Global tech giant Microsoft has completed the acquisition of a prime plot near Leeds in the UK for £52.9 mln (€64 mln) which will be the site of a hyperscale data centre.
The 27 acre (11 ha) site, dubbed plot 1, is situated at the former Skelton Grange power station. UK regeneration specialist Harworth Group has divested the land to Microsoft and will service its redevelopment under a separate agreement.
As previously announced, contracts were exchanged with Microsoft in June for the conditional sale of 48 acres of land at the site comprising two adjoining land parcels. Plot 2, which comprises 21 acres, will be sold on a serviced basis to Microsoft for a gross consideration of approximately £53.2 mln. Completion of the sale of plot 2 remains targeted for H1 2026.
Upon completion of the sales of both plots, Harworth expects that it will have invested £48.7 mln in the site, with the investment realising a total £135.7 mln of sales, generating an IRR above 40%.
The former Skelton Grange power station site was purchased by Harworth in December 2014 for £3 mln. The site is located to the south-east of Leeds and the work undertaken by Harworth as master-developer since acquisition has been an integral part of the regeneration of the area, supporting significant inward investment.
To date, Harworth has initiated remediation and enabling works, optimised the planning status of the site, and, acquired a further 21 acres of adjoining land.
The company has also secured a series of transactions including a 19.5-acre land sale to Enfinium in 2020, which is developing a 49MW energy-from-waste (EfW) renewable electricity generation facility for its own operation, the grant of a lease in 2021 to facilitate the development of a battery energy storage system (BESS) facility on a 5.7-acre demise, and exchanging on the conditional sale to Microsoft.
Once the development is complete, Skelton Grange is expected to provide 250,000 ft2 (23,225 m2) of Grade A industrial & logistics space, a hyperscale datacentre, a BESS facility, an EfW facility, and 8 acres of land returned to natural habitat alongside improved green travel infrastructure, which Harworth estimates will represent in excess of £4 bn of inward investment providing a substantial boost to the regional economy.
Lynda Shillaw, chief executive at Harworth commented: ‘I am delighted to be able to announce that we have completed the first phase of our landmark 48-acre land sale at Skelton Grange to Microsoft.
‘Our technical teams are now fully mobilised and initial site works are underway. We continue to work closely with Microsoft and other key stakeholders as we focus on the full remediation and servicing of the site to enable the second tranche of the sale, which remains on track for H1 2026.
‘Skelton Grange has the most challenging ground conditions of any of our sites and is a fantastic example of the value Harworth delivers as a leading regenerator of brownfield land through optimising our masterplans, deploying timely and effective investments into remediation and infrastructure and creating a scheme that has attracted a range of industries.
‘The transaction with Microsoft has also further enhanced our existing expertise to include datacentres, and we continue to review our land portfolio for other potential value enhancing opportunities.’
