Microsoft has bought 48 acres of land at Skelton Grange in Leeds from Harworth for £106.6m with a view to building a hyperscale data centre.
The plot comprises two adjoining land parcels and the cash is payable in two tranches linked to a phased completion of the sale. The disposal price represents a premium to the plot’s book value.
Harworth intends to use the net proceeds to support the company’s increased focus on the direct development of Grade A industrial and logistics properties from its strategic land bank.
Harworth will retain 16 acres of land at the Skelton Grange site on which it will promote circa 250,000 sq ft of employment space.
Lynda Shillaw (pictured), chief executive of Harworth Group, said: “Since re-listing in 2015 Harworth has successfully completed a number of significant transactions that create value for our shareholders but this sale at Skelton Grange is the group’s largest to date and is yet another exemplary case study that demonstrates the successful regeneration of brownfield land.
“It highlights Harworth’s capabilities in identifying and acquiring complex sites, creating planning-friendly masterplans that maximise site potential, and deploying timely and effective investments into remediation and infrastructure. This transaction further builds our expertise to include datac entres and evidences the growing spectrum of industries that continue to be attracted to the schemes that Harworth brings to the serviced land market.
“Over the last three years and, despite volatile market conditions, we have been successful in implementing our strategy, scaling the business and continuing to deliver market leading returns. We remain confident that we will reach our goal of growing our business to £1bn of EPRA NDV by 2027 and in our ability to continue to scale the business beyond this.
“Despite this operational resilience, elevated share price discounts persist across the listed real estate sector, and so with the aim of maximising both total accounting returns and total shareholder returns for our investors, we have undertaken a detailed evaluation of our strategy to determine where our focus should be in the second half of our strategic plan period.
“Today, over 60% of the value of Harworth’s business is in the industrial and logistics sectors, and as we move into the second phase of our growth strategy we expect this weighting to increase, to over 85% by the end of 2029. The continued successful delivery of our residential sites is integral to our strategy as the proceeds from land sales provide a steady funding platform for the industrial and logistics development programme.
“We will retain more of our own prime Grade A industrial and logistics directly developed properties and therefore expect to see our investment portfolio grow in coming years, reaching around £0.9bn by the end of 2029. We see this increased focus on industrial and logistics development as an opportunity to both maximise shareholder value, and position the business for longer term sustainable growth and returns as we create an industrial and logistics business of significance in the UK market and within our regions.”
