Firm snaps up brownfield and greenfield sites totalling 299 acres
Brownfield regeneration and property investment specialist Harworth has snapped up four sites totalling 299 acres in a deals worth a combined £45m.
Harworth, headquartered in Rotherham, has also increased its existing loan facilities to £100m. The acquisitions comprise a mix of brownfield and greenfield sites across 299 acres, the largest of which was acquired for £32.45m at Wyke in Bradford.
The firm said the acquisitions were part of its ongoing delivery of a double-digit rate of return by replenishing its strategic land bank and building its recurring income. In total, the acquisitions could see the development of up to 3,000 homes and over 1m sq ft of commercial space.
The 112-acre site at Wyke, Bradford, comprises of a 32 acre area which is the agrochemical works used by Nufarm UK. Alongside this, the firm has snapped up a further 80 acres of unoccupied land. It is let on a 50-year lease, commencing October 2005, at a current passing rent of over £2.1m per annum, representing a net initial yield of 6.2% and a reversionary yield of 7.0% based on fixed uplifts.
Harworth said the 80-acres of unoccupied land also has the long-term potential to deliver a major new commercial development.
The second Yorkshire site is a 22-acre site in Flaxby, North Yorkshire, which was purchased for £8.75m plus acquisition costs.
The site comprises a 276,000 sq ft commercial unit occupied by Ilke Homes, the modular homes manufacturer. A 14-year lease has been agreed with Ilke at a stabilised rent of £1m per annum, representing a stabilised net initial yield of 10.9% and a reversionary yield of 12.1%. Harworth said the site’s very low density of 29% also provides a potential opportunity for further commercial development.
As part of expanding its regional presence, Harworth has also acquired two strategic sites in the Midlands, totalling 165 acres, for a total consideration of £3.88m plus acquisition costs.
The first is in Cinderhill, Derbyshire. Harworth has acquired 112 acres of land across three separate parcels near Denby in Derbyshire. These purchases are in addition to Harworth’s existing promotion agreement for the wider masterplan. The site is currently being promoted through Amber Valley District Council’s Local Plan process as a major new residential-led development across 421 acres that could deliver up to 3,000 new homes and 450,000 sq ft of commercial space.
Finally, Harworth has acquired 53 acres of greenfield land in Bardon, Leicestershire, which is adjacent to the company’s existing major development at Coalville. Harworth will promote the site through the planning process for a commercial scheme of up to 350,000 sq ft of manufacturing, distribution and roadside uses.
The acquisitions have been funded through the company’s existing Revolving Credit Facility, which has been extended from £75m to £100m, with Santander UK PLC providing an additional £25m commitment to sit alongside the existing £75m commitment from The Royal Bank of Scotland.
Owen Michaelson, chief executive of Harworth, said: “These acquisitions and the increase in our financing facilities demonstrate the continued implementation of our strategic priorities. We are expanding our strategic land bank to deliver further value to our shareholders through clear, long-term value-add opportunities, whilst both securing additional income and maintaining low gearing and financing headroom to support the continued growth of the business.
“Our confidence in the strength of, and the outlook for, our principal markets in the North of England and Midlands is underpinned by the continued undersupply of new homes and commercial space in the face of high levels of demand from housebuilders and commercial occupiers alike. Harworth continues to make a significant contribution to the ongoing economic growth of the regions as one of the UK’s leading regeneration companies.”
