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 companies 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
April – June 2021
Net sales for the second quarter 2021 amounted to SEK 1,929 million (1,977). Operating profit improved to SEK 252 million (138).
January – June 2021
Net sales for the first half-year 2021 shrunk to SEK 3,639 million (3,946). The reduction is attributable to both Housing Development and Property Development. Operating profit improved to SEK 465 million (312) and the operating margin was 12.8 percent (7.9).
Capital employed in Project Development at the end of the period amounted to SEK 13,258 million (13,521).
Brf Mässingsröret
Upplands Väsby
Capital employed
| MSEK | Jun 30 2021 | Jun 30 2020 | Dec 31 2020 | |
| Mkr | 30 jun 2021 | 30 jun 2020 | 31 dec 2020 | |
| Operations property | Driftsfastigheter | 73 | 133 | 161 |
| Investment property | Förvaltningsfastigheter | 48 | 114 | 112 |
| Project and development property | Projekt- och exploateringsfastigheter | 9,742 | 9,746 | 9,060 |
| of which housing development rights | varav bostadsbyggrätter | 5,190 | 5,205 | 4,819 |
| of which commercial development rights | varav kommersiella byggrätter | 669 | 600 | 585 |
| of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 2,226 | 2,119 | 1,730 |
| of which ongoing rental projects in Sweden | varav pågående hyresrättsprojekt i Sverige | 598 | 881 | 1,100 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 407 | 251 | 226 |
| of which completed property | varav färdigställda fastigheter | 303 | 332 | 311 |
| of which other | varav övrigt | 349 | 358 | 289 |
| Participation in joint ventures | Andelar i joint ventures | 1,858 | 1,711 | 1,873 |
| Loans to joint ventures | Utlåning till joint ventures | 1,331 | 1,128 | 1,213 |
| Working capital and other | Rörelsekapital och övrigt | 206 | 689 | -230 |
| Total | Summa | 13,258 | 13,521 | 12,189 |
| of which Property Development | varav Fastighetsutveckling | 3,811 | 3,486 | 3,766 |
| of which Housing Development | varav Bostadsutveckling | 9,447 | 10,035 | 8,423 |
Key ratios
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | Jul-Jun 2020/2021 | Jan-Dec 2020 | ||
| Apr-jun 2021 | Apr-jun 2020 | Jan-jun 2021 | Jan-jun 2020 | Jul-jun 2020/2021 | Jan-dec 2020 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 1,929 | 1,977 | 3,639 | 3,946 | 7,193 | 7,500 |
| of which Property Development | varav Fastighetsutveckling | 33 | 111 | 63 | 233 | 205 | 375 |
| of which Housing Development | varav Bostadsutveckling | 1,896 | 1,866 | 3,576 | 3,713 | 6,988 | 7,125 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 252 | 138 | 465 | 312 | 1,822 | 1,669 |
| of which Property Development | varav Fastighetsutveckling | 29 | -17 | 39 | 8 | 1,013 | 982 |
| of which Housing Development | varav Bostadsutveckling | 223 | 155 | 426 | 304 | 809 | 687 |
| Operating margin, % | Rörelsemarginal, % | 13.1 | 7.0 | 12.8 | 7.9 | 25.3 | 22.3 |
| of which Property Development | varav Fastighetsutveckling | 87.9 | -15.3 | 61.9 | 3.4 | 494.1 | 261.9 |
| of which Housing Development | varav Bostadsutveckling | 11.8 | 8.3 | 11.9 | 8.2 | 11.6 | 9.6 |
| Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 13,258 | 13,521 | 13,258 | 13,521 | 13,258 | 12,189 |
| Orders received, MSEK | Orderingång, Mkr | 2,496 | 1,420 | 5,003 | 3,090 | 8,853 | 6,940 |
| Order backlog, MSEK | Orderstock, Mkr | 6,833 | 4,511 | 6,833 | 4,511 | 6,833 | 5,151 |
| Average number of employees 1) | Medelantalet anställda 1) | 245 | 335 | 245 | 335 | 245 | 290 |
1) Calculated on rolling 12 months
Housing Development
April – June 2021
Net sales amounted to SEK 1,896 million (1,866). Net sales have decreased in Sweden but increased in Finland. Operating profit increased to SEK 223 million (155) and the operating margin improved to 11.8 percent (8.3) with increases in all three countries.
