Business area Project Development
Business area Project Development, which comprises Housing Development and Property Development, creates sustainable and vibrant urban environments with residential, commercial and public property.
The business area 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 companies or in collaboration with other partners in joint ventures. 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.
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 processes and develops office buildings, premises and sometimes entire city boroughs in collaboration with municipalities and other partners. Operations are primarily concentrated to the big city areas throughout the Nordic region.
Net sales and profit
Net sales for the first quarter 2022 increased in Project Development by 44 percent and amounted to SEK 2,464 million (1,710). The increase is attributable to Housing Development. Operating profit improved and amounted to SEK 289 million (213) with an operating margin of 11.7 percent (12.5).
Capital employed in Project Development at the end of the period amounted to SEK 13,624 million (12,853). The increase primarily refers to higher investments in project and development property.
Capital employed
| MSEK | Mar 31 2022 | Mar 31 2021 | Dec 31 2021 | |
| Mkr | 31 mar 2022 | 31 mar 2021 | 31 dec 2021 | |
| Operations property | Driftsfastigheter | 53 | 176 | 52 |
| Investment property | Förvaltningsfastigheter | 36 | 112 | 36 |
| Project and development property | Projekt- och exploateringsfastigheter | 10,919 | 9,656 | 10,628 |
| of which housing development rights | varav bostadsbyggrätter | 6,489 | 5,303 | 6,629 |
| of which commercial development rights | varav kommersiella byggrätter | 558 | 601 | 613 |
| of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 1,954 | 2,214 | 1,549 |
| of which ongoing rental projects in Sweden | varav pågående hyresrättsprojekt i Sverige | 794 | 597 | 727 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 575 | 293 | 483 |
| of which completed property | varav färdigställda fastigheter | 124 | 304 | 123 |
| of which other | varav övrigt | 425 | 344 | 504 |
| Participation in joint ventures | Andelar i joint ventures | 2,442 | 1,830 | 2,371 |
| Loans to joint ventures | Utlåning till joint ventures | 1,193 | 1,240 | 1,177 |
| Working capital and other | Rörelsekapital och övrigt | -1,019 | -161 | -741 |
| Total | Summa | 13,624 | 12,853 | 13,523 |
| of which Property Development | varav Fastighetsutveckling | 4,312 | 3,795 | 4,265 |
| of which Housing Development | varav Bostadsutveckling | 9,312 | 9,058 | 9,258 |
Key ratios
| Jan-Mar 2022 | Jan-Mar 2021 | Apr 2021- Mar 2022 | Jan-Dec 2021 | ||
| Jan-mar 2022 | Jan-mar 2021 | Apr 2021- mar 2022 | Jan-dec 2021 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 2,464 | 1,710 | 10,251 | 9,497 |
| of which Property Development | varav Fastighetsutveckling | 59 | 30 | 550 | 521 |
| of which Housing Development | varav Bostadsutveckling | 2,405 | 1,680 | 9,701 | 8,976 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 289 | 213 | 1,313 | 1,237 |
| of which Property Development | varav Fastighetsutveckling | 34 | 10 | 255 | 231 |
| of which Housing Development | varav Bostadsutveckling | 255 | 203 | 1,058 | 1,006 |
| Operating margin, % | Rörelsemarginal, % | 11.7 | 12.5 | 12.8 | 13.0 |
| of which Property Development | varav Fastighetsutveckling | 57.6 | 33.3 | 46.4 | 44.3 |
| of which Housing Development | varav Bostadsutveckling | 10.6 | 12.1 | 10.9 | 11.2 |
| Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 13,624 | 12,853 | 13,624 | 13,523 |
| Orders received, MSEK | Orderingång, Mkr | 2,495 | 2,507 | 9,969 | 9,981 |
| Order backlog, MSEK | Orderstock, Mkr | 6,910 | 6,149 | 6,910 | 6,555 |
| Operating cash flow, MSEK | Operativt kassaflöde, Mkr | 342 | -268 | 859 | 249 |
| Average number of employees 1) | Medelantalet anställda 1) | 245 | 264 | 245 | 242 |
1) Calculated on rolling 12 months
Brf Hamnutsikten
Hammarö
Housing Development
Net sales increased by 43 percent and amounted to SEK 2,405 million (1,680). The increase is related to the Swedish operations. More ongoing housing projects and a high level of home sales has had a positive effect on net sales. Operating profit improved to SEK 255 million (203) and the operating margin was 10.6 percent (12.1). The operating margin for the latest 12 month period was 10.9 percent compared to 11.2 percent for the entire year 2021.
The number of start-ups of our own housing developments was high during the first quarter and amounted to 724 units (662). Production-starts primarily refer to Sweden but are well spread geographically throughout the country. Of these production-starts 147 (206) have been converted from rental projects. The number of sold homes was 800 (657), most of which were in Sweden.
Our own housing developments in production at the end of the period increased to 4,831 (3,821). The level of sold homes in production was 77 percent (74). The number of repurchased homes per March 31, 2022 was 134 (222) and they were mainly in Sweden and Finland.
