Political headwinds hit property business but demand remains high
Leading regeneration business, Harworth Group has announced its preliminary results for the year ended 31 December.
The figures which show a total return of 7.7% for the year down from 13.3% in 2018, reflect both the company’s business model and the challenges faced over the last 12 months by changes in local government.
Owen Michelson, chief executive officer at Harworth Group who has today also announced his plans to retire at the end of the year commented: “The in-year result is impressive when considered against the backdrop of the unprecedented political headwinds we faced in 2019 and I am pleased with the way the business adapted to the challenge. The primary impact was the change of political control of some local authorities following elections in May which delayed the determination of a handful of our live planning applications. I am confident that our swift work to amend planning strategies in these cases has prevented any long-term value erosion in each individual project. Ultimately the nature of our business means that we must always take a long-term view and our acquisitions, planning and delivery strategy reflects this discipline.”
Mr Michelson who has been with the business for over a decade outlined that 2019 was a good year for sales and that demand remained for its developments. Highlighting that the business “made significant progress in growing our portfolio, both in our pipeline of new strategic land sites and increased recurring income from investment property.”
In Leeds specifically the business, through Aire Valley Land its JV with Evans Property Group, sold. Three plots on the Gateway45 development on the Leeds City Region Enterprise Zone for a total consideration of £30.3m (£15.2m Harworth share).
In Sheffield the business secured a pre-let on the AMP with the UK Atomic Energy Authority for a new 20-year term at a local headline rent for a 22,300 sq. ft bespoke fusion technology research facility.
Looking to the future Mr Michelson stated: “The outlook for the “beds and sheds” markets in our regions remains healthy and that our sites persist in their popularity. The stability of the regional markets in which we operate is underpinned by comparatively low prices, a continuing lack of consented and engineered land for housing, and the need for new commercial space where good quality stock is scarce.”
He also backed the Government’s levelling up agenda adding: “We are also cautiously optimistic about proposed Government support aimed at helping to rebalance the UK economy through additional investment in skills, infrastructure, rail connectivity and in sectors such as advanced manufacturing. Its ongoing commitment to regional devolution to provide powers and funding at local level is also welcomed, further strengthened by the Budget announcement made in early March.”
Commenting on Owen’s retirement, Alastair Lyons, Non-Executive Chair of Harworth, said: “In large part Harworth owes its existence to Owen. He seized the regeneration potential of the former UK Coal collieries and, in doing so, created a business that is now a leader in its field, transforming former industrial sites and urban edge extensions into new homes and employment areas across the breadth of the North of England and the Midlands. Throughout the last 10 years, under Owen’s leadership, Harworth has remained true to its purpose, investing to transform land and property into sustainable places where people want to live and work, and in doing so has created material value for our shareholders and a strong platform from which to grow further. He will take with him our every good wish for life after Harworth.”