The number of start-ups of our own developed homes during the second quarter amounted to 785 units (518), and is divided between Sweden and Finland. There is a good geographic spread in production start-ups in both countries. The number of sold homes was 797 (501), most of which were in Sweden and Finland. In the second quarter production of 135 (64) homes in rental apartment projects were started, of which 109 are under contract to be sold upon completion.
January – June 2021
Net sales decreased to SEK 3,576 million (3,713) and the reduction is related to Sweden and Norway while net sales in Finland improved. Operating profit amounted to SEK 426 million (304) and the operating margin improved to 11.9 percent (8.2). The operating margin improved in all countries. In the latest rolling 12 month period the operating margin amounted to 11.6 percent compared to 9.6 percent for the entire year of 2020.
The number of start-ups of our own developed homes amounted to 1,447 units (1,021), of which 262 (187) have been converted from rentals. There is a good geographic spread in the start-ups. The number of sold homes was 1,454 (1,288). During the period the sales have been good in all three countries. The number of own developed homes in production at the end of the period was 4,132 (4,153). The level of sold homes in production was 76 percent (70). The number of repurchased homes per June 30, 2021 was 200 (267) and most of them were in Sweden. Production started on 388 homes (139) in rental apartment projects on our own balance sheet during the first half of the year and 91 homes (–) were sold. The number of homes in rental apartment projects in production was 798 (445) at the end of the period. Of these 528 have been sold to investors and will be recognized in revenue when they are turned over.
Capital employed has decreased at the end of the period and amounted to SEK 9,447 million (10,035).
Net sales
Development rights for housing
| Number, approx. | Jun 30 2021 | Jun 30 2020 | Dec 31 2020 | |
| Antal, cirka | 30 jun 2021 | 30 jun 2020 | 31 dec 2020 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 18,200 | 19,400 | 18,900 |
| Development rights via joint ventures | Byggrätter via joint ventures | 4,600 | 4,600 | 4,400 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 9,700 | 10,000 | 9,700 |
| Total | Totalt | 32,500 | 34,000 | 33,000 |
Own housing development construction
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | Jul-Jun 2020/2021 | Jan-Dec 2020 | ||
| Apr-jun 2021 | Apr-jun 2020 | Jan-jun 2021 | Jan-jun 2020 | Jul-jun 2020/2021 | Jan-dec 2020 | ||
| 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 | 785 1) | 518 1) | 1,447 2) | 1,021 2) | 2,717 | 2,291 |
| Number of sold homes during the period | Antal under perioden sålda bostäder | 797 | 501 | 1,454 | 1,288 | 2,848 | 2,682 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 4,132 | 4,153 | 4,132 | 4,153 | 4,132 | 4,014 |
| Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 76% | 70% | 76% | 70% | 76% | 73% |
| Number of repurchased homes on our balance sheet, at the end of the period | Antal återköpta bostäder i egen balansräkning, vid periodens slut | 200 | 267 | 200 | 267 | 200 | 222 |
| Rentals | Hyresrätter | ||||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | 135 | 64 | 388 | 139 | 751 | 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 | 56 | 187 | 262 | 187 | 303 | 228 |
| Total number of homes in production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 798 | 445 | 798 3) | 445 | 798 | 763 |
1) Includes 56 (187) homes that have been converted from rentals
2) Includes 262 (187) homes that have been converted from rentals
3) Of which 528, respectively 66 percent, are under contract to be sold upon completion
Time of completion of our own ongoing housing developments 1)
1) Refers to Swedish tenant-owner associations and single homes, Norwegian condominiums and share housing and Finnish residential limited companies
Property development
Net sales and operating profit from operations are derived from acquisitions, development, running and managing wholly owned property, shares in the result from partly owned companies as well as capital gains/losses from the divestiture of completed property and shares in partly owned companies.
