Derwent London Plc · LSE:DLN
Derwent London — H1 2024 Earnings Presentation
97 slides from Derwent London's earnings presentation, 2024
Slide 1: Interim Results 2024
Interim Results 2024
Slide 2: Contents
Contents Presenters Contents Paul Williams Introduction and overview 01 Damian Wisniewski Results and financial review 05 Nigel George Valuation and investment 15 Emily Prideaux Sustainability 21 Leasing and asset management 23 The Derwent London offer 30 Regeneration pipeline 33 Summary 41 Appendic
Slide 3: Introduction and overview
Introduction and overview Paul Williams The Featherstone Building EC1 1
Slide 4: Performance overview
Performance overview Continued strong leasing momentum Derwent London leasing activity Rental income (£m pa) 45 • £10.8m of new lettings YTD; +9.0% vs ERV1 41.5 40 • £8.8m in H1; +10.3% vs ERV1 35 • £3.4m currently under offer 34.0 31.4 30 • ‘Furnished + Flexible’ (£3.0m; +12.4% vs ERV) 27.1 28.4 26
Slide 5: A more positive London market
A more positive London market Valuations at turning point • Recovery expected after difficult few years • Yields now stabilised having increased 169bp1 • Attractive to range of investors Supply constrained market • Rental growth accelerating • Vacancy levelled off; low Grade A availability • Limited
Slide 6: Delivering attractive total returns
Delivering attractive total returns Resilient earnings • Long portfolio WAULT • Low vacancy rate • Mid-market average rent • Effective cost control • 98% of debt fixed or hedged Rental growth & other • H1 ERV growth: 2.0% • 2024 ERV guidance: 3% to 6% • Asset management activity Value creation • 0.9
Slide 7: Results and financial review
Results and financial review Damian Wisniewski 25 Baker Street W1 5
Slide 8: Financial highlights
Financial highlights EPRA NTA per share1, 2 EPRA earnings per share2 Cash and undrawn facilities3 3,044p 52.7p £566m Dec 2023: 3,129p H1 2023: 49.5p Jun 2023: £562m -2.7% +6.5% Dec 2023: £480m Gross rental income Net rental income Interest cover ratio (ICR)4 £107.5m £95.0m 4.0x H1 2023: £105.9m H1 2
Slide 9: EPRA NTA movement
EPRA NTA movement Pence 3,500 3,250 53 1 -2.7% (55) 0 0 3,129 (84) 3,044 3,000 2,750 Investment properties (£87.2m) (77p) Trading properties (£5.1m) (5p) Owner-occupied property (£2.0m) (2p) Total (£94.3m) (84p) 2,500 2,250 2,000 31 Dec EPRA Profit on Dividends Revaluation Revaluation Other 30 Jun 2
Slide 10: EPRA earnings
EPRA earnings £m 150 (12.5) 125 Slide Slide 9 2.7 10 107.5 (12.1) 100 (0.4) (19.8) 75 (19.6) 1.2 (0.3) 59.2 52.7p 50 per share 25 0 Gross Premiums Property Waivers Admin Net Tax JVs/other EPRA rental & other expenditure & expenses finance charge earnings income income impairments costs 49.5p H1 2023
Slide 11: Gross rental income
Gross rental income £m Like-for-like vs H1 2023 140 Gross 120 rental income 3.2 +1.7% 2.4 (3.5) (0.5) 107.5 105.9 100 The Featherstone Bldg EC1 £1.5m 1-2 Stephen Street W1 (£0.9m) 80 Soho Place W1 Total £0.9m £2.4m 20 Farringdon Road EC1 (£0.4m) 230 Blackfriars Road SE1 (£0.3m) Net Other (£1.9m) ren
Slide 12: Property expenditure
Property expenditure H1 2023 H2 2023 H1 2024 £m £m £m Irrecoverable service charges Voids 2.1 1.8 1.5 Inclusive leases 0.3 0.2 0.5 Caps 1.0 0.1 0.5 Balancing charges/other 1.1 - 0.3 4.5 2.1 2.8 Property costs Legal and letting 2.2 2.4 2.1 Rates 1.1 1.7 2.0 Ground rent 1.2 1.1 1.0 Marketing 1.0 0.7 0
Slide 13: H1 2024 project expenditure
H1 2024 project expenditure Investment Trading Trading property property1 stock2 Investments Other Total 25 Baker Street W1 34.2 25.1 3.9 - - 63.2 Network W1 13.4 - - - - 13.4 On-site major projects 47.6 25.1 3.9 - - 76.6 Completed major projects 5.0 - - - - 5.0 Old Street Quarter EC13 - - - - 0.1 0
