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Veidekke Bostad is a major player in the Swedish market with operations in the Stockholm area, Skåne and Gothenburg.
In 2009 Veidekke Bostad completed 391 (501) homes, and initiated 185 (32) homes in 5 (2) projects. At the end of 2009 it had operations in Sweden with 247 (453) properties under production in 9 (11) projects. 15 (29) of the housing units under production were not sold. There were 0 (3) completed, unsold homes at year-end.
The housing market showed a clear positive trend through 2009 with 215 properties already sold compared with 86 in 2008. The improvement may primarily be linked to areas in and around Stockholm, but sales also picked up in Skåne and Gothenburg. The improvement is most visible on small housing projects, as well as for smaller blocks of flats in outskirt areas. The market for larger blocks of flats is still somewhat selective.
At the end of the year the land bank totaled 3 900 residential units, of which 70% were purchase options. High site prices in recent years have meant that we have concentrated on option purchases (from municipalities and private) where the risk is low because sites are not paid for until later in the process. The municipalities in Sweden own large land areas, and provide property developers so-called land allocations (options). The acquisition may be canceled if for some reason we wish not to complete the agreement. Option agreements allow for a very capital efficient operation.
Rights to build 640 homes were acquired in 2009, of which a large part is options based, reducing the need for capital in the development period. A valuation of all sites in the portfolio was undertaken at year’s end and no basis for devaluing the portfolio was found.
Swedish activities had a turnover in 2009 of MNOK 359 (MNOK 720). Profit before tax was MNOK 21.2 (MNOK 101.8). The low volume and earnings decline are related to the weak market in recent years. Few new projects were initiated.
At the end of the year MNOK 498 (MNOK 415) was tied up in Sweden.