Good morning, everyone. Kitty and I are delighted to be here, and thank you for joining us for Harworth's full year results for the year end of 31 December 2025. We're going to do a presentation of two parts today. Firstly, we'll take you through our financial and operational performance for 2025, where we'll cover the progress that we made across our strategic London development pipeline and how this sets up to deliver attractive returns in the future. In the second part of the presentation, we will look forward, highlighting where we've been investing over the last few years to unlock the latent value in our portfolio and provide a deeper dive into some of the emerging market opportunities.
We're gonna present probably for around 30 minutes, and then we'll take questions from those of you in the room, followed by any questions online. Starting with last year. 2025 was a year of strong operational momentum and disciplined delivery against a challenging market backdrop. We continued to execute our industrial and logistics growth strategy, accelerate enabling works across our next generation of sites, and strengthen the quality of our investment portfolio. Our total property return was 8.4%, outperforming the MSCI UK Annual Property Index by 280 basis points. Return on capital employed at property level was 23% in industrial and logistics, strategic land and major developments, and 9% in the investment portfolio. These portfolios are the main medium-term growth drivers of the business.
The portfolio overall is now 70% weighted to industrial and logistics, reflecting our strategic shift and capital recycling from mature residential sites. A significant proportion of near and medium-term sites now power enabled, opening up access to in-demand growth sectors, which taken alongside 4 million sq ft that is enabled and a further 15.2 million sq ft in the planning system already to start, means that we're in a strong position to begin to crystallize value into the medium term. Our through the cycle model continues to deliver, and this slide highlights the consistency of our performance.
The bar charts on the left of the slide show that since 2020, we've grown the gross portfolio value by 52%, and this has been delivered purely on balance sheet, underpinned by selling GBP 705 million of London property and reinvesting the proceeds into higher returning opportunities. Our sustained progress in 2025 continues to reinforce Harworth's long-term outperformance of the sector, and over the same period, EPRA NDV has increased by 41% despite the unpredictability and volatility of the market since the second half of 2022. We've moved to the charts on the right. To date, in relative TAR and TSR terms, we've outperformed the core EPRA and MSCI indices throughout the strategic plan period.
Our cumulative total property return since 2021 is 73.5%, and you can see the jaws widening on the bottom of the chart from 2021 as we begin to build momentum in the execution of our plan. This track record gives us confidence in our ability to continue compounding value. Harworth's all about land and how we apply our skills to create and unlock value. These are our superpowers. Our through the cycle business model takes land from acquisition, through planning and into development, and we've consistently created value by flexing our master plans and evolving our products to meet market opportunities. This slide shows our business model and where we have invested to both secure our ability to smoothly deliver I&L product from our large scale sites and also meet emerging market themes.
We've always delivered industrial and logistics and advanced manufacturing for a wide range of occupiers, and these are the bedrock of our strategic growth plans. In 2022, we began investing to secure power allocations ahead of planning or delivery phases where they were critical to value creation. Over time, we've built a substantial powered land platform, which strongly positions our land bank to meet data center and other power-hungry land users. This was key to our transaction with Microsoft at Skelton Grange in 2024. Since then, we have identified the opportunity to deliver more data centers from our powered land, creating the potential for data center land products to become another value driver of the business.
Our work on our land bank over the last five years means that today Harworth is well positioned to deliver product into some of the U.K.'s most powerful structural trends. As you can see this on the next slide, which shows that 2025 marked a step change in the scale of development-ready land across our portfolio. We closed the year with our largest ever volume of development-ready land, with 4 million sq ft enabled industrial and logistics land. It has a GDV of around GBP 600 million, and includes sites such as Chatterley Valley, Wingates and Skelton Grange, which are positioned to realize value. In terms of interest in our sites, we have 1.6 million sq ft of active demand across pre-lets and land sales, and we have 0.8 GW of incremental power connections, excluding our Skelton Grange site to Microsoft.
