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Okay. Good morning, everyone, and welcome to Harworth's half year results presentation for the 6 months to the 30th of June 2021. I'm sorry we're starting a little bit late, but we were organizing our live audience who have, I think, got a little bit out of practice of these things over the last 18 months. I'm Lynda Shillaw, I'm Chief Executive; and I'm joined by Kitty Patmore, our Chief Finance Officer. I'm delighted to be reporting a strong set of half year results today and our operational performance and the tailwinds in our focused markets of industrial and logistics and residential delivered significant growth in the total returns of the business during the period. In terms of the agenda today, I will begin by making a few opening remarks on our first half performance, our markets and our strategy that we've also announced earlier. And then I'll hand over to Kitty, who will take you through the financials. I'll then provide a more detailed review of our operational performance and take a deeper look at our strategy before concluding with our outlook. We'll then open up to any questions. And just a reminder, if you're watching online, you have the opportunity to submit a question through the webcast browser, and we'll try to answer as many of those as we can at the end of the presentation. Now while I know many of you are familiar with Harworth, I just wanted to start by reflecting on what differentiates us as a business. And I believe that one of Harworth's key strengths is our consistency in delivering our purpose to transform London property into sustainable places where people want to live and work. We're specialists at what we do, and we have a unique set of expertise in regenerating large complex sites. We're focused on the industrial logistics and residential sectors and both of these are in structural undersupply and with very favorable demand dynamics. And our focus regions of the North England and the Midlands are experiencing significant economic growth and investment. In addition, we have a large and high-quality pipeline of strategic land and development sites. And we have a robust financial position to help us to unlock the potential of our sites and deliver development. Last but not least, we are and take great pride in being a responsible business, focused on building thriving communities, providing new homes, jobs and opportunities and minimizing our environmental impact. All of this over the last 5 years has translated into a strong track record, delivering an average total return of circa 10% per year, and it positions us strongly to deliver the next phase of our strategy. So turning now to our results for the first half. Our operational progress combined with market tailwinds, delivered a strong first half performance. And as you can see, this is summarized on this slide. Our EPRA NDV per share increased from 183.2 p from 160 p at the end of last year. Driven mainly by valuation gains and delivering a total return of 15.4%, a significant improvement on the negative 4.5% return seen in the first half of last year. Across our 26 million square foot industrial and logistics pipeline, highlights in the period included the securing of planning permission for 1.1 million square foot of space at our site in Wingates, Bolton. Preparing for construction at our 332,000 square foot development at Bardon Hill in Leicestershire, which actually commenced on site last week. And the practical completion of a 51,000 square foot unit at Logistics North. Across our residential pipeline of over 30,000 housing plots, we secured consent for 500 new homes during the period across 3 of our smaller sites, and exchanged on GBP 19.4 million of residential plots with housebuilders. Our investment portfolio, which was previously called Business Space, continued to post strong operational metrics with a very high rent collection rate of 97% in the first half and a low vacancy of 3%, but also a very busy period for letting activity, including the 149,300 square foot at Logistics North with a further letting at the period end, concluding our multiplied JV at the site and generating one-off promote fees. Our business remains well capitalized with available liquidity of GBP 36.2 million and have a net loan to portfolio value, which remains low at 13.4%. We also continued to deliver for our people, our communities and our planet through the Harworth Way, establishing a Board Committee for ESG during the period and maintaining an MSCI ESG rating of A. I've touched on this already, but the last 6 months have seen significant tailwinds in our core markets. In industrial and logistics, the MSCI/IPD data for June 2021 suggests that capital values have increased by between 15% and 20% over the last 12 months and 10% to 13% over the last 6 months alone. On the back of record levels of occupier take-up and continued constrained supply, you can see this demonstrates in the chart on the bottom left showing that the take-up of industrial and logistics space in the first half of 2021 has been the strongest on record. The residential market, too, is continuing to strengthen, particularly the new homes market. And this is echoed by consistent positive statements from housebuilders, agents and data providers, with average house prices up between 5% and 6% to date in 2021 in Yorkshire, the Northeast and the Northwest. Reflecting this, we're seeing healthy levels of demand for service land and for residential development. These typically conclude in the second half of the year once we've completed our earthworks programs. During the first half of the year, I've reviewed the business in detail to identify our potential to create value and deliver consistent, attractive returns for investors. The strategy that I'm outlining today is an evolution of the business, which delivers growth from our significant land bank by deploying our existing strengths and scale and the key attributes that I've already outlined. Our new strategic plan is exciting and ambitious and aims to double our EPRA NDV from December 2020 levels to over GBP 1 billion over the next 5 to 7 years. The plan is evolution, not revolution. It builds on what we already do, but with material shifts in the pace and scale of delivery. It is focused on the 4 key drivers of growth that we've outlined on this slide, increasing direct development of industrial and logistics assets, accelerating sales and broadening the range of our residential products, growing our strategic land portfolio and repositioning our investment-grade portfolio to modern Grade A. I will provide more details on the strategy later in the presentation. But before that, I would like to hand over to Kitty to take you through the financials. Kitty?
