Surewood Housing, part of Gelba and Active Invest, has purchased the factory, which will be handed over next week on 20 February, Skanska said in a short statement.

Skanska launched BoKlok as a joint venture with Swedish furniture brand Ikea in the mid-1990s, when Skanska鈥檚 then-CEO Melker Sch枚rling and Ikea founder Ingvar Kamprad decided to develop the concept of good housing for people on ordinary incomes.

Skanska has invested heavily in the project over the years. In 2017, by which time the company was building 1,200 homes a year, it announced that it was ploughing SEK 250 million (US$18.5 million) into the Gullringen factory between 2018 and 2020 to increase capacity, efficiency and automation. That involved the construction of a new assembly hall and a state-of-the-art production line, leading to a 50% increase in production capacity.

But a sluggish residential construction market in Sweden and Europe amid inflation and higher interest rates spelled trouble for the low-price housing brand.

Skanska took a SEK 331 million (US$30.9 million) hit on BokLok in Q1 of 2023, related to a weak market and turnaround measures, before taking sole ownership of the concept in 2024.

Skanska鈥檚 latest set of results showed that during 2024 the situation failed to improve, with BokLok making a SEK 614 million (US$57.3 million) operating loss.

But explaining its purchase of the factory, Surewood said that there is a housing shortage in over half of Sweden鈥檚 municipalities, with 52,000 homes needing to be built each year until 2030 to meet housing demand.

The company specializes in building timber homes adapted for rental, as well as for ownership, ranging from townhouses and lofts to apartment buildings up to four storeys.

鈥淚n recent years, many construction projects have been cancelled or paused due to excessively high construction costs and long delivery times but a turnaround is now visible,鈥� it said in a statement translated from Swedish.

Leif West, chairman of the board of Surewood Housing Holding, said, 鈥淭he acquisition is a natural next step that will enable us to offer homes, manufactured in the state-of-the-art factory in Gullringen, to customers throughout the country.鈥�

Production at the factory is expected to start in the second quarter of 2025 and Surewood is initially hiring for 40 production roles.

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