Harworth bullish on post-Covid market as names Shillaw CEO

The developer said its robust balance sheet, lifted by recent sales and acquisition deals, will enable it to take advantage of post-pandemic opportunities driven by the Government’s Build Back Better recovery plan.

“The company’s strong balance sheet, supported by an extension of its banking facilities in May, sales progress and supportive market fundamentals, means it is well positioned to mitigate any short-term market volatility and take advantage of any land and property opportunities that arise as a result of present market conditions,” Harworth Group said in a trading update today, in which it also announced the appointment of former Manchester Airports Group executive Lynda Shillaw as chief executive from 1 November.

London Stock Exchange-listed Harworth, which is developing the Logistics North industrial park in Bolton and has other interests in the region and beyond, said it achieved several portfolio milestones in the six months ending 30 June, despite the challenges presented by Covid-19.

Income collection, generated from a predominantly industrial tenant base, has continued to be “robust” over the period, reaching 95% for the June quarter day, broadly in line with Q1 and historical performance, Harworth said.

Housebuilders have recommenced work on all 10 of the company’s residential development sites after a temporary shutdown in April.

Further progress has been made in the disposal of the non-core portfolio, with nine sites totalling 899 acres sold in the first half of 2020, including 4.4 acres at Logistics North to retailer A&F Forecourts in early June. This has given “management time to focus on key value-adding projects and reduced drag on the wider portfolio,” the firm said.

Meanwhile, there remains “significant” strategic land acquisition opportunities in the business’ core regions, in line with pre-pandemic levels, and “robust” underlying demand for its residential and industrial land.

The group is prioritising capital expenditure on seven major development sites where agreed sales are in place for later in the year, as well as on progressing its infrastructure delivery programme to ensure it has a pipeline of further sites ready for sale in 2021.

Harworth’s portfolio included 30,049 potential residential plots and 25m sq ft of potential industrial space as of 30 June.

Harworth has delivered phases of Logistics North with Lancashire County Pension Fund

The trading update was issued ahead of the company’s interim results due to be announced on 6 October.

“It remains too early to say with any certainty the extent to which the disruption caused by the Covid-19 pandemic will affect the company’s results for the financial year to 31 December,” Harworth said.

“However, the recently completed sales at or above book value are entirely consistent with the well documented demand for logistics space and new homes, particularly in suburban areas, indicating that the residential and industrial markets in Harworth’s core regions remain fundamentally sound.

“This is also supported by the Government’s priorities to ‘build, build, build’ and ‘level up’ [the regions].”

Harworth’s board today appointed Shillaw to succeed Owen Michaelson as chief executive with effect from 1 November, ahead of Owen’s retirement from the company on 31 December.

Shillaw is group property director and a board member at retail landlord Town Centre Securities. She was previously divisional chief executive, property, at MAG, where she was responsible for the Airport City joint venture.

Alastair Lyons, non-executive chair of Harworth, said:“I am delighted to have someone succeeding Owen who is as well known in our core regions and beyond as Lynda is for the depth of her real estate and regeneration experience, and who has an undoubted natural affinity for our core purpose – to transform land and property into sustainable places where people want to live and work.”

Shillaw added: “Few companies have Harworth’s track record in successfully regenerating large complex sites and I look forward to working with and leading such a strong and experienced team.”