April – June 2021
During the second quarter 2021 net sales were SEK 33 million (111) and operating profit was SEK 29 million (-17). Profit from sales of property amounted to SEK 26 million (8) which included the divesture of an office building in Helsingborg to Annehem Fastigheter. During the quarter some operations connected to travel and tourism have been negatively affected by the corona pandemic which lowered operating profit by SEK -10 million (-45). The comparison period included SEK -32 million related to Ängelholm-Helsingborg Airport, of which SEK -20 million referred to the write-down of goodwill.
January – June 2021
During the first half-year 2021 net sales were SEK 63 million (233) and operating profit was SEK 39 million (8). Profit from sales of property amounted to SEK 26 million (17) which included the divesture of an office building in Helsingborg to Annehem Fastigheter. During the period some operations connected to travel and tourism have been negatively affected by the corona pandemic which lowered operating profit by SEK -17 million (-38). The comparison period included SEK -35 million related to Ängelholm-Helsingborg Airport, of which SEK -20 million referred to the write-down of goodwill.
Capital employed in Property Development was SEK 3,811 million (3,486) at the end of the second quarter 2021. A large part of the capital employed was shares in partially owned companies and loans to partially owned companies.
Skiab Invest AB, half-owned by Peab and SkiStar, has signed contracts for the acquisition of three lodges with a property value of SEK 737 million and development rights worth SEK 305 million from SkiStar. Peab and SkiStar own and manage three lodges in Swedish and Norwegian mountainside locations through various jointly owned companies. These will now come together in the half-owned company Skiab Invest AB. In addition, the company acquires three new lodges in Hemsedal in Norway, Lindvallen in Sälen and Hundfjället in Sälen (under construction) and development rights for around 60,000 GFA in Sälen, Vemdalen, Åre and Duved. In conjuncture with the transaction SkiStar is signing new leases on both the newly acquired properties and the previously jointly owned properties. These are triple net leases that run between 12-25 years with an average longevity of 17 years. Revenue from the leases amounts to SEK 93 million. The contracts were pending approval by a General Meeting in SkiStar of the divestiture and lease signing as well as maintaining existing financing or arranging new financing by September 15th. Since the above conditions were met, all the transactions were finalized in July 2021.
The table below presents the larger ongoing property projects per June 30, 2021. Last year contracts were signed for the sale of the office building in Solna to Annehem Fastigheter. During the period Peab has signed a contract for the sales of the logistic facility in Almnäs, Södertälje to Annehem Fastigheter and the underlying value of the property is SEK 96 million. The building will be environmentally certified according to Miljöbyggnad, level Silver. The divesture of the completed construction is planned for the second quarter of 2022. During the period Peab has also decided to build the office building The Corner in Hyllie, Malmö. The building will have 7,100 m2 flexible office space spread out on seven floors with co-working and a restaurant on the ground floor. The building will be environmentally certified according to Miljöbyggnad and WELL to guarantee the best possible conditions for both people and the environment.
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 | Solna | Kontor | Solna | 4,300 | 100 | 155 | 194 | Q3-2021 | 80 |
| Sports hall | Sundsvall | Idrottshall | Sundsvall | 14,700 | 100 | 147 | 223 | Q2-2022 | 66 |
| Logistic facility | Södertälje | Logistikanläggning | Södertälje | 2,200 | 100 | 11 | 67 | Q2-2022 | 16 |
| Office building | Malmö | Kontor | Malmö | 7,100 | 12 | 51 | 296 | Q1-2023 | 17 |
| Other ongoing projects | Övriga pågående projekt | 43 | |||||||
| Total | Summa | 407 |
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 the 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 June 30, 2021 1): SEK 5,212 million (4,640)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 370 million (269)
Major ongoing projects: LP Parken, Gothenburg 15,000 m2 rentable area , Tallbohov, Järfälla 10,500 m2 rentable area and other apartment building projects in Helsingborg, Lund and Umeå
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 June 30, 2021 1): SEK 7,324 million (6,798)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 468 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 June 30, 2021: SEK 1,981 million (1,910)
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 June 30, 2021: SEK 1,369 million (1,354)
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 the joint venture companies are not included in Peab’s accounts.