Thank you, Lynda, and good morning, everyone. I would now like to talk you through our financial results for the first half of the year. Starting with the income statement. Revenue for the first half was GBP 18.9 million and comprised sales of service land and property as well as collection of rents, royalties and fees. This compares to GBP 23.7 million during the same period last year, with the reduction mainly resulting from sales rephasing during COVID-19, which has given us a sales profile, which is much more concentrated in the second half than we've seen in previous years. The percentage of budgeted sales completed or agreed for completion during the year is currently 98% higher than at this point last year or in 2019 and indicating very positive momentum for the rest of the year. Revaluation gains are an important component of our performance seen in both the income statement and the balance sheet. In the income statement, we can see the increases in the fair value of assets held for sale and investment properties. In this instance, investment properties consist predominantly of our investment portfolio, which was previously called business space, our strategic land and our natural resources portfolio, but it does not include any increases in the fair value of our development properties. The result is that the increase in other gains was predominantly due to a GBP 67.6 million increase in the fair value of these investment properties and assets held for sale. This was also the major reason for the increase in the deferred tax charge. Admin expenses increased by GBP 2.1 million relative to the same period last year to GBP 8.7 million during this period. This is mainly due to higher insurance costs, expenses associated with the business review process and higher staff costs. The one-off component of these costs was around GBP 0.6 million. Together, this will result in an operating profit of GBP 76.5 million, a significant increase for the GBP 3.7 million operating loss for the prior year period. Finally, the Board has decided to pay an interim dividend of 0.367 p per share, reflecting growth of 10% and in line with our progressive dividend policy. Turning now to our balance sheet. Our EPRA NDV increased to GBP 590.7 million as at 30th of June 2021 from GBP 515.9 million in December 2020, and equating to 183.2 p per share. This growth was driven mainly by an increase in portfolio valuations, seen in the property portfolio and the mark-to-market of development properties and on which I will provide more details in the next slide. It was partially offset by an increase in deferred tax liabilities due to unrealized gains on investment properties. Gross borrowings were GBP 104.2 million, higher than 2020 due to increased activity on sites and the 2021 sales profile. Despite the increase, this is broadly in line with our typical debt profile which sees our drawings increase over the year before sales complete in the second half. Combined with the dividend, this growth in EPRA NDV led to an increase in total return during the period to 15.4% compared to a negative total return of 4.5% in the first half of last year. Looking now at our valuation gains in some more detail. Revaluation gains across our portfolio were GBP 105.7 million, resulting in a total portfolio valuation of GBP 748 million as at 30th of June 2021. One of the major drivers of this growth was demand in the industrial and logistics market. We saw this firstly in major developments, which are the development sites on which we have achieved planning permission and commenced works with a view to sale with value gains of GBP 52.5 million were driven by profitable sales, market demand for our industrial and logistics sites as well as robust housebuilder activity. In strategic land, which are the sites where we are currently assembling, preparing for planning or in the planning system, we saw value gains of GBP 28.7 million, driven by increased market appetite for industrial and logistics strategic land and progress in planning commissions, such as those secured at our site in Wingates in June. Under our investment portfolio previously referred to as business space saw value gains of GBP 25.4 million, driven by strong operational metrics letting progress and increased demand for built properties of this kind. Slide 11 shows a breakdown of our GBP 748 million portfolio by asset type. As you can see, industrial and logistics land and properties shown here in shades of red represents around 2/3 of our portfolio by value. Note that our strategic land in this category in the lighter color, which is our pipeline of sites was valued at GBP 77 million. They represent over twice the square foot as our major development sites, which are those where we're on-site bringing forward land sales and development, and these are valued at GBP 106 million. This demonstrates the value creation that occurs as we take our sites through the planning and place-making process. Our residential pipeline shown here in light green accounts for almost 1/3 of the portfolio by value. And you can see that the major development site shown in dark green are valued at almost 4x the value of the strategic land sites in residential despite accounting for less than half the number of housing plots. Turning now to our net debt bridge on Slide 12. Closing net debt increased from GBP 71.2 million as at 30th December 2020 to GBP 100.2 million as at 