These are all conditionally secured or in the pipeline with network operators capable of supporting data centers and other power-intensive users. Alongside this, our next phase of sites now comprises 15.2 million sq ft, which are consented or in the planning system. Combined, this platform has the potential to generate GBP 350 million-GBP 450 million of value gains over the next four years. I'm now gonna hand you over to Kitty, who'll take you through our financial performance in 2025.
Thank you, Lynda. Turning to the financials, 2025 was a year of solid performance despite a challenging macro backdrop. EPRA NDV per share increased to 224.4 pence, driven by value gains of 44 and a half million GBP, primarily from our industrial and logistics portfolio. While residential valuations were impacted by market conditions, our industrial and logistics performance more than offset this. With strong revaluation gains across strategic land, major developments in the investment portfolio, and I'll come back to this in more detail shortly. Adding dividends paid in the year gave a total accounting return of 1.7%.
Total property sales were GBP 115 million, broadly in line with our average from 2021 to 2023, and we maintained a conservative balance sheet with Net Loan to Value of 15.6%, well within our self-imposed target of 20% at year-end. In November, we completed a refinancing of the business and upsized our revolving credit facility to GBP 275 million, with an uncommitted accordion of GBP 50 million. We improved our pricing and extended the term, and this provides us with greater funding capacity to support our growth. Lastly, we've continued to grow our dividend by 10% this year, making this the 11th year of dividend progression. Value gains are the core component of our EPRA NDV performance. In 2025, our industrial and logistics portfolio was the primary driver of value creation.
Across strategic land and major developments, we delivered valuation gains of over GBP 64 million, reflecting planning progress, enabling works, direct development completions, and the effectiveness of our delivery model. The investment portfolio also contributed GBP 9.1 million of value gains, supported by new lettings and asset management activity. These gains demonstrate the strength of demand for high quality and well-located industrial and logistics space across our regions. You can see the impact of the challenging residential market and cost increases on this chart in the bottom bars, with residential delivering GBP 26.8 million of value losses, predominantly in major developments where pricing and cost pressures impacted valuations and site-wide infrastructure costs. Combined, this resulted in net value gains of GBP 44 and a half million for 2025. Alongside generating value gains, we're focused on creating a high-quality income stream.
Over the last few years, we've transformed the investment portfolio to 76% Grade A, improving the quality of our rent, which is now above 2021 levels as we sold out to secondary properties and developed new industrial and logistics assets to hold. Alongside rental income, which we expect to continue to grow as we complete new developments, we've generated fee income this year from development management and PPA sales, diversifying our income streams. As I said, total property sales in the year were GBP 115 million, comprising residential land sales and investment portfolio in natural resources disposals. Residential sales included around 1,800 plots, with 725 sold through planning promotion agreements, generating over GBP 3 million of fee income. The level of sales achieved was broadly consistent with average sales between 2021 and 2023.
Including large sales such as those at Anstey and Skelton in 2024, our total sales completed now exceeds GBP 700 million over the last five years. These sales prove our valuation on a regular basis, and proceeds are reinvested into our pipeline to create future value. The investment portfolio is now GBP 305 million, generating GBP 18.3 million of annual headline rent, up 4.6% driven by leasing activity. On a like for like basis, headline rental growth from lettings on existing space renewals and rent reviews completed was up by 10%. At the same time, vacancy reduced to 1%, demonstrating sustained occupier demand. Rapid uplift in portfolio quality is translating into stronger income, with a higher rent per sq ft driven by direct development completions and targeted disposals.
In the year, we completed developments at the Advanced Manufacturing Park and Droitwich, which added 300,000 sq ft to the portfolio for a value of GBP 42 million. Both were let at year-end, adding a further GBP 2.3 million of rent. The portfolio is positioned for continued rental resilience, underpinned by a strongly performing Grade A core as Harworth progresses towards 100% Grade A by 2027. Our balance sheet remains a key strength, and I'm going to talk for a few slides about how we've used our balance sheet and how we think about capital allocation to drive returns.
