Harworth FY2025: I&L engine purrs, data centre optionality builds, residential drags
Harworth’s 2025 numbers tell a clear story: Industrial & Logistics (I&L) is doing the heavy lifting, the data centre/power-enabled land push is gathering pace, and residential remains a headwind. Returns moderated year-on-year, but the portfolio mix and groundwork for future value look stronger.
Key FY2025 numbers investors should know
| Metric | FY2025 | YoY |
|---|---|---|
| EPRA NDV per share | 224.4p | +0.9% |
| Total Accounting Return | 1.7% | down from 9.1% |
| Total Property Return | 8.4% | vs 12.0%; beat MSCI UK index of 5.6% |
| Portfolio value | £937.2m | +9.1% |
| I&L share of portfolio value | 70% | from 63% |
| I&L Investment Portfolio value | £305.0m | +2.6% |
| EPRA vacancy (I&L IP) | 1.0% | from 5.6% |
| Total property sales | £115.0m | -46.7% |
| Residential plots sold | 1,837 | -23.0% |
| Operating profit | £21.6m | -71.0% |
| Net debt | £145.9m | from £46.7m |
| Net LTV | 15.6% | from 5.4% |
| Total dividend per share | 1.775p | +10.0% |
Quick jargon check: EPRA NDV is a net asset measure that reflects the fair value of development property and tax effects; LTV is loan-to-value leverage across the portfolio.
Industrial & Logistics momentum: quality up, vacancy down
Harworth is executing on its I&L pivot. The Investment Portfolio is now 76% Grade A by value (modern, best-in-class space), up from 63%, and vacancy collapsed to 1.0%. Like-for-like rents were up 10.4%, with 1.4m sq ft of leasing activity, including 379,000 sq ft of new deals adding £3.7m of rent. Headline rental income rose to £18.3m, with a WAULT to expiry of 11.2 years.
Value creation is coming through development and planning progress. I&L delivered £73.6m of value gains in 2025 across Strategic Land, Major Developments and the Investment Portfolio, helping drive an 8.4% Total Property Return. Enabling works are complete or well advanced on land with capacity to deliver 4.0m sq ft into I&L and emerging growth sectors.
Data centres and power-enabled land: a genuine optionality kicker
This is the strategic swing factor. Harworth now has 0.8GW of power connections conditionally secured or advancing through Network Operators’ pipelines. That positions selected sites for data centres and other power-intensive uses over the next five to ten years.
- Skelton Grange (West Yorkshire): enabling works progressing for Microsoft’s proposed hyperscale data centre. A further £53.2m second-phase payment is expected in the next 12 months.
- Gateway 45 (West Yorkshire): Harworth acquired the remaining 50% interest, adjacent to Skelton Grange, underpinning up to 0.8m sq ft of future I&L space.
Why it matters: power is the gating item for data centre development, and land at scale with grid access is scarce. If even a subset of these power-enabled positions transact, value gains could be “lumpier” and superior to standard I&L land sales. It is not guidance, but the groundwork is being laid.
Residential: still funding the strategy, but at a cost
Residential remains a cash engine, albeit in a tough market. Harworth sold 1,837 plots, including 725 under Planning Promotion Agreements (PPAs) generating £3.1m of fees, and 1,112 freehold plots with headline sales of £52.0m. Completions were achieved at a marginal discount to June book values, with an average 4% discount mentioned in the narrative.
The sting: residential Major Developments saw £28.7m of value losses, reflecting weaker market pricing and cost pressures. Total property sales fell to £115.0m (from £215.8m), and the residential drag is a key reason why Total Accounting Return slipped to 1.7%.
On the positive side, since 2020 the Group has crystallised £343m from residential, reducing consented plots by 67%, improving capital efficiency and freeing cash to accelerate I&L. At year-end, only 3,065 consented plots remained out of a 29,386-plot pipeline.
Funding, leverage and liquidity: more muscle for I&L growth
Net debt rose to £145.9m as Harworth invested in enabling works, completed developments and acquired Gateway 45. Even so, net LTV of 15.6% is below the self-imposed year-end target of under 20%. Liquidity stood at £127.1m.
- RCF refinanced and enlarged to £275m, with an accordion to £325m, and a 25-35bps improvement in the margin ratchet.
- Post year-end, a £50m interest rate cap was added at a 4.5% strike.
In short, leverage has stepped up to fund value creation, but remains conservative versus the land-led, through-the-cycle model.
Strategy scoreboard: progress against medium-term targets
- I&L weighting: 70% now; target 85% by 2029.
- Investment Portfolio: £305.0m today; ambition ~£0.9bn by end of 2029; 100% Grade A by end 2027 (currently 76% by value).
- I&L build/run-rate: enabling works underpin 4.0m sq ft capacity; target 0.8m sq ft average annual run-rate by 2027.
- EPRA NDV: £727.3m; £1bn ambition reconfirmed with timeline extended to between end 2028 and end 2029.
- Planning pipeline: I&L land bank of 35.0m sq ft, with 75% consented or in the system; 13.7m sq ft submitted in 2025 awaiting determination.
Dividends and shareholder returns
The total dividend per share rose 10% to 1.775p (final 1.237p). While Total Accounting Return dipped to 1.7%, Harworth clocked a five-year cumulative TAR of 44.5% to 2025. The Board remains focused on through-the-cycle value creation as the I&L pivot matures.
What I like vs what to watch
Positives
- Material I&L value gains (£73.6m) and a cleaner, higher-quality Investment Portfolio (76% Grade A) with 1.0% vacancy.
- Clear optionality from power-enabled land and data centres: 0.8GW in the grid pipeline, plus the Skelton Grange second-phase £53.2m expected within 12 months.
- Conservative leverage (15.6% LTV) and more firepower via the upsized RCF.
- Planning momentum: 22.2m sq ft of I&L in or near planning, and strong reported interest in 1.6m sq ft of potential deals.
Negatives
- Residential continues to weigh on reported returns: £28.7m of value losses and property sales down 46.7% year-on-year.
- Operating profit dropped 71% to £21.6m; admin costs rose to £36.3m (flagged as a 2026 focus).
- Net debt trebled to £145.9m; execution needs to convert the enlarged pipeline into cash and recurring income.
- Macro risks (notably Middle East conflict) could delay deals, keep rates higher for longer, and dent valuations.
Outlook: set up for medium-term value, with near-term lumpiness
Management’s target to lift I&L to 85% and grow EPRA NDV to £1bn (end 2028–end 2029) looks credible if the leasing and planning momentum continues and power-enabled land starts to crystallise. The Investment Portfolio’s rising Grade A share and rent growth are doing exactly what they should at this point in the cycle.
On the flip side, returns could stay choppy while residential pricing is soft and transaction timelines remain elongated. The step-up in leverage is sensible given the opportunity set, but it increases the importance of execution on disposals, lettings and the high-value data centre pathway.
Bottom line for retail investors
Harworth is leaning into the parts of the market that are working – high-quality northern and midlands I&L – and has carved out a potential edge in power-enabled land for data centres. 2025 shows that strategy biting: better quality assets, stronger rents, ultra-low vacancy and meaningful value gains in I&L. The residential hangover and lower near-term returns are the trade-off.
If you’re judging progress, watch for: Grade A percentage climbing towards 100%, further letting at Droitwich/AMP/Gateway 36, planning decisions across the 13.7m sq ft submitted in 2025, the £53.2m Skelton Grange receipt, and any announcements on power-enabled land transactions. Deliver those building blocks and the £1bn EPRA NDV ambition moves from aspiration to arithmetic.
