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
October – December 2021
Net sales for the fourth quarter 2021 increased by 73 percent and amounted to SEK 3,117 million (1,804). Operating profit was SEK 446 million (1,195). In 2020 operating profit included the effect of the distribution of Annehem Fastigheter by SEK 896 million.
January – December 2021
Net sales for 2021 increased by 27 percent and amounted to SEK 9,497 million (7,500). The increase is primarily attributable to Housing Development. Operating profit was SEK 1,237 million (1,669). Operating profit in 2020 included the effect of the distribution of Annehem Fastigheter by SEK 896 million. The operating margin was 13.0 percent (22.3). Excluding the effect of Annehem Fastigheter the operating margin in 2020 was 10.3 percent.
Capital employed in Project Development at the end of the year amounted to SEK 13,523 million (12,189). The increase is primarily due to investments in project and development property and an increase in the value of the shares in joint venture companies.
Brf Solgårdsterassen
Stenungsund
Capital employed
| MSEK | Dec 31 2021 | Dec 31 2020 | |
| Mkr | 31 dec 2021 | 31 dec 2020 | |
| Operations property | Driftsfastigheter | 52 | 161 |
| Investment property | Förvaltningsfastigheter | 36 | 112 |
| Project and development property | Projekt- och exploateringsfastigheter | 10,628 | 9,060 |
| of which housing development rights | varav bostadsbyggrätter | 6,629 | 4,819 |
| of which commercial development rights | varav kommersiella byggrätter | 613 | 585 |
| of which unsold part of ongoing housing projects | varav osåld del av pågående bostadsprojekt | 1,549 | 1,730 |
| of which ongoing rental projects in Sweden | varav pågående hyresrättsprojekt i Sverige | 727 | 1,100 |
| of which ongoing commercial projects | varav pågående kommersiella projekt | 483 | 226 |
| of which completed property | varav färdigställda fastigheter | 123 | 311 |
| of which other | varav övrigt | 504 | 289 |
| Participation in joint ventures | Andelar i joint ventures | 2,371 | 1,873 |
| Loans to joint ventures | Utlåning till joint ventures | 1,177 | 1,213 |
| Working capital and other | Rörelsekapital och övrigt | -741 | -230 |
| Total | Summa | 13,523 | 12,189 |
| of which Property Development | varav Fastighetsutveckling | 4,265 | 3,766 |
| of which Housing Development | varav Bostadsutveckling | 9,258 | 8,423 |
Key ratios
| Oct-Dec 2021 | Oct-Dec 2020 | Jan-Dec 2021 | Jan-Dec 2020 | ||
| Okt-dec 2021 | Okt-dec 2020 | Jan-dec 2021 | Jan-dec 2020 | ||
| Net sales, MSEK | Nettoomsättning, Mkr | 3,117 | 1,804 | 9,497 | 7,500 |
| of which Property Development | varav Fastighetsutveckling | 425 | 71 | 521 | 375 |
| of which Housing Development | varav Bostadsutveckling | 2,692 | 1,733 | 8,976 | 7,125 |
| Operating profit, MSEK | Rörelseresultat, Mkr | 446 | 1,195 | 1,237 | 1,669 |
| of which Property Development | varav Fastighetsutveckling | 122 | 961 | 231 | 982 |
| of which Housing Development | varav Bostadsutveckling | 324 | 234 | 1,006 | 687 |
| Operating margin, % | Rörelsemarginal, % | 14.3 | 66.2 | 13.0 | 22.3 |
| of which Property Development | varav Fastighetsutveckling | 28.7 | 1,353.5 | 44.3 | 261.9 |
| of which Housing Development | varav Bostadsutveckling | 12.0 | 13.5 | 11.2 | 9.6 |
| Capital employed at the end of the period, MSEK | Sysselsatt kapital vid periodens utgång, Mkr | 13,523 | 12,189 | 13,523 | 12,189 |
| Orders received, MSEK | Orderingång, Mkr | 3,085 | 2,211 | 9,981 | 6,940 |
| Order backlog, MSEK | Orderstock, Mkr | 6,555 | 5,151 | 6,555 | 5,151 |
| Average number of employees 1) | Medelantalet anställda 1) | 242 | 290 | 242 | 290 |
1) Calculated on rolling 12 months
Housing Development
October – December 2021
Net sales increased by 55 percent and amounted to SEK 2,692 million (1,733). An increase in the number of production-started housing projects and good sales of homes have had a positive effect during the quarter. Operating profit increased to SEK 324 million (234) and the operating margin was 12.0 percent (13.5).
The number of start-ups of our own developed homes during the fourth quarter amounted to 895 units (679) and are mainly located in Sweden and Finland. Of these production-starts 89 (41) have been converted from rental projects. There is a good geographic spread in production start-ups in both countries. The number of sold homes was 846 (664), most of which were in Sweden and Finland. During the fourth quarter production started on 288 homes (303) in rental projects on our own balance sheet in Sweden.
January – December 2021
Net sales increased by 26 percent to SEK 8,976 million (7,125) and the increase is related to Sweden and Finland. Operating profit increased and amounted to SEK 1,006 million (687) and the operating margin improved to 11.2 percent (9.6). The operating margin improved in all the countries compared to the last year.
