Microsoft to Open Data Centre in UK

The US computing giant Microsoft has acquired 48 acres of land in the north of the UK for a data centre as part of its plans to develop more data centres around the world.

This is the second data centre campus Microsoft is looking to develop outside Leeds. In February, Microsoft was proposing to develop a data centre campus on the site of a decommissioned power station in Eggborough, North Yorkshire, which is around 20 miles east of the Skelton site.

The UK-based real estate group Harworth announced it had sold the above said land at its Skelton Grange site in Leeds for $134.83 million to Microsoft, the London-based DataCentreDynamics reported.

The deal comprises two adjacent plots, with the deals due to close in H2 of 2024 and H1 of 2026. Microsoft’s MSFT MCIO Limited is the buyer and Microsoft has acquired the site with plans to develop a hyperscale data centre campus, Harworth said.

While plot 1 comprises 27 acres and sold for $67 million, the other plot admeasuring 21 acres will be sold for $67.3 million. However, no further details of Microsoft’s plans for the site were shared.

Located to the Southeast of Leeds, Harworth bought the former Skelton Grange power station site in December 2014 for $3.8 million, with remediation and enabling works commencing shortly after. The company has secured planning approval for more than 1 million sq ft of industrial and logistics space on the site to date.

Value for Shareholders

Harworth Group’s Chief Executive Lynda Shillaw said that since re-listing in 2015, 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.

“This transaction further builds our expertise to include data centres and evidences the growing spectrum of industries that continue to be attracted to the schemes that Harworth brings to the serviced land market,” Lynda added.

Harworth has owned the Skelton site since 2016. The company sold around 20 acres to Enfinium in 2019, on which it is developing a 49MW energy-from-waste renewable electricity generation facility. In 2020 Skelton Peak Power submitted plans to develop a 100MW Battery Energy Storage System facility on five acres at the site.

Skelton Grange power station comprised two coal-powered stations in the Stourton area of Leeds totaling 800MW. Work started on the first plant in the late 1940s, and work on the second finished in the early 1960s; plant A was decommissioned in 1983, and B in 1994.

After it was decommissioned, the site was considered for a new stadium for the Leeds United football team in 2001, and later as a depot for the planned and then abandoned eastern branch of the High Speed 2 rail line. RWE npower wanted to construct industrial warehousing on the site as far back as 2007.