Slide 14: Estimated future capex
Estimated future capex EPC upgrades H2 2024 2 38 23 26 3 22 7 103 • £91m estimated cost to upgrade to EPC ‘B’ by 2030 • £44m specifically provided for in the Jun 2024 2025 44 46 34 51 8 156 external valuation, plus further allowance for general upgrades • Portfolio by ERV 70.0% 2030 compliant, up 20
Slide 15: Proforma impact of major projects and disposals
Proforma impact of major projects and disposals • Assumes no further lettings, acquisitions or disposals other than those already contracted • Shows impact of estimated remaining capex on major projects, both completed and on-site • Excludes design fees and smaller refurbishment projects Proforma im
Slide 16: Strong balance sheet
Strong balance sheet Maturity profile of debt facilities Cash and undrawn Weighted average £m facilities1 maturity of borrowings 0 100 200 300 400 500 600 700 800 £566m 4.5 years 2024 2025 83 175 Jun 2023: £562m Jun 2023: 5.6 years 2026 230 93.5 356.5 Dec 2023: £480m Dec 2023: 5.0 years 2027 10.5 18
Slide 17: Valuation and investment
Valuation and investment Nigel George White Collar Factory EC1 15
Slide 18: Valuation – performance and themes
Valuation – performance and themes Investment portfolio valued at £4.8bn Total property return in H1 2024 • Underlying valuation -1.7% (H2 2023: -7.2%) • Derwent London +0.3% • West End -1.5% (H2 2023: -6.5%) • MSCI Central London Offices1 -0.1% • City Borders -2.7% (H2 2023: -9.4%) • MSCI UK All Pr
Slide 19: Valuation – performance and themes
Valuation – performance and themes • Developments – continued positive returns Valuation movement by capital value Six-month valuation movement (%) 5 • Rents – strong growth for best in class 4 4.3 • Location and product important 3 2 • Yields – stabilised 1 • Larger lot sizes – some outward movemen
Slide 20: Rental value and yields
Rental value and yields Rental value growth Rental values % 15 • Rental values increased 2.0% in H1 2024 • Offices: 93% of portfolio1 +1.9% 10 • Retail: 7% of portfolio +3.1% 1 5 • Average office passing rent £49.32 psf2 0 (Dec 2023: £50.46 psf) Derwent London H1 growth • Average ‘topped-up’ office
Slide 21: Build-up of portfolio ERV
Build-up of portfolio ERV • Contracted rent of £199.4m Build-up of ERV3 • Portfolio reversion of £111.7m1 Annualised Potential annualised accounting rent4 accounting rental uplift5 • £48.6m contracted, including £m £206.5m £50.5m 350 • 80 Charlotte Street W1 £11.4m 11.0 8.4 • Soho Place W1 £11.1m 30
Slide 22: Investment market
Investment market H1 2024 Outlook Themes Themes • Constrained liquidity • Yields stabilised; possible recovery • £1.9bn in H1; below 10-year H1 average • Cost and availability of debt improving • Average lot size £29m • 25bp UK base rate cut; more to come • Restrictive cost and availability of debt
Slide 23: Sustainability
Sustainability Nigel George 45 Whitfield Street W1 21
Slide 24: Making progress on our journey to net zero
Making progress on our journey to net zero Energy intensity Scottish solar park • Total energy usage down 8% compared to H1 2023 • Consent for 100-acre 18.4MW solar park • Installation of first phase of air source heat • >40% of London managed portfolio electricity pumps at 1-2 Stephen Street W1 nee
Slide 25: Leasing and asset management
Leasing and asset management Emily Prideaux The Featherstone Building EC1 23
Slide 26: Occupational market themes
Occupational market themes Quality & sustainability Growing demand in London • Good design and innovation • Rising number of jobs • Strong building fundamentals • Demand well spread by sector • Positive environmental credentials • Resilience of London Location & connectivity Constrained supply • Pre
