Harworth Group plc, a leading regenerator of land and property for development and investment, has purchased a Short-Term Operating Reserve (STOR) facility in Newport, South Wales, as part of the further consolidation of its income portfolio.
The Company has acquired the facility, sat on 0.5 acres of land in an established commercial area south of Newport Town Centre, for £495,000 plus acquisition costs. It is already let to UK Capacity Reserve Ltd (Sembcorp Energy UK Ltd) on a lease expiring in 2041 and at a rent equivalent to a net initial yield of 8.45%. Alder King advised Harworth on the transaction.
Harworth is already the landlord to a number of third-party STOR operators across the North of England and the Midlands, with this deal following the purchase of a similar UK Capacity Reserve Ltd facility in Gloucester in June. STOR facilities provide a source of extra power to the National Grid to help manage actual demand on the system when it is greater than forecast or when other sources are unavailable, adding significant resilience to the network.
In a separate transaction, Harworth has also sold 49 acres of non-core land at Oxcroft in Derbyshire for £444,000, above book value, providing the business with additional financial headroom to make further strategic land or income producing property acquisitions in the future.
“STOR assets maintain a stability of service from the grid for residents and businesses alike and have proven their value during this pandemic period. We are keen to add to our portfolio of STOR assets following the acquisition of two facilities earlier this year. These assets bring societal benefit whilst also delivering a long-term recurring income streams to the business.”
Matthew Smith, Senior Asset Manage, Harworth Group plc
“Harworth has once again proven their ability to swiftly and efficiently purchase assets within this specialist property class. We look forward to supporting their Income Generation team as they look to further expand their portfolio.”
Simon Smith, Partner, Alder King