Harworth Group completes two site acquisitions in £8.2m deal
Harworth Group plc, the Rotherham-based brownfield regeneration and property investment specialist, has purchased two strategic land sites in Droitwich and Doncaster for £8.2m.
The sites have been acquired using the remaining proceeds from the £27.1m equity placing in March 2017.
Harworth has purchased a privately sourced 131-acre site in Doncaster for £3m plus acquisition costs, with an option agreement for a further 131 neighbouring acres.
Adjacent to Junction 5 of the M18, Harworth will promote the site through the planning process to deliver an employment scheme, totalling up to 2.4 million sq ft of distribution, manufacturing and engineering space.
The group has also bought an 8.7-acre site at Berry Hill Industrial Estate in Droitwich, Worcestershire, from DHL for £5.2m. Three miles from Junction 5 of the M5, the site currently comprises a 112,416 sq ft commercial unit, that has immediately been leased back to DHL.
The five-year term at a passing rent of £450k per annum represents a net initial yield of 8.15% and a reversionary yield of 8.65%,
The two acquisitions follow the land purchases completed in August 2017 across the Midlands and North West; Chatterley Valley in Stoke-on-Trent; Coalville in Leicestershire; and Wingates in Bolton.
These five transactions plus acquisition costs and initial planning and infrastructure costs account for the full £27.1m of new equity raised in March 2017.
Owen Michaelson, chief executive officer, said: “This is a major milestone for the business which sees the culmination of the successful deployment of all new equity raised in March through the acquisition of two well-located sites that are projected to deliver double-digit returns.
“Expanding our strategic land bank is a core part of our business strategy of delivering continued value to our shareholders and both purchases provide clear long-term value-add opportunities.
“In addition, securing a strong covenant at Droitwich adds to our medium-term income stream, as we look to improve the defensive qualities of the portfolio.
“The outlook for our principal markets in the North of England and Midlands remains strong, with a scarcity of good quality new commercial space continuing to drive the allocation of new sites and occupier demand for well-connected new space.
“Both of these purchases directly respond to these requirements as we continue to develop a portfolio of high quality places where people want to live and work.”