Harworth trading update: second data centre site takes centre stage

Harworth Group PLC has put powered land firmly at the centre of its growth plans after revealing advanced negotiations over a second hyperscale data centre site.

The regeneration and development group said the potential value gains from the site could exceed those achieved through its first hyperscale data centre transaction. That was a £106.6 million land sale to Microsoft in 2024.

Alongside this potentially significant transaction, Harworth reported encouraging demand for industrial and logistics space. However, softer residential demand and rising housebuilder costs mean its asset value is expected to have declined modestly during the first half.

Here is what investors need to know from the original company announcement.

Harworth's half-year update at a glance

Metric	Position
First hyperscale data centre land sale	£106.6 million in 2024
Power-enabled land bank	0.8GW
Annualised rent from three pre-lets	£3.7 million
Average premium to combined ERV	17%
Further letting and land sale negotiations	1.5 million sq ft
Budgeted full-year sales completed, exchanged or in legals	60%
Residential plots included in sales activity	952
Industrial and logistics land bank	34.8 million sq ft
Land bank consented or in planning	73%
Substantially construction-ready space	4.0 million sq ft
Potential GDV over three to five years	c.£600 million
Pro-forma LTV at 30 June 2026	20.4%
Pro-forma LTV as at 5 August 2026	15.6%
Available liquidity at 30 June 2026	£99.5 million

ERV means estimated rental value, while GDV is gross development value, or the expected total value of a completed development. LTV is loan-to-value, measuring debt relative to property assets.

A second data centre opportunity

The standout news is that Harworth has identified another site within its powered land portfolio that could accommodate a hyperscale data centre.

The site already benefits from planning consent and power connections. Harworth has entered advanced negotiations with several counterparties regarding a sale, although a transaction has not yet been agreed and the potential consideration has not been disclosed.

Management believes the site could produce total value gains above those from the £106.6 million Microsoft land sale. Importantly, it referred to value gains rather than saying the second site's sale proceeds would exceed £106.6 million.

This distinction matters, but the message is still positive. Securing planning permission and suitable power connections can make land more valuable to data centre operators. Harworth believes value within its 0.8GW power-enabled land bank has yet to be realised or reflected in its current EPRA net disposal value, or EPRA NDV.

EPRA NDV is an industry measure intended to represent the value attributable to shareholders if a property company's assets were sold and its liabilities settled.

The group also sees scope for further hyperscale opportunities, alongside smaller digital infrastructure projects such as colocation facilities and edge providers. No expected timing or financial value was disclosed for those additional opportunities.

Industrial occupier demand is building

Harworth completed or entered legal processes on three pre-lets for buildings that it intends to construct and retain within its Investment Portfolio.

Together, the units should generate £3.7 million of annualised rental income. The agreed rents are an average of 17% above their combined ERV, suggesting occupier demand is supporting terms ahead of the group's previous rental assumptions.

The three units comprise:

• A 30,700 sq ft last-mile parcel and postal distribution facility for a logistics operator at Gateway 36 in Barnsley.
• A 108,600 sq ft advanced manufacturing facility for an automotive parts designer at Chatterley Park in Staffordshire.
• A 180,000 sq ft unit for an existing occupier at the Advanced Manufacturing Park in Rotherham.

The Chatterley Park agreement is particularly notable because it will be the first unit at a construction-ready development capable of delivering 1.1 million sq ft of power-enabled space.

Harworth is also progressing negotiations covering another 1.5 million sq ft of lettings and land sales. Management reported increasing momentum across products ranging from mid-sized buildings to big-box units.

Sales activity and development capacity

The group has completed, exchanged or entered legal processes on 60% of its budgeted full-year sales. This includes 952 residential plots, with the remaining sales pipeline said to be progressing well.

Its industrial and logistics land bank now covers 34.8 million sq ft. Some 73% has planning consent or is moving through the planning system, while 4.0 million sq ft is substantially construction-ready.

Harworth estimates that construction-ready space offers up to c.£600 million of GDV potential over the next three to five years. This is development value rather than expected profit or cash generation, but it indicates the scale of projects available if occupier demand, financing and construction conditions remain supportive.

Balance sheet provides flexibility

Harworth reported a pro-forma LTV of 20.4% at 30 June 2026, based on property valuations from 31 December 2025. This had fallen to 15.6% by 5 August, although the reason for the subsequent reduction was not disclosed.

Available liquidity reached £99.5 million at the half-year point, up from £59.8 million a year earlier. That gives the group capacity to invest in construction-ready projects and reallocate capital towards powered land and industrial opportunities.

Management intends to increase the industrial and logistics weighting of the portfolio to 85% by 2029, reducing residential exposure below 15%. The industrial and logistics weighting had already reached 70% at the end of 2025.

Harworth now plans to accelerate this capital reallocation because of the scale of opportunities and occupier interest across powered land and industrial growth sectors.

Residential weakness remains the main pressure point

The update is not entirely positive. Harworth expects EPRA NDV at 30 June 2026 to be modestly below its level at 31 December 2025, principally because of residential market headwinds.

Industrial and logistics land valuations are expected to be broadly unchanged. Management actions across industrial, logistics and data centre sites largely offset higher labour and material costs.

Residential land valuations, however, are expected to decline because of softer demand and increased costs in housebuilder end markets. Investors should therefore separate the operational progress in industrial assets and powered land from the near-term pressure on the group's reported asset value.

What matters at the September results

The second data centre site could become an important demonstration of the value within Harworth's powered land portfolio. For now, negotiations are advanced rather than completed, and neither the transaction value nor expected timing has been disclosed.

Attention will also fall on the conversion of pre-lets and negotiations into signed agreements, progress with the remaining full-year sales budget and the extent of the residential valuation decline.

Harworth is scheduled to publish its half-year results on 15 September 2026. Those results should provide the fuller financial picture behind a trading update that shows growing industrial momentum, balance-sheet flexibility and a potentially valuable data centre pipeline, tempered by continued residential market weakness.