Land regeneration firm Harworth Group said over 70 per cent of its budgeted sales for 2019 have already been completed, exchanged or agreed, reflecting the underlying strength of the “beds and sheds” markets in its core regions of the North and the Midlands.
The Rotherham-based firm sold land for 1,091 residential plots and completed or exchanged on a further 55 acres for commercial development during the first half of 2019.
The group said profit excluding value gains rose 59 per cent in the six months to June 30 and operating profit more than doubled to £13.3m.
Harworth’s chief executive Owen Michaelson said: “We’ve had really good sales momentum. Normally we are quite second half weighted as a business. We’ve put a lot of work in over the years to try and flatten that cyclical cycle. That investment over a number of years in management time has finally paid off.”
He said the group’s strength in the North and the Midlands has provided a big boost.
“Despite what everyone says about London housing, out in the regions we haven’t all shut up shop. We’re moving along nicely,“ he said.
“We don’t do city centre development, we do large brownfield sites. We do low rise housing and industrial and distribution units.“
He said the beds and sheds markets are two very separate sectors.
“Houses are still very affordable in the regions when compared with the South East of England,” he said.
“It’s steady. People can get mortgages.“
However, the group has seen a definite slowdown of enquiries in industrial property.
“It’s due to Brexit and political uncertainty,” said Mr Michaelson.
“It’s as simple as that. Why would a big company make a decision to move and make massive investment in new equipment at the moment when they’re not quite sure what the landscape is going to be? The market is not closed. We’re still seeing steady enquiries for where we’ve got space.
“It’s entirely due to the national, political turmoil. There is a softening, but it’s by no means closed.”
The group said commercial sales at the Gateway 45 development in Leeds are progressing well. 10 acres of fully serviced commercial land have been sold to Leeds University, 2.5 acres have been sold to Leeds City Council for an extension to its existing park and ride facility, and contracts have been exchanged with PLP UK Logistics Venture.
“Gateway 45 in Leeds is our landmark site in Yorkshire,” said Mr Michaelson.
“It’s a great site, a great location. We are seeing fantastic momentum.”
Head of investor relations Iain Thomson said: “The reason Gateway 45 is doing so well is driven by HS2’s decision to put their new proposed rolling stock depot on the site.
“If HS2 doesn’t go ahead, then the Leeds University Institute will still go ahead.
“Leeds City Council are already there for their park and ride. It’s one of the most attractive commercial developments in Yorkshire.”