Strong demand for regeneration boosts Harworth

Harworth Group'‹, which specialises in the regeneration of former coalfield and other brownfield sites,'‹ has reported a 60 per cent rise in 2017 revenue and said its focus on "beds and sheds" in the North of England is firmly underpinned by strong economic and consumer trends in the regions. '‹

Harworths Logistics North site

Rotherham-based​ Harworth has won planning consent for 1.45m square feet of new commercial space at Kellingley in Selby, North Yorkshire, two years after the UK’s last deep mine operations ended there.

The group said hundreds of new jobs could be created on the site, bringing £200m of economic benefit to the region.​

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Kellingley Colliery closed in December 2015 and Harworth took control of the site in March 2016 with an ambitious 10-year plan to revive the area and create more jobs that the original mine offered.

Harworth's chief executive ​Owen Michaelson said demolition works are ongoing at Kellingley and the group hopes to finish them by the summer. The group will be ready to build on the site next year and it plans to actively market the site in the summer

The deep mine employed 700 people at its end in 2015. Mr Michaelson pointed to the success of Harworth's Waverley Advanced Manufacturing Park (AMP) in Rotherham, the site of the former Orgreave Colliery, as a guide for Kellingley's potential.

"We have got over 1,200 people working at Waverley and we're only half way through," he said.

Harworth has signed up some high profile tenants at Waverley including Rolls-Royce, Boeing and more recently McLaren Automotive, which is taking a 20-year lease on a new 75,000 sq ft unit.

The McLaren building is due to complete at the end of April.

"There have been a lot of bespoke alterations for specialist equipment," said Mr Michaelson.

"McClaren are recruiting hard and they are working with Sheffield University."

Harworth has no new space to let at Waverley and so it is building a second phase for tenants such as British Steel. The group typically targets high quality tenants in a bid to kick start areas that have been neglected following the end of deep coal mining in Britain.

In addition to commercial space at Waverley, Harworth has planning permission for 3,890 homes and community facilities such as a doctors' surgery and a possible 20 stores.

Harworth's finance director Andrew Kirkman said: "The site is coming forward and maturing. It's a place where people want to live and work. It's a complete new community on the scale of the garden villages."

Greenfield space is very important to Harworth and it typically builds on just a third to a half of its developments, leaving the rest for grass, trees, hedgerows and lakes.

Harworth's results for the year to December 31 showed a 60 per cent jump in revenue from £34m to £54m.

Pre-tax profit fell from £43.5m to £41.8m, but Mr Kirkman said this was a technical accounting issue after the group reclassified some properties from investment to development. He said a better indicator was net asset value, which rose 12.5 per cent.

Analyst Chris Spearing at Canaccord said: "In our view, Harworth Group has delivered another strong set of results; good progress has been made in extracting value from the land bank.

"Property gains were £47.4m, which we estimate is equivalent to a capital return of around 12 per cent, comfortably ahead of capital growth of 5.2 per cent for the MSCI IPD Quarterly Index."