Slide 27: Positive market fundamentals
Positive market fundamentals Under Offer Floorspace (million sq ft) Floorspace (million sq ft) % 4.5 12 8.6 11 8.4 4.0 8.2 10 3.5 8.0 9 3.0 7.8 8 7.6 2.5 7 7.4 2.0 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 6 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 7.2 Q1 23 Q2 23 Q3 23 Q4 23 Active demand Floorspace (million
Slide 28: Strong occupier demand
Strong occupier demand Take-up Under offer1 Active demand • H1 2024: 4.4m sq ft • H1 2024: 4.2m sq ft • H1 2024: 11.2m sq ft • 10-year average: 6.0m sq ft • 10-year average: 3.4m sq ft • 5-year average: 7.2m sq ft • On upward trajectory • Well above long-term average • Broad-based; requirements laun
Slide 29: Prime space in short supply
Prime space in short supply Vacancy Central London vacancy rate by quality Vacancy rate (%) • Central London office vacancy 8.3% (Dec 2023: 8.4%) 10 Total vacancy rate 9 Grade A vacancy rate • Grade A vacancy rate only 1.8% 8 • West End 1.2% < City 2.1% 7 6 • Secondhand 68% of total 5 4 Development
Slide 30: Derwent London leasing activity
Derwent London leasing activity Good letting activity year to date • £10.8m new rent YTD; 9.0% above Dec 2023 ERV1 Key letting activity • £8.8m in H1, 10.3% above ERV1 • ‘Furnished + Flexible’: £3.0m, 12.4% above ERV • Activity well spread across portfolio • £3.4m currently under offer On-site proje
Slide 31: Derwent London asset management activity
Derwent London asset management activity Asset management activity H1 2024 Lease expiries and break outcome analysis % Previous New New rent vs 100 11 11 8 10 10 13 14 Area rent rent Uplift Dec 2023 ERV 90 7 23 21 ‘000 sq ft £m pa £m pa % % 14 35 7 80 26 22 35 Rent reviews 22.1 1.3 1.4 3.9 6.5 20 70
Slide 32: The Derwent London offer
The Derwent London offer Emily Prideaux 80 Goswell Road EC1 30
Slide 33: Our differentiated product and offering
Our differentiated product and offering Design & Sustainability Net Zero Intelligent Buildings Innovative architecture and engineering Traditional HQ Furnished + Flexible • All sizes (>10,000 sq ft) • Typically <10,000 sq ft units • Longer leases (5-20 years) • Available on shorter leases (<5 years)
Slide 34: Design & innovation
Design & innovation DL/ Members Adaptable Cat A HQ Innovative design spaces • ‘Long-life, low carbon, intelligent’ buildings • The right product to meet London’s varied demand • Relationship & community focused • Quality & Sustainability • Best in class service and amenity DL/28 in Old Street EC1 •
Slide 35: Regeneration pipeline
Regeneration pipeline Paul Williams Network W1 33
Slide 36: Our development pipeline
Our development pipeline 1 25 Baker Street 2 Network 3 Holden House On site On site Start: H2 2025 7 4 50 Baker Street 2 Start: H1 2026 6 4 1 3 Greencoat & 5 Gordon Refurb On site Start: H1 2026 0.4m sq ft 8 Longer-term Major schemes 1.1m sq ft 2.0m sq ft 20 Farringdon Rd Next phase 6 7 Old St Quart
Slide 37: Attractive development returns
Attractive development returns Yield on cost scenario Yield on cost % On-site projects 6.6 6.3 (+£10 psf1) • 298,000 sq ft 6.2 • PC: H1 2025 5.9 6.0 6.0 (at ERV) • Main office block (206,000 sq ft) 5.8 5.8 • 172,600 sq ft pre-let (84%) • £103.20 psf, 15% above appraisal 5.5 ERV 5.4 5.4 • 13 private
Slide 38: 25 Baker Street W1
25 Baker Street W1 £m Growing the ERV 25 Available ERV Pre-let +2% +2% +9% 3.5 20 0% 4.8 9.3 15 10 18.4 18.4 17.4 15.6 10.7 5 0 H1 2022 FY 2022 H1 2023 FY 2023 H1 2024 Derwent London plc – Interim Results 2024 36
Slide 39: 25 Baker Street W1
25 Baker Street W1 Q1 2023 £103.40 psf average (106,100 sq ft - 5th to 9th floors) £111.35 psf on upper two terraced floors Q3 2023 £101.25 psf (49,400 sq ft - 3rd & 4th floor) Q2 2024 £107.50 psf (17,100 sq ft - Part 1st floor) Derwent London plc – Interim Results 2024 37