30th of June 2021. This is mainly as a result of sales, acquisitions, infrastructure and development works on site and a normal pattern of cash flow for our business over a 12-month period. We expect net debt to reduce by the end of the year as sales associated with this expenditure complete. Harworth's financing strategy on Slide 13 remains to be prudently geared. The income generation portfolio provides a recurring income source to service debt facilities. And this is supplemented by proceeds from an established sales track record that has been built up since relisting in 2015. The gearing strategy has been revised following the business review, and the group will have a target net loan to portfolio value at year-end of less than 20% with a maximum of 25%. This continues to entail the group seeking as a principle to maintain its cash flows in balance by funding the majority of infrastructure expenditure and investment in acquisitions through disposal proceeds, whilst allowing for growth in the portfolio. Finally, the group will continue to take out site-specific development and infrastructure loans alongside the main banking facilities. Post period end, one such loan has been entered into to deliver the development at Bardon Hill. And with that, I would like to hand you back to Lynda to provide more on the operational review and more details on our strategy.
Thank you, Kitty. Turning now to an operational overview of our business. Slide 15 provides an overview of our 26 million square foot industrial and logistics portfolio. At the end of the first half, over 1/3 of this portfolio was consented and over 3/4 was held in freehold or joint ventures, with the remainder subject to planning permission agreements or options. It's been a very active period for this part of the business, and I just wanted to touch on a few key highlights. First, the securing a planning permission for 1.1 million square foot at our site Wingates in June. This site is located adjacent to Junction 6 of M61 in Bolton. And this area is very well known to us due to its proximity to our Logistics North site. As well as benefiting from direct accessibility to the motorway network, the site proximity to Bolton and Wingates ensures we provide much-needed employment opportunities for this area and it helps meet the objectives of the Bolton economic strategy. The planning includes significant upgrades to local infrastructure and in line with our commitment to promoting green spaces and protecting local biodiversity, we will deliver extensive boundary landscaping and an ecological enhancement area. The second key highlight was the preparations to begin construction at our 332,000 square foot development at Bardon Hill in Leicestershire. That construction commenced last week, and the buildings will be completed over the next 12 months. The development sits within a concentration of industrial sites where vacancy is very low, and existing occupiers include Amazon, Eddie Stobart and DHL. So we expect demand to be very high. At this site, we will directly develop 6 units ranging from 28,000 square foot to 116,000 square foot, also BREEAM Very Good standard and capable to be net-zero carbon in operation. And once again, environmental improvements will be central to our development plans, and this a 10-acre local wildlife center. Turning to our residential portfolio. At the 30th of June, we have 30,655 plots within our pipeline with around 1/3 of these consented and just over half of these owned freehold. Again, it was a busy first half for this portfolio. We gained planning approval for up to 500 homes across some of our smallest sites in Awsworth, Little Lever and Birdwell. We're prepared for the submission of plans for Olive Lane, a new heart of the community for the residents at Waverley and over 2,000 workers at the Advanced Manufacturing Park. And we exchanged on sales, representing 728 plots in line with or ahead of December 2020 valuations. As you can see from the right-hand side of this slide, our residential portfolio is diverse in terms of site size, development length and geographical location. One site in particular that I would like to highlight is our Moss Nook site in Merseyside, our first residential development in the Northwest, where up to 900 homes are to be delivered less than a mile from St. Helen's town center. The 95-acre site was acquired by Harworth in 2018 after previous development plans had stalled and the progress we have made to date really demonstrates the unique skills and expertise we have in transforming complex sites. Alongside homes, our plans include a new spine road with segregated pedestrian and cycling routes, providing a direct connection to the town center and also new sports facilities. Funding was secured from Liverpool City regions combined authorities brownfield land fund to construct the spine road and a lot of the first phase of residential development, leading us to exchanging on first land sale at the site in April 2021. Moving on to our GBP 270 million investment portfolio previously referred to as our Business Space portfolio. As you can see from the right-hand side of this slide, this portfolio benefits from a strong and highly diversified occupier lineup focused on growing industries such as logistics, chemicals, manufacturing and housebuilding. And the highlights for the first half include 206,400 square foot of new lettings, which included 149,300 square