Harworth is on track to become a £1bn developer, said chief executive Lynda Shillaw, but added that the first half of the year was likely to be its best.
Shillaw said: “We are cautious that the anticipated uncertainty in near-term market conditions in the UK, combined with the strong performance in the first six months of the year, mean that our 2022 results will likely be first-half weighted.”
The regeneration specialist said it had made “significant operational and financial progress” during the first half of the year, and was also making “significant progress” towards its goal to directly develop 800,000 sq ft each year. Harworth has increased its direct development industrial and logistics pipeline to 32.2m sq ft.
Some 332,000 sq ft at Bardon Hill, Leicestershire, is on track to practically complete in August, with 92% exchanged or under offer.
Harworth has also completed its largest ever residential sale to date at Waverley. “This has driven our EPRA NDV and means we are continuing to deliver successfully against our growth strategy, supported by a robust market for our residential and industrial and logistics products.”
The firm completed its 100,000 sq ft unit at the Advanced Manufacturing Park in Rotherham in June. A further 203,000 sq ft is being developed at the AMP and Gateway 36 in Barnsley.
Harworth said it was also on target to secure a 12-15 year land supply through acquisitions and progressing sites through planning. This year it has so far added 1,143 plots and 3.9m sq ft to the total development pipeline.
Later this year, it is expecting planning decisions for 3m sq ft of industrial and logistics space in Gascoigne Wood in North Yorkshire, Skelton Grange in Leeds and Houghton Main in Barnsley.
The investment portfolio is also showing strong performance, with a vacancy rate of 3.8% and 96.1% of rent collected for the June quarter.
Harworth has also completed just under 50,000 sq ft of leasing deals during the first half, with new lettings at an average 17% premium to ERV, and renewals on average 15% ahead of previous passing rent.
Acknowledging that macroeconomic factors would make the second half tougher, Shillaw said Harworth’s business model made it particularly robust. “Harworth is particularly well-positioned within our markets: we sell serviced and therefore de-risked residential land to housebuilders, we develop industrial and logistics sites in underserved regional markets, and the scale of our portfolio and range of our products, including our newly launched single-family build-to-rent portfolio, provide significant diversification.”
She added: “The supply and demand factors supporting our markets have been resilient to date, our pipeline remains robust and our through the cycle investment and management actions continue to drive value across our portfolio.”
Shillaw said Harworth’s financial position and proven track record “provide a stable platform for growth as we continue to deliver on our strategic plan to reach £1bn of EPRA NDV over the medium term”.
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