Microsoft strikes £106 million deal to build hyperscale data center in Yorkshire

Microsoft has announced a deal to acquire 48 acres of land in Yorkshire to build a new hyperscaler data center. 

Located at Skelton Grange in Leeds, the tech giant purchased the site from property firm Harworth for £106.6 million. The site consists of two plots, with the first deal expected to be completed by the end of this year, and the second in the first half of 2026.

Harworth bought the land, the site of the former Skelton Grange power station, in December 2014 for around £3 million. It started clearing the area soon after.

In November 2023, it won approval for 800,000 sq. ft. of industrial and logistics space, winning a reserved matters approval for a further 320,000 sq. ft. in May this year.

It also sold a 19.5-acre land sale to Enfinium in 2020 for the development of a 49MW energy-from-waste renewable electricity generation facility for its own operation, and a year later granted a lease for the development of a 100MW Battery Energy Storage System (BESS) facility on a neighboring 5.7 acres.

Once the development is complete, Skelton Grange is expected to provide around 250,000 sq. ft. of Grade A industrial and logistics space.

This will include a hyperscale data center, the battery BESS facility, an energy-from-waste (EfW) facility, and around 28 acres of land that the firm said will be returned to a natural habitat alongside improved green travel infrastructure.

Harworth believes this will represent more than £4 billion of inward investment, providing a substantial boost to the local economy.

Harworth itself will hang on to 16 acres, on which it plans to promote around 250,000 sq. ft. of employment space.

"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," said Lynda Shillaw, Harworth Group's chief executive.

"This transaction further builds our expertise to include data centers and evidences the growing spectrum of industries that continue to be attracted to the schemes that Harworth brings to the serviced land market."

Late last year, Microsoft announced plans to ramp up data center capacity in the UK, with £2.5 billion in funding for AI data center infrastructure across the country and the expansion of existing sites in London and Cardiff.

Earlier this year, it confirmed plans for another data center in Yorkshire, on the site of a decommissioned nuclear power station in Eggborough. It expects to have the site fully cleared by late next year, with construction starting in early 2027.

The tech giant now runs more than 300 data centers in over 34 countries, with UK data center campuses in London, the South East and Wales.