Derwent London Plc · LSE:DLN
Derwent London — FY2024 Earnings Presentation
113 slides from Derwent London's earnings presentation, Feb 27, 2025
Slide 1: Annual Results 2024
Annual 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 17 Emily Prideaux Sustainability 23 Leasing and asset management 26 Our portfolio and differentiated offer 33 Regeneration pipeline 37 Summa
Slide 3: Introduction and overview
Introduction and overview Paul Williams 25 Baker Street W1 1
Slide 4: Key highlights – outperforming the market
Key highlights – outperforming the market Commitment to regeneration Continued strong leasing momentum driving returns • £18.9m of new leases; 12.3% above ERV1 • Further de-risking of on-site projects • Activity spread across portfolio • Development valuations +15.1% • EPRA vacancy 3.1% (2023: 4.0%)
Slide 5: London – a market in demand
London – a market in demand Occupational • ERV growing and broadening against backdrop of robust demand and low supply market • London’s diverse economy forecast to outperform • Employment expectations revised upwards • Office-centric working strategies prioritised Investment • Importance of London’
Slide 6: Our strategy
Our strategy Strategically well-placed portfolio Occupier-focused • 75% in the West End • Enhanced amenities including DL/ Lounges • Well-located close to transport network • Provide full range of space: • Brand: Design-led, amenity rich • HQs on long leases • Relationship-focused • ‘Furnished + Fle
Slide 7: Results and financial review
Results and financial review Damian Wisniewski White Collar Factory EC1 5
Slide 8: Financial highlights
Financial highlights EPRA NTA per share1, 2 EPRA earnings per share2 Cash and undrawn facilities3 3,149p 106.5p £487m Jun 2024: 3,044p 2023: 102.0p Jun 2024: £566m Dec 2023: 3,129p +4.4% Dec 2023: £480m Gross rental income Net rental income Interest cover ratio (ICR)4 £214.8m £189.6m 3.9x 2023: £212
Slide 9: EPRA NTA movement
EPRA NTA movement Pence 3,500 2 3,250 106 (80) +0.6% (8) 0 0 3,149 3,129 3,000 Investment properties (£2.7m) (2p) Trading properties (£9.2m) (8p) H1: (84p) Owner-occupied property £2.9m 2p H2: 76p Total (£9.0m) (8p) Total: (8p) 2,750 2,500 31 Dec EPRA Profit Dividends Revaluation Revaluation Other 3
Slide 10: EPRA earnings
EPRA earnings £m 250 Slide Slide 10 7.9 9 214.8 (24.8) 200 (41.1) 150 Including surrender premiums of: 4 & 10 Pentonville Road N1 £1.6m (39.6) 2.8 1-2 Stephen Street W1 £0.9m (0.4) (0.1) 119.5 100 106.5p per share 50 H1: 52.7p H2: 53.8p Total: 106.5p 0 Gross Premiums Property Admin Net Waivers Tax J
Slide 11: Gross rental income
Gross rental income £m The Featherstone Building EC1 £1.5m Like-for-like 45 Whitfield Street W1 £0.8m 300 1 Soho Place W1 £0.5m The White Chapel Building E1 £0.5m Turnmill EC1 (£1.8m) Gross Other £1.9m Other (£0.1m) Total £5.2m Total (£1.9m) rental income 2.6% 250 6.3 5.2 (7.6) (1.9) 214.8 2023: 1.7
Slide 12: Property expenditure
Property expenditure H1 2023 H2 2023 2023 H1 2024 H2 2024 2024 £m £m £m £m £m £m Irrecoverable service charges Voids 2.1 1.8 3.9 1.5 1.6 3.1 Inclusive leases 0.3 0.2 0.5 0.5 0.7 1.2 Caps 1.0 0.1 1.1 0.5 1.0 1.5 Balancing charges/other 1.1 - 1.1 0.3 0.5 0.8 4.5 2.1 6.6 2.8 3.8 6.6 Property costs Lega
Slide 13: 2024 project expenditure
2024 project expenditure Investment Trading Trading property property1 stock2 Investments Other Total 2023 25 Baker Street W1 32.3 57.3 8.1 - - 97.7 94.3 Network W1 34.4 - - - - 34.4 23.1 On-site major projects 66.7 57.3 8.1 - - 132.1 117.4 Old Street Quarter EC13 - - - - 0.1 0.1 3.5 50 Baker Street