During the year, net debt increased to GBP 145.9 million, reflecting investment in enabling works on our industrial and logistics sites and the acquisition of the remaining 50% interest in Gateway 45, a site adjacent to our Skelton Grange development in Leeds, and which is an important part of our value creation pipeline. We continue to complete servicing works at our residential major development sites and received GBP 119.6 million of sales proceeds during the year, resulting in available liquidity of GBP 127 million, which provides significant capacity to continue investing in our industrial and logistics pipeline and supporting our strategic ambition to grow the portfolio weighting to 85% industrial and logistics.
As we've previously guided, as we shift our investment into preparing sites such as Wingates and Skelton Grange as drivers of future value, we expect to see our loan to value at the end of the year at higher levels than the low single digits of previous years. Albeit still well within our self-imposed target of 20% loan to value at year-end and supported by our new banking facilities. We have a disciplined approach to capital allocation, with a clear focus on value creation and balance sheet discipline, and a few key points to pull out of this slide.
Firstly, we're highly selective on acquisitions, prioritizing industrial and logistics sites where planning and power can unlock meaningful value, and increasingly using capital light structures and partnerships to preserve flexibility. Secondly, we deploy infrastructure spend only where it creates serviced, development-ready land that can be monetized quickly through sales or direct development, and this is the engine that converts planning progress into cash and valuation gains. Thirdly, we invest in direct development, where we can crystallize development profits and add assets into our investment portfolio. On capital sources, we recycle capital consistently. We dispose of serviced land and industrial and logistics assets where asset management plans are complete, and we target between GBP 100 million and GBP 250 million of sales each year to fund higher returning opportunities. We optimize our financing mix and partner capital, and our revolving credit facility supports working capital and site delivery.
We complement this with third-party capital through partnership structures, such as those at Logistics North and our residential strategic partnerships, and these allow us to share risk and accelerate build-out across our substantial pipeline while generating attractive returns. The primary source of capital for investment into early-stage sites and infrastructure remains serviced land sales, and we continue to accelerate the transition of the residential portfolio, reducing the mature consented Land Bank to 11% of the portfolio, down from 31% in 2020, freeing up capital for higher returning industrial logistics opportunities.
Planning momentum stepped up materially last year, with applications for residential sites submitted for over 9,000 plots in 2025, and around 45% of this residential pipeline now has a planning status, with plots either consented or in the planning system, providing clear visibility of future sales and supporting our strategy to realize value through planning rather than long dated delivery. We remain focused on capital light delivery and partnerships to accelerate cash generation, and 51% of our pipeline is now under these structures. Capital generated from sales will then be reinvested into our industrial and logistics pipeline, and with 75% with the consent or in the planning system, we have good visibility on near-term and future value creation as we continue to progress this pipeline.
Our highest growth conviction is in industrial and logistics and adjacent sectors such as data centers and advanced manufacturing, and we've been working to reposition the portfolio to take advantage of this growth. The portfolio now stands at GBP 937 million, of which 70% by value is industrial and logistics, and the remaining 30% in residential, natural resources, and other. In 2025, the industrial and logistics strategic land and development sites generated a property-level return of 22.9%, meeting our long-term track record for this part of the portfolio. The industrial and logistics investment portfolio delivered a property-level return of 8.7% and serves as an important role of providing income to go towards covering costs and supporting our debt facilities.
These returns underpin our decision to continue to pivot the portfolio to a weighting of 85% industrial and logistics and continue to deliver high portfolio-level returns. I will now hand you back over to Lynda.
