STOCKHOLM (Reuters) -Shares in Sweden's Skanska eased on Wednesday after the company late on Tuesday announced property value writedowns, mainly within U.S commercial development.
Shares in the Nordic region's biggest builder, and one of the biggest in the United States, fell 3% at 1010 GMT, taking a year-to-date drop to 6%, while the wider market in Stockholm was roughly unchanged.
In the fourth quarter, Skanska said it is booking 2.0 billion crowns ($195 million) worth of impairments and fair market value changes in its Commercial Property Development, Residential Development and Investment Properties operations.
"The continued weakness in the property markets has led to challenges in assessing the value of property assets," it said in a statement after market close in Stockholm on Tuesday.
"For Commercial Property Development, total impairments amount to 1.4 billion crowns, which is primarily driven by the U.S. portfolio. The U.S. remains the weakest geography."
Chief Financial Officer Magnus Persson told analysts and reporters in a call that in the U.S, offices are the hardest hit, partly due to low post-pandemic return-to-office rates.
"We've been lagging behind in leasing compared to what we assumed at the start of a lot of the projects," he said, adding that high borrowing costs are also affecting demand for office properties.
Few recent comparable transactions makes it hard to assess the value of Skanska's properties in the U.S. In the Nordics, however, the builder is fairly confident about its valuations thanks to better visibility, he said.
Skanska said it had also reduced surplus value in Commercial Property Development by 1.6 billion crowns with no impact on fourth-quarter results. The bulk is related to Skanska's U.S. operations, a spokesperson said.
Persson said Skanska, which is due to report full-year results on Feb. 9, would be very cautious in the near term on starting new projects in the U.S.
($1 = 10.2470 Swedish crowns)