Slide 14: Estimated future capex
Estimated future capex EPC upgrades • £86m estimated cost to upgrade to EPC ‘B’ by 2030 • £41m specifically provided for in the Dec 2024 external valuation, plus further allowance for general upgrades • Portfolio by ERV 69.2% 2030 compliant, up 0.8% from Dec 2023 EPC costs 2025 45 44 13 37 27 23 4 1
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 on-site projects and major developments starting in 2025 Proforma impact of major projects and disposals Contrac
Slide 16: Recent refinancing
Recent refinancing • Jun 2024 – £100m unsecured bank loan signed. Three-year initial term with two one-year extension options • Oct 2024 – £83m 3.99% secured loan repaid • Dec 2024 – £115m unsecured bank term loan/revolving credit facility signed. Two-year initial term with two one-year extension op
Slide 17: Near-term refinancing
Near-term refinancing Refinance at Current rate Current cost 5.25% 1 Impact Fixed rate debt Maturity % £m pa £m pa £m pa £175m convertible bonds Jun 2025 2.302 4.0 9.2 5.2 £55m private placement notes Jan 2026 2.68 1.5 2.9 1.4 £175m secured bonds Mar 2026 6.50 11.4 9.2 (2.2) • £450m unsecured revolv
Slide 18: Debt summary
Debt summary Maturity profile of debt facilities £m Cash and undrawn Total facilities 800 Fixed rate bonds and loans facilities1,2 £1,940m Drawn bank loans £487m 700 Headroom Facility signed in Feb 2025 395.5 600 Dec 2023: £1,808m Dec 2023: £480m 500 400 87.0 300 Weighted average 115.0 475 Net debt/
Slide 19: Valuation and investment
Valuation and investment Nigel George DL/28 in Old Street EC1 17
Slide 20: Valuation performance
Valuation performance Investment portfolio valued at £5.0bn Total property return in 2024 • Underlying valuation +0.2% (2023: -10.6%) • Derwent London 4.1% • West End +1.2% (2023: -8.6%) • MSCI Central London Offices1 1.3% • City Borders -3.4% (2023: -15.8%) • MSCI UK All Property1 5.5% • MSCI Centr
Slide 21: Valuation themes
Valuation themes • Developments – outperformed Valuation movement by capital value • Demand for best-in-class office space Valuation movement (%) 16 H1 2024 H2 2024 2024 • Rents – positive rental growth across the portfolio 12 • Yields – stabilised in H2 • High quality and location 8 • West End – 75
Slide 22: Rental values and yields
Rental values and yields Rental value growth Rental values % 15 • Rental values increased 4.3% in 2024 • Offices: 91% of portfolio1 +4.0% 10 • Retail: 9% of portfolio +8.1% 1 5 • Average office passing rent £50.05 psf2 0 (Dec 2023: £50.46 psf) Derwent London H1 growth • Average ‘topped-up’ office re
Slide 23: Build-up of portfolio ERV
Build-up of portfolio ERV • Contracted rent of £204.3m Build-up of ERV3 • Portfolio reversion of £116.2m1 Annualised Potential annualised accounting rent4 accounting rental uplift5 • £42.3m contracted, including £m £210.7m £59.1m 350 • 80 Charlotte Street W1 £11.4m 18.3 320.5 • 1 Soho Place W1 £5.5m
Slide 24: Investment market
Investment market 2024 Outlook • Liquidity constrained • Early signs the market is improving • £4.9bn in 2024; lowest level of activity for 25 years • 10-year Gilt 4.5%; 5-year swap <4% • <£100m lot size focus; average £33m • UK base rate: pace of cuts unclear and trajectory • West End more liquid t
Slide 25: Sustainability
Sustainability Nigel George The Featherstone Building EC1 23
Slide 26: Key milestones