foot unit as part of Phase 2 of Multiply Logistics North, and I'll provide some more detail on this in a moment. We also acquired the Towngate Business Park, Widnes in March, representing an attractive net initial yield of 7.1% and a reversion yield of 9.4%. And we also completed GBP 2.7 million of sales in line with or ahead of December 2020 valuations as we begin our churn of this portfolio. This activity translated into a robust set of operational metrics. And as you can see at the bottom right of this slide, this included a reduction in vacancy and a continued very high rent collection rate. And just to touch on Logistics North, and this slide provides a case study on Logistics North in Bolton, where we've been very active during the first half. You might have seen that last week, we completed the letting of plot F2/H at Logistics North, which has planning permission for 131,000 square foot unit as part of Phase III of our Multiply joint venture, following the letting of the 149,300 square foot unit in June to the same occupier. This now completes our Multiply joint venture at the site, which has delivered over 430,000 square foot of modern Grade A warehousing space over the last 4 years. Elsewhere at Logistics North, we reached practical completion on a 51,000 square foot unit in May built to BREEAM Very Good Standards and designed to be net-zero carbon in operation, and we have now let this unit for manufacturing occupier. Combined, these conclude the successful build-out of Logistics North, where in just 8 years, Harworth has transformed a former surface mine into a regionally significant industrial and logistics scheme, through a combination of plot sales, direct development and joint ventures. We've also developed the 558-acre Cutacre Country Park at the site, providing unique surroundings for workers and demonstrating our commitment to placemaking. Several of the units that we've built have been retained for our investment portfolio, allowing us to continue to benefit from our high standards of build quality, environmental credentials and the placemaking on our side. And no review would be complete without a look at how we delivered for our people, our communities, our partners and the planet during the first half of what we referred to -- and what we referred to as the Harworth Way. ESG runs in everything we do at Harworth. It's central to how we plan and deliver developments, and we continue to develop our approach. This slide provides just a flavor of how we've delivered against the pillars of the Harworth Way in the first half. In April, we established an ESG committee of the Board to provide oversight and guidance of the ESG strategy. We joined the U.K. Green Building Council, and we ensured all of our developments during the period were designed or built to high environmental standards. We introduced a salary sacrifice car scheme exclusively for fully electric and hybrid vehicles to encourage takers amongst our staff. And we secured funding from places to ride for 2 innovative cycle infrastructure projects, which will further promote healthy lifestyles within our communities. In our full year results, we intend to provide ESG targets aligned with the pillars of the Harworth way and to improve the monitoring and disclosure of relevant environmental and social data. This will help us to continue to enhance our commitment to developing sustainable communities as we implement our strategy and the business growth. Now moving on details of our strategy that we've outlined today. And I would like to begin with this slide, which provides a good overview. The strategy delivers our purpose of creating sustainable places where people want to live and work. And alongside the 4 drivers of growth, there are a number of key enablers shown here in green, which are going to be key to the delivery of our strategic plan. The first of these is the Harworth Way. And as I've just touched on this, it's central to everything that we do at Harworth, and it will be key to unlocking opportunities for us as a business. The second enabler is our core markets of industrial and logistics and residential. These markets are structurally undersupplied. They have strong local and national government policy support and are fundamental to the growth of the U.K. economy. And we believe that this twin sector strategy is the right one for the business. Our financing strategy that Kitty has touched already will ensure that we're funded appropriate to deliver our plan and prudently geared. And finally, the expertise and passion of our people who are the driving force behind the business and fundamental to our continued success. We have a detailed resource plan in place to support strategy, and I'm pleased to be welcoming Andrew Blackshaw into the business as our new COO; and Jonathan Haigh, our new CIO. These enablers and our 4 key drivers of growth combined will double our EPRA NDV over the next 5 to 7 years delivering growth responsibly, leverage our scale to deliver more for our local stakeholders communities and aligned to our purpose delivered through an empowered culture. So looking in a bit more detail at the key drivers of what they will deliver. Starting with increased direct development, Harworth is an experienced developer already built 1.3 million square foot of industrial and logistics space since we were listed in 2015 with our most recent development, the 51,000 square foot