Slide 40: Network W1
Network W1 • ERV £13.1m • Office ERV £95 psf • Capex to complete £71m • Circular economy principles • Embodied carbon intensity c.530 kgCO2e/sqm Derwent London plc – Interim Results 2024 • Appendices 40 to 41 38
Slide 41: Next phase of regeneration projects (0.5m sq ft)
Next phase of regeneration projects (0.5m sq ft) Proposed Proposed Holden House W1 50 Baker Street W1 Greencoat & Gordon Redevelopment behind façade (50:50 JV) House SW1 Start date: H2 2025 Redevelopment Comprehensive refurbishment Start date: H1 2026 Start date: H1 2026 Proposed: c.150,000 sq ft Pr
Slide 42: Longer-term pipeline (1.1m sq ft)
Longer-term pipeline (1.1m sq ft) 20 Farringdon Road EC1 Old Street Quarter EC1 230 Blackfriars Road SE1 Comprehensive refurbishment Mixed-use campus redevelopment Redevelopment Start date: 2027 Start date: 2028+ Start date: 2030+ Current: 166,300 sq ft Target: 750,000+ sq ft Target: 200,000+ sq ft
Slide 43: Summary
Summary Paul Williams The Featherstone Building EC1 41
Slide 44: Summary
Summary Derwent well placed for growth • Rental growth accelerating • H1 strongest half-year ERV growth since 2016 • ERV guidance upgraded to 3% to 6% • Attractive yields • London a dynamic and growing global city • Strong balance sheet and ambition to invest • Attractive returns from development pi
Slide 45: Appendices
Appendices 43
Slide 46: Appendices
Appendices Financials 45 Valuation 58 Portfolio income profile 65 Sustainability 74 London office market 78 Developments & refurbishments 89 44
Slide 47: Financials
Financials Appendices 01. Headline numbers 46 02. Group balance sheet 47 03. EPRA net asset value metrics 48 04. Group income statement 49 05. IFRS loss and EPRA earnings 50 06. Explanation of EPRA adjustments 51 07. Group cash flow 52 08. Like-for-like income reconciliation 53 09. Green debt facili
Slide 48: Appendix 1 – Headline numbers
Appendix 1 – Headline numbers Jun 2024 % change Dec 2023 Jun 2023 Net asset value (NAV) £3,419.5m (2.5)* £3,508.8m £3,869.2m EPRA net tangible assets per share 1,2 3,044p (2.7)* 3,129p 3,444p EPRA net disposal value per share1,2 3,164p (2.4)* 3,243p 3,609p Total return -1.0% n/a -11.7% -3.7% Gross r
Slide 49: Appendix 2 – Group balance sheet
Appendix 2 – Group balance sheet Jun 2024 Dec 2023 Jun 2023 £m £m £m Investment property 4,471.1 4,551.4 4,852.1 Owner-occupied property 44.1 46.1 47.4 Investment in joint ventures 36.9 35.8 39.2 Other non-current assets 205.1 209.7 207.1 4,757.2 4,843.0 5,145.8 Other current assets and liabilities
Slide 50: Appendix 3 – EPRA net asset value metrics
Appendix 3 – EPRA net asset value metrics Jun 2024 Dec 2023 EPRA NTA1 EPRA NDV2 EPRA NRV3 EPRA NTA1 EPRA NDV2 EPRA NRV3 £m £m £m £m £m £m Net assets attributable to equity shareholders 3,419.5 3,419.5 3,419.5 3,508.8 3,508.8 3,508.8 Revaluation of trading properties 4.7 4.7 4.7 9.8 9.8 9.8 Deferred
Slide 51: Appendix 4 – Group income statement
Appendix 4 – Group income statement Half year ended Year ended Half year ended Jun 2024 Dec 2023 Jun 2023 £m £m £m Gross property income 107.8 212.9 105.9 Write-down of trading property - (0.4) (0.1) Other income 2.4 4.5 2.4 Waivers and impairment (0.4) (2.6) (1.9) Other property outgoings (12.1) (2
Slide 52: Appendix 5 – IFRS loss and EPRA earnings
Appendix 5 – IFRS loss and EPRA earnings Half year ended Year ended Half year ended Jun 2024 Dec 2023 Jun 2023 £m £m £m IFRS loss for the period attributable to shareholders (27.5) (476.4) (143.2) Revaluation deficit 87.2 581.5 196.7 Joint venture revaluation deficit - 9.2 4.8 Profit on disposal of
Slide 53: Appendix 6 – Explanation of EPRA adjustments
