Derwent London plc REIT (DLN) AI Stock Analysis

• Market Cap: £2.21B
• Dividend Yield: 335.52%
• Average Volume (3M): 283.65K
• Price to Earnings (P/E): 19.2
• Beta (1Y): 1.03
• Revenue Growth: 3.70%
• EPS Growth: N/A
• Country: UK
• Employees: 201
• Sector: Real Estate
• Sector Strength: 61
• Industry: REIT - Office
• EPS (TTM): 0.55
• Shares Outstanding: 112,290,930
• 10 Day Avg. Volume: 275,729
• 30 Day Avg. Volume: 283,652
• PEG Ratio: -0.23
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.65
• 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: £2,408.50
• Price Target Upside: 22.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: 2,148.00p ▲(8.98%Upside)

The overall stock score reflects Derwent London's financial stability and proactive corporate strategies, notably in credit management and lease expansions. However, mixed technical indicators and caution over valuation metrics temper enthusiasm.

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 plc generates revenue primarily through rental income from its extensive portfolio of commercial properties, which includes office spaces, retail outlets, and residential units. The company focuses on high-demand areas in Central London, allowing it to command premium rental rates. Additionally, Derwent London engages in property development and refurbishment projects, which contribute to capital growth and increased rental income upon completion. The company may also occasionally sell properties to realize capital gains, further enhancing its financial position. Strategic partnerships with architects, urban planners, and local authorities play a significant role in optimizing development projects and ensuring the long-term appeal and occupancy of its properties.

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: 1971.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• 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 1971 is below the 20-day moving average (MA) of 1978.45, below the 50-day MA of 1979.24, and above the 200-day MA of 1939.66, indicating a neutral trend. The MACD of -7.98 indicates Positive momentum. The RSI at 43.14 is Neutral, neither overbought nor oversold. The STOCH value of 47.89 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
SHC	76 Outperform	£3.08B	11.43	7.05%	210.83%	12.79%	-74.41%
GPE	74 Outperform	£1.39B	11.42	6.47%	229.99%	-0.63%	―
LAND	69 Neutral	£4.38B	10.98	6.13%	567.92%	0.97%	―
DLN	68 Neutral	£2.21B	19.19	3.29%	335.52%	3.70%	―
SGRO	68 Neutral	£8.89B	14.73	5.18%	4.49%	-9.88%	―
BLND	65 Neutral	£3.60B	10.24	6.14%	637.23%	-20.83%	―
Sector *	54 Neutral	$1.23B	3.75	0.67%	6.15%	-2.39%	-129.28%

Derwent London plc REIT Corporate Events

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.

Derwent London Reports Strong Q1 Performance Amid Robust Office Demand

Derwent London plc reports strong demand in the central London office market, with significant leasing and asset management transactions completed or under offer. The company highlights the progress of key developments like 25 Baker Street W1 and Network W1, with pre-letting success and ongoing discussions with potential occupiers. The firm maintains a low vacancy rate and continues to focus on asset recycling to fund its development pipeline. Financially, Derwent London has reduced its net debt slightly and secured a new loan facility, positioning itself well for future market conditions.

Derwent London Announces Annual Bondholders Meeting

Derwent London plc has announced the annual meeting of the bondholders of London Merchant Securities Limited’s £175 million 6.50% secured bonds due in 2026. The meeting, scheduled for June 18, 2025, will be attended by key financial executives of Derwent London, including the CFO and other directors, and will feature a presentation and Q&A session. This meeting is significant for stakeholders as it provides an opportunity to engage with the company’s financial leadership and gain insights into the company’s financial strategies and future outlook.

Derwent London Updates Share Capital and Voting Rights

Derwent London plc has announced that its issued share capital consists of 112,290,929 ordinary shares, each with voting rights, and holds no treasury shares. This update is crucial for shareholders as it provides the denominator for calculating their required notifications of interest changes under the FCA’s Disclosure and Transparency Rules, impacting how stakeholders manage their investments in the company.