The number of start-ups of our own developed homes amounted to 3,020 units (2,291), of which 426 (228) have been converted from rentals. There is a good geographic spread in production starts. The number of sold homes was 3,047 (2,682). During the year sales have been good in all three countries. Our own developed homes in production at the end of the year were 4,702 (4,014). The portion of sold homes in production was 76 percent (73). The number of repurchased homes per December 31, 2021 decreased during the year and was 144 (222) and most of them were in Sweden. During the year production started on 676 homes (502) in rental projects on our own balance sheet and 91 homes (4) were sold. The number of homes in rental projects in production was 922 (763) at the end of the year. Of these 638 have been sold to investors and will be recognized in revenue when they are turned over.
Capital employed increased at the end of the year and amounted to SEK 9,258 million (8,423). The increase is primarily due to investments in housing development rights. In December 2021 part of the property Stockholm Primus 1 on Lilla Essingen in Stockholm with development rights for over 40,000 m2 GFA (gross area) and an underlying property value of SEK 1,167 million was acquired.
Net sales
Development rights for housing
| Number, approx. | Dec 31 2021 | Dec 31 2020 | |
| Antal, cirka | 31 dec 2021 | 31 dec 2020 | |
| Development rights on our own balance sheet | Byggrätter i egen balansräkning | 19,500 | 18,900 |
| Development rights via joint ventures | Byggrätter via joint ventures | 4,600 | 4,400 |
| Development rights via options etc. | Byggrätter via optioner m.m. | 10,500 | 9,700 |
| Total | Totalt | 34,600 | 33,000 |
Own housing development construction
| Oct-Dec 2021 | Oct-Dec 2020 | Jan-Dec 2021 | Jan-Dec 2020 | ||
| Okt-dec 2021 | Okt-dec 2020 | Jan-dec 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 | 895 1) | 679 1) | 3,020 2) | 2,291 2) |
| Number of sold homes during the period | Antal under perioden sålda bostäder | 846 | 664 | 3,047 | 2,682 |
| Total number of homes under production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 4,702 | 4,014 | 4,702 | 4,014 |
| Portion of sold homes under production, at the end of the period | Andel sålda bostäder i produktion, vid periodens slut | 76% | 73% | 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 | 144 | 222 | 144 | 222 |
| Rentals | Hyresrätter | ||||
| Number of production-started homes during the period | Antal under perioden produktionsstartade bostäder | 288 | 303 | 676 | 502 |
| Number of sold homes during the period | Antal under perioden sålda bostäder | – | 4 | 91 | 4 |
| Number converted to tenant-owner associations during the period | Antal under perioden konverterade till bostadsrätter | 89 | 41 | 426 | 228 |
| Total number of homes in production, at the end of the period | Totalt antal bostäder i produktion, vid periodens slut | 922 | 763 | 922 3) | 763 |
1) Includes 89 (41) homes that have been converted from rentals
2) Includes 426 (228) homes that have been converted from rentals
3) Of which 638, respectively 69 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.
October – December 2021
During the fourth quarter 2021 net sales increased to SEK 425 million (71) and operating profit was SEK 122 million (961). Last year the effect of the distribution of Annehem Fastigheter by SEK 896 million was included in operating profit. Capital gains from property sales amounted to SEK 151 million (8). During the quarter, among other things, an office building in Solna was sold to Annehem Fastigheter. Profit contributions from partially owned companies were lower in the fourth quarter compared to the corresponding quarter last year.
January – December 2021
During 2021 net sales increased to SEK 521 million (375) and operating profit was SEK 231 million (982). Last year the effect of the distribution of Annehem Fastigheter by SEK 896 million was included in operating profit. Capital gains from property sales amounted to SEK 218 million (51) which included, among other things, the divestment of office buildings in Helsingborg and Solna to Annehem Fastigheter. Profit contributions from partially owned companies have been somewhat lower compared to 2020. Some operations connected to travel and tourism have been negatively affected by the corona pandemic which lowered operating profit in Property Development by SEK -20 million (-64). The comparable period included SEK -44 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 4,265 million (3,766) at the end of the 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 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 December 31, 2021. During the year 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 year 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 year 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.
A contract was signed in December 2021 with Corem to acquire the mall Knallerian with four properties and a total area of 15,165 m2 in the commercial area Knalleland in Borås for an underlying property value of SEK 110 million. The leasable space is close to 23,000 m2 and currently has around 40 tenants. Peab will continue to run the mall parallel with developing the area. Takeover and payment took place on February 1, 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 | 195 | 223 | Q2-2022 | 88 |
| Logistic facility | Södertälje | Logistikanläggning | Södertälje | 2,200 | 100 | 60 | 67 | Q2-2022 | 90 |
| Padel hall | Trollhättan | Padelhall | Trollhättan | 3,900 | 100 | 16 | 52 | Q4-2022 | 31 |
| Office building | Malmö | Kontor | Malmö | 7,100 | 28 | 98 | 296 | Q1-2023 | 33 |
| Office building | Gothenburg | Kontor | Göteborg | 13,100 | 25 | 101 | 516 | Q1-2024 | 20 |
| Other ongoing projects | Övriga pågående projekt | 13 | |||||||
| Total | Summa | 483 |
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 December 31, 2021 1): SEK 7,497 million (7,103)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 573 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 December 31, 2021: SEK 1,991 million (1,956)
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 December 31, 2021: SEK 1,385 million (1,356)
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 December 31, 2021 1): SEK 2,093 million (41)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 16 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.
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 December 31, 2021 1): SEK 5,649 million (5,019)
Peab’s portion of unrecognized fair value exclusive tax 1): SEK 417 million (357)
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.