unit at Logistics North reaching practical completion in May '21. Our 9 million square foot consented industrial landbank has a GDV of GBP 1.1 billion across 6 key sites, and our strategy will be to undertake direct development of the majority of this consented pipeline. This will see us scale up from building an average of 200,000 square foot per annum we did between 2015 and 2021 to 800,000 square foot per annum between 2022 and 2026. And as we do this, we'll manage risk through a combination of pre-lets and selective land cells with some speculative development as we have done previously. The table in the top right of this slide shows how much of the pipeline we intend to directly develop by 2026, delivering a GDV of around GBP 400 million to GBP 440 million. And as you can see quite clearly the step change from our development activities in the past 5 years is shown in the left-hand column. Our second key driver is accelerating sales and broadening our product range in residential. Harworth's portfolio of land for residential development is significant and has the ability to deliver in excess of 30,000 housing units into the market. The strong housing market of 2020 has continued into 2021 and the housebuilding sector is in robust health. It's also evolving with increased consumer and investor appetite for a variety of built-to-rent products. This market is increasingly expanding from urban centers to suburban areas and beyond where it's possible to achieve scale. Our portfolio is particularly suited to delivering institutional quality single-family rental homes at a volume that can deliver the required return on investments. And as a result, we plan to develop an initial single-family rental portfolio of up to 600 units, creating the potential for further schemes in the coming years. Through a combination of increased plot sales through Harworth's traditional build-to-sell markets and new rental products, our ambition is to double residential sales to around 2,000 plots per annum by 2026. Slide 17 shows our third and fourth drivers. The third key driver is scaling up land acquisition and promotional activities. Our existing landbank of over 15,000 acres underpins our ability to deliver our strategy. Around 1/3 of this is already consented and our time line to secure consents and fully develop the remaining 2/3 extends beyond 2035. Our land bank puts us in a strong position to deliver this strategy. We are a business skilled at strategic land assembly, and we take a long-term view, focusing our resources today on replenishing our pipeline for the future to deliver sustained growth. Our target is to maintain a 12- to 15-year supply of land throughout the period of the plan. As we step into the delivery of our strategy, organic growth of the business will be supplemented by developing key partnerships to assemble and deliver large-scale regeneration schemes. We will also seek out larger acquisition opportunities throughout the life of the plan. Our final key driver of growth is repositioning our investment portfolio to modern Grade A. Our investment portfolio is already integral to the way to which we fund our business, and it will continue to be so for the foreseeable future. As we progress our direct development pipeline, our strategy will be to largely retain the assets that we develop and dispose of those assets from our existing portfolio where we've completed our asset management initiatives. And over time, this approach will progressively reposition our investment portfolio to modern high-quality Grade A assets with good access to infrastructure and proximity to urban centers. The benefits of this approach are clear. Having controlled all aspects of the quality, design, sustainability and environmental impact to the product, this will enable us to lever further upside from our direct developments. It will allow us to stabilize assets where necessary and to continue to build both strategic land and major development portfolios. Together, our strategy aims to double our EPRA NDV over the next 5 to 7 years to in excess of $1 billion. This bridge gives an indication of how the 4 drivers of growth that I've just outlined deliver the growth and returns underpinned by our strategic plan. So to conclude and summarize our presentation today, demand in our industrial and logistics and residential sites remains very strong, reflecting our unique positioning, but also the structural tailwinds in our end markets. We expect these trends to continue for the foreseeable future due to favorable supply and demand dynamics. We have a large quality landbank, which enables us to deliver growth and strong returns to investors. And our strategy is bold and ambitious and aims to double the size of the business over the next 5 to 7 years, delivering sustainable growth and returns to investors. Harworth has delivered very strong returns in the first half of 2021. And our focus for the remainder of the year will be on the build-out of our major development sites, the plot sales in residential, the progression of our direct developments and stepping into our builds and ambitious strategy. So this concludes our presentation today. Now Kitty and I we're very happy to take your questions. We'll start with those in the room and then we'll move on to the phone lines, and we'll try to answer as many questions as possible that are submitted through the webcast. So thank you for listening.
