Derwent London plc REIT (DLN) AI Stock Analysis

• Market Cap: £1.90B
• Dividend Yield: 3.93%
• Average Volume (3M): 283.47K
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.77
• Revenue Growth: 2.30%
• EPS Growth: N/A
• Country: UK
• Employees: 201
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 0.47
• Shares Outstanding: 112,290,930
• 10 Day Avg. Volume: 223,379
• 30 Day Avg. Volume: 283,473
• PEG Ratio: 0.30
• Price to Book (P/B): 0.54
• Price to Sales (P/S): 5.02
• P/FCF Ratio: 8.95
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £2,090.86
• Price Target Upside: 23.65% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.99
• Revenue Forecast (FY): £213.45M

• Rating: 63 Neutral
• Price Target: 1,801.00p ▲(6.51% Upside)
• Action: Downgraded Date: 03/04/26
• Date: Action: Downgraded 03/04/26

The score is led by recovering financial performance and a generally positive, returns-focused outlook from management (upgraded ERV guidance, leasing momentum, and capital recycling), supported by reasonable valuation and yield. These positives are tempered by weak technicals (bearish trend and negative momentum) and near-term earnings pressure from higher financing costs and elevated development CapEx.

Positive Factors

Prime Central London portfolio positioning

Concentration in West End submarkets and proximity to Elizabeth line stations supports sustained occupier demand and pricing power. This structural location advantage reduces long-term vacancy risk, improves re-letting prospects and underpins durable rental growth and asset value resilience.

Strong asset-management and leasing track record

Consistent, above-ERV rent reviews and record asset-management income demonstrate the firm’s ability to extract rental upside and re-let space at premium levels. That recurring operational capability strengthens cash generation and lowers structural leasing risk across market cycles.

Disciplined capital recycling and strong liquidity

A clear £1bn recycling program plus substantial cash/undrawn facilities and an A- rating provide balance sheet flexibility to de-risk the pipeline. Recycling proceeds targeted into selective, high-IRR developments improves long-term returns while keeping leverage targets in check.

Negative Factors

Rising financing costs

Higher average borrowing costs materially increase net finance expenses and reduce cash available for dividends and reinvestment. Given the REIT’s reliance on leverage for development and recycling, sustained higher rates compress margins and lengthen payback periods for projects.

Large development CapEx and near-term earnings dilution

Significant near-term CapEx ties up capital and creates temporary voids that depress distributable earnings. While developments target attractive IRRs, their scale and timing mean short-to-medium-term cash generation and dividend cover are pressured until schemes stabilize and are fully let.

Back‑loaded return profile and execution risk

Reliance on multi-year redevelopment and disposal programs means most value uplift is expected well into the medium term. Execution, leasing and market risks over the coming years make near-term earnings and capital return timing uncertain, lowering predictability for investors.

Derwent London plc REIT Business Overview & Revenue Model

Company Description

Derwent London plc owns 83 buildings in a commercial real estate portfolio predominantly in central London valued at £5.4 billion (including joint ventures) as at 30 June 2020, making it the largest London-focused real estate investment trust (REIT). Our experienced team has a long track record of creating value throughout the property cycle by regenerating our buildings via development or refurbishment, effective asset management and capital recycling. We typically acquire central London properties off-market with low capital values and modest rents in improving locations, most of which are either in the West End or the Tech Belt. We capitalise on the unique qualities of each of our properties - taking a fresh approach to the regeneration of every building with a focus on anticipating tenant requirements and an emphasis on design. Reflecting and supporting our long-term success, the business has a strong balance sheet with modest leverage, a robust income stream and flexible financing. As part of our commitment to lead the industry in mitigating climate change, in October 2019, Derwent London became the first UK REIT to sign a Green Revolving Credit Facility. At the same time, we also launched our Green Finance Framework and signed the Better Buildings Partnership's climate change commitment. The Group is a member of the 'RE100' which recognises Derwent London as an influential company, committed to 100% renewable power by purchasing renewable energy, a key step in becoming a net zero carbon business. Derwent London is one of only a few property companies worldwide to have science-based carbon targets validated by the Science Based Targets initiative (SBTi). Landmark schemes in our 5.6 million sq ft portfolio include 80 Charlotte Street W1, Brunel Building W2, White Collar Factory EC1, Angel Building EC1, 1-2 Stephen Street W1, Horseferry House SW1 and Tea Building E1. In 2019, the Group won several awards including EG Offices Company of the Year, the CoStar West End Deal of the Year for Brunel Building, Westminster Business Council's Best Achievement in Sustainability award and topped the real estate sector and was placed ninth overall in the Management Today 2019 awards for 'Britain's Most Admired Companies'. In 2013 the Company launched a voluntary Community Fund and has to date supported over 100 community projects in the West End and the Tech Belt. The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is 25 Savile Row, London,

How the Company Makes Money

Derwent London generates revenue primarily through rental income from its diverse portfolio of commercial properties, which include office spaces, retail units, and mixed-use developments. The company leases its properties to a range of tenants, from large corporations to smaller businesses, ensuring a steady cash flow. Additionally, revenue is supplemented through property sales and development gains, particularly when properties are sold at a premium following successful redevelopment or refurbishment. The company also benefits from strategic partnerships with key stakeholders, enhancing its market position and operational efficiency. Factors contributing to earnings include the demand for high-quality office space in prime locations, effective asset management, and the ability to adapt to changing market trends.