Thank you, Kitty. Now turning to the industrial and logistics development pipeline. To recap, our land bank is Harworth's USP, and we have an industrial and logistics platform that is positioned for sustained growth. We've made strong progress on enabling works across our major sites, meaning more of our industrial and logistics land is now construction-ready and capable of being monetized through developmental serviced land sales. Our planning momentum has accelerated with 75% of the industrial and logistics pipeline now in the planning system, and this gives us the next generation of sites to drive value creation over the medium term. Our investment portfolio is now 76% Grade A, and the whole portfolio is now 70% weighted to industrial and logistics, reflecting both our strategic pivot and the strength of market fundamentals. The scale of our industrial and logistics portfolio is really exciting.
We're 5 years into our plan, and the transition to shift the weighting of the portfolio is now well underway. We've pressed hard to get the next wave of sites into the planning system, and we have a clear deliverable next generation of sites across the Northwest, Yorkshire, and the Midlands. Near-term opportunities are driven from the 4 million sq ft of construction and near-ready land, and with a GDV of GBP 600 million, this gives the platform to accelerate delivery as market conditions improve. We're in active discussions across a range of I&L projects from prelets to land sales for 1.6 million sq ft of space, which is a similar run rate to the volume of developments and land sales achieved on average between 2020 and 2025.
The scale and potential of our I&L pipeline is now very visible, and taken together, our near-term and next phase of sites have a combined 19.2 million sq ft of space with a completed GDV of GBP 3 billion. This next slide, I think, is back by popular demand, and we're trying to bring to life the key and near-term delivery sites, which are the sites in blue on the map, and the sites that are currently in the planning process are the sites in orange. At the end of 2025, our I&L pipeline stood at 35 million sq ft, up from just over 33 million sq ft last year.
Our sites sit on major growth corridors across our regions, and most have the capacity to deliver over 1 million sq ft, which gives Harworth the flexibility to deliver projects ranging from logistics to advanced manufacturing campuses and digital infrastructure, but it also gives occupiers the opportunity to scale. These sites are significant for the regions that they're in, and they're fundamental to economic growth, providing capacity and scale for core growth sectors. The 4 million near-term and 15.2 million sq ft of next generation pipeline will be delivered through a combination of two core products. Firstly, developments that we complete and hold in our investment portfolio before optimizing the portfolio makeup. We'll also continue to expect around 40% of the near-term pipeline to be developed for hold in the investment portfolio, generating a potential rent of GBP 20-25 million.
To date, we've delivered 300,000 sq ft of this, and we expect our next development starts to be later this year, subject to the market. Our main product continues to be land that we will sell to owner-occupiers, developers, and investors. Where we can structure delivery of the product, we'll also benefit from fees under development or asset management agreements. This pipeline offers the potential for significant partnership structures, and as we seek to deliver across both the near and medium-term pipeline, we will pursue this. The final decision on whether land is developed or sold depends on a number of factors. Firstly, the size of the investment portfolio needed to support our growth and return ambitions, and secondly, the opportunities to crystallize value creation in a way that we created value through deals such as Kellingley, Anstey, and Skelton.
This is the largest volume of development-ready land that we have ever created, positioning us to deliver our targeted annual runway and capture improving market fundamentals. The next section of the presentation focuses on looking forward, highlighting where we have been investing over the last few years to unlock latent value in our portfolio and providing a deeper dive into some of the emerging market opportunities. The first couple of slides in this section set the market context for power-enabled land, which is now the critical bottleneck in the UK's digital infrastructure growth ambitions and the billions of investment that this has the potential to unlock. The UK, anchored by London, is one of the most mature and capacity-rich digital markets in Europe, but it's increasingly constrained by land and power availability and planning timelines.
Over the last couple of years, we've seen a proportion of growth redirected to other U.K. regions. Policy and regulatory alignment, including U.K. grid reform, planning streamlining, and industrial strategy, will materially influence the U.K.'s ability to maintain its leadership position. With the data center sector expected to see 20%-30% compound annual growth rates over the next decade, this is a core sector for government investment and policy. As with our Microsoft developments at Skelton Grange, we're seeing regional support for investment through accelerated planning and power permits to secure development. Now, while a lot of attention goes on Hyperscalers, market demand is broad-based, with Hyperscale, co-location, and edge operators all expanding footprints, reinforcing long-term structural growth opportunities for our business.
