Derwent London plc REIT (DLN) AI Stock Analysis

• Market Cap: £1.99B
• Dividend Yield: 3.93%
• Average Volume (3M): 283.47K
• Price to Earnings (P/E): 12.6
• 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: -0.15
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 8.12
• P/FCF Ratio: -28.68
• 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: 17.93% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.99
• Revenue Forecast (FY): £213.45M

• Rating: 72 Outperform
• Price Target: 2,113.00p ▲(19.18% Upside)
• Action: Upgraded Date: 12/07/25
• Date: Action: Upgraded 12/07/25

Derwent London plc's strong valuation and positive corporate events are the primary drivers of its score. Despite a bearish technical outlook, the company's financial stability and strategic initiatives in the real estate market support a cautiously optimistic view.

Positive Factors

Healthy balance sheet

A reasonable debt-to-equity mix and strong equity ratio provide durable financial flexibility for a REIT. This reduces refinancing risk, supports funding of developments and refurbishments, and helps absorb cyclical shocks to rental income, underpinning long-term stability.

Positive operating cash flow and strong gross margins

Consistently positive operating cash flow and robust gross margins reflect reliable rental income and efficient cost control. This cash generation supports recurring distributions, funds capex and development activity, and sustains the business through property cycles over months to years.

Operational momentum from corporate events

Leases secured above estimated rental value, low vacancies and partnerships improve long-term income potential and asset quality. Successful project completions and disposals enhance portfolio repositioning, boosting recurring rents and creating durable value from redevelopment capability.

Negative Factors

Inconsistent net income and free cash flow growth

Volatility in net income and uneven free cash flow growth reduce predictability of distributable earnings and complicate capital allocation. For a development-oriented REIT, this makes dividend planning and reinvestment pacing harder and raises sensitivity to market cycles.

Net profit margin volatility and historical losses

Significant swings in net income and volatile net margins undermine earnings quality. Despite improving EBIT, past losses and margin variability increase the risk of earnings reversals, impairments on investment property, and uneven return on equity over the medium term.

Modest revenue growth

Low single-digit revenue growth suggests limited organic top-line expansion from rents alone and greater reliance on value-accretive developments or disposals to lift returns. This constrains scalability of income and exposes performance to timing of asset recycling.

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

Derwent London plc REIT demonstrates financial stability and resilience with strong gross profit margins and a healthy balance sheet. However, challenges in maintaining consistent net income and free cash flow growth, likely due to external market conditions, temper the outlook.

Income Statement

The company shows signs of revenue stability with a modest growth rate in recent years. Gross profit margins have remained strong, although net profit margins have seen volatility due to significant swings in net income, likely driven by external factors impacting the real estate sector. The EBIT margin is improving, indicating better operational management, but historical losses create a mixed outlook.

Balance Sheet

The balance sheet is healthy with a reasonable debt-to-equity ratio, indicating a balanced approach to leveraging. The equity ratio is strong, suggesting that the company is not overly reliant on debt financing, which is a positive for stability. However, the return on equity has been inconsistent, impacted by fluctuating net incomes over the years.

Cash Flow

Operating cash flows have been positive, which is a good sign of core business strength. However, free cash flow growth has been inconsistent, reflecting capital investments and variable financing activities. The ratios of cash flow to net income are healthy, but the variability in net income suggests caution.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	267.80M	271.70M	267.80M	249.00M	240.30M	266.90M
Gross Profit	186.70M	192.70M	195.30M	192.50M	188.00M	196.60M
EBITDA	148.90M	152.50M	-438.00M	-242.40M	277.10M	-55.50M
Net Income	237.90M	115.90M	-476.40M	-280.50M	252.30M	-77.60M
Balance Sheet
Total Assets	5.33B	5.21B	5.03B	5.51B	5.91B	5.53B
Cash, Cash Equivalents and Short-Term Investments	91.70M	71.40M	73.00M	76.60M	105.50M	50.70M
Total Debt	1.59B	1.50B	1.37B	1.28B	1.32B	1.10B
Total Liabilities	1.76B	1.67B	1.52B	1.43B	1.47B	1.22B
Stockholders Equity	3.58B	3.54B	3.51B	4.08B	4.44B	4.26B
Cash Flow
Free Cash Flow	80.00M	-76.90M	96.30M	109.40M	127.30M	85.40M
Operating Cash Flow	80.00M	64.60M	97.00M	111.40M	128.90M	85.80M
Investing Cash Flow	-173.30M	-101.90M	-98.00M	-51.70M	-240.00M	-62.40M
Financing Cash Flow	101.80M	35.70M	-2.60M	-88.60M	128.10M	-27.20M

Derwent London plc REIT Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1773.00
• 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 1773 is below the 20-day moving average (MA) of 1830.85, below the 50-day MA of 1828.00, and below the 200-day MA of 1807.41, indicating a bearish trend. The MACD of -19.55 indicates Positive momentum. The RSI at 43.65 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	£4.01B	9.01	6.14%	5.85%	-20.83%	―
DLN	72 Outperform	£1.99B	12.64	6.80%	3.93%	2.30%	―
SHC	68 Neutral	£2.94B	8.27	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	£1.37B	9.64	7.31%	2.52%	12.73%	―
WKP	57 Neutral	£798.82M	-10.52	-5.20%	7.31%	-1.67%	-120.18%
HLCL	55 Neutral	£254.06M	10.08	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 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.

Derwent London Announces Current Share Capital and Voting Rights

Derwent London plc announced that its issued share capital comprises 112,290,929 ordinary shares, each with voting rights. This figure is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure and Transparency Rules, impacting how they manage their investments in the company.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2460.00 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 Reports Strong Q3 Momentum and Positive Outlook

Derwent London plc reports strong operational momentum in its third-quarter update, with new leases signed at 10% above estimated rental value (ERV) and a low vacancy rate of 3.7%. The company has completed over £200 million in disposals, enhancing its financial capacity for reinvestment into development projects, and is targeting further asset sales to optimize shareholder returns. Major projects like 25 Baker Street and Network W1 are progressing well, with significant leasing activity and development milestones achieved. The company’s strategic focus on capital recycling and asset management supports its confidence in the London office market’s strength, aiming for a 3-6% ERV growth in 2025.

The most recent analyst rating on (GB:DLN) stock is a Hold with a £1943.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.