Derwent London (DLN) H1 2025 earnings summary

Executive summary

• Achieved £13.8m in new rent agreed YTD, with open market lettings 10.5% above ERV and a further £3.8m under offer; H1 2025 total accounting return was 3.0% (7.3% over 12 months).

• Major projects at 25 Baker Street, Network W1, and Holden House are progressing, with strong pre-letting, attractive returns, and further pipeline projects set for 2026 and beyond.

• Outperformed the MSCI Central London Office index by 120bp in H1 and 230bp per annum over five years.

• Strategic reshaping and capital recycling continue, with nearly £1 billion invested and over £1 billion sold or contracted for sale since 2020.

• Strongest total return outlook in several years, supported by robust market fundamentals and ERV guidance of +3% to +6% for 2025.

Financial highlights

• EPRA NTA per share increased 1.2% to 3,187p (Dec 2024: 3,149p); total accounting return of 3.0% in H1 2025.

• Gross rental income rose 1.5% to £109.1m; net rental income slightly lower at £94.0m; EPRA earnings per share at 52.2p.

• Interim dividend increased by 2% to 25.5p per share.

• Net debt increased to £1.55bn (Dec 2024: £1.48bn); EPRA LTV at 30.5%.

• IFRS profit before tax of £94.0m, reversing a loss of £27.2m in H1 2024.

Outlook and guidance

• Reiterated ERV growth guidance of +3% to +6% for 2025, with further rental increases expected.

• TAR outlook is the strongest in several years, supported by stable yields and development profits.

• Near-term earnings to be impacted by higher interest rates and lower occupancy ahead of new project commencements, but positioned for long-term growth.

• Borrowings expected to fall in H2 as contracted sales complete.