Regeneration specialist on track for £1bn net disposal value
Regeneration specialist Harworth Group has said it is on track for its net disposal value to hit £1bn by 2027 after unlocking high value uses on some of its development sites.
The company’s net disposal value (EPRA NDV) increased 3.5% to £687m while it said its extensive existing land pipeline has the potential to deliver 38.8 million sq. ft. of industrial and logistics space and 26,639 plots for new homes.
Planning permission achieved for 1.8 million sq. ft. and 500 plots, plus a further 1.5 million sq. ft. and 500 plots post period end, alongside new draft allocations or allocations in local plans for 5.7 million sq. ft. and 2,875 plots.
In its results for the six months ended 30 June 2024, Harworth said it completed, exchanged, or is in heads of terms on 145% of budgeted land sales for the year.
Harworth reported operating profit of £21.1m in the first six months of 2024, up from £8m in the prior year period.
Lynda Shillaw, chief executive of Harworth, said: “Harworth continues to consistently deliver strong progress against its strategic objectives and we remain on track to reach £1bn EPRA NDV by the end of 2027. In June we announced that the group would increase its focus on Industrial & Logistics direct development, with an intention to grow the investment portfolio, through direct development and selective acquisitions, to £0.9 billion by the end of 2029.
“This reflects the opportunity we see to deliver into a sector which is key to economic growth and where there is critical undersupply of high-quality space, in order to grow recurring income and underpin sustainable shareholder returns.
“The first half saw significant progress on planning approvals, adding further capacity to our near-term Industrial & Logistics pipeline and driving a strong revaluation performance. We are ahead of budget for land sales, with the standout transaction, as well as our largest sale to date, being the conditional £106.6m serviced land sale to Microsoft at Skelton Grange, announced in June. The sale of serviced land provides a stable funding channel for the planned growth in our Industrial & Logistics development programme.
“Sustained demand for Harworth’s serviced land and employment spaces, alongside management actions, has underpinned EPRA NDV growth of 3.5% and we expect further growth in the second half as we continue to develop out our existing sites.”
She added: “We are cautiously optimistic that a combination of improving economic stability and supportive government policy will be beneficial for both the real estate sector and Harworth. In the near term we recognise market confidence could potentially be tempered by the extent of the steps taken by the Government to address the public funding deficit, but as a long-term investor Harworth is well versed in delivering performance through different policy environments.
“Ultimately, Harworth is a long-term through-the-cycle business and its extensive land pipeline, track record, specialist skillset and strong balance sheet sets us apart from our peers and enables us to maximise the value created from our sites for our shareholders.”
