The continued weakness in the property markets has led to challenges in assessing the value of property assets. The impairment charges are made to ensure that recognized values reflect Skanska´s best current assessment of the underlying value of property assets.

For Commercial Property Development, total impairments amount to SEK 1.4 billion, which is primarily driven by the US portfolio. The USA remains the weakest geography. At the end of the third quarter, property assets in Commercial Property Development amounted to SEK 43 billion, of which SEK 4.0 billion had already been divested according to segment reporting. Additionally in the fourth quarter, the expected surplus value at completion of the portfolio is reduced by SEK 1.6 billion. Total expected market values at completion in the third quarter was SEK 63 billion, of which SEK 7.9 billion had already been divested according to segment reporting. The total surplus value at the end of third quarter was SEK 7.8 billion. The change in surplus value has no impact on the result for the period.

In Residential Development, the low-cost segment BoKlok remains very weak and represents the majority of the impairments. Total impairments amount to SEK 0.5 billion. At the end of the third quarter, property assets in Residential Development amounted to SEK 22 billion, of which SEK 6.4 billion had already been sold according to segment reporting.

In Investment Properties, which is the only segment that applies IAS40 and records fair market value of assets, Skanska currently holds 3 properties in Malmö and 2 properties in Stockholm. Assessed average yields are 4 percent in Malmö, and 4.3 percent in Stockholm. Total reduction of fair market value amounts to SEK 0.2 billion. At the end of the third quarter, we held 3 property assets in Investment Properties amounting to SEK 3.7 billion in total.