Microsoft to build hyperscale datacentre in Yorkshire
Inks £106 million land deal with real estate group Harworth
Tech giant Microsoft is solidifying its presence in Yorkshire with the acquisition of a 48-acre plot of land at Skelton Grange, located southeast of Leeds.
The £106.6 million deal, announced by real estate group Harworth, will see the construction of a hyperscale - i.e. very large - datacentre by Microsoft. This will be Microsoft's second datacentre project in the region.
The investment in Yorkshire aligns with Microsoft's global strategy of expanding its datacentre footprint to support the ever-growing demands of AI and its overall business operations. The company plans to invest billions of dollars into datacentres worldwide to meet this growing need.
Microsoft's land purchase at Skelton Grange consists of two adjacent plots.
The first, spanning 27 acres, will be acquired by the end of 2024 for £52.9 million. The second, encompassing 21 acres, is slated for acquisition in the first half of 2026 for £53.2 million.
Harworth, a property developer that specialises in regenerating brownfield locations, acquired the former Skelton Grange power station site in 2014. It has secured planning permission for over 1 million square feet of industrial and logistics space on the property.
Microsoft's datacentre isn't the only development planned for Skelton Grange. Harworth Group envisions the site becoming a hub for sustainable energy solutions, potentially including a battery energy storage system (BESS) and an energy-from-waste facility.
Additionally, the company plans to return roughly 28 acres of the land to its natural state and implement improved green travel infrastructure.
Harworth highlights the project's potential economic impact, estimating over £4 billion of inward investment and a significant boost to the local economy.
"Harworth has successfully completed a number of significant transactions that create value for our shareholders but this sale at Skelton Grange is the Group's largest to date and is yet another exemplary case study that demonstrates the successful regeneration of brownfield land," said Lynda Shillaw, chief executive of Harworth Group.
"This transaction further builds our expertise to include datacentres and evidences the growing spectrum of industries that continue to be attracted to the schemes that Harworth brings to the serviced land market."
Microsoft's deal not only strengthens its presence in the UK but also positions Yorkshire as a key player in the country's digital landscape.
Earlier this year, plans were confirmed for another Yorkshire datacentre on the site of a decommissioned nuclear power station in Eggborough.
Late last year, Microsoft announced a £2.5 billion commitment to AI datacentre development across the country, including expansions of existing facilities in London and Cardiff.
Microsoft currently operates over 300 datacentres in 34 countries.