Key milestones Embodied carbon initiatives External ratings • Progress decarbonising regeneration activity • ‘A’ rated public disclosure (100/100) • Circular economy strategy formalised Development 5 star (97/100) • Selection of third party partner Standing Assets 4 star (84/100) • Accelerating Conc
Slide 27: Good progress on our journey to net zero
Good progress on our journey to net zero Energy intensity (EUI) Operational carbon1 EPC ratings 137 kWh/sqm (-8% YoY) 12,357 tCO2e (-14% YoY) 69% ‘A’ or ‘B’ • Gas usage -21% YoY; electricity -3% • UK grid factors unchanged in 2024 • 87% ‘A’ to ‘C’ • Occupier engagement • Scope 1 down 37% • Full owne
Slide 28: Leasing and asset management
Leasing and asset management Emily Prideaux 80 Goswell Road EC1 26
Slide 29: Derwent London strong leasing activity
Derwent London strong leasing activity Positive leasing momentum Key letting activity • £18.9m of new rent on 324,700 sq ft • Average 12.3% above Dec 2023 ERV1 • 100% pre-let (offices) • 53% West End; 43% City Borders; 4% Scotland • 13.5 year WAULT (to break) • 47% pre-lets • £21.2m rent pa (gross)
Slide 30: Derwent London positive asset management activity
Derwent London positive asset management activity Asset management activity 2024 Lease expiries and break outcome analysis % Previous New New rent vs 100 11 11 8 10 10 13 15 Area rent rent Uplift Dec 2023 ERV 90 7 23 21 ‘000 sq ft £m pa £m pa % % 14 35 9 80 26 22 35 Rent reviews 70.9 4.5 5.0 10.9 8.
Slide 31: London’s competitive advantage
London’s competitive advantage A leading global city Strong market fundamentals • Global connectivity • Favourable office supply/ demand imbalance • World leading universities • Broad sector base • Tech and innovation hub of Europe • A European HQ city • European leader in inward VC investment • Rob
Slide 32: Active demand and constrained supply
Active demand and constrained supply Take-up Vacancy rate Active demand • 2024: 11.3m sq ft, +4% YoY • Central London office vacancy 7.5% • 2024: 12.8m sq ft, +30% YoY (Dec 2023: 8.6%) • 10-year average: 11.7m sq ft • 5-year average: 7.5m sq ft • Grade A vacancy rate only 1.9% • Upward trajectory •
Slide 33: Prime space in short supply
Prime space in short supply Development pipeline • 14.5m sq ft under construction to complete by end 2028 • 8.4m sq ft speculative • 42% pre-let/under offer (2023: 38%) • 51% of 2025 completions already pre-let/under offer Central London development pipeline and vacancy Floorspace (million sq ft) Va
Slide 34: Occupier themes
Occupier themes Location Quality Building • Design • Amenity • Adaptability • Sustainability Landlord, service and value • Sub-markets and • Integrity micro-location • Track record • Connectivity • Amenity and service • Centralisation • Partnership approach The ‘Stay Put’ and regear Cost and value •
Slide 35: Our portfolio and differentiated offer
Our portfolio and differentiated offer Emily Prideaux DL/ Service at White Collar Factory EC1 33
Slide 36: Distinctively Derwent
Distinctively Derwent Fundamentals of our product • Innovative, inspiring architecture and design • Personal, relationship-focused ethos • Unique, user-centric approach to service and amenity • DL/ membership for every office occupier with tangible benefits and experiences • Commitment to sustainabi
Slide 37: Our balanced portfolio
Our balanced portfolio A best-in-class office portfolio to meet London’s varied demand Delivering the right product in the right location HQ Offices Furnished + Flexible >10,000 sq ft <10,000 sq ft Short/flexible lease + simple Long lease transaction process Longer WAULT Shorter WAULT CAT A delivery
Slide 38: The DL/ Members
