Harworth Group (LON:HWG) reported full-year results for the year ended 31 December 2025, with management citing “strong operational momentum” and disciplined delivery in a challenging macroeconomic environment. In prepared remarks, the company highlighted progress in its industrial and logistics strategy, growth in development-ready land, and continued portfolio repositioning away from mature residential sites.
2025 operational performance and portfolio positioning
Chief Executive Lynda Shillaw said 2025 performance reflected continued execution of the group’s industrial and logistics (“I&L”) growth strategy, acceleration of enabling works across the next wave of sites, and improvements to the quality of the investment portfolio.
The company said the portfolio is now 70% weighted to industrial and logistics, reflecting its strategic shift and capital recycling from mature residential sites. Shillaw also emphasized the importance of power-enabled land in unlocking value, noting that a significant proportion of near- and medium-term sites are now power enabled. Harworth closed 2025 with 4 million square feet of enabled I&L land and a further 15.2 million square feet in the planning system.
Management said the year marked a “step change” in the scale of development-ready land. The company cited a gross development value (GDV) of around £600 million for the 4 million square feet of enabled land, including sites such as Chatterley Valley, Wingates, and Skelton Grange. Harworth also reported 1.6 million square feet of active demand across pre-lets and land sales.
Harworth said it has 0.8 gigawatts (GW) of incremental power connections that are conditionally secured or in the pipeline with network operators, excluding Skelton Grange’s power for the Microsoft transaction completed in 2024. Across the enabled land and next-phase sites in planning, management said the platform has the potential to generate £350 million to £450 million of value gains over the next four years.
Financial results: EPRA NDV growth, sales activity, and refinancing
Finance Director Kitty added that EPRA net disposal value (NDV) per share increased to 224.4 pence, driven by value gains of £44.5 million, primarily from industrial and logistics. She said industrial and logistics outperformance more than offset residential valuation impacts linked to market conditions.
Including dividends paid during the year, management reported a total accounting return of 1.7%. Total property sales were £115 million, which the company said was broadly in line with its average from 2021 to 2023. Net loan-to-value (LTV) was 15.6% at year-end, within Harworth’s self-imposed target of 20%.
In November, the company refinanced and upsized its revolving credit facility (RCF) to £275 million, with an uncommitted accordion of £50 million. Management said pricing improved and the term was extended, providing additional funding capacity to support growth. Harworth also raised its dividend by 10% for the year, marking its 11th year of dividend progression.
Value gains by segment and investment portfolio income growth
Harworth said value gains were driven by industrial and logistics. Across strategic land and major developments, it delivered valuation gains of more than £64 million, which management attributed to planning progress, enabling works, development completions, and the delivery model.
The investment portfolio contributed £9.1 million of value gains, supported by new lettings and asset management activity. By contrast, residential recorded £26.8 million of value losses, primarily in major developments, with management citing pricing and cost pressures and site-wide infrastructure cost impacts. The net outcome was £44.5 million of value gains in 2025.
The investment portfolio was reported at £305 million and generated £18.3 million of annual headline rent, up 4.6% due to leasing activity. Like-for-like headline rental growth from lettings, renewals, and rent reviews was up 10%, while vacancy declined to 1%.
Harworth said it has transformed the investment portfolio to 76% Grade A and is progressing towards 100% Grade A by 2027. During 2025, developments at the Advanced Manufacturing Park and Droitwich added 300,000 square feet to the portfolio, valued at £42 million. Both were let at year-end, adding £2.3 million of rent.
Capital allocation, balance sheet, and pipeline delivery model
Net debt increased to £145.9 million, reflecting investment in enabling works and the acquisition of the remaining 50% interest in Gateway 45, a site adjacent to Skelton Grange in Leeds. Harworth reported £119.6 million of sales proceeds in the year and available liquidity of £127 million at year-end.
