Derwent London plc REIT (DLN) AI Stock Analysis

• Market Cap: £1.98B
• Dividend Yield: 3.78%
• Average Volume (3M): 238.69K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.04
• Revenue Growth: 2.30%
• EPS Growth: N/A
• Country: UK
• Employees: 201
• Sector: Real Estate
• Sector Strength: 47
• Industry: REIT - Office
• EPS (TTM): 0.52
• Shares Outstanding: 112,290,930
• 10 Day Avg. Volume: 267,574
• 30 Day Avg. Volume: 238,694
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: £2,277.00
• Price Target Upside: 30.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: 2,131.00p ▲(21.84% Upside)

Derwent London plc's overall stock score reflects a balance of financial stability and strategic corporate actions. The company's strong leasing activity and positive market outlook are significant strengths. However, technical indicators suggest caution due to bearish trends, and valuation metrics indicate a fair but not compelling investment opportunity. The absence of earnings call data limits insight into management's outlook.

Positive Factors

Leasing Progress

Leasing progress continues with £13.3m of lettings during the first nine months at an aggregate 8.5% premium to ERV.

Rental Market Opportunities

The rental market has further scope to re-rate higher and provide more development opportunities for Derwent.

Valuation

The stock trades at values per square meter approximating 2013 levels, with implied portfolio values at construction costs similar to 2009-11, when the stock rallied over 200%.

Negative Factors

Development Funding

Derwent needs to make disposals to fund development commitments without pushing-up the LTV.

Stock Performance

Derwent's shares have sold-off markedly, down 17%, since mid-September.

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 portfolio of commercial properties, which includes office buildings, retail spaces, and mixed-use developments. The company leases these properties to a diverse range of tenants, including major corporations and small businesses, ensuring a stable cash flow. Additionally, Derwent London engages in property development and refurbishment projects, which can yield significant returns upon completion and leasing. The company may also benefit from capital appreciation of its properties over time, contributing to overall profitability. Significant partnerships with construction firms and local authorities enhance its development capabilities and streamline project execution, further bolstering its revenue streams.

Derwent London plc REIT Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

Breakdown	TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	278.40M	267.80M	249.00M	240.30M	266.90M	227.60M
Gross Profit	201.60M	195.30M	192.50M	188.00M	196.60M	179.20M
EBITDA	153.40M	-438.00M	-242.40M	277.10M	-55.50M	311.70M
Net Income	-360.70M	-476.40M	-280.50M	252.30M	-77.60M	283.40M
Balance Sheet
Total Assets	5.03B	5.03B	5.51B	5.91B	5.53B	5.63B
Cash, Cash Equivalents and Short-Term Investments	73.00M	73.00M	76.60M	105.50M	50.70M	54.50M
Total Debt	1.37B	1.37B	1.28B	1.32B	1.10B	1.04B
Total Liabilities	1.52B	1.52B	1.43B	1.47B	1.22B	1.16B
Stockholders Equity	3.51B	3.51B	4.08B	4.44B	4.26B	4.42B
Cash Flow
Free Cash Flow	96.10M	96.30M	109.40M	127.30M	85.40M	127.10M
Operating Cash Flow	96.60M	97.00M	111.40M	128.90M	85.80M	127.40M
Investing Cash Flow	-99.10M	-98.00M	-51.70M	-240.00M	-62.40M	-74.60M
Financing Cash Flow	-12.70M	-2.60M	-88.60M	128.10M	-27.20M	-16.60M

Derwent London plc REIT Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1749.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 1749 is below the 20-day moving average (MA) of 1913.95, below the 50-day MA of 1964.16, and below the 200-day MA of 1917.61, indicating a bearish trend. The MACD of -41.61 indicates Positive momentum. The RSI at 26.78 is Positive, neither overbought nor oversold. The STOCH value of 10.49 is Positive, 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
SHC	75 Outperform	£2.98B	9.09	8.66%	2.18%	-0.04%	655.16%
DLN	70 Outperform	£1.98B	8.33	6.80%	3.78%	2.30%	―
BLND	69 Neutral	£3.44B	9.80	6.14%	6.61%	-20.83%	―
SGRO	69 Neutral	£8.62B	13.89	5.20%	4.69%	-4.77%	―
LAND	69 Neutral	£4.29B	10.83	6.13%	5.75%	0.97%	―
Sector *	62 Neutral	AU$3.04B	8.41	-1.53%	5.05%	16.79%	54.28%
GPE	61 Neutral	£1.33B	10.84	6.47%	2.42%	-0.63%	―