Tom Musson from Liberum here. Just one question on the revaluation gains, particularly within the major developments portfolio. Can you give us sort of any color on how those are split between sort of what's coming from the industrial and logistics sites and what's coming from the housebuilding sites?
So over the first half of this year, Tom, we saw gains in both industrial and logistics and residential. But the gains are very much weighted towards those major development sites on the industrial and logistics side and driven really by activity on site and that strong market demand for industrial and logistics land that's increased over the first half of the year.
And just on the sort of strategy a bit, how should we sort of think about the size of the central cost base going forward for the business thinking about supporting your sort of ambitions to double NDV over the next 5 years? How should we think about that?
So I would openly say it's going to have to grow a little bit. I mean we're a small company. We've only got 86 people in the business. The volumes of really -- of activity has really begun to sort of step up as we've gone into this year and obviously, the plan builds on that going forward. So we will be hiring more people to -- as we go through the life of the strategy to enable us to deliver. So you will see an increase in sort of in the pay overhead in particular.
It's Matt Saperia from Peel Hunt. Two questions on the investment portfolio, if I may. First, how should we be thinking about the scale of that in the context of doubling of the net assets of the business on 5 to 7 year view? And then thinking about what will go into it, will it exclusively be industrial logistics? Or are there opportunities to add other assets, and I'm thinking specifically about PRS potentially as you develop that across the residential sites.
Thank you. So in terms of size, I mean, we think it's a good size at the moment, and we're just going to have to actively manage that as we go forward. So we've got a transition of some of the existing stock that's sitting in there where the asset management activities are complete and it doesn't have a long-term future in our portfolio. So we'll actually switch that out and bring the sort of modern Grade A stuff and we developed to replace it. And we'll just actively manage the size of that portfolio over time. It will basically depend on the risk, the returns, sort of the opportunities in the market that we see. We do -- we have assumed in the strategy that we do continue to sell portfolios of modern Grade A as we go forward through the strategy. But what I would say is think about it the size that it is today, but you will see some fluctuations at any point in time depending on where we are in the strategy and in the cycle in the market. And then in relation to the second part of the question, which is, is it just industrial and logistics or residential primarily, industrial and logistics pretty much as it is today. We will explore opportunities to basically sort of make investments in residential. It's not where the strategy starts. It's very much about creating that product for institutional investors effectively to take away from as a manage, but we accept that at some of our sites actually may be right for us to stay in with the stake for a period of time. So we'll look at that on a site-by-site basis or when the investment opportunity arises and it works.
[ Sam James ] from Peel Hunt. Maybe on the 3.2 million square foot development looking forward. I'm just wondering how you kind of set it on that number? And is it the natural kind of phasing of the projects with planning consents? Is it the level of risk that the company is willing to take related to the size or any thoughts around how exactly you came about that number? And then maybe the second question, industrial logistics again, we've seen obviously very strong rental growth driven by tenants and also yield compression. Can you talk a little bit about what you're seeing in the market today? Are you seeing evidence of that rental growth is continuing. And likewise, recent transactions that you've seen other indications of further yield shifts kind of moving into H2.