No apartments in rental development projects have been production started or sold during the first quarter. During the same quarter last year 253 apartments in rental development projects were production started and 91 were sold. The number of apartments in rental development projects in production was 775 (719) at the end of the period. Of these 638 (419) have been sold to investors and will be recognized in profit/loss when they are turned over.
The need for housing is still considered good and we see a continuing interest in our own housing developments. Higher construction costs and possible hikes in interest rates make it difficult to assess future developments.
Capital employed increased at the end of the period and amounted to SEK 9,312 million (9,058).
Net sales
Development rights for housing
| Number, approx. | Mar 31 2022 | Mar 31 2021 | Dec 31 2021 | |
| Antal, cirka | 31 mar 2022 | 31 mar 2021 | 31 dec 2021 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 20,100 | 18,800 | 19,500 |
| Development rights via joint ventures | Byggrätter via joint ventures | 4,600 | 4,400 | 4,600 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 9,900 | 9,800 | 10,500 |
| Total | Totalt | 34,600 | 33,000 | 34,600 |
Own housing development construction
| Jan-Mar 2022 | Jan-Mar 2021 | Apr 2021- Mar 2022 | Jan-Dec 2021 | ||
| Jan-mar 2022 | Jan-mar 2021 | Apr 2021- mar 2022 | Jan-dec 2021 | ||
| 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 | 724 1) | 662 1) | 3,082 | 3,020 2) |
| Number of sold homes during the period | Antal under perioden sålda bostäder | 800 | 657 | 3,190 | 3,047 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 4,831 | 3,821 | 4,831 | 4,702 |
| Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 77% | 74% | 77% | 76% |
| Number of repurchased homes on our balance sheet, at the end of the period | Antal återköpta bostäder i egen balansräkning, vid periodens slut | 134 | 222 | 134 | 144 |
| Rentals | Hyresrätter | ||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | – | 253 | 423 | 676 |
| Number of sold homes during the period | Antal under perioden sålda bostäder | – | 91 | – | 91 |
| Number converted to tenant-owner associations during the period | Antal under perioden konverterade till bostadsrätter | 147 | 206 | 367 | 426 |
| Total number of homes in production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 775 3) | 719 | 775 | 922 |
1) Includes 147 (206) homes that have been converted from rentals
2) Includes 426 (228) homes that have been converted from rentals
3) Of which 638 (419), respectively 82 percent (58), are under contract to be sold upon completion
Time of completion of our own ongoing housing development projects 1)
1) Refers to Swedish tenant-owner associations and single homes, Norwegian condominiums and share housing and Finnish residential limited companies
Gamelstad Pier
Gothenburg
Property development
Net sales and operating profit from operations are derived from acquisitions, development, running and managing wholly owned property, shares in profit/loss from partially owned companies as well as capital gains/losses from the divestiture of completed property and shares in partially owned companies.
During the first quarter 2022 net sales increased to SEK 59 million (30) and operating profit improved to SEK 34 million (10). Capital gains from property sales amounted to SEK 13 million (-). Profit contributions from partially owned companies amounted to SEK 33 million during the first quarter compared to SEK 15 million in the same quarter last year.
Capital employed in Property Development was SEK 4,312 million (3,795). Most of the capital employed consists of shares in partially owned companies and loans to partially owned companies.
The table below presents the ongoing property projects per March 31, 2022. The sports arena in Sundsvall and the paddle hall in Trollhättan are under contract to be sold to external parties during the second, respectively fourth quarter 2022. The logistics facility in Södertälje is under contract to be sold to Annehem Fastigheter during the second quarter 2022.
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, % | ||
| Sports hall | Sundsvall | Idrottshall | Sundsvall | 14,700 | 100 | 212 | 225 | Q2-2022 | 94 |
| Logistic facility | Södertälje | Logistikanläggning | Södertälje | 2,200 | 100 | 68 | 77 | Q2-2022 | 89 |
| Padel hall | Trollhättan | Padelhall | Trollhättan | 3,900 | 100 | 25 | 52 | Q4-2022 | 48 |
| Office building | Malmö | Kontor | Malmö | 7,100 | 35 | 128 | 296 | Q1-2023 | 43 |
| Office building | Gothenburg | Kontor | Göteborg | 13,100 | 25 | 127 | 526 | Q3-2024 | 24 |
| Other ongoing projects | Övriga pågående projekt | 15 | |||||||
| Total | Summa | 575 |
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 March 31, 2022 1): SEK 7,612 million (7,197)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 591 million (435)
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, 2022: SEK 1,964 million (1,970)
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
Location: Hyllie, Malmö
Recognized value on properties March 31, 2022: SEK 1,388 million (1,354)
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 March 31, 2022 1): SEK 2,249 million (41)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 27 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 and tenant-owner apartments in Timmerbyn, Lindvallen in Sälen with 20 apartments
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, 2022 1): SEK 5,850 million (5,103)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 420 million (360)
Major ongoing projects: LP Parken, Gothenburg 15,000 m2 rentable area , Tallbohov, Järfälla 10,500 m2 rentable area, Tamarinden, Örebro 11,000 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.