was 12.5 percent (8.8). Capital employed in Project Development at the end of the period amounted to SEK 12,853 million (13,898).
Capital employed
MSEK | Mar 31 2021 | Mar 31 2020 | Dec 31 2020 | |
Mkr | 31 mar 2021 | 31 mar 2020 | 31 dec 2020 | |
Operations property | Driftsfastigheter | 176 | 118 | 161 |
Investment property | Förvaltningsfastigheter | 112 | 114 | 112 |
Project and development property | Projekt- och exploateringsfastigheter | 9,656 | 10,932 | 9,060 |
of which housing development rights | varav bostadsbyggrätter | 5,303 | 5,144 | 4,819 |
of which commercial development rights | varav kommersiella byggrätter | 601 | 584 | 585 |
of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 2,214 | 3,042 | 1,730 |
of which ongoing rental projects in Sweden | varav pågående hyresrättsprojekt i Sverige | 597 | 946 | 1,100 |
of which ongoing commercial projects | varav pågående kommersiella projekt | 293 | 524 | 226 |
of which completed property | varav färdigställda fastigheter | 304 | 218 | 311 |
of which other | varav övrigt | 344 | 474 | 289 |
Participation in joint ventures | Andelar i joint ventures | 1,830 | 1,585 | 1,873 |
Loans to joint ventures | Utlåning till joint ventures | 1,240 | 1,119 | 1,213 |
Working capital and other | Rörelsekapital och övrigt | -161 | 30 | -230 |
Total | Summa | 12,853 | 13,898 | 12,189 |
of which Property Development | varav Fastighetsutveckling | 3,795 | 3,648 | 3,766 |
of which Housing Development | varav Bostadsutveckling | 9,058 | 10,250 | 8,423 |
Key ratios
Jan-Mar 2021 | Jan-Mar 2020 | Apr-Mar 2020/2021 | Jan-Dec 2020 | ||
Jan-mar 2021 | Jan-mar 2020 | Apr-mar 2020/2021 | Jan-dec 2020 | ||
Net sales, MSEK | Nettoomsättning, Mkr | 1,710 | 1,969 | 7,241 | 7,500 |
of which Property Development | varav Fastighetsutveckling | 30 | 122 | 283 | 375 |
of which Housing Development | varav Bostadsutveckling | 1,680 | 1,847 | 6,958 | 7,125 |
Operating profit, MSEK | Rörelseresultat, Mkr | 213 | 174 | 1,708 | 1,669 |
of which Property Development | varav Fastighetsutveckling | 10 | 25 | 967 | 982 |
of which Housing Development | varav Bostadsutveckling | 203 | 149 | 741 | 687 |
Operating margin, % | Rörelsemarginal, % | 12.5 | 8.8 | 23.6 | 22.3 |
of which Property Development | varav Fastighetsutveckling | 33.3 | 20.5 | 341.7 | 261.9 |
of which Housing Development | varav Bostadsutveckling | 12.1 | 8.1 | 10.6 | 9.6 |
Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 12,853 | 13,898 | 12,853 | 12,189 |
Orders received, MSEK | Orderingång, Mkr | 2,507 | 1,670 | 7,777 | 6,940 |
Order backlog, MSEK | Orderstock, Mkr | 6,149 | 4,885 | 6,149 | 5,151 |
Average number of employees 1) | Medelantalet anställda 1) | 264 | 341 | 264 | 290 |
1) Calculated on rolling 12 months
Housing Development
Net sales decreased by nine percent to SEK 1,680 million (1,847). All countries have slightly lower net sales compared to the first quarter 2020. Operating profit increased to SEK 203 million (149) and the operating margin improved to 12.1 percent (8.1). The operating margin for the latest 12 month period was 10.6 percent compared to 9.6 percent for the full year 2020.
The number of start-ups of our own housing developments during the first quarter amounted to 662 units (503), of which 206 have been converted from rentals. The start-ups have been well spread geographically. The number of sold homes was 657 (787). During the quarter sales were good in all three countries. Our own housing developments in production at the end of the period decreased to 3,821 (4,538). The level of sold homes in production was 74 percent (72). The number of repurchased homes per March 31, 2021 was 222 (245).
Production started on 253 homes (75) in rental apartment projects on our own balance sheet during the first quarter and 91 homes (–) were sold. The number of homes in rental apartment projects in production was 719 (568) at the end of the period. Of these 419 have been sold to investors and will be recognized in profit/loss when they are turned over.
Capital employed has decreased at the end of the period and amounted to SEK 9,058 million (10,250). Fewer ongoing homes in production have entailed less capital employed compared to the end of the corresponding period last year.
