Harworth Group (HWG) CMD 2024 summary

Strategic Growth and Financial Guidance

• Targeting growth of the investment portfolio to £900 million by end-2029, primarily by retaining more self-developed industrial and logistics assets and supplementing with selective acquisitions.

• Aiming for £1 billion of EPRA NDV by end-2027, with a 33% EPRA NAV increase over the past 3.5 years and requiring 46% growth over the next 3.5 years.

• Maintaining a low leverage model with a loan-to-portfolio value policy of 20% or less at year-end; current loan-to-portfolio value is 9.8% as of June 2024.

• Intends to increase shareholder dividends as recurring income grows, without impacting growth targets.

• Portfolio expected to be 100% modern Grade A by end-2027, up from 45% currently, through asset replacement and selective acquisitions.

Industrial and Logistics Sector Focus

• Industrial and logistics (I&L) market is robust, with 1H24 national take-up up 38% year-on-year, driven by both logistics and manufacturing.

• Strategic target to achieve an average of 800,000 sq ft per year of direct development by 2027, with enabling works ramping up since 2023.

• Pipeline totals 38.8 million sq ft, with 9.6 million consented and over 5 million sq ft expected to complete by 2027.

• Recent acquisition of the Catalyst scheme for £44 million adds 285,000 sq ft of Grade A space, now 90% let, supporting asset management at the AMP.

• Focus on sustainability, with evolving development specs to meet occupier and regulatory decarbonization goals.

Major Site Developments and Case Studies

• Skelton Grange transformed from derelict power station to a major energy and data hub, including a £107 million land sale to Microsoft for a hyperscale data center and >40% IRR.

• Skelton Grange expected to deliver over 40% IRR and attract £4 billion in inward investment, with additional energy and logistics facilities and 28 acres returned to natural habitat.

• Gascoigne Interchange, with 1.5 million sq ft consented and potential for 1 million more, leverages extensive rail infrastructure and is projected to create up to 4,500 jobs.

• Both sites exemplify value creation through remediation, stakeholder partnerships, and strategic land assembly.

• Portfolio management blends land sales, speculative and pre-let development, and build-to-suit, with a North Star IRR target of 15% across the life of sites.