Okay. So start with the first bit first. I hope you would hope I would say all of the above. So we've done a really detailed review of what we've got in our landbank, particularly this GBP 9 million that's consented and sort of -- and is sitting there waiting to be developed. Not all of them are at the stage where you can immediately start vertical construction. So we've got to invest in the infrastructure, there's elements of remediation. We've got to create the platform. So very much that plan has been built on sort of the phasing of where we already got planning, the work that we know that we've got to do to bring the site forward. To be honest, once you're at the point where you're starting to create the platforms, we'll be actively marketing anyway or to secure pre-lets alongside anything else that we were thinking about doing with the sites. So it is a little bit of all of the above and looking at the sort of risk and the exposure, the financial exposure of the company within sort of Kitty's financing strategy as well. In relation to what's happening in the market, it is still pretty hot from an industrial and logistics perspective. I think probably what we're starting to see in the second half of the year is the Midlands is more selective. It's actually good quality site, consented sites, good quality stock, where you're still going to see rental growth, and I think you'll still get maybe a little bit of yield compression but not much. We've seen particularly in the Yorkshire and Central markets, the valuation sort of really shift and start to align more to what you typically see in the Midlands and the Northwest, but it feels like a pretty solid market as we look forward for the next couple of years. A lot of occupier demand out there as well, which is U.K. economy related. I think there's still some Brexit-related. But there's still -- the last budget incentivizes businesses to invest as well. So we're actually starting to see that come through. Any questions on the online, yes?
[Operator Instructions] We will take our first question from the phone from Colm Lauder from Goodbody.
Congrats on a impressive set of numbers this morning. Just had a couple of questions on the updated strategy. And I might just tick away a couple of sort of detailed points, and I'd be curious to understand your thought process around it. Maybe just first picking up on the increase in direct build of industrial units, moving from approximately 200,000 square feet per annum quadrupling to 800,000 as you've guided. I was curious to understand your appetite in terms around speculative development versus pre-lets within that mix? Would you be willing to take additional risk in terms of increasing speculative? Or would the preference continue to be more down the pre-let side?
So, Colm, I think the easy answer is everybody loves the pre-lets actually. But in all seriousness, in the market that we're in and if you look at the case study on Logistics North, which I said we're now done, we have done all of the above. I mean it's one of the ways that developers are bringing forward some of these big schemes manage risk. There'll be a combination of pre-lets, there'll be joint ventures in there, there'll be some sort of plot sales in there, and there'll be some spec development. So plus the 51,000 square foot was actually speculative. We're on site in Bardon and the 332,000 square foot site, and we've started that speculative, obviously, with a lot of marketing activity to secure lettings as we go through the development process. So the reality is it's a combination of all to bring sites at this scale forward. And we'll basically continue to monitor the market, continue to monitor where we sit against our financial covenants and the risk appetite that we have as a company. But we've got a big track record and experience in development in this space and bringing through these complex schemes through a variety of routes. So we'll just continue to pretty much deploy what we do today.
Okay. And a similar vein in terms of the move into a build to rent, or PRS portfolio, noting you'd be looking at 600 units in 2022 and gradually scaling up. And, obviously it takes on to the preference here is for forward fund presumably bringing institutional investor. At what sort of stage do you think or do you envisage that you would bring in institutional investor would it be after you've appointed a contractor and started to move forward? Or would it be at a much more advanced stage?
I think Colm, to get it right you've got to do the 2 things in tandem. The institutional investor will have a particular product requirement, the construction contractor will have a particular sort of range of specifications. So marrying those 2 up to make sure that we're delivering the right product into the institutional investor is really important. So we're talking to construction contractors sort of a number of those as we speak, and we'll start to open that dialogue up with institutional investors as we move into implementing the strategy.
And just as a quick follow-on from that. Obviously you're tailoring the product to institutional investor requirements. I noticed you obviously mentioned single family at this stage, would you explore the multifamily option on your sites as well as density is allowed and demand allowed?
I think, yes. I think if it works for the sites, I mean, with the number of sites that we've got, they're all quite different. And I suppose every developer will say that in Harworth's case, it genuinely is the case. We've got a huge variety of sites with different sort of market requirements, different absorption rates for products, different sort of constraints and viabilities. So if it made sense to do something that was more multifamily alongside single-family, we would. But we're very focused on the single-family product that research that we've done, the work that we've done and market analysis that we've done looking at what our sites deliver is pointing to really a very strong demand for that single-family product and that -- the scale we can deliver, delivers quite well into the institutional space.
