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
April – June 2022
Net sales for the second quarter 2022 amounted to SEK 1,977 million (1,929). Operating profit improved to SEK 264 million (252).
January – June 2022
Net sales for the first half-year 2022 increased by 22 percent to SEK 4,441 million (3,639). The increase is primarily attributable to Housing Development. Operating profit improved to SEK 553 million (465) and the operating margin was 12.5 percent (12.8).
Capital employed in Project Development at the end of the period amounted to SEK 13,911 million (13,258). The increase primarily refers to higher investments in project and development property.
Capital employed
| MSEK | Jun 30 2022 | Jun 30 2021 | Dec 31 2021 | |
| Mkr | 30 jun 2022 | 30 jun 2021 | 31 dec 2021 | |
| Operations property | Driftsfastigheter | 53 | 73 | 52 |
| Investment property | Förvaltningsfastigheter | 36 | 48 | 36 |
| Project and development property | Projekt- och exploateringsfastigheter | 11,338 | 9,742 | 10,628 |
| of which housing development rights | varav bostadsbyggrätter | 6,687 | 5,190 | 6,629 |
| of which commercial development rights | varav kommersiella byggrätter | 590 | 669 | 613 |
| of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 1,840 | 2,226 | 1,549 |
| of which ongoing rental projects | varav pågående hyresrättsprojekt | 1,103 | 598 | 727 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 582 | 407 | 483 |
| of which completed property | varav färdigställda fastigheter | 130 | 303 | 123 |
| of which other | varav övrigt | 406 | 349 | 504 |
| Participation in joint ventures | Andelar i joint ventures | 2,573 | 1,858 | 2,371 |
| Loans to joint ventures | Utlåning till joint ventures | 1,222 | 1,331 | 1,177 |
| Working capital and other | Rörelsekapital och övrigt | -1,311 | 206 | -741 |
| Total | Summa | 13,911 | 13,258 | 13,523 |
| of which Property Development | varav Fastighetsutveckling | 4,367 | 3,811 | 4,265 |
| of which Housing Development | varav Bostadsutveckling | 9,544 | 9,447 | 9,258 |
Key ratios
| Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 | Jul-Jun 2021/2022 | Jan-Dec 2021 | ||
| Apr-jun 2022 | Apr-jun 2021 | Jan-jun 2022 | Jan-jun 2021 | Jul-jun 2021/2022 | Jan-dec 2021 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 1,977 | 1,929 | 4,441 | 3,639 | 10,299 | 9,497 |
| of which Property Development | varav Fastighetsutveckling | 120 | 33 | 179 | 63 | 637 | 521 |
| of which Housing Development | varav Bostadsutveckling | 1,857 | 1,896 | 4,262 | 3,576 | 9,662 | 8,976 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 264 | 252 | 553 | 465 | 1,325 | 1,237 |
| of which Property Development | varav Fastighetsutveckling | 43 | 29 | 77 | 39 | 269 | 231 |
| of which Housing Development | varav Bostadsutveckling | 221 | 223 | 476 | 426 | 1,056 | 1,006 |
| Operating margin, % | Rörelsemarginal, % | 13.4 | 13.1 | 12.5 | 12.8 | 12.9 | 13.0 |
| of which Property Development | varav Fastighetsutveckling | 35.8 | 87.9 | 43.0 | 61.9 | 42.2 | 44.3 |
| of which Housing Development | varav Bostadsutveckling | 11.9 | 11.8 | 11.2 | 11.9 | 10.9 | 11.2 |
| Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 13,911 | 13,258 | 13,911 | 13,258 | 13,911 | 13,523 |
| Orders received, MSEK | Orderingång, Mkr | 1,530 | 2,496 | 4,025 | 5,003 | 9,003 | 9,981 |
| Order backlog, MSEK | Orderstock, Mkr | 6,698 | 6,833 | 6,698 | 6,833 | 6,698 | 6,555 |
| Operating cash flow, MSEK | Operativt kassaflöde, Mkr | 0 | -9 | 342 | -277 | 868 | 249 |
| Number of employees 1) | Antal anställda 1) | 247 | 245 | 247 | 245 | 247 | 242 |
1) Calculated on rolling 12 months
Housing Development
April – June 2022
Net sales for the second quarter 2022 amounted to SEK 1,857 million (1,896). Net sales have increased in Sweden but decreased in Finland and Norway. Operating profit amounted to SEK 221 million (223) and the operating margin was relatively unchanged at 11.9 percent (11.8).
The number of start-ups of our own developed homes during the second quarter amounted to 528 units (785), located in Sweden and Finland. The number of start-ups was somewhat lower in the quarter in part due to a guarded market. The number of sold homes was 445 (797), most of which were in Sweden and Finland. The high sales rate of 75 percent (76) in ongoing projects meant fewer available objects for sale, which is the primary reason for the somewhat lower sales in the quarter. In the second quarter production started on 300 (135) homes in rental apartment projects, of which 294 are under contract to be sold upon completion.
January – June 2022
Net sales increased to SEK 4,262 million (3,576) and the increase is related to Sweden. More ongoing housing projects and a high level of home sales has had a positive effect on net sales. Operating profit amounted to SEK 476 million (426) and the operating margin was 11.2 percent (11.9). In the latest rolling 12 month period the operating margin amounted to 10.9 percent compared to 11.2 percent for the entire year of 2021.
