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Microsoft data centre plans for power station site following £106.6m deal

Harworth Group has agreed a £106.6m sale of land at a former power station in Leeds for the development of a hyperscale data centre.

Contracts have been exchanged with Microsoft (MSFT MCIO Ltd) for the conditional sale of 48 acres of land at the Skelton Grange site.

The site is made up of two parcels of land. Plot 1, which comprises 27 acres, will be sold on an unserviced basis for gross consideration of approximately £52.9m, with completion of the sale targeted for the second half of 2024.

Servicing of Plot 1 is expected to be completed by Harworth as development manager under a separate development agreement.

Plot 2, which comprises 21 acres, will be sold on a serviced basis for gross consideration of approximately £53.2m. Completion of the sale is targeted for the first half of 2026.

Lynda Shillaw, chief executive at Harworth Group, said: “Since re-listing in 2015 Harworth has successfully completed a number of significant transactions that create value for our shareholders but this sale at Skelton Grange is the group’s largest to date and is yet another exemplary case study that demonstrates the successful regeneration of brownfield land.

“It highlights Harworth’s capabilities in identifying and acquiring complex sites, creating planning-friendly masterplans that maximise site potential, and deploying timely and effective investments into remediation and infrastructure.

“This transaction further builds our expertise to include datacentres and evidences the growing spectrum of industries that continue to be attracted to the schemes that Harworth brings to the serviced land market.”

Harworth is set to reinvest the proceeds in its industrial and logistics development programme, and intends to retain more directly developed prime Grade A properties in its investment portfolio.

Its industrial and logistics pipeline totals 38 million sq ft, with 5.5 million sq ft of that already in, or about to enter into development.

The former Skelton Grange power station site was purchased by Harworth in December 2014 for circa £3m, with remediation and enabling works beginning shortly afterwards.

The group secured approval in November 2023 for 800,000 sq ft of industrial and logistics space, and most recently in May 2024, reserved matters approval for a further 320,000 sq ft of industrial and logistics space.

A 19.5-acre land sale was completed to Enfinium in 2020 for the development of a 49MW energy-from-waste (EfW) renewable electricity generation facility, with a lease granted in 2021 to facilitate the development of a circa 100MW Battery Energy Storage System (BESS) facility on a 5.7-acre plot.