[Operator Instructions]
I just put my glasses on to look at the webcast ones.Yes. Okay. So we've got a question from one of the retail investors. I'm asking is the focus on residential and industrial and logistics, the right approach? Or would it be better to focus purely on industrial and logistics given the obvious strength of that market. It's a great question, and it's one that we sort of pondered and examined hard when we put the strategy together. But I think you've got to think about what Harworth is. We deliver places where people want to live and work, so this is all about regeneration of places. And some of them are purely residential plays. Some of them are purely logistics plays, but actually, a lot of them are both. So from a Harworth's perspective, we see sort of really sort of good hedged between the sort of 2 markets that we deliver product into. We see both of them as being integral parts of regenerating sites. We did look at it quite hard for, I think, the obvious reason behind this question, but for Harworth, what we do is regeneration on a big scale, and it's to create places where people want to live and work.
And I think also to add to that, Lynda, when you think of the size and scale of the landbank that we've got already, we've got the potential to deliver 26 million square feet of industrial and logistics space and 30,000 housing plots. So it's very powerful to have both markets to operate in as a long-term investor in those sites as well.
Yes. I think when you look, I suppose just to sort of add a little bit. I mean, when you look at a site like Waverly, which has transformed former colliery and coking works into a place where ultimately we'll have sort of 3,000 or so houses. There's at least 1,500 there today. We've got families living on the sites. We've built a school. But actually, there's 2,000 people now working on that site in the Advanced Manufacturing Park. So those schemes are absolutely sort of the essence of what Harworth does, and I think does it brilliantly well.
Great. And we've got another question here. What type of sites are you looking at, at the moment? And who are you looking to buy from?
So we have acquisitions specialists in our business, and we created 3 regional teams a couple of years ago so that we could actually grow delivery on the ground but also grow the sorts of products that we need access, the product we need to acquire. You'll start to see, I mean, actually, the volume of activity that we've seen accelerate -- is accelerating to in this year and the back end of last year is due to building those regional teams out and then not just bringing us to forward on the ground, but actually starting to acquire more sites and bringing them into the portfolio. We track sites sometimes for a decade. I mean land assembly -- strategic land assembly in the space that we're in is basically a very long-term process sometimes a short-term opportunistic opportunities. But generally, it's a long-term process. And we piece that together over a long period of time. We still like the big dirty ones, actually. And there are a number of those around the -- but sort of land, generally, if we can actually get scale, which is the important thing for Harworth from piecing something together or we can apply -- or we can acquire at scale is typically where we focus. So we've got a very active forward-looking pipeline from an acquisition perspective.
And I think we've got time for 1 more maybe before we have to wrap up. But do we have the resources in the business today to deliver the new strategy and which areas might be supplementing with additional people coming in.
So as we said earlier, I think the question on would admin expenses grow. We're a small team, but we're a small team that does a lot with a very experienced supply chain who's worked with us for many years around us. The hiring of Andrew Blackshaw, Jonathan Haigh is a start of actually starting to introduce some more sort of skills into the business. We've got a couple of other offers that have been accepted in the pipeline, I can't talk to you about today because that's not to be announced. But we're continuing to basically sort of work to supplement the resource that we have with more key skills. And our vision around actually how we deliver the resourcing strategy for the business is also to grow the people that we've got in the company today. We've got some brilliant people in the company today. And in a world where there's a war of talent, I want to give these people every incentive to stay in the business. So actually, sort of growing the roles of some of our existing people and recruiting at more junior levels, which helps us also to increase our diversity strategy as well is actually really important, but we'll actively pick key senior skills up as we go through the mobilization of this plan. It's not something you're going to do overnight. This is a 3-year plan as we step into the resource and to support the delivery of the strategy, but we're already on with that.
Excellent. So I think that's it probably for the time that we've got for questions at the moment. So thank you, everyone, for listening and joining us today.
Thank you, everyone. Have a good day. Thank you.