Management reiterated its capital allocation framework, describing a selective approach to acquisitions—particularly where planning and power can unlock value—and increased use of capital-light structures and partnerships. It said infrastructure spend is targeted at creating serviced, development-ready land that can be monetized through sales or direct development, while direct development supports development profits and additions to the investment portfolio.
Harworth reiterated a sales target of £100 million to £250 million per year to fund higher-returning opportunities, and said it complements its RCF with third-party capital through partnership structures, including at Logistics North and in residential strategic partnerships. Management said 51% of its pipeline is now under capital-light delivery and partnership structures.
In residential, the company said planning momentum increased, with applications submitted for more than 9,000 plots in 2025. Around 45% of the residential pipeline now has a planning status, with plots either consented or in the planning system. Harworth said it has reduced the mature consented residential land bank to 11% of the portfolio, down from 31% in 2020, freeing capital for industrial and logistics investment.
Across industrial and logistics, Harworth said its pipeline stood at 35 million square feet at the end of 2025, up from just over 33 million square feet the prior year. The company described near-term delivery opportunities from 4 million square feet of “construction and near-ready” land, and said near-term and next-phase sites together represent 19.2 million square feet with a completed GDV of £3 billion. Management said it expects around 40% of the near-term pipeline to be developed for hold in the investment portfolio, with potential rent of £20 million to £25 million, and noted that the timing of development starts would be “later this year, subject to the market.”
Data centers, powered land, and management’s outlook
Shillaw said Harworth began investing in securing power allocations in 2022, positioning its land bank to meet demand from data centers and other power-intensive users. She pointed to the Microsoft transaction at Skelton Grange in 2024 as an example and said the company has since identified further data center opportunities, viewing “land-led data center products” as aligned with Harworth’s skill set and risk-adjusted preferences.
Management framed power-enabled land as a key bottleneck for UK digital infrastructure growth and said demand is broad-based across hyperscale, co-location, and edge operators. The company cited expectations for the data center sector of 20% to 30% compound annual growth over the next decade. Harworth said its powered land pipeline includes 0.8 GW of potential capacity phased over the next decade, and a further 0.7 GW beyond that.
During Q&A, management said the 0.8 GW pipeline is “split roughly half and half,” with about 0.4 GW in the nearer term (2–5 years) and 0.4 GW beyond that. In response to questions about how much capacity is secured versus in-process, the company said “a chunk” is at the offer stage, while another portion is working through additional steps requiring sign-off from National Grid. Management also highlighted what it described as increasing regional support for data center investment, drawing parallels with the Skelton Grange process.
Asked whether Harworth might exit residential over time, management said residential remains an important part of the company’s track record and skill set, pointing to a large planning pipeline. However, it emphasized that the focus is on how the company engages in the residential market, using different structures to maximize value, and on capital allocation rather than exiting the segment entirely.
Looking ahead, management reiterated its ambition to grow EPRA NDV to £1 billion within its target timeline and said its industrial and logistics portfolio and pipeline are expected to drive growth through the remainder of the strategic plan period. It outlined expectations that a mix of planning progress, land sales, and direct development could generate a 15% to 25% annual return on capital employed, while recurring income from rents and fees could help compound returns. The company also cited a self-funded model based on recycling £150 million to £250 million of annual serviced land and property sales, maintaining a year-end LTV target below 20%.
Management acknowledged ongoing macro uncertainty, including “very uncertain” impacts from conflict in the Middle East on investor and occupier confidence in 2026. It said its priorities remain progressing planning, unlocking value across sites, and maintaining balance sheet strength, while using the optionality of a land-led model to adapt to changing market conditions.
About Harworth Group (LON:HWG)
Harworth Group plc is a leading sustainable regenerator of land and property for development and investment which owns, develops and manages a portfolio of over 14,000 acres of land on around 100 sites located throughout the North of England and Midlands. The Group specialises in the regeneration of large, complex sites, in particular former industrial sites, into new residential and industrial & logistics developments. Visit www.harworthgroup.com for further information.
