Derwent London (DLN) H2 2024 earnings summary

Executive summary

• Achieved GBP 18.9 million in new lettings, with open market lettings over 12% above ERV and EPRA vacancy reduced to 3.1%.

• ERV growth reached 4.3%, the strongest since 2016, driving significant uplift in reversion.

• Valuations recovered in H2 2024, with a full-year increase of 0.2% and development valuations up 15.1%.

• Total return for the year was 3.2%, with EPRA NTA per share up to GBP 31.49 and EPRA earnings per share rising 4.4% to GBP 1.065.

• Final dividend increased for the 17th consecutive year, now at GBP 0.805 per share, 1.3% higher year-over-year.

Financial highlights

• Gross rental income increased to GBP 214.8 million, with like-for-like net rent up 4.3%.

• EPRA earnings per share split: GBP 0.527 in H1, GBP 0.538 in H2.

• Revaluation deficit on wholly owned portfolio was GBP 9 million, a strong reversal from H1.

• Net finance costs were GBP 39.6 million, aided by GBP 11.2 million of capitalized interest.

• IFRS profit for the year was GBP 115.9 million, reversing a GBP 476.4 million loss in 2023.

Outlook and guidance

• ERV growth for 2025 expected between 3% and 6%, with better buildings likely to outperform.

• Total property return expected to continue outperforming benchmarks, driven by ERV growth and development profits.

• London faces a supply shortfall for high-quality space, supporting continued rental growth.

• Ongoing capital recycling and continued investment in a c.2m sq ft pipeline, with a focus on the West End.