Acquisition of two strategic land sites

6 December 2017

Harworth Group plc ("Harworth" or the "Company")

Harworth completes deployment of equity raise proceeds with two further site acquisitions

Harworth Group plc, the brownfield regeneration and property investment specialist, announces that it has purchased two strategic land sites, in Droitwich and Doncaster, for a total consideration of £8.2 million. The sites have been purchased using the remaining proceeds from the £27.1 million equity placing in March 2017. Both are forecast to support Harworth's ongoing delivery of a double-digit target internal rate of return and significant value appreciation.

131-acre land acquisition close to Junction 5 of the M18, Doncaster

Harworth has purchased a privately sourced 131-acre site in Doncaster, South Yorkshire, for £3.0 million plus acquisition costs, with an option agreement for a further 131 neighbouring acres. Adjacent to Junction 5 of the M18, Harworth will leverage its market leading land regeneration skills to promote the site through the planning process, to deliver a regionally significant employment scheme, totalling up to 2.4m sq ft of distribution, manufacturing and engineering space.

Industrial Estate, Droitwich, Worcestershire

Harworth has purchased an 8.7-acre site at Berry Hill Industrial Estate in Droitwich, Worcestershire, from DHL, for £5.2 million plus acquisition costs. Three miles from Junction 5 of the M5, the site currently comprises a 112,416 sq ft commercial unit, that has immediately been leased back to DHL. The five-year term at a passing rent of £450,000 per annum represents a net initial yield of 8.15% and a reversionary yield of 8.65%, supporting the Group's strategy of increasing and improving the quality of its recurring income base, whilst in the longer-term, the site's very low density of 30% provides attractive upside opportunity for a whole or partial site redevelopment.

The two acquisitions follow the three strategic land purchases completed in August 2017 across the Midlands and North West; Chatterley Valley in Stoke-on-Trent; Coalville in Leicestershire; and Wingates in Bolton. These five transactions plus acquisition costs and initial planning & infrastructure costs account for the full £27.1 million of new equity raised in March 2017. All 2017 acquisitions are forecast to support Harworth's ongoing delivery of a double digit target internal rate of return and significant value appreciation.

Commenting on these deals, Owen Michaelson, Chief Executive Officer, said:

"This is a major milestone for the business which sees the culmination of the successful deployment of all new equity raised in March through the acquisition of two well-located sites that are projected to deliver double-digit returns. Expanding our strategic land bank is a core part of our business strategy of delivering continued value to our shareholders and both purchases provide clear long-term value-add opportunities. In addition, securing a strong covenant at Droitwich adds to our medium-term income stream, as we look to improve the defensive qualities of the portfolio.

"The outlook for our principal markets in the North of England and Midlands remains strong, with a scarcity of good quality new commercial space continuing to drive the allocation of new sites and occupier demand for well-connected new space. Both of these purchases directly respond to these requirements as we continue to develop a portfolio of high quality places where people want to live and work."

-ENDS-

Enquiries:

FTI Consulting

Dido Laurimore T: 020 3727 1000

Tom Gough E: harworth@fticonsulting.com

Richard Gotla

NOTES TO EDITORS

About Harworth Group

Listed on the main market of the London Stock Exchange, Harworth Group plc (LSE: HWG) ("Harworth") is a leading brownfield land and property developer & investor which owns and manages a portfolio of over 21,000 acres of land on over 140 sites located throughout the Midlands and North of England. The Company specialises in the regeneration of former coalfield sites and other brownfield land into employment areas, new residential developments and low carbon energy projects.

http://www.harworthgroup.com/