Harworth grows income portfolio with Gloucester acquisition
Harworth Group, a regenerator of land and property for development and investment, has purchased a Short-Term Operating Reserve (STOR) facility in Gloucester for GBP1.2 million as it continues to consolidate its income portfolio.
The facility, which sits on 1.28 acres of land on Bristol Road to the south of Gloucester town centre, is let to UK Capacity Reserve Ltd (Sembcorp Energy UK Ltd) on a lease expiring in 2040, reflecting a net initial yield of 8.25 per cent. 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.
This deal follows Harworth’s recent purchase of Thorns Road Industrial Estate near Dudley for GBP10.1 million plus acquisition costs, reflecting a Net Initial Yield of 10.2 per cent. The Estate is let to key West Midlands manufacturers Xandor Automotive and Sunrise Medical. Both transactions are in line with Harworth’s strategy to grow its recurring income base through the acquisition of high yielding assets with further asset management potential.
Richard Bousfield, Director – Head of Income at Harworth Group, says: “Growing recurring income from energy generation on our sites is a key part of our investment strategy. The income we generate from our portfolio continues to cover our overheads and financing costs, allowing the wider business to successfully trade through the current pandemic as we continue to deliver sustainable new developments across the North of England and the Midlands.”
Matthew Smith, Senior Asset Manager at Harworth Group, adds: “STOR assets are an essential part of keeping the lights on in the UK, maintaining a stability of service from the grid for residents and businesses alike. We’re keen to add further sites to our existing STOR portfolio in order to support this societal benefit, whilst delivering a strong income stream to the Company.”