The DL/ Members • A tangible benefits package for businesses and individuals across the portfolio, endorsed by engagement with over 70% of the portfolio • A portfolio approach allowing costs to be spread more widely rather than at individual asset level Derwent London plc – Annual Results 2024 36
Slide 39: Regeneration pipeline
TITLE Regeneration pipeline Emily Prideaux 1 Footnote Network DerwentW1 London plc – Annual Results 2024 37
Slide 40: Our regeneration pipeline
Our regeneration pipeline Greencoat & Gordon 25 Baker Street W1 Network W1 Holden House W1 50 Baker Street W1 House SW1 Next phase On site 298,000 sq ft 139,000 sq ft 133,500 sq ft c.240,000 sq ft 107,800 sq ft Project timeline for major projects 2025 2026 2027 2028 2029 2030+ On site 25 Baker St Ne
Slide 41: Delivering attractive returns
Delivering attractive returns Project returns1 On-site projects Summary £m End value 853 Less: Total cost 742 Project surplus 111 • 298,000 sq ft Less: Booked to Dec 24 72 • Target PC: H1 2025 Surplus to come 39 Profit on total cost 15% • Offices 100% pre-let Yield on cost 6.1% • £104 psf, 16.5% abo
Slide 42: 25 Baker Street W1
25 Baker Street W1 ERV (£m) Growing the ERV 25 Available 21.3 Pre-let +16% 0.6 20 18.4 (retail) 15 20.7 (office) 10 5 0 H1 2022 FY 2022 H1 2023 FY 2023 H1 2024 FY 2024 Derwent London plc – Annual Results 2024 • Appendices 41 to 42 40
Slide 43: 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) Q4 2024 CONFIDENTIAL (24,500 sq ft - 2nd floor) Q4 2024 £107.50 psf Q2 2024 £107.50 psf (7,200 sq ft - Pt 1st) (17,100 sq f
Slide 44: 25 Baker Street W1
25 Baker Street W1 Hopkins Architects Confident and classical architecture in Portland stone Net zero, all-electric Intelligent Building Tenth floor sky room amenity and lounge 8,750 sq ft terraces Derwent London plc – Annual Results 2024 42
Slide 45: Network W1
Network W1 • ERV £13.1m • Office ERV £95 psf • Capex to complete £50m • PC: H2 2025 • Embodied carbon intensity c.530 kgCO2e/sqm • BREEAM Outstanding Derwent London plc – Annual Results 2024 • Appendices 41 to 42 43
Slide 46: Network W1
Network W1 Piercy&Company architects Beautifully crafted scalloped concrete Net zero, all-electric, Intelligent Building Derwent London plc – Annual Results 2024 44
Slide 47: Network W1
Network W1 Double-height terrazzo reception 9,900 sq ft external terraces Derwent London plc – Annual Results 2024 45
Slide 48: Next phase of regeneration projects
Next phase of regeneration projects • Target development yield of 6-7% c Holden House W1 50 Baker Street W1 Greencoat & Gordon House Redevelopment behind facade Redevelopment SW1 Comprehensive refurbishment Start date: H2 2025 Start date: H1 2026 Start date: H1 2026 Next phase Proposed Proposed 133,
Slide 49: Holden House W1
Holden House W1 DSDHA architects On site: H2 2025 Derwent London plc – Annual Results 2024 47
Slide 50: Holden House W1
Holden House W1 Beautiful rooftop terrace and amenity space with uncompromised views across London Derwent London plc – Annual Results 2024 48
Slide 51: 50 Baker Street W1
50 Baker Street W1 AHMM architects On site: H1 2026 Derwent London plc – Annual Results 2024 49
Slide 52: 50 Baker Street W1
50 Baker Street W1 Derwent London plc – Annual Results 2024 50
Slide 53: 50 Baker Street W1
50 Baker Street W1 Generous rooftop terrace including two clubrooms offering amenity and event space Derwent London plc – Annual Results 2024 51
Slide 54: Greencoat & Gordon House SW1
