Review of 2010 – USD version - Skanska

Business streams
estimated completion cost for ongoing projects, multiplied
by the economic vacancy rate for each respective
project. Capital at risk is limited to a maximum amount
approved by the Board of Directors.
A leader in Green Premises
Interest in green and energy-efficient commercial premises
is continuously increasing. Skanska is a leader in
developing energy-efficient, environmentally certified
properties. Energy-efficient solutions add value for both
investors and users.
Skanska is the first construction and development
company to require LEED certification of all new commercial
properties developed for its own account in the
Nordic countries, Central Europe and the U.S. In recent
years, a number of projects have also received EU Green-
Building certification, which requires a building to show
25 percent lower energy use and climate impact than the
national construction norm for new properties.
When completed, the Gårda office building project
will be the first in Gothenburg to achieve the highest
level, LEED Platinum. The aim of Skanska’s new projects
in Warsaw, Wrocław, Prague and Budapest is to achieve
LEED Platinum certification.
By means of new, improved technical solutions,
consumption of both energy and water is substantially
reduced in both renovated and newly constructed
projects, compared to standard projects.
Markets
Skanska carries out commercial property development,
mainly of office buildings, in selected major Nordic,
Central European and U.S. growth centers.
It also develops logistics and high-volume retail
properties at strategic locations in Sweden, Denmark
and Finland.
Increasing investment appetite
The capital market is increasingly interested in commercial
property investments. Return requirements
are falling. Transaction market volume rose in 2010.
Skanska sold USD 0.5 billion worth of properties during
the year, of which USD 416 M in the Nordic countries. Its
gain on these divestments totaled USD 110 M.
Skanska’s financial strength enables it to start new
property projects early in the business cycle. During 2010
it invested a total of USD 430 M in 14 new office building
projects and in land for future projects in the U.S., Central
Europe and the Nordic countries.
Commercial Property Development – Projects in 2010
Commercial
Development
Nordic
Commercial
Development
Europe
Commercial
Development
USA
No. of projects started, 2010 8 4 2 14
Total investment commitments, USD M 372 166 154 692
Number of ongoing projects 12 4 2 18
Leasable space, 000 sq.m 154 84 36 274
Economic occupancy rate, % 51 3 15 32
Ongoing projects sold 3 0 0 3
Leasable space, 000 sq.m 30 0 0 30
Commercial Property Development – Ongoing projects
Type of
project
City
Leasable
area
000 sq.m
Completion
year
Total
Economic
occupancy
rate, %
Nordics
Gångaren 15 Office Stockholm, Sweden 14 2011 99
Lustgården 14, phase 1 Office Stockholm, Sweden 51 2013 0
Uppsala Entré Office Uppsala, Sweden 12 2012 86
Gårda, phase 1 Office Gothenburg, Sweden 15 2011 76
Gårda, phase 2 Office Gothenburg, Sweden 6 2011 76
Svågetorp Retail Malmö, Sweden 5 2011 100
Bassängkajen, Universitetsholmen,
phase 1 Office Malmö, Sweden 10 2011 88
Bassängkajen, Universitetsholmen,
phase 2 Office Malmö, Sweden 9 2011 0
Polisen 1, Rosengård Office Malmö, Sweden 3 2012 100
Ruskeasou, phase 1 Office Helsinki, Finland 13 2012 100
Ruskeasou, phase 2 Office Helsinki, Finland 10 2012 0
Scanport, Nordhuset Office Copenhagen, Denmark 5 2011 50
Europe
Green Tower Office Wrocław, Poland 17 2012 14
Green Corner Office Warsaw, Poland 23 2012 0
City Green Court Office Prague, Czech Republic 19 2012 0
Green House Office Budapest, Hungary 26 2012 0
U.S.
733 10th Street Office Washington, D.C. 18 2011 25
1776 Wilson Boulevard,
Arlington Office Washington, D.C. 18 2011 0
Total 274 32
Recovery in the leasing market
The recovery after the global financial crisis began, but
demand for commercial premises remained relatively
weak. Office vacancy rates are stable in Central Europe
and the Nordic countries. In the US there is good potential,
since many market players lack financial resources.
Skanska signed new leases for 116,000 sq. m (1.25 million
sq. ft.) of space.
Cautious optimism about 2011
The outlook for 2011 is cautiously optimistic, with stable
or rising rents. The vacancy rate has stabilized and is
low in Skanska’s property portfolio. Transaction volume
and interest on the part of investors are expected to
remain at good levels.
In Skanska’s markets, very few projects have been
started on speculation by other developers. This is
expected to strengthen the competitiveness of Skanska’s
ongoing projects, especially since Skanska’s projects
have a strong and clear environmental profile.
Nordic countries
Skanska Commercial Development Nordic initiates and
develops real estate projects, mainly office, logistics and
retail buildings. Its office building development operations
focus on the Stockholm, Gothenburg and Malmö
regions of Sweden; the Copenhagen region of Denmark;
and Helsinki, Finland. In Oslo, Norway, the business
unit carried out its first land purchase for development
and groundbreaking during the next few years.
The business unit pursues the development of logistics
and high-volume retail properties at strategic locations
in Sweden, Denmark and Finland.
A number of ongoing or fully developed office
properties were sold during the year. They included the
Flat Iron Building and Kvarteret Bylingen in Stockholm,
as well as Hjälmarekajen in Malmö and Lintulahti,
Skanska’s first project for its own account in Helsinki.
46 Commercial Property Development Skanska Review of 2010 – USD version