Appendix 6 – Explanation of EPRA adjustments Adjustments H1 2024 H1 2023 H1 2024 A B C EPRA EPRA IFRS basis basis £m £m £m £m £m £m Net property and other income 97.7 - 0.1 - 97.8 93.4 Administrative expenses (19.8) - - - (19.8) (19.2) Revaluation deficit (87.2) - 87.2 - - - Profit on disposal 1.5 (
Slide 54: Appendix 7 – Group cash flow
Appendix 7 – Group cash flow Half year ended Year ended Half year ended Jun 2024 Dec 2023 Jun 2023 £m £m £m Cash generated from operations 58.7 135.3 59.71 Interest received 0.2 0.8 0.71 Interest and other finance costs paid (15.5) (38.1) (15.7)1 Distributions from joint ventures - 0.3 0.41 Tax paid
Slide 55: Appendix 8 – Like-for-like income reconciliation
Appendix 8 – Like-for-like income reconciliation Like-for-like Like-for-like Development Acquisitions movement to portfolio property & disposals Total H1 2024 £m £m £m £m H1 2024 h1 Gross rental income 105.4 0.4 1.7 107.5 Other property expenditure (11.6) (0.4) (0.1) (12.1) Write-off/impairment of r
Slide 56: Appendix 9 – Green debt facilities and expenditure
Appendix 9 – Green debt facilities and expenditure Green debt facilities Green borrowings and qualifying expenditure £m • £300m green tranche within £450m revolving credit 900 Green RCF Available green headroom Green expenditure facilities Green bond Drawn green facilities • £350m green bond 800 • P
Slide 57: Appendix 10 – Debt summary
Appendix 10 – Debt summary Jun 2024 Dec 2023 Maturity profile of fixed rates and hedging Bank facilities drawn £104m £84m £m 0 50 100 150 200 250 300 350 400 450 500 Fixed rates borrowings £1,238m £1,238m 2024 83 Fixed rate Hedged Drawn facilities £1,342m £1,322m 2025 175 75 Unutilised facilities an
Slide 58: Appendix 11 – Debt facilities
Appendix 11 – Debt facilities Drawn Undrawn Total Maturity £m £m £m 1.5% unsecured convertible bonds 175.0 - 175.0 June 2025 6.5% secured bonds 175.0 - 175.0 March 2026 1.875% unsecured green bonds 350.0 - 350.0 November 2031 2.68% unsecured private placement notes 55.0 - 55.0 January 2026 3.46% uns
Slide 59: Appendix 12 – Net debt
Appendix 12 – Net debt Jun 2024 Dec 2023 £m £m Borrowings – current 276.1 102.9 Borrowings – non-current 1,080.6 1,233.2 Acquired fair value of secured bonds less amortisation (4.3) (5.0) Unamortised discount on unsecured green bonds 1.4 1.5 Equity component of convertible bonds 7.7 7.7 Unwinding of
Slide 60: Valuation
Valuation Appendices 13. Property return 59 14. Valuation performance by village 60 15. Rental value growth and average rents 61 16. Valuation yields 62 17. Context to yield movement 63 18. Portfolio statistics by village 64 58
Slide 61: Appendix 13 – Property return
Appendix 13 – Property return • Derwent London total property return +0.3% • MSCI Central London Offices1 -0.1% • Since 2007 cumulative total property return +173% • Cumulative total property return +109% Total property return Cumulative total property return % Index (31 Dec 2007=100) 18 350 Derwent
Slide 62: Appendix 14 – Valuation performance by village
Appendix 14 – Valuation performance by village Valuation Valuation Weighting movement Jun 2024 Jun 2024 H1 20241 £m % % West End Central Fitzrovia 1,655.8 35 (1.5) Marylebone 404.7 8 2.3 Victoria 404.1 8 (4.4) Soho/Covent Garden 359.5 8 (2.0) Paddington 325.8 7 (1.6) Mayfair 102.9 2 4.8 3,252.8 68 (
Slide 63: Appendix 15 – Rental value growth and average rents
Appendix 15 – Rental value growth and average rents Rental value growth1 H1 2023 H2 2023 2023 H1 2024 % % % % West End 1.0 0.9 1.9 1.9 City Borders 1.0 1.7 2.7 1.9 Central London 1.0 1.1 2.1 1.9 Provincial 0.0 2.7 2.7 5.7 Underlying 0.9 1.2 2.1 2.0 Average rents - Central London offices ‘Topped-up’
Slide 64: Appendix 16 – Valuation yields
