Review of 2010 – USD version - Skanska

Stavanger, on the southern
coast of Norway, has a very
strong housing market. In 2010,
135 homes of various kinds were
sold. Shown here are the first
phases of Fjordspeilet, which
will comprise 114 homes
including an upcoming phase.
Lomma Hamn is a new district
being developed in Lomma
on the shore of the Öresund
waterway just north of Malmö,
Sweden. Aside from new
Skanska homes, the area has a
marina and a fishing harbor as
well as a sandy beach.
In the Czech Republic and Slovakia, Skanska focuses on
the Prague and Bratislava markets. In Prague, Skanska
is one of the largest residential developers. Increased
consumer confidence in the future, greater willingness
by banks to provide loans and a stabilization in
unemployment − which is significantly lower in the two
capitals − are having a positive impact on demand. At
present, the greatest demand is for somewhat smaller
apartments since customer interest shifted toward
lower total cost.
As earlier, Skanska’s home buyers also have access
to financially attractive offerings. Marketing is being
reinforced with the help of showroom apartments and
greater accessibility to projects on the Internet − steps
that have proved successful in the Nordic countries.
As part of Skanska’s new business plan, the Group
is initiating efforts to expand residential development
operations to Poland and the U.K.
Focused sales efforts
Skanska has its own sales organization, which enables
it to establish a broad range of contacts with potential
buyers. The salespeople are knowledgeable about
Skanska’s products and can thereby guide customers
in making choices. This also makes them aware of customers’
preferences and wishes. All sales activities are
measured, providing a direct picture of the attractiveness
of each product in the market and the impact of
various activities on sales. Including this knowledge in
project development work is an important element of
risk management.
To further increase its familiarity with customers,
Skanska’s housing panel conducts in-depth surveys in
which a large number of individuals are asked about
their preferences and needs.
Skanska has also developed new, improved interior
design in its model homes to stimulate sales. The décor in
these homes is targeted to selected customer categories,
generating greater interest in Skanska’s residential homes.
“Expo” is another concept; it means that a full-scale
model home is constructed in a planned residential
area. The model home, which is fully furnished, also has
windows with a projection showing how the view will
look when construction is completed. Expo has been
used very successfully at the Frölunda Torg project in
Gothenburg and at Linabergskajen in Stockholm.
The right customer, product and market
Operations focus on selected geographic markets and
a limited number of products targeting three different
specific customer categories or market segments − for
example young couples and first-time buyers, families
with children and affluent couples without children
living at home. Clearly defined customer segments and
needs provide the basis for the products and concepts
that Skanska chooses to invest in. The design of these
products is adapted to the Company’s prioritized
customer segments.
It is also a matter of developing the right product for
the right market.
Skanska’s future residential development strategy
will also include focusing on higher volume in a number
of product types and metropolitan regions selected on
the basis of their economic situation and population
growth, business and infrastructure investment as well
as volume and price trends.
The aim of this strategy is to boost volume, which
will also require a well-adapted land bank. To meet
these requirements, Skanska continuously evaluates its
land holdings, resulting in acquisitions, divestments or
land exchanges.
Boosting cost-effectiveness
In order to improve productivity and cost-effectiveness,
Skanska is working to develop standardized components,
industrialized production and coordinated purchasing.
Three technical product platforms, for apartment
buildings, single-family homes and BoKlok buildings,
make possible a high degree of repetition without sacrificing
varied designs in individual projects.
As part of the pan-Nordic development project Skanska
Xchange, some 60 projects are underway based on these
new platforms. Most of them are apartment buildings.
Experience is showing increased efficiency and substantial
cost savings. Time and costs are being lowered
throughout the process from design to construction
− among other things due to repetition, use of Building
Information Modeling (BIM) as a planning aid and
prefabricated modules for bathrooms, ventilation units
and other components.
There is also potential for improvement by boosting
volume, for example by developing large, coherent
residential areas or neighborhoods.
Skanska Industrial Production Nordic is responsible
for a large proportion of this production. Starting in
2011 it will supply all wooden-framed single-family
homes in Sweden and Norway. For BoKlok homes, the
Gullringen element factory in Vimmerby, Sweden also
assembles kitchen modules. Purchasing in the Nordic
countries is also being centralized in a specialist unit.
The value enhancement process
Development of residential projects is a continuous
process – land acquisition, planning, product definition,
marketing, construction and sales – in which the developer
has full responsibility in all phases. Development
operations are capital-intensive, especially during the
start-up of new projects. Value enhancement occurs
continuously in the various phases. In order to reduce
tied-up capital, a rapid pace of sales is sought.
Skanska Review of 2010 – USD version
Residential Development 37