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
July – September 2021
Net sales for the third quarter 2021 increased and amounted to SEK 2,741 million (1,750). Operating profit improved to SEK 326 million (162).
January – September 2021
Net sales for the period January-September 2021 increased by twelve percent and amounted to SEK 6,380 million (5,696). The increase is attributable to Housing Development. Operating profit improved to SEK 791 million (474) and the operating margin was 12.4 percent (8.3).
Capital employed in Project Development at the end of the period amounted to SEK 13,685 million (13,174). The increase is primarily due to a higher value of the shares in joint venture companies.
Brf Teleterassen
Stockholm
Capital employed
| MSEK | 30 Sep 2021 | 30 Sep 2020 | Dec 31 2020 | |
| Mkr | 30 sep 2021 | 30 sep 2020 | 31 dec 2020 | |
| Operations property | Driftsfastigheter | 65 | 146 | 161 |
| Investment property | Förvaltningsfastigheter | 48 | 113 | 112 |
| Project and development property | Projekt- och exploateringsfastigheter | 9,513 | 9,428 | 9,060 |
| of which housing development rights | varav bostadsbyggrätter | 5,251 | 5,172 | 4,819 |
| of which commercial development rights | varav kommersiella byggrätter | 586 | 588 | 585 |
| of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 1,660 | 1,771 | 1,730 |
| of which ongoing rental projects in Sweden | varav pågående hyresrättsprojekt i Sverige | 628 | 929 | 1,100 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 533 | 346 | 226 |
| of which completed property | varav färdigställda fastigheter | 307 | 332 | 311 |
| of which other | varav övrigt | 548 | 290 | 289 |
| Participation in joint ventures | Andelar i joint ventures | 2,401 | 1,790 | 1,873 |
| Loans to joint ventures | Utlåning till joint ventures | 1,197 | 1,142 | 1,213 |
| Working capital and other | Rörelsekapital och övrigt | 461 | 555 | -230 |
| Total | Summa | 13,685 | 13,174 | 12,189 |
| of which Property Development | varav Fastighetsutveckling | 4,261 | 3,540 | 3,766 |
| of which Housing Development | varav Bostadsutveckling | 9,424 | 9,634 | 8,423 |
Key ratios
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | Oct-Sep 2020/2021 | Jan-Dec 2020 | ||
| Jul-sep 2021 | Jul-sep 2020 | Jan-sep 2021 | Jan-sep 2020 | Okt-sep 2020/2021 | Jan-dec 2020 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 2,741 | 1,750 | 6,380 | 5,696 | 8,184 | 7,500 |
| of which Property Development | varav Fastighetsutveckling | 33 | 71 | 96 | 304 | 167 | 375 |
| of which Housing Development | varav Bostadsutveckling | 2,708 | 1,679 | 6,284 | 5,392 | 8,017 | 7,125 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 326 | 162 | 791 | 474 | 1,986 | 1,669 |
| of which Property Development | varav Fastighetsutveckling | 70 | 13 | 109 | 21 | 1,070 | 982 |
| of which Housing Development | varav Bostadsutveckling | 256 | 149 | 682 | 453 | 916 | 687 |
| Operating margin, % | Rörelsemarginal, % | 11.9 | 9.3 | 12.4 | 8.3 | 24.3 | 22.3 |
| of which Property Development | varav Fastighetsutveckling | 212.1 | 18.3 | 113.5 | 6.9 | 640.7 | 261.9 |
| of which Housing Development | varav Bostadsutveckling | 9.5 | 8.9 | 10.9 | 8.4 | 11.4 | 9.6 |
| Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 13,685 | 13,174 | 13,685 | 13,174 | 13,685 | 12,189 |
| Orders received, MSEK | Orderingång, Mkr | 1,893 | 1,639 | 6,896 | 4,729 | 9,107 | 6,940 |
| Order backlog, MSEK | Orderstock, Mkr | 6,045 | 4,673 | 6,045 | 4,673 | 6,045 | 5,151 |
| Average number of employees 1) | Medelantalet anställda 1) | 243 | 314 | 243 | 314 | 243 | 290 |
1) Calculated on rolling 12 months
Housing Development
July – September 2021
Net sales improved and amounted to SEK 2,708 million (1,679). Net sales have increased in both Sweden and Finland. An increase in the number of production-started housing projects and good sales in projects converted from rental apartments to tenant-owner homes has had a positive effect during the quarter. Operating profit increased to SEK 256 million (149) and the operating margin improved to 9.5 percent (8.9) as a result of a good project portfolio and the good housing market in all three countries.
The number of start-ups of our own developed homes during the third quarter amounted to 678 units (591), and are mainly in Sweden and Finland. There is a good geographic spread in production start-ups in both countries. The number of sold homes was 747 (730), most of which were in Sweden and Finland. No homes were production started in rental apartment projects in the third quarter (60).
January – September 2021
Net sales increased to SEK 6,284 million (5,392) and the increase is related to Sweden and Finland. Operating profit increased and amounted to SEK 682 million (453) and the operating margin improved to 10.9 percent (8.4). The operating margin improved in all the countries compared to the corresponding period last year. In the latest rolling 12 month period the operating margin amounted to 11.4 percent compared to 9.6 percent for the entire year of 2020.