Greencoat & Gordon House SW1 Squire and Partners architects Comprehensive refurbishment of two Victorian warehouses 107,800 sq ft offices over seven floors Rooftop amenity and terrace Derwent London plc – Annual Results 2024 52
Slide 55: Examples of rolling refurbishments
Rolling refurbishments 1-2 Stephen Street W1 Middlesex House W1 Rolling from 2023 Rolling from 2024 Examples of rolling refurbishments £82+ psf £80+ psf Scheme ERV1 Scheme ERV1 £63 psf £60 psf Previous/passing rent2 Previous/passing rent2 1 Office ERV after capex 2 ‘Topped-up’ office rent Derwent Lo
Slide 56: Longer term pipeline
Longer term pipeline 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+ Longer term 166,300 sq ft 750,000+ sq ft 200,000+ sq ft Target/Uplift: 80% Target/
Slide 57: Design and innovation for future growth
Design and innovation for future growth A Design-led market-leading Driving value innovation differentiated and returns product Derwent London plc – Annual Results 2024 55
Slide 58: Summary
Summary Paul Williams White Collar Factory EC1 56
Slide 59: Strongest total return outlook for several years
Strongest total return outlook for several years • ERV growth strengthening and broadening • Reversionary profile increasing • Continuing to invest in developments • c.2m sq ft pipeline with West End focus • Ongoing capital recycling • 2025 ERV guidance of 3% to 6% • Total returns driven by ERV grow
Slide 60: Appendices
Appendices 58
Slide 61: Appendices
TITLE Appendices Financials 60 Valuation 73 Portfolio income profile 80 Sustainability 89 London office market 93 Developments & refurbishments 105 1 Footnote Derwent London plc – Annual Results 2024 59
Slide 62: Financials
TITLE Financials Appendices 01. Headline numbers 61 02. Group balance sheet 62 03. EPRA net asset value metrics 63 04. Group income statement 64 05. IFRS profit/(loss) and EPRA earnings 65 06. Explanation of EPRA adjustments 66 07. Group cash flow 67 08. Like-for-like income reconciliation 68 09. Gr
Slide 63: Appendix 1 – Headline numbers
Appendix 1 – Headline numbers Dec 2024 Dec 2023 % change Net asset value (NAV) £3,539.8m £3,508.8m 0.9 EPRA net tangible assets per share 1,2 3,149p 3,129p 0.6 EPRA net disposal value per share1,2 3,261p 3,243p 0.6 EPRA total return 3.2% -11.7% n/a Gross rental income £214.8m £212.8m 0.9 Net rental
Slide 64: Appendix 2 – Group balance sheet
Appendix 2 – Group balance sheet Dec 2024 Dec 2023 £m £m Investment property 4,670.1 4,551.4 Owner-occupied property 49.0 46.1 Investment in joint ventures - 35.8 Other non-current assets 205.8 209.7 4,924.9 4,843.0 Non-current assets held for sale 25.7 - Other current assets and liabilities (116.1)
Slide 65: Appendix 3 – EPRA net asset value metrics
Appendix 3 – EPRA net asset value metrics Dec 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 3,539.8 3,539.8 3,539.8 3,508.8 3,508.8 3,508.8 Revaluation of trading properties 0.6 0.6 0.6 9.8 9.8 9.8 Deferred
Slide 66: Appendix 4 – Group income statement
Appendix 4 – Group income statement Year ended Year ended Dec 2024 Dec 2023 £m £m Gross property income 217.6 212.9 Write-down of trading property - (0.4) Other income 5.1 4.5 Waivers and impairment (0.4) (2.6) Other property outgoings (24.0) (23.9) Net property and other income 198.3 190.5 Administ
Slide 67: Appendix 5 – IFRS profit/(loss) and EPRA earnings
Appendix 5 – IFRS profit/(loss) and EPRA earnings Year ended Year ended Dec 2024 Dec 2023 £m £m IFRS profit/(loss) for the year attributable to shareholders 115.9 (476.4) Revaluation deficit 2.7 581.5 Joint venture revaluation deficit 0.3 9.2 Profit on disposal of investment property (1.9) (1.2) Imp
