Swedish Fortifications Agency
Encyclopedia
The Swedish Fortifications Agency (SFA) is a Swedish government agency
under the Swedish Ministry of Finance
(), tasked with managing government-owned defense-related buildings and land. The agency functions as the landlord
for the Swedish Armed Forces
(), managing various types of military installations. The SFA is one of the largest holders of real estate
in Sweden.
, which was meant to emulate market-like conditions. The main purpose with the reform was to create economic incentives for the authorities in the public sector to economise on premises. In the defense sector, the real estate holdings were transferred from the Swedish Armed Forces
— the user of the real estate — to the SFA; with the Swedish Armed Forces remaining in the estate as a tenant.
Currently, the SFA acts as landlord
for several Swedish government agencies in the defense sector. The main tenant is the Swedish Armed Forces, which in 2007 was the source of over 90% of the SFA:s revenue
.
. Instead, it covers its expenses by charging rent
for the real estate it leases. In 2008, the agency's revenue
was 3.0 billion SEK
, and its net income
67 million SEK. The rent is adjusted so that the net income — which goes into the state treasury
— conforms to a predefined level of return on equity
, as set by the Ministry of Finance
. To finance investment
s, the SFA borrows money from the National Debt Office , which acts as the internal bank of the government.
s, where employees work in areas such as project management
, property development and maintenance services
. At the regional and national level, employees work in real estate purchasing and sales, defense facility development, and various management functions. The SFA considers its core competencies to be security and protective technology. The agency has stated that it aims to increase the amount of outsourcing
, and as an experiment in 2006, it outsourced the property maintenance of two garrison
s.
of the government real estate stock managed by the SFA was 10.1 billion SEK
, largely consisting of depots, garrisons, training facilities, offices, and proving ground
s. In 2007, the total real estate stock included:
Government agency
A government or state agency is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions, such as an intelligence agency. There is a notable variety of agency types...
under the Swedish Ministry of Finance
Ministry of Finance (Sweden)
The Ministry of Finance is a Swedish government ministry responsible for matters relating to economic policy, the central government budget, taxes, banking, security and insurance, international economic work, central, regional and local government....
(), tasked with managing government-owned defense-related buildings and land. The agency functions as the landlord
Landlord
A landlord is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called a tenant . When a juristic person is in this position, the term landlord is used. Other terms include lessor and owner...
for the Swedish Armed Forces
Swedish Armed Forces
The Swedish Armed Forces is a Swedish Government Agency responsible for the operation of the armed forces of the Realm. The primary task of the agency is to train, organize and to deploy military forces, domestically and abroad, while maintaining the long-term ability to defend the Realm in the...
(), managing various types of military installations. The SFA is one of the largest holders of real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
in Sweden.
Function in the government
The formation of the SFA in 1994 was part of the Swedish government effort to increase the cost-efficiency of government real estate usage through a system of internal rentInternal rent
Internal rent is a form of transfer pricing where a company owning its own premises forces single departments in that company to pay rent for the real estate they use...
, which was meant to emulate market-like conditions. The main purpose with the reform was to create economic incentives for the authorities in the public sector to economise on premises. In the defense sector, the real estate holdings were transferred from the Swedish Armed Forces
Swedish Armed Forces
The Swedish Armed Forces is a Swedish Government Agency responsible for the operation of the armed forces of the Realm. The primary task of the agency is to train, organize and to deploy military forces, domestically and abroad, while maintaining the long-term ability to defend the Realm in the...
— the user of the real estate — to the SFA; with the Swedish Armed Forces remaining in the estate as a tenant.
Currently, the SFA acts as landlord
Landlord
A landlord is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called a tenant . When a juristic person is in this position, the term landlord is used. Other terms include lessor and owner...
for several Swedish government agencies in the defense sector. The main tenant is the Swedish Armed Forces, which in 2007 was the source of over 90% of the SFA:s revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
.
Economy
The SFA does not receive an allowance from the government budgetGovernment budget
A government budget is a legal document that is often passed by the legislature, and approved by the chief executive-or president. For example, only certain types of revenue may be imposed and collected...
. Instead, it covers its expenses by charging rent
Renting
Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...
for the real estate it leases. In 2008, the agency's revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
was 3.0 billion SEK
Swedish krona
The krona has been the currency of Sweden since 1873. Both the ISO code "SEK" and currency sign "kr" are in common use; the former precedes or follows the value, the latter usually follows it, but especially in the past, it sometimes preceded the value...
, and its net income
Net income
Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings...
67 million SEK. The rent is adjusted so that the net income — which goes into the state treasury
Treasury
A treasury is either*A government department related to finance and taxation.*A place where currency or precious items is/are kept....
— conforms to a predefined level of return on equity
Return on equity
Return on equity measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity . ROE shows how well a company uses investment funds to generate earnings growth...
, as set by the Ministry of Finance
Ministry of Finance (Sweden)
The Ministry of Finance is a Swedish government ministry responsible for matters relating to economic policy, the central government budget, taxes, banking, security and insurance, international economic work, central, regional and local government....
. To finance investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
s, the SFA borrows money from the National Debt Office , which acts as the internal bank of the government.
Personnel
The SFA employed 689 people in 2008. The majority of the employees work on a local level in real estate units linked to garrisonGarrison
Garrison is the collective term for a body of troops stationed in a particular location, originally to guard it, but now often simply using it as a home base....
s, where employees work in areas such as project management
Project management
Project management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end , undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value...
, property development and maintenance services
Maintenance, Repair and Operations
Maintenance, repair, and operations or maintenance, repair, and overhaul involves fixing any sort of mechanical or electrical device should it become out of order or broken...
. At the regional and national level, employees work in real estate purchasing and sales, defense facility development, and various management functions. The SFA considers its core competencies to be security and protective technology. The agency has stated that it aims to increase the amount of outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
, and as an experiment in 2006, it outsourced the property maintenance of two garrison
Garrison
Garrison is the collective term for a body of troops stationed in a particular location, originally to guard it, but now often simply using it as a home base....
s.
Real estate stock
In 2008, the book valueBook value
In accounting, book value or carrying value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or Impairment costs made against the asset. Traditionally, a company's book value...
of the government real estate stock managed by the SFA was 10.1 billion SEK
Swedish krona
The krona has been the currency of Sweden since 1873. Both the ISO code "SEK" and currency sign "kr" are in common use; the former precedes or follows the value, the latter usually follows it, but especially in the past, it sometimes preceded the value...
, largely consisting of depots, garrisons, training facilities, offices, and proving ground
Proving ground
A proving ground is the US name for a military installation or reservation where weapons or other military technology are experimented or tested, or where military tactics are tested...
s. In 2007, the total real estate stock included:
- 8 000 buildings
- 3.3 million square meters of open space facilities
- 7 700 defense facilities
- 11 airfields
- 380 000 hectareHectareThe hectare is a metric unit of area defined as 10,000 square metres , and primarily used in the measurement of land. In 1795, when the metric system was introduced, the are was defined as being 100 square metres and the hectare was thus 100 ares or 1/100 km2...
s of land, including: - 100 000 hectareHectareThe hectare is a metric unit of area defined as 10,000 square metres , and primarily used in the measurement of land. In 1795, when the metric system was introduced, the are was defined as being 100 square metres and the hectare was thus 100 ares or 1/100 km2...
s of forest