Microsoft secures 48-acre UK data centre site from Harworth in £107m deal

UK land and property regeneration firm Harworth Group is selling a hyperscale datacentre development site to Microsoft for £106.6m (€126.1m).

Harworth said it has agreed to sell 48 acres of land at its Skelton Grange site in Leeds to Microsoft-owned MSFT MCIO, in a deal expected to be completed in two phases.

In the first phase, Harworth will sell Plot 1, which is 27 acres, for around £52.9m. This is expected to be finalised this year. The book value of Plot 1 as of 31 December 2023, was £39m. Harworth will also receive an additional £0.5m to cover costs associated with securing additional power capacity for the site.

The second phase involves Plot 2, which is 21 acres. This will be sold with utilities already installed for £53.2m in a deal expected to complete in the first half of 2026. The book value of Plot 2 as of 31 December 2023 was £12.9m. Harworth expects this will incur £5.1m in costs for installing utilities on this plot.

The London-listed firm said it intends to use the net proceeds to support an increased focus on the direct development of Grade A industrial and logistics properties from its landbank which will be transferred to, and then retained in, its investment portfolio, “driving an increase in recurring earnings, alongside new investment opportunities”.

The former Skelton Grange power station site was purchased by Harworth in December 2014 for £3m. Since acquisition, Harworth said it has “optimised the planning status of the site”, securing approval in November 2023 for 800,000sqft of industrial and logistics space, and most recently in May 2024, a “reserved matters approval for a further 320,000sqft of industrial and logistics space”. 

Lynda Shillaw, CEO of Harworth Group, said: “Since re-listing in 2015 Harworth has successfully completed a number of significant transactions that create value for our shareholders but this sale at Skelton Grange is the group’s largest to date and is yet another exemplary case study that demonstrates the successful regeneration of brownfield land.

“It highlights Harworth’s capabilities in identifying and acquiring complex sites, creating planning-friendly masterplans that maximise site potential, and deploying timely and effective investments into remediation and infrastructure.”

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