Derwent London plc REIT Financial Statement Overview

Summary

2025 shows a strong rebound (revenue up sharply, solid profitability, and improved cash generation), supported by moderate leverage. The score is held back by historical volatility, including losses in 2022–2023 and negative free cash flow in 2024, which reduces predictability.

Income Statement

Revenue rebounded strongly in 2025 (up ~45% vs. 2024) and profitability is currently solid, with 2025 showing healthy margins and positive net income. However, results have been volatile across the period, including large losses in 2022–2023 and uneven margin performance year-to-year, which reduces confidence in earnings stability.

Balance Sheet

Leverage appears moderate for an office REIT, with debt running at roughly 0.39–0.43x equity in 2023–2025 and equity remaining sizable relative to assets. That said, returns on equity have been inconsistent (negative in 2020 and 2022–2023), indicating that profitability has not reliably translated into shareholder returns despite a generally stable capital base.

Cash Flow

Cash generation improved meaningfully in 2025, with operating cash flow and free cash flow both strong and broadly in line with net income (free cash flow close to net income). The key weakness is volatility: 2024 saw negative free cash flow and weak cash conversion versus earnings, showing that cash flows can swing materially year-to-year.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	388.70M	271.70M	267.80M	249.00M	240.30M
Gross Profit	199.90M	192.70M	195.30M	192.50M	188.00M
EBITDA	212.80M	152.50M	-438.00M	-242.40M	277.10M
Net Income	161.10M	115.90M	-476.40M	-280.50M	252.30M
Balance Sheet
Total Assets	5.31B	5.21B	5.03B	5.51B	5.91B
Cash, Cash Equivalents and Short-Term Investments	131.70M	71.40M	73.00M	76.60M	105.50M
Total Debt	1.57B	1.50B	1.37B	1.28B	1.32B
Total Liabilities	1.70B	1.67B	1.52B	1.43B	1.47B
Stockholders Equity	3.62B	3.54B	3.51B	4.08B	4.44B
Cash Flow
Free Cash Flow	218.00M	-76.90M	96.30M	109.40M	127.30M
Operating Cash Flow	228.00M	64.60M	97.00M	111.40M	128.90M
Investing Cash Flow	-96.70M	-101.90M	-98.00M	-51.70M	-240.00M
Financing Cash Flow	-71.00M	35.70M	-2.60M	-88.60M	128.10M

Derwent London plc REIT Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1691.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DLN, the sentiment is Negative. The current price of 1691 is below the 20-day moving average (MA) of 1820.20, below the 50-day MA of 1828.04, and below the 200-day MA of 1806.20, indicating a bearish trend. The MACD of -26.97 indicates Positive momentum. The RSI at 35.99 is Neutral, neither overbought nor oversold. The STOCH value of 24.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:DLN.

Derwent London plc REIT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BLND	75 Outperform	£3.82B	8.45	6.14%	5.85%	-20.83%	―
SHC	68 Neutral	£2.79B	7.67	8.66%	2.58%	-0.04%	655.16%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
GPE	64 Neutral	£1.33B	9.13	7.31%	2.52%	12.73%	―
DLN	63 Neutral	£1.90B	11.78	6.80%	3.93%	2.30%	―
WKP	57 Neutral	£767.10M	-10.12	-5.20%	7.31%	-1.67%	-120.18%
HLCL	55 Neutral	£243.75M	9.72	6.07%	2.71%	-14.09%	―

Derwent London plc REIT Corporate Events

Derwent London Confirms Total Voting Rights at 112.3 Million Shares

Derwent London plc has reported that its issued share capital currently comprises 112,290,929 ordinary shares of 5 pence each, all of which carry voting rights and none of which are held in treasury. This disclosure sets the total number of voting rights at 112,290,929, providing the key reference figure shareholders must use to assess and report any holdings or changes in their interests under the Financial Conduct Authority’s disclosure and transparency rules.

By clarifying its voting rights position, Derwent London reinforces transparency for investors and ensures compliance with market regulations governing significant shareholdings. The announcement helps institutional and retail shareholders alike determine whether their stakes trigger reporting thresholds, supporting orderly market disclosure and aiding analysts and governance watchers in tracking ownership dynamics in the REIT.

The most recent analyst rating on (GB:DLN) stock is a Hold with a £1550.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Sells Fitzrovia Office for £110.5m to Fund Higher-Return Projects

Derwent London has agreed to sell its Fitzrovia office asset at 90 Whitfield Street W1 to Lone Star Real Estate for £110.5 million, implying a capital value of about £1,100 per sq ft and a 5.0% net initial yield, with completion expected in August 2026. The 103,500 sq ft freehold, developed in 2007 and currently 88% occupied with a WAULT to break of 3.7 years, generates £5.9 million in annual passing income and the disposal is expected to be broadly earnings neutral while helping to lower the group’s leverage ratios.