Appendix 16 – Valuation yields Yield profile1 Initial yields2 % 8 Net initial ‘Topped-up’ Reversionary yield True equivalent yield yield initial yield Initial yield % % 7 West End 4.0 5.1 6 City Borders 4.9 5.9 5 Central London 4.3 5.3 Provincial 7.7 8.2 4 EPRA portfolio 4.3 5.4 3 2 2007 2008 2009 2
Slide 65: Appendix 17 – Context to yield movement
Appendix 17 – Context to yield movement • As at 30 June 2024 Valuation yields1 % • Derwent London true equivalent yield 5.73% 12 Derwent London true equivalent yield UK 10-year Gilt (+18bp in H1 2024) BBB yield 10 • BBB yield 5.72% (+31bp in H1) • UK 10-year Gilt yield 4.17% (+57bp in H1) 8 • Capita
Slide 66: Appendix 18 – Portfolio statistics by village
Appendix 18 – Portfolio statistics by village Vacant Net Vacant Floor floor contracted Average space Estimated area1 area rental rental rental Lease Total rental Valuation Weighting ‘000 ‘000 income income value reversion2 reversion value £m % sq ft sq ft £m pa £ psf £m pa £m pa £m pa £m pa West End
Slide 67: Portfolio income profile
Portfolio income profile Appendices 19. Build-up of portfolio ERV 66 20. Available space and projects 67 21. Vacancy rate and lease expiry analysis 68 22. Lease expiry profile and lease length 69 23. Timing of the reversion 70 24. Portfolio summary 71 25. Major tenants 72 26. Rent and tenant banding
Slide 68: Appendix 19 – Build-up of portfolio ERV
Appendix 19 – Build-up of portfolio ERV Rent uplift pa Rent pa £m £m £m Contracted rental income, net of ground rents 199.4 Contractual rental uplifts 80 Charlotte Street W1 11.4 Soho Place W1 11.1 Brunel Building W2 4.3 The Featherstone Building EC1 3.2 The White Chapel Building E1 2.7 White Collar
Slide 69: Appendix 20 – Available space and projects
Appendix 20 – Available space and projects Pre-let/ Pre-let Vacant sold Total Gross Net net area area area vacant Ground vacant rent Total ‘000 ‘000 ‘000 ERV rent ERV ERV net ERV sq ft sq ft sq ft £m pa £m pa £m pa £m pa £m pa Comment Available to occupy The White Chapel Building E1 114 - 114 2.3 -
Slide 70: Appendix 21 – Vacancy rate and lease expiry analysis
Appendix 21 – Vacancy rate and lease expiry analysis Vacancy rates • Derwent London EPRA vacancy rate1 3.2% at Jun 2024 % 10 Derwent London (by rental value) • 4.0% in Dec 2023; 4.5% in Jun 2023 9 CBRE central London offices (by floorspace) CBRE West End offices (floorspace) 8 • CBRE central London
Slide 71: Appendix 22 – Lease expiry profile and lease length
Appendix 22 – Lease expiry profile and lease length Expiries and breaks as a percentage of portfolio income1 West City End Borders Provincial H2 2024 2025 2026 2027 2028 Total Expiries 1 2 1 4 10 6 8 7 35 Rolling breaks 1 - - 1 1 - - - 2 Single breaks - - - - 6 3 3 2 14 Total 2 2 1 5 17 9 11 9 51 Pr
Slide 72: Appendix 23 – Timing of the reversion
Appendix 23 – Timing of the reversion Contracted uplifts and pre-lets: £66.0m Reviews and expiries: £11.0m £m £m 25 6 Pre-let developments Expiries Contracted uplifts and pre-lets 4.2 5 Reviews 20 4 3 15 5.4 3.2 2 0.7 0.4 10 18.9 1.2 1 1.4 1.4 1.4 0.9 0.4 0.3 11.0 0 (0.3) 10.2 5 5.4 5.1 2.4 (1) 1.8
Slide 73: Appendix 24 – Portfolio summary
Appendix 24 – Portfolio summary Future appraisal Core Proforma income for Old Street Pipeline 19% Quarter EC1 50% 50% acquisition⁵ Floor area: 1.03m sq ft Rental income: £33.3m WAULT: 5.8 yrs Rent2: £47.02 ERV: £48.25 54% 5.32m sq ft1 Floor area: 0.78m sq ft Potential projects Floor area: 2.01m sq f
Slide 74: Appendix 25 – Major tenants
Appendix 25 – Major tenants ‘Topped-up’ Passing rent % rent % 01 Expedia 6.0 7.9 02 Public sector1 5.9 6.6 03 Burberry 5.5 6.9 04 Boston Consulting Group 5.1 3.4 05 PIMCO (pre-let) 4.1 - 06 G-Research 3.6 2.4 07 Arup 3.6 2.6 08 Fora (including The Office Group) 3.0 3.2 09 Apollo 3.0 2.0 10 Paymentse
