Harworth Group has purchased four strategic sites across the North of England (Nufarm, Bradford; Flaxby, North Yorkshire) and the Midlands (Cinderhill, Derbyshire; Bardon Hill, Leicestershire), for a total consideration of €51m (£45m) plus acquisition costs. The acquisitions comprise a mix of brownfield and greenfield sites across 299 acres, the largest of which was acquired for €36.8m (£32.45m), and support the Company’s ongoing delivery of a double-digit rate of return by replenishing its strategic land bank and building its recurring income.
The acquisitions have been funded through the Company’s existing Revolving Credit Facility (“RCF”), which has been extended from €85m (£75m) to €113.4m (£100m), with Santander UK PLC providing an additional €28.35m (£25m) commitment to sit alongside the existing €85m (£75m) commitment from The Royal Bank of Scotland. Following these acquisitions, over €22.7m (£20m) of the RCF remains undrawn and the Company expects its year-end loan to value to remain in the range of 10% to 15%.
The sites, in Yorkshire, Derbyshire and Leicestershire, are within the Group’s core markets of the North of England and the Midlands. Two of the sites generate existing income of €3.5m (£3.1m) per annum from two commercial tenants. In total, the acquisitions provide the potential for the development of up to 3,000 homes and over 1m ft² of commercial space. Harworth will use its market leading master planning and regeneration skills to promote the sites through the planning process and remediate the land ready for future development where applicable.
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.”