Management describes the building as a relatively mature property and frames the transaction as part of its ongoing capital recycling strategy within its central London office portfolio. Proceeds are earmarked for higher-return opportunities, including capex at major development projects where the company anticipates attractive internal rates of return, underscoring a continued focus on reinvesting into assets and initiatives that can strengthen long-term income growth and reinforce Derwent London’s positioning in the prime London office market.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2113.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Lifts Rental Growth Outlook as Disposals and Lettings Gain Pace

Derwent London reported improving momentum in 2025, with gross rental income edging up to £218.3m, a 1.7% uplift in capital values and a higher total accounting return of 5.0%, while EPRA NTA per share rose 2.4% and the portfolio delivered 4.0% ERV growth. The group signed £11.3m of new leases nearly 10% ahead of ERV, recorded a record £58.9m of asset management activity and completed the fully pre-let 25 Baker Street scheme, supporting confidence in sustained rental growth.

Management is accelerating disposals, having sold £216.1m of assets in 2025 and targeting £1bn over the next three years to recycle capital into developments, selective acquisitions and potential buybacks while keeping leverage in check. The company has upgraded 2026 ERV guidance to 4%–7%, outlined ambitions for 7%–10% annual total accounting return and 25%–30% EPRA EPS growth by 2030, and announced leadership transitions alongside an 18th consecutive annual dividend increase, underscoring a positive medium-term outlook for shareholders in a tightening London office market.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2113.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Sells Tottenham Court Road Asset Above Book Value to Fund New Projects

Derwent London has agreed to sell its freehold property at 80-85 Tottenham Court Road W1 for £32.6 million, a price above its June 2025 book value and equivalent to £755 per sq ft, with completion expected in June 2026. The 43,300 sq ft mixed-use asset, comprising 28,300 sq ft of offices over six floors and four ground-floor retail units generating £1.7 million of income, is being acquired by a new value-add joint venture between Purestone Capital and BPS London. Chief executive Paul Williams said the deal reflects robust investor appetite for smaller value-add assets and underscores the group’s disciplined capital recycling strategy, with proceeds earmarked for higher-return projects including major schemes at Holden House W1 and Greencoat & Gordon House SW1, reinforcing Derwent London’s focus on capturing rental growth in prime central London locations.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2113.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Confirms Total Voting Rights at 112.3 Million Shares

Derwent London plc has confirmed that, as of 30 January 2026, its issued share capital comprises 112,290,929 ordinary shares of 5 pence each, all of which carry voting rights, with no shares held in treasury. This disclosure sets the official total of voting rights at 112,290,929, providing shareholders and market participants with the denominator needed to assess whether they must notify the Financial Conduct Authority of any holdings or changes in holdings under the UK’s Disclosure and Transparency Rules, thereby supporting ongoing transparency in the company’s shareholder base and regulatory compliance.

The most recent analyst rating on (GB:DLN) stock is a Hold with a £2078.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Chief Executive Paul Williams to Retire After 38 Years with the Group

Derwent London has announced that long-serving executive Paul Williams intends to retire as chief executive and step down from the board once a successor is appointed, bringing to a close a 38-year career at the group that culminated in his leadership role since 2019. The board, led by chairman Mark Breuer, has launched a formal process to identify his replacement, stressing that the company’s market-leading central London office portfolio, significant development pipeline and capital recycling strategy leave it well positioned to continue creating value for shareholders, while Williams has pledged to remain fully focused on driving performance during the transition period.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2095.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Confirms Total Voting Rights at Year-End

Derwent London plc has confirmed that, as of 31 December 2025, its issued share capital comprises 112,290,929 ordinary shares of 5 pence each, all of which carry voting rights, with no shares held in treasury. This disclosure sets the official total number of voting rights in the company at 112,290,929, providing the benchmark figure shareholders must use to assess whether they are required to notify the Financial Conduct Authority of any holdings or changes in their interests under UK disclosure and transparency rules.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £1845.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Secures Planning for Brixton Hotel Development

Derwent London has received planning permission for a hotel-led development at Blue Star House in Brixton, marking a significant step in its strategy to enhance portfolio value. The project, designed by GRID Architects, will include a 341-room hotel, office/commercial space, and public realm improvements, aligning with the company’s sustainable approach. This development is expected to support local regeneration, with construction set to begin in mid-2027 and completion anticipated by late 2029.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £1845.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.

Derwent London Secures Long-Term Lease Extension with Burberry

Derwent London has extended its lease with Burberry at Horseferry House SW1 until 2043, enhancing its income visibility and increasing earnings by approximately £0.9 million annually. This agreement underscores a strong relationship with Burberry, one of Derwent’s largest occupiers, and reflects Burberry’s long-term commitment to its global headquarters, contributing to Derwent’s robust regear and renewal activities totaling £19.2 million this year.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £1845.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.