Slide 75: Appendix 26 – Rent and tenant banding
Appendix 26 – Rent and tenant banding Central London ‘topped-up’ Profile of tenants’ office rent banding1 business sector2 £0-£30 psf Other 4% £30-£40 psf Flexible office providers 5% Business £80+ psf 7% 4% services 19% Technology 19% 6% £40-£50 psf 12% Public sector 7% 5.32m sq ft Retail & hospita
Slide 76: Sustainability
Sustainability Appendices 27. Portfolio EPC profile 75 28. EPC rating progression 76 29. Embodied carbon 77 74
Slide 77: Appendix 27 – Portfolio EPC profile
Appendix 27 – Portfolio EPC profile Exempt Project A B C D E 0.3 ERV 11.2 10.0 48.5 17.6 7.6 4.8 2030 compliant: 70.0% 1.1 Floorspace 7.9 9.3 46.9 19.6 8.2 7.0 2030 compliant: 65.2% 0 10 20 30 40 50 60 70 80 90 100 London commercial portfolio (%) Derwent London plc – Interim Results 2024 75
Slide 78: Appendix 28 – EPC rating progression
Appendix 28 – EPC rating progression 1 London commercial portfolio by ERV (%) 100 99.9 100.0 100.0 100.0 Dec 2021 Dec 2022 Dec 2023 Jun 2024 90 87.5 87.6 85.7 80 78.9 70 70.0 68.4 65.3 60 61.0 50 40 30 20 10 0 2023 compliant 2027 compliant 2030 compliant 1 London commercial portfolio and assumes pro
Slide 79: Appendix 29 – Embodied carbon
Appendix 29 – Embodied carbon Embodied Embodied carbon carbon intensity footprint kgCO2e/ Year Scheme tCO2e sqm 2020 80 Charlotte Street W1 19,790 506 2021 6-8 Greencoat Place SW1 763 191 Small refurbishments (three) 273 128 2022 1 Soho Place W1 16,401 550 The Featherstone Building EC1 8,603 539 Fra
Slide 80: London office market
London office market Appendices 30. Take-up 79 31. Take-up by type 80 32. Under offer and active demand 81 33. Vacancy rates 82 34. Availability by location 83 35. Supply 84 36. New construction starts 85 37. Prime office rents 86 38. Investment market 87 39. Investment demand 88 78
Slide 81: Appendix 30 – Take-up
Appendix 30 – Take-up Market statistics Office take-up Floorspace (million sq ft) 20 Central London • Central London 18 • 4.4m sq ft of take-up in H1 2024 16 • LTA 6.1m sq ft 14 Annual average 12 • 2.0m sq ft in Q1, 2.4m sq ft in Q2 10 8 • West End 6 • 1.2m sq ft let in H1 2024 4 2 • LTA 2.0m sq ft
Slide 82: Appendix 31 – Take-up by type
Appendix 31 – Take-up by type Floorspace (million sq ft) 18 Pre-let New completed 16 Secondhand modern Secondhand other 14 Annual average 12 10 8 6 4 2 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 2024 Source: CBRE Derwent London plc – Interim Results 2024 80
Slide 83: Appendix 32 – Under offer and active demand
Appendix 32 – Under offer and active demand Space under offer Floorspace (million sq ft) Space under offer 5.0 West End City Docklands Midtown Southbank • 4.2m sq ft under offer in central London 4.5 • 58% increase in six months 4.0 Average • 21% above the 10-year average 3.5 3.0 • 26% of total unde
Slide 84: Appendix 33 – Vacancy rates
Appendix 33 – Vacancy rates % 18 West End City 16 Central London 14 12 10 8 6 4 2 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Source: CBRE Derwent London plc – Interim Results 2024 82
Slide 85: Appendix 34 – Availability by location
Appendix 34 – Availability by location Floorspace (million sq ft) % 27 90 West End Tenant controlled % City Secondhand % 24 Docklands, Midtown & Southbank 80 21 70 18 60 15 50 12 40 9 30 6 20 3 10 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 0 2024 Source: CBRE Der
Slide 86: Appendix 35 – Supply
Appendix 35 – Supply Existing supply Office development pipeline Floorspace(million sq ft) Vacancy rate (%) • Central London vacancy rate 8.3% at 30 June 2024 12 12 Central London Under construction available Under construction let/under offer • Down from 8.4% at the end of 2023 Completed 10 10 Comp