I mentioned earlier that over the last couple of years, we've been investing to secure power capacity for our industrial and logistics development before we secure planning and where we see the opportunity to drive returns through access to sectors aligned to digital infrastructure growth and reindustrialization. Our powered land pipeline is a subset of the industrial and logistics development pipeline, and we currently have 0.8 gigawatts of potential capacity phased equally over the next decade and a further 0.7 gigawatts beyond this, positioning the portfolio to meet the full spectrum of data center demand. I've said a couple of times so far, and probably many times in the past, that it's all about the land for Harworth.
Land-led data center products play both to our skill set and our track record, as well as offering the right risk-adjusted profile, lower up-front capital commitments, and delivery risk at attractive multiples to industrial and logistics land. In this part of the market, power is the critical value driver, so our secured and in-progress capacity is significant to the execution of a deal. If you have land, planning, and a commitment to power, you can start discussions with investors and developers well in advance of the physical power delivery. Our Microsoft transaction at Skelton Grange illustrates our offer in each of these land categories. Phase one, which completed at the end of 2024, was the land sale with power and planning, and we are currently undertaking the servicing of the land to enable us to conclude phase two.
Now, this really makes it sound easy, but these deals are a number of years in the making, and then they take a couple of years beyond this to complete, which requires a disciplined approach to participation in this part of the market, and these are key areas of differentiation for Harworth. Sites that enable occupiers to scale and have secure power connections are also key to the growth of the advanced manufacturing sector, a core component of which is defense. This is another area where Harworth has deep expertise and a strong track record for both investment and building bespoke buildings for occupiers, as well as working across local and central government and with academia to create campuses for global businesses such as Boeing, Rolls-Royce, McLaren, and Danieli.
Today, much of our land bank is capable and ready to provide product into some of the UK's highest-value, fastest-growing industrial sectors. As momentum builds, we're well positioned to capture the structural growth across these sectors over the coming decade. We have a clear, credible pathway to growing the business to GBP 1 billion of EPRA NDV in our target timeline. Our industrial and logistics portfolio is the key driver of growth throughout the remainder of our strategic plan period and into the medium term. The 4 million sq ft of land that is largely enabled, alongside the 15.2 million sq ft of strategic land in the planning system, are the primary value drivers. Depending on the mix and timing of planning progress, land sales and direct development should generate a 15%-25% annual return on capital employed.
Our 0.8 GW powered land portfolio opens up opportunities in emerging markets, particularly data centers, providing upside beyond traditional industrial and logistics land. Recurring income streams strengthen the base case, with rental income and fees compounding returns while operating costs, finance, and tax remain tightly managed. High single- to low double-digit sustainable total accounting returns underpin the long-term model to the end of 2029 and beyond. Turning to funding. Harworth has an attractive self-funded growth model, recycling GBP 150-250 million of annual serviced land and property sales into our land and development pipeline, while maintaining a low geared balance sheet with a year-end LTV target below 20%. This preserves financial resilience and our capacity to invest through cycles.
We are disciplined on capital deployment with typically GBP 100-250 million of annual CapEx, focused on land assembly, planning, infrastructure and direct development. This is concentrated across both building to hold plus investment in land to sell. Our capital sources are supplemented by our banking facilities, which provide important working capital and also development finance. Alongside this, we selectively utilize capital from partnerships and development agreements, enabling scale without overstretching the balance sheet. We flex this mix of third party capital to reflect market conditions, balancing risk and returns. Given the macro and to sustain a velocity of capital, we anticipate in the near term of the plan to be weighted towards serviced land sales, forward funding arrangements, and growing our strategic partnership business.