Derwent London plc REIT Corporate Events

Derwent London Reports Strong Leasing Activity and Positive Market Outlook

Derwent London plc reported strong leasing activity with £13.8 million in new leases and renewals, and open-market lettings 10.5% above estimated rental value (ERV) for the first half of 2025. The company is positioned for growth, with a low vacancy rate and significant capital growth, driven by a robust Central London office market with high demand and limited supply. Derwent London continues to outperform the MSCI Central London Office index and has a strong outlook for total accounting returns, supported by strategic asset recycling and ongoing development projects. The company is actively reshaping its portfolio, with substantial disposals and reinvestments planned, and is well-positioned to capitalize on improving investment market liquidity.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 Executive Director Nigel George’s Retirement

Derwent London plc announced the retirement of Executive Director Nigel George, effective March 2026, after a long tenure since 1998. George played a crucial role in the company’s growth and major transactions, including the 2007 merger with LMS. He will continue to support the company as a consultant until 2028. This transition marks a significant change in leadership but ensures continuity in strategic projects, reflecting the company’s commitment to maintaining its strong market position and innovative approach.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 New Headlease for 50 Baker Street Development

Derwent London has secured a new 125-year headlease for its 50 Baker Street W1 development with The Portman Estate, consolidating ownership of the site and enabling the project to commence next year. This development, featuring efficient office space, retail, and residential flats, aligns with Derwent London’s sustainability goals and addresses the shortage of Grade A space in Marylebone, promising strong rental returns and further enhancing its partnership with The Portman Estate.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 Francis House for £55.5 Million

Derwent London plc has announced the sale of Francis House, a 43,000 sq ft office space, for £55.5 million to a Local Government Pension Scheme. This sale, scheduled to complete in early Q4 2025, reflects a 4.9% net initial yield and is expected to be slightly accretive to EPRA earnings. The transaction is part of Derwent London’s strategy to reinvest proceeds into higher-return opportunities, including projects in the West End. This move highlights the strengthening investor demand in the London office market and supports the company’s ongoing investment and development plans.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 Extends £450m Credit Facility to Support Growth and Sustainability

Derwent London plc has extended its £450 million revolving credit facility with Barclays, HSBC, and NatWest, maintaining its strong credit rating and flexible financing options. The facility will support the company’s development pipeline and sustainability initiatives, while the cancellation of certain credit tranches reflects strategic financial management. This move, alongside recent bond issuances, underscores Derwent London’s robust financial strategy and commitment to long-term growth.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 its current issued share capital, consisting of 112,290,929 ordinary shares with voting rights, and confirmed it holds no treasury shares. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure and Transparency Rules, impacting how they manage their interests in the company.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 Major Lease Expansion with Adobe

Derwent London has announced a significant lease extension and expansion with Adobe at the White Collar Factory, EC1. Adobe has increased its space by 25% to 67,000 sq ft and extended its lease until 2038, with a break option in 2033. This deal, which raises the overall rent to £4.5 million, underscores the value of high-quality office spaces and highlights the strength of Derwent London’s portfolio and the buoyancy of London’s office market.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 Redeems £175 Million Convertible Bonds

Derwent London plc has announced the full redemption of its £175 million 1.5% convertible bonds due in 2025, utilizing existing liquidity resources without converting any bonds into equity. This action leaves the Group’s net debt position unchanged, indicating a stable financial strategy and potentially reinforcing its market confidence and operational stability.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 Change in Major Shareholding

Derwent London plc has announced a change in the voting rights held by the Canada Pension Plan Investment Board, which has decreased its stake from 3.09% to 2.98%. This adjustment in holdings reflects a minor shift in the company’s shareholder structure, which may influence future corporate governance and decision-making processes.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 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 £250m Bond to Fund Growth and Refinancing

Derwent London plc has successfully priced a £250 million 7-year senior unsecured bond with a 5.25% interest rate, which will be listed on the London Stock Exchange. The proceeds will be used to repay existing credit facilities, refinance near-term debt, and fund development projects, including the upcoming Holden House W1 project. This bond issuance extends the company’s weighted average debt maturity to approximately 5 years, reflecting strong market confidence and supporting its strategic growth initiatives.

The most recent analyst rating on (GB:DLN) stock is a Buy with a £2600.00 price target. To see the full list of analyst forecasts on Derwent London plc REIT stock, see the GB:DLN Stock Forecast page.