Slide 87: Appendix 36 – New construction starts
Appendix 36 – New construction starts Central London office starts (million sq ft) 3.0 Construction starts 4-quarter rolling average 2.5 2.0 1.5 1.0 0.5 0.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: CBRE Derwent London plc – Interim Results 2024 85
Slide 88: Appendix 37 – Prime office rents
Appendix 37 – Prime office rents £ psf 160 Q2 2016 (EU referendum) 155 Q4 2019 (pre-pandemic) Q2 2024 140 120 120 110 110 105 102.50 100 90 90 90 90 90 87.50 85 85 82.50 82.50 82.50 80 80 77.50 77.50 78 73 70 67.50 60 40 20 0 Mayfair Soho North of North of Midtown Victoria Paddington City & St James
Slide 89: Appendix 38 – Investment market
Appendix 38 – Investment market Central London office investment • £1.9bn of investment transactions in H1 2024 £bn 22 H1 H2 • Lowest H1 total in 25+ years 20 18 • 33% lower than H1 2023 16 • £1.1bn in Q1, £0.8bn in Q2 14 Annual average 12 10 8 Half-year average 6 4 2 0 2000 2002 2004 2006 2008 2010
Slide 90: Appendix 39 – Investment demand
Appendix 39 – Investment demand Investment demand by source Central London office yields Prime office yield (%) 7.0 West End City Middle 6.5 East 12% 6.0 North UK & 5.5 America Europe 5.0 14% 34% 4.5 £19.2bn 4.0 3.5 SE Asia 3.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 15% Sou
Slide 91: Developments & refurbishments
Developments & refurbishments Appendices 40. Developments on site: profit on cost 90 41. Project summary: current projects 91 42. Project summary: future projects 92 43. Portfolio map 93 89
Slide 92: Appendix 40 – Developments on site: profit on cost
Appendix 40 – Developments on site: profit on cost Summary £m End value 847 Less: Total cost1 740 Project surplus 107 Less: Booked to Jun 24 31 Surplus to come 76 Profit on total cost 14% Yield on cost2 6.0% Completion H1 2025 H2 2025 Sensitivity4 – project surplus (£m), profit Commercial area (sq f
Slide 93: Appendix 41 – Project summary: current projects
Appendix 41 – Project summary: current projects Current Pre H2 Total Current net scheme Proposed 2024 2025 2026+ capex to office income area area capex capex capex complete Delivery c.ERV Property £m pa ‘000 sq ft ‘000 sq ft £m £m £m £m date psf On-site/completed major projects 25 Baker Street W11 -
Slide 94: Appendix 42 – Project summary: future projects
Appendix 42 – Project summary: future projects Current Pre- net scheme Proposed Earliest income area area possession Property £m pa ‘000 sq ft ‘000 sq ft year Comment Consented Holden House W1 4.1 91 150 2025 Strathkelvin Retail Park (Scotland) 0.9 108 130 2024 B&Q unit sub-division commenced in Q3
Slide 95: Appendix 43 – Portfolio map
Caledonian Road Camden Road Appendix 43 – Portfolio map Essex Road London Fields Camden Town Primrose Hill Carnegie St Islington TECH BEL Wharfdale Rd Angel T Kings Cross Albany Regent’s Park St Pancras Hoxton St International Th Maida Vale am es lin k Euston Up pe rW ob Old Street Clerkenwell urn O
Slide 96: Executive Committee and senior management
Executive Committee and senior management Executive Committee Senior management Paul Williams Chief Executive Lesley Bufton Head of Marketing Damian Wisniewski Chief Financial Officer Tim Hyman Group Architect Nigel George Executive Director Benjy Lesser Head of Design & Innovation Emily Prideaux Ex
Slide 97: Disclaimer
Disclaimer This presentation has been prepared by Derwent London plc (the apparent. Past performance is not indicative of future results “Company”). No representation or warranty (express or implied) and forward-looking statements are not guarantees of future of any nature is given nor is any respon