Microsoft Gets Go-ahead for £4bn Leeds Data Centre Hub 2026

Key Points

• Leeds City Council has unanimously approved Microsoft’s hybrid planning application for a hyperscale data centre campus at the former Skelton Grange power station site.
• The project involves the construction of three data centre buildings spanning approximately 424,000 sq ft, alongside essential power and water infrastructure.
• The approval facilitates a significant land transaction with the Harworth Group, valued at approximately £107m, involving phased payments.
• Construction is expected to span six years, supporting an average of 740 jobs during the build phase, with over 350 permanent operational roles created upon completion.
• The site design includes provision for an additional 160,000 sq ft of industrial space, which will be retained by the Harworth Group for future development.

Leeds (The Leeds Times) April 27, 2026 – Microsoft has officially secured planning permission from Leeds City Council to develop a substantial hyperscale data centre campus situated at the former Skelton Grange power station site on the north-east bank of the River Aire. This major infrastructure project, which represents a significant investment in the region’s digital capacity, received unanimous backing from local planning authorities, marking a pivotal milestone for the site’s regeneration.

What does the approved plan involve for the Skelton Grange site?

As reported by Construction Enquirer, the approved scheme centres on the construction of three state-of-the-art data centre facilities, which will collectively occupy a footprint of approximately 424,000 sq ft.

The development plan encompasses not only the technical buildings but also the essential power, water, and energy infrastructure required to support high-intensity data processing operations.

In addition to the primary data centre campus, the approval includes outline consent for 160,000 sq ft of industrial space on land retained by the original site owner, the Harworth Group.

According to details previously outlined in Place Yorkshire, the land at Skelton Grange is accessed via the existing Skelton Grange Road and bridge, strategically positioning the site within the Aire Valley.

How is the financial structure of the deal between Microsoft and Harworth Group arranged?

The planning approval serves as a key catalyst for a land transaction originally agreed upon in 2024, valued at approximately £107m. As noted in reports by the Harworth Group, the financial arrangement is divided into two distinct tranches.

The company has confirmed that £51.2m has already been processed, with a further £53.2m due upon the successful completion of the project’s second phase.

Lynda Shillaw, Chief Executive of the Harworth Group, expressed confidence in the progression of the site. As reported by Construction Enquirer, Ms. Shillaw stated:

“Obtaining the resolution to grant planning consent is demonstrable progress towards the completion of the Plot 2 sale and reflects our close and effective collaboration with Microsoft.”

What are the economic and employment impacts for the Leeds region?

The construction phase of the project is expected to be a substantial driver of regional employment, with projections estimating the support of approximately 740 jobs over the course of a six-year build programme. Once the campus is fully operational, the site is expected to house more than 350 permanent roles, spanning both the data centre operations and the integrated logistics elements of the campus.

The professional project team tasked with delivering the vision includes the architect firm TTSP, alongside engineering consultants HDR and Ramboll, who are providing the technical expertise necessary for such a complex infrastructure build.

While the precise commencement date for work on-site has not been finalised, industry estimates suggest that ground could be broken within the next 12 to 18 months.

What is the background of this particular development at Skelton Grange?

The Skelton Grange site, formerly home to a coal-fired power station, has been a significant focus for regional regeneration efforts for several years. Following the acquisition of the site, the Harworth Group moved to optimise its planning status, securing initial approval in November 2023 for substantial industrial development before the pivot toward digital infrastructure.

The partnership with Microsoft represents a shift toward high-tech investment, leveraging the site’s existing utility connections and strategic location in the Aire Valley. This development aligns with broader trends in the UK, where brownfield industrial sites are increasingly being repurposed to meet the rising demand for cloud computing and hyperscale data storage capacity.

How will this development affect the local economy and residents of Leeds?

The arrival of a Microsoft hyperscale campus is poised to have a transformative effect on the local economy in Leeds, particularly by cementing the city’s status as a key node in the UK’s digital infrastructure. For the local workforce, the primary benefit lies in the transition from traditional industrial construction to the creation of high-skilled, long-term operational roles in the technology and data sectors.

Residents in the immediate vicinity may notice increased traffic and activity during the six-year construction period; however, the project is designed to integrate with the surrounding industrial landscape. Over the longer term, the presence of such a major tech hub often acts as a magnet for further investment in the digital supply chain, potentially leading to secondary employment growth in the surrounding areas and reinforcing Leeds’ reputation as a centre for innovation.