Review of 2010 – USD version - Skanska

Business streams
A supply of land suitable for development is a
precondition for a continuous flow of projects. Due to
lengthy planning and permit processes, ample lead
time is required.
Värdeskapande i Bostadsutveckling
Increasing Värde the value of building rights
The value of land and buildings varies with the demand
for housing, i.e. changes in prices and rents. Value also
Kundvård
depends on location. As development Försäljning och risks diminish,
value increases. A major step
produktion
in value enhancement
Marknadsföring
occurs when och a projektering parcel of undeveloped land is transformed
Planläggning into a building right. The process leading to an
och bygglov
approved local development plan may take up to five years.
Idé och
Skanska analys plays a proactive role, working closely with
local government bodies in planning processes Tid for land
use and Markförvärv neighborhood development. Förhandsbokning Value Tillträde is further
inför produktionsstart
5–7 år
Value creation in Residential Development
Value
Planning
and permitting
Concept and
analysis
Land purchase
Marketing and
pre-construction
engineering
Customer care
Sales and
construction
Advance booking Move-in
before groundbreaking
5–7 years
Time
Generating value, step by step
In residential development, macroeconomic and demographic
trends are fundamental in generating value. Before making land
purchases, Skanska also analyzes local conditions in detail.
Maximum customer value is achieved in stages. Skanska establishes
a framework in close collaboration with local government.
Based on the potential offered by the surroundings, it then creates
a neighborhood with clear character. The design and marketing of
an attractive product are also based on the wishes of a well-defined
customer category.
The Skanska project team leading this task includes business and
project developers, architects, salespeople and builders. When
purchasing their homes, individual customers will also contribute
to the process with their specific requirements and requests.
enhanced in the next phase, when the building right is
turned into a completed project that can be sold at the
prevailing market price.
In Finland and the Czech Republic, project development
generally begins on land that local governments
have designated and planned for residential projects.
This involves a shorter execution period and lower tiedup
capital.
Of fundamental importance for successful residential
development is Skanska’s ability to correctly assess
demand and customer needs in such a way that its
development work results in attractive housing of the
expected quality in the right place, at the right time and
at the right price. Customer surveys provide data on the
preferences of potential customers in terms of location,
design and price level.
Effective from 2010, accounting principles were
changed. Skanska is managing residential development
operations on the basis of the segment reporting system
described earlier. See page 10.
Risk management
The right product at the right time is the basis for success.
The general risk lies in having the wrong product in the
wrong location. The basic prerequisite for minimizing
this risk is to be familiar with customers and their needs.
Capital at risk is limited to a maximum amount.
This means that new projects may not be started until
room has been created by further sales of homes that are
under construction or completed. Capital at risk equals
the estimated completion cost for all unsold homes,
both completed and under construction.
Rising above Espoo outside
Helsinki, Finland, is the 70 m
(230 ft.) Leppävaara tower with
its 113 apartments. Residents of
the 21-story building have access
to a common sauna department
and a roof top terrace.
BoKlok attached homes are
making their debut in Lambohov,
Linköping, Sweden. The 15 homes
are being sold as cooperative
units, and the monthly cost will
be USD 1,068 and up, including
interest and principal.
38 Residential Development Skanska Review of 2010 – USD version