As we look ahead, we remain confident in the strength of our platform and the opportunities that it allows us to unlock. Our portfolio is positioned at the convergence of powerful structural drivers across industrial and logistics, advanced manufacturing, defense, and data-driven growth. Demand for high quality industrial space remains resilient, and UK vacancy rates are near historic lows. The shift to AI and the cloud is accelerating the need for power enabled land. At the same time, government and industry investment into advanced manufacturing, clean energy, and sovereign defense capability is rising, with our regions at the center of this activity. Now, the macro is challenging, and the impact of the conflict in the Middle East is very uncertain, but this will inevitably impact global investor and occupier confidence in 2026.
For us as the management team, we're focused on what we can control, progressing planning, unlocking value in our sites, and maintaining our balance sheet strength. As a land-led business, we have a high degree of optionality and ability to flex into changing markets. The potential of our pipeline is clear, and the opportunity that we have created is for the long term. This gives us confidence in delivering attractive through the cycle returns and achieving our GBP 1 billion EPRA NDV ambition. Thank you for listening, and we'll now go to Q&A. Thank you.
Bjorn.
Thank you. Bjorn Zetterstrom from Panmure Gordon. Just a question on the 0.8 gigawatts power connections. Can you give us a sense of how that is attributed across sites, and how many sites could support another hyperscaler opportunity?
Oh, I can't answer some of that question. We do have a number of sites. I think those of you who were around when we did the Microsoft transaction in 2024, we talked then about actually reviewing the portfolio and identifying a number of sites that we felt were capable of delivering, and that's really all about power. There are a number of hyperscale opportunities sitting in there across that full range of data center products that we talked about. It's split roughly half and half, so you know, sort of 0.4 of it is we're looking at nearer term, so two-five years, and then the other sort of 0.4 is actually sort of beyond that.
That's how it splits, but there are opportunities at both ends of the spectrum to deliver product.
Morning, it's James Carswell from Berenberg. Maybe to follow on the north 0.8 as well. I mean, how much of that is secured versus your kind of in the queue and potentially has risk of delays?
A chunk of it, we've got offers. There is a process that sits beyond your local operator making an offer because it needs to be signed off by National Grid. Sort of a chunk of it is actually working through sort of their system. That's you know sort of the split. I think the big shift that actually we're starting to see in the regions is the level of regional support that we've got. Again, we saw this with Skelton, you know, where it went across the mayor and the team. It went a lot across leaders of the city council. We worked into government. We worked with the sort of national providers from a utility perspective to unlock that capacity.
I think that's a trend and a theme that you're actually seeing across the regions where there are opportunities, and there's power available and capacity in the network, or it's coming. You know, sort of that's actually driving the dialogue, you know, with some of the sort of main operators that want to come into the regions and secure land and power actually. You know, there is a chunk of it that, like I say, is at the offer stage, and there's a chunk of it that's still working through the process. But we work not just with the power operators, but with the local government sort of reps to basically sort of push these sites through, 'cause they are quite important to them as well as us actually.
Thanks. Yeah, obviously you've pivoted the business away from residential towards the kind of industrial logistics, and you've obviously now got data centers as well. I mean, looking further down the line, I mean, do you think there's a point at which Harworth might exit the residential side altogether, or will there always be a part of the business kind of focus on the residential?
Do you want to stay that one?
Yeah.
I can do. Yeah. I think so. I think residential's a big part of Harworth's track record, and we have a really strong skill set in it. We've got a very big pipeline as well, so over 9,000 plots that are in the planning system. It's more about how we engage in that part of the market at the moment. When we did the strategy in 2020, we knew that one of the keys to making residential work was the acceleration through the sites, and that's been very much the focus of the last few years, and that's why you've seen that consented land bank reduce. We still have that skill set that we can use, just using it in slightly different structures in order to drive maximum value.
More about how we allocate the capital across the portfolio rather than necessarily moving out of it entirely.
Thanks.
Any more questions? No. Have we got any online? No. We have no more questions in the room. We have no more questions online. Thank you, everybody, for joining. We'll see a lot of you, as we hit the investor roadshow. Thank you.