Microsoft to build ‘hyperscale’ datacentre near Leeds after £106m deal

Tech giant Microsoft is one step closer to building a ‘hyperscale’ datacentre near Leeds after it purchased a 48-acre site from British property developer Harworth Group.

The company bought the land, which used to be home to the Skelton Grange power station, for £106m, with the sale expected to be completed by the end of the year.

The site is part of a major development for Harworth Group, which has planning permission to create a 800,000 sq. ft industrial and logistics hub to the south east of Leeds city centre.

Once the development is complete, Skelton Grange is expected to provide around 250,000 sq ft of industrial and logistics space, Microsoft’s hyperscale datacentre, a battery energy storage system facility, an energy for waste facility and around 28 acres of land returned to a natural habitat alongside improved green travel infrastructure.

In an announcement published this morning, the London-listed developer said: “As the group moves into the second half of its growth strategy to deliver £1bn EPRA NDV by the end of 2027, Harworth believes there is a clear opportunity to maximise shareholder value by focusing on growing its investment portfolio through the development of its next generation of industrial and logistics sites which combine high quality logistics space with complementary energy uses.

“Sites of this nature are well-suited to high value use classes such as data centres and advanced manufacturing, and are critical to the growth of the UK economy.

“The group’s industrial and logistics pipeline totals c.38 million sq ft of which sites with the potential to provide up to 5.5 million sq. ft. are in, or about to enter into, their development phase, and sites with the potential to provide up to a further 12.8 million sq ft have an allocation in a local plan or are awaiting determination, forming the next wave of sites to move into development.

“The group’s extensive industrial and logistics pipeline is expected to deliver potential GDV of £800m over the next five years with a targeted yield on cost of 6-8 per cent for the vertical build stage.”