Harworth spends big to strengthen South Yorks power base

In its largest ever acquisition, the Rotherham-based property group has paid £43.7m for Catalyst, a 285,000 sq ft five-unit development adjacent to the firm’s flagship Advanced Manufacturing Park.

Catalyst, delivered in 2023, is now 90% occupied, with just a 28,000 sq ft unit to let. When fully occupied, the logistics park will bring in an annual rental income of £2.5m.

Investor, developer and asset manager Mirastar committed to a multimillion-pound funding agreement in 2022 to help deliver Catalyst, alongside developers Premcor and Peveril Securities.

The scheme has let well, with the latest deals agreed being a 92,000 sq ft transaction with Octopus Energy and 22,500 sq ft let to Aviva subsidary Solus in June this year.

The £43.7m purchase price reflects a net initial yield of 5.4%.

Harworth said that, being next to its flagship industrial holding, “the acquisition delivers an extension to the AMP which now benefits from a highly prominent, extensive frontage on both sides of the Sheffield Parkway and its excellent arterial connectivity provides access to a vast labour pool”.

The acquisition is very much in line with Harworth’s strategy to grow its investment portfolio to £900m by the end of 2029 and transition its core portfolio to 100% grade A stock by 2027.

Following this acquisition, alongside practical completion of a further 73,000 sq ft of logistics space at the AMP earlier this month, the group’s investment portfolio will total 2.8m sq ft, of which 45% is classed as grade A, up from 37% just three months ago.

Chief executive Lynda Shillaw said: “This acquisition, the largest of an industrial & logistics investment asset in Harworth’s history, aligns with our strategy to grow our high-quality investment portfolio. It also continues our track record of strategic site assembly, providing an opportunity to extend the AMP, further establishing it as one of the leading manufacturing and distribution centres in the region.

“Increased direct development and the retention of grade A industrial & logistics assets across our major sites, supplemented by select, income producing acquisitions, is core to our strategy, whilst we will also look to recycle properties where value has been maximised through completed asset management initiatives.”