Harworth Group has completed the purchase of an industrial unit in Yorkshire for €10.8m (£9.2m) and sold a portfolio of freehold land on which the company acted as landlord for seven solar developments (Solar Portfolio) for €5.9m (£5m). Both deals form part of the company’s strategy of recycling capital out of its more mature income assets into new assets with greater return potential, thereby improving its recurring income base and supporting its aim of delivering a market-leading total return to shareholders.
Harworth has purchased a 253,352ft² industrial unit across 12.1 acres in Sherburn-in-Elmet, close to its existing Sherburn Rail Freight Terminal and Kellingley sites. An existing 10.5-year lease is in place with Esterform Packaging Limited, a leading independent converter of PET (Polyethylene Terephthalate), which provides a net initial yield of 7.0% and a reversionary yield of 8.1% based on a fixed rental uplift in 2020. The property also has a low site cover of 47% which provides future asset management opportunities.
In the second transaction, Harworth has sold the freehold for its Solar Portfolio – seven former Colliery sites in Yorkshire, Nottinghamshire and Derbyshire totalling 251 acres with no further development potential – to Lightsource BP.
“Adopting an income portfolio churn strategy is an essential element of delivering market-leading returns and these deals represent this strategy in practice. Our operational strength is also strongly in evidence, with the team acquiring a well-located property for our income portfolio with further asset management potential whilst also using our proven strong property management skills to deliver another portfolio sale at an attractive low exit yield below 5%. Both deals show that the regional markets we operate in remain robust," said Owen Michaelson, Chief Executive Officer of Harworth Group.
