Harworth Group plc has sold five units totalling 145,248 sq ft at its Gateway 36 Business Park in Barnsley, South Yorkshire to clients of Mayfair Capital “(Mayfair)” for £15.807m, reflecting a Net Initial Yield of 4.76% and at a price above Harworth’s book value.
The sale forms part of the companies active churn strategy of its mature income assets, allowing it to recycle the capital into both direct development opportunities and other income-producing assets to improve its recurring income base and to support its aim of delivering a double-digit total return to shareholders.
Located less than a mile from Junction 36 of the M1 in Barnsley, the sale comprises four fully-let industrial/warehouse units and one drive-thru retail unit, which were all previously developed and let by Harworth between 2015 and 2018. The units were all let on long-term leases to Barnsley Metropolitan Borough Council, Motor Depot Limited and Fieldrose Limited. The development of the units was previously unlocked by an £8.9m investment by the Sheffield City Region’s Local Enterprise Partnership that has funded key improvements to Junction 36 of the M1 to facilitate development. This phase includes a dedicated lane from the M1 slip road, preventing queues backing onto the M1 at J36, cutting local traffic jams, and improving bus journey times.
Harworth were advised by Gent Visick & Knight Frank, with Keebles LLP acting as solicitor on Harworth’s behalf. Mayfair were advised by GVA.
Proceeds from the sale will be used to fund future income acquisitions for Harworth’s Business Space and Natural Resources portfolios and to pursue direct development and asset management opportunities where appropriate on its existing sites. Harworth also owns 110 acres of neighbouring land to Gateway 36 that it intends to bring forward through the planning system for a major new mixed-use development from 2019.
David Travis, Director of Business Space at Harworth, said:
“We are delighted to complete the sale of these fully-let units to Mayfair, following an extremely competitive bidding process and several years of hard work by Harworth and our partners to establish Gateway 36 as a key commercial location in the Sheffield City Region. We are now focused on re-investing these monies into sourcing and converting further income-producing opportunities across the North of England and the Midlands, in order to further sustain the business and provide additional opportunities for “value add” for the portfolio in both the short and medium-term.”
Garry Howes, Director of Gent Visick, commented:
“The thought that went into the design and the build quality of these assets was a significant factor contributing to both the speed of transaction and the price achieved. We’re delighted to have secured a great result for Harworth.”
Graham Foxton, Partner at Knight Frank, added:
“The level of interest from the UK institutional market has shown that the sector continues to go from strength to strength and quality product like this is keenly contested.”