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Harworth further grows income portfolio with acquisition

Energy

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 an above book value price of £444,000, providing the business with additional financial headroom to make further strategic land or income producing property acquisitions in the future.   

Matthew Smith, Senior Asset Manager at Harworth Group, said: “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’re keen to add to the two STOR assets we’ve acquired this year in order to support this societal benefit whilst delivering a long-term recurring income stream to the business.”

Simon Smith, partner at Alder King, commented: “Harworth have once again proven their ability to swiftly & efficiently purchase assets within this specialist property class.  We look forward to supporting their Income Generation team to further expand its portfolio.”

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