Net sales
Own housing development construction
Jan-Mar 2021 | Jan-Mar 2020 | Apr 2020- Mar 2021 | Jan-Dec 2020 | ||
Jan-mar 2021 | Jan-mar 2020 | Apr 2020- mar 2021 | Jan-dec 2020 | ||
Tenant-owner associations, share housing and residential limited companies | Bostadsrätter, ägarlägenheter och bostadsaktiebolag | ||||
Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | 662 1) | 503 | 2,450 | 2,291 |
Number of sold homes during the period | Antal under perioden sålda bostäder | 657 | 787 | 2,552 | 2,682 |
Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 3,821 | 4,538 | 3,821 | 4,014 |
Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 74% | 72% | 74% | 73% |
Number of repurchased homes on our balance sheet, at the end of the period | Antal återköpta bostäder i egen balansräkning, vid periodens slut | 222 | 245 | 222 | 222 |
Rentals | Hyresrätter | ||||
Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | 253 | 75 | 680 | 502 |
Number of sold homes during the period | Antal under perioden sålda bostäder | 91 | – | 95 | 4 |
Number converted to tenant-owner associations during the period | Antal under perioden konverterade till bostadsrätter | 206 | – | 434 | 228 |
Total number of homes in production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 719 2) | 568 | 719 | 763 |
1) Includes 206 homes that have been converted from rentals
2) Of which 419, respectively 58 percent, are under contract to be sold upon completion
Development rights for housing
Number, approx. | Mar 31 2021 | Mar 31 2020 | Dec 31 2020 | |
Antal, cirka | 31 mar 2021 | 31 mar 2020 | 31 dec 2020 | |
Development rights on our own balance sheet | Byggrätter i egen balansräkning | 18,800 | 20,000 | 18,900 |
Development rights via joint ventures | Byggrätter via joint ventures | 4,400 | 4,600 | 4,400 |
Development rights via options etc. | Byggrätter via optioner m.m. | 9,800 | 9,700 | 9,700 |
Total | Totalt | 33,000 | 34,300 | 33,000 |
Time of completion of our own ongoing housing developments 1)
1) Refers to Swedish tenant-owner associations and own housing developments, Norwegian condominiums and share housing and Finnish residential limited companies
Property Development
Net sales and operating profit from operations are derived from acquiring, developing, maintaining and managing wholly owned property, shares in the profit from partly owned companies as well as capital gains/losses from the divestiture of completed property and shares in partly owned companies.
During the first quarter 2021 net sales were SEK 30 million (122) and operating profit was SEK 10 million (25). During the quarter some operations connected to air travel and tourism have been negatively affected by the corona pandemic which lowered operating profit by around SEK 20 million compared to the first quarter 2020.
Capital employed in Property Development was SEK 3,795 million (3,648) at the end of the first quarter 2021. A large part of the capital employed consists of shares in partially owned companies as well as loans to partially owned companies. The table below presents the larger ongoing property projects per March 31, 2021. Last year contracts were signed for the sales of the office buildings in Helsingborg and Solna to Annehem Fastigheter.
Ongoing 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, % | ||
Office building | Helsingborg | Kontor | Helsingborg | 2,900 | 88 | 104 | 106 | Q2-2021 | 98 |
Office building | Solna | Kontor | Solna | 4,300 | 100 | 135 | 194 | Q3-2021 | 70 |
Sports hall | Sundsvall | Idrottshall | Sundsvall | 14,700 | 100 | 116 | 223 | Q2-2022 | 52 |
Total | Summa | 355 | |||||||
of which operations property | varav driftsfastigheter | 104 | |||||||
of which project and development property | varav projekt- och exploateringsfastigheter | 251 |
Significant joint ventures
Peab’s significant joint venture companies Tornet Bostadsproduktion AB, Fastighets AB Centur, 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 affect 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 March 31, 2021 1): SEK 5,103 million (4,560)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 360 million (262)
Major ongoing projects: LP Parken, Gothenburg 15,000 m2 rentable area , Tallbohov, Järfälla 10,500 m2 rentable area 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 March 31, 2021 1): SEK 7,197 million (6,708)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 435 million (426)
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 March 31, 2021: SEK 1,970 million (1,893)
Major ongoing projects: Research building 6,400 m2
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
Location: Hyllie, Malmö
Recognized value on properties March 31, 2021: SEK 1,354 million (1,309)
Major ongoing projects: No major ongoing projects
1) Valued at market price in joint venture companies. The market prices on properties that affect the recognized values in joint venture companies are not included in Peab’s accounts.