The number of start-ups of our own developed homes amounted to 2,125 units (1,612), of which 337 (187) have been converted from rentals. There is a good geographic spread in production starts. The number of sold homes was 2,201 (2,018). During the period sales have been good in all three countries. Our own developed homes in production at the end of the period were 4,487 (4,056). The portion of sold homes in production was 77 percent (72). The number of repurchased homes per September 30, 2021 was 170 (195) and most of them were in Sweden. During the period January – September production started on 388 homes (199) in rental apartment projects on our own balance sheet and 91 homes (–) were sold. The number of homes in rental apartment projects in production was 723 (505) 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 decreased at the end of the period compared to the corresponding point in time in 2020 and amounted to SEK 9,424 million (9,634).
Net sales
Development rights for housing
| Number, approx. | Sep 30 2021 | Sep 30 2020 | Dec 31 2020 | |
| Antal, cirka | 30 sep 2021 | 30 sep 2020 | 31 dec 2020 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 19,600 | 19,600 | 18,900 |
| Development rights via joint ventures | Byggrätter via joint ventures | 4,800 | 4,600 | 4,400 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 9,800 | 9,700 | 9,700 |
| Total | Totalt | 34,200 | 33,900 | 33,000 |
Own housing development construction
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | Oct-Sep 2020/2021 | Jan-Dec 2020 | ||
| Jul-sep 2021 | Jul-sep 2020 | Jan-sep 2021 | Jan-sep 2020 | Okt-sep 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 | 678 1) | 591 1) | 2,125 2) | 1,612 2) | 2,804 | 2,291 |
| Number of sold homes during the period | Antal under perioden sålda bostäder | 747 | 730 | 2,201 | 2,018 | 2,865 | 2,682 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 4,487 | 4,056 | 4,487 | 4,056 | 4,487 | 4,014 |
| Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 77% | 72% | 77% | 72% | 77% | 73% |
| Number of repurchased homes on our balance sheet, at the end of the period | Antal återköpta bostäder i egen balansräkning, vid periodens slut | 170 | 195 | 170 | 195 | 170 | 222 |
| Rentals | Hyresrätter | ||||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | – | 60 | 388 | 199 | 691 | 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 | 75 | – | 337 | 187 | 378 | 228 |
| Total number of homes in production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 723 | 505 | 723 3) | 505 | 723 | 763 |
1) Includes 75 (–) homes that have been converted from rentals
2) Includes 337 (187) homes that have been converted from rentals
3) Of which 528, respectively 73 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 profit/loss from partially owned companies as well as capital gains/losses from the divestiture of completed property and shares in partially owned companies.
July – September 2021
During the third quarter 2021 net sales were SEK 33 million (71) and operating profit was SEK 70 million (13). Profit from property sales amounted to SEK 41 million (26). Contributions from profit in partially owned companies has improved compared to the corresponding quarter last year. Some operations connected to travel and tourism were negatively affected by the corona pandemic which lowered operating profit in the third quarter in Property Development by SEK -1 million (-21).
January – September 2021
During January – September 2021 net sales were SEK 96 million (304) and operating profit was SEK 109 million (21). Profit from property sales amounted to SEK 67 million (43) which included the divesture of an office building in Helsingborg to Annehem Fastigheter. Some operations connected to travel and tourism have been negatively affected by the corona pandemic which lowered operating profit in Property Development by SEK -18 million (-59). The comparable period included SEK -44 million related to Ängelholm-Helsingborg Airport, of which SEK -20 million referred to the write-down of goodwill. Our partially owned companies continue to develop well and contributions from profit in partially owned companies is on par with the corresponding period last year.
Capital employed in Property Development was SEK 4,261 million (3,540) at the end of the third 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, signed contracts in May 2021 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 have owned and managed three lodges in Swedish and Norwegian mountainside locations through various jointly owned companies. These have now been gathered together in the half-owned company Skiab Invest AB. In addition, the company acquired 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 signed 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 of the divestiture and lease signing by a General Meeting in SkiStar as well as maintaining existing financing or arranging new financing latest by September 15th. After the above conditions were met, all the transactions were finalized per July 2021.
The table below presents the larger ongoing property projects per September 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 sale 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 decided to build the office building The Corner in Hyllie, Malmö. The building will have 7,100 m2 flexible office space spread out over 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. During the period Peab also decided to build the office building Gamlestaden Smedjan in Gothenburg. The location of the property provides excellent communications and is in one of Gothenburg’s development areas. The building will contain in total rentable space of about 13,100 m2 divided into eight floors. The property will be certified according to Breeam Excellent and to further contribute to sustainable development it will be equipped with solar panels in combination with an energy storing system in the building.
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 | 170 | 194 | Q4-2021 | 88 |
| Sports hall | Sundsvall | Idrottshall | Sundsvall | 14,700 | 100 | 167 | 223 | Q2-2022 | 75 |
| Logistic facility | Södertälje | Logistikanläggning | Södertälje | 2,200 | 100 | 21 | 67 | Q2-2022 | 31 |
| Office building | Malmö | Kontor | Malmö | 7,100 | 28 | 66 | 296 | Q1-2023 | 22 |
| Office building | Gothenburg | Kontor | Göteborg | 13,100 | 0 | 62 | 516 | Q1-2024 | 12 |
| Other ongoing projects | Övriga pågående projekt | 47 | |||||||
| Total | Summa | 533 |
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 September 30, 2021 1): SEK 7,343 million (6,894)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 474 million (427)
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 September 30, 2021: SEK 1,979 million (1,924)
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 September 30, 2021: SEK 1,369 million (1,355)
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 September 30, 2021 1): SEK 2,028 million (42)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 12 million (–)
Major ongoing projects: Ski lodge Hundfjället with rentable space of about 19,000 m2. The property is rented to SkiStar
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 September 30, 2021 1): SEK 5,358 million (4,953)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 375 million (332)
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
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.