The number of start-ups of our own developed homes amounted to 1,252 units (1,447), of which 147 (262) have been converted from rentals. The number of sold homes was 1,245 (1,454). During the period sales have been good in all three countries although they have lagged in the second quarter. The number of own developed homes in production at the end of the period was 4,835 (4,132). The level of sold homes in production was 75 percent (76). The number of repurchased homes per June 30, 2022 was 126 (200) and most of them were in Finland. Production started on 300 homes (388) in rental apartment projects on our own balance sheet during the first half of the year. No homes in rental apartment projects have been sold and settled during the period (91). The number of homes in rental apartment projects in production was 1,075 (798) at the end of the period. Of these 932 are under contract to be sold upon completion.
The underlying need for housing is still considered good but higher construction costs and hikes in interest rates make it difficult to assess future developments.
Capital employed has increased slightly at the end of the period and amounted to SEK 9,544 million (9,447).
Joint venture established for housing properties in Finland
Peab has established a joint venture with Slättö to develop and manage newly produced green housing developments in Finland. The partners share an ambition to develop the portfolio focusing on big cities in Finland. The initial acquisition consists of two housing projects in Vantaa and Turku with a total of 178 apartments and 705 m2 commercial space in locations with good communications. All the properties will be environmentally certified. Peab will build the properties on its own balance sheet until completion at the end of 2023 when they will be divested to the joint venture.
Net sales
Development rights for housing
| Number, approx. | Jun 30 2022 | Jun 30 2021 | Dec 31 2021 | |
| Antal, cirka | 30 jun 2022 | 30 jun 2021 | 31 dec 2021 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 20,800 | 18,200 | 19,500 |
| Development rights via joint ventures | Byggrätter via joint ventures | 4,500 | 4,600 | 4,600 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 8,600 | 9,700 | 10,500 |
| Total | Totalt | 33,900 | 32,500 | 34,600 |
Own housing development construction
| Apr-Jun 2022 | Apr-Jun 2021 | Jan-Jun 2022 | Jan-Jun 2021 | Jul-Jun 2021/2022 | Jan-Dec 2021 | ||
| Apr-jun 2022 | Apr-jun 2021 | Jan-jun 2022 | Jan-jun 2021 | Jul-jun 2021/2022 | 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 | 528 | 785 1) | 1,252 2) | 1,447 2) | 2,825 | 3,020 |
| Number of sold homes during the period | Antal under perioden sålda bostäder | 445 | 797 | 1,245 | 1,454 | 2,838 | 3,047 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 4,835 | 4,132 | 4,835 | 4,132 | 4,835 | 4,702 |
| Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 75% | 76% | 75% | 76% | 75% | 76% |
| Number of repurchased homes on our balance sheet, at the end of the period | Antal återköpta bostäder i egen balansräkning, vid periodens slut | 126 | 200 | 126 | 200 | 126 | 144 |
| Rentals | Hyresrätter | ||||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | 300 | 135 | 300 | 388 | 588 | 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 | – | 56 | 147 | 262 | 311 | 426 |
| Total number of homes in production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 1,075 | 798 | 1,075 3) | 798 3) | 1,075 | 922 |
1) Includes 56 homes that have been converted from rentals
2) Includes 147 (262) homes that have been converted from rentals
3) Of which 932 (528), respectively 87 percent (66), 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
Brf Scheelepromenad
Lund
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 2022
During the second quarter 2022 net sales were SEK 120 million (33) and operating profit was SEK 43 million (29). Capital gains from property divestitures amounted to SEK 9 million (26). The amount included divestment of a logistic facility in Södertälje to Annehem Fastigheter. Profit contributions from partially owned companies amounted to SEK 38 million during the quarter compared to SEK 16 million in the same quarter last year.
January – June 2022
During the first half-year 2022 net sales were SEK 179 million (63) and operating profit was SEK 77 million (39). Capital gains from property divestitures amounted to SEK 22 million (26). The period included, among others, divestment of a logistic facility in Södertälje to Annehem Fastigheter. Profit contributions from partially owned companies amounted to SEK 71 million compared to SEK 31 million in the same period last year.
Capital employed in Property Development was SEK 4,367 million (3,811) at the end of the second quarter 2022. A large part of the capital employed is shares in partially owned companies and loans to partially owned companies.
The table below presents the ongoing property projects per June 30, 2022. The sports arena in Sundsvall was sold to Balder on July 1, 2022 and will be recognized in revenue in the third quarter. The paddle hall in Trollhättan is under contract to be sold to external party during the fourth 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 | 220 | 225 | Q3-2022 | 98 |
| Padel hall | Trollhättan | Padelhall | Trollhättan | 3,900 | 100 | 39 | 52 | Q4-2022 | 74 |
| Office building | Malmö | Kontor | Malmö | 7,100 | 42 | 153 | 310 | Q1-2023 | 49 |
| Office building | Gothenburg | Kontor | Göteborg | 13,100 | 0 | 154 | 530 | Q3-2024 | 29 |
| Other ongoing projects | Övriga pågående projekt | 16 | |||||||
| Total | Summa | 582 |
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 June 30, 2022 1): SEK 7,747 million (7,324)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 620 million (468)
Major ongoing projects: Varvsstaden, Malmö, renovation of Gjuteriet of around 4,600 m2 (tenant Oatly) and renovation of Snickeriet of around 2,500 m2 (tenant Lindahls)
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, 2022: SEK 1,968 million (1,981)
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 June 30, 2022: SEK 1,396 million (1,369)
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 June 30, 2022 1): SEK 2,231 million (41)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 28 million (–)
Major ongoing projects: Sadelbyn 7 with 42 tenant-owner apartments in Åre and 20 tenant-owner apartments in Timmerbyn, Lindvallen in Sälen
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, 2022 1): SEK 6,057 million (5,212)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 423 million (370)
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.