Slide 68: Appendix 6 – Explanation of EPRA adjustments
Appendix 6 – Explanation of EPRA adjustments Adjustments 2024 2023 2024 A B C EPRA EPRA IFRS basis basis £m £m £m £m £m £m Net property and other income 198.3 - 0.2 - 198.5 191.5 Administrative expenses (41.1) - - - (41.1) (39.1) Revaluation deficit (2.7) - 2.7 - - - Profit on disposal 1.9 (1.9) - -
Slide 69: Appendix 7 – Group cash flow
Appendix 7 – Group cash flow Year ended Year ended Dec 2024 Dec 2023 £m £m Cash generated from operations (adjusted)1 155.4 160.0 Expenditure on trading properties /stock (52.8) (24.7) Interest received 0.3 0.8 Finance costs (38.3) (38.1) Distributions from joint ventures - 0.3 Tax paid in respect o
Slide 70: Appendix 8 – Like-for-like income reconciliation
Appendix 8 – Like-for-like income reconciliation Like-for-like Development Acquisitions portfolio property & disposals Total £m £m £m £m 2024 h1 Gross rental income 199.6 12.5 2.7 214.8 Other property expenditure (18.8) (5.9) (0.1) (24.8) Write-off/impairment of receivables (0.4) 0.2 - (0.2) Impairm
Slide 71: 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 facilities Green bond Drawn green facilities Green expenditure • £350m green bond 800 • P
Slide 72: Appendix 10 – Debt summary
Appendix 10 – Debt summary Dec 2024 Dec 2023 Maturity profile of fixed rates and hedging Bank facilities drawn £293m £84m £m 0 50 100 150 200 250 300 350 400 450 500 Fixed rates borrowings £1,155m £1,238m 2025 175 75 Fixed rate Hedged Drawn facilities £1,448m £1,322m Unutilised facilities and cash1
Slide 73: Appendix 11 – Debt facilities
Appendix 11 – Debt facilities At 31st Dec 2024 Drawn Undrawn Total Maturity £m £m £m 1.5% convertible bonds 175.0 - 175.0 June 2025 6.5% secured bonds 175.0 - 175.0 March 2026 1.875% green bonds 350.0 - 350.0 November 2031 2.68% private placement notes 55.0 - 55.0 January 2026 3.46% private placemen
Slide 74: Appendix 12 – Net debt
Appendix 12 – Net debt Dec 2024 Dec 2023 £m £m Borrowings – current 194.1 102.9 Borrowings – non-current 1,269.4 1,233.2 Acquired fair value of secured bonds less amortisation (3.4) (5.0) Unamortised discount on unsecured green bonds 1.3 1.5 Equity component of convertible bonds 7.7 7.7 Unwinding of
Slide 75: Valuation
TITLE Valuation Appendices 13. Property return 74 14. Valuation performance by village 75 15. Rental value growth and average rents 76 16. Valuation yields 77 17. Context to yield movement 78 18. Portfolio statistics by village 79 1 Footnote Derwent London plc – Annual Results 2024 73
Slide 76: Appendix 13 – Property return
Appendix 13 – Property return • Derwent London total property return 4.1% • MSCI Central London Offices1 1.3% • Since 2007 cumulative total property return 183% • Cumulative total property return 112% Total property return Cumulative total property return % Index (31 Dec 2007=100) 18 350 Derwent Lon
Slide 77: Appendix 14 – Valuation performance by village
Appendix 14 – Valuation performance by village Valuation Valuation Weighting movement Dec 2024 Dec 2024 20241 £m % % West End Central Fitzrovia 1,712.9 34 0.4 Marylebone 544.0 11 12.4 Victoria 397.8 8 (6.1) Soho/Covent Garden 378.3 8 2.6 Paddington 327.8 6 (1.0) Mayfair 112.3 2 14.5 3,473.1 69 1.8 W
Slide 78: Appendix 15 – Rental value growth and average rents
Appendix 15 – Rental value growth and average rents Rental value growth1 2023 H1 2024 H2 2024 2024 % % % % West End 1.9 1.9 2.4 4.3 City Borders 2.7 1.9 1.7 3.7 Central London 2.1 1.9 2.2 4.1 Provincial 2.7 5.7 6.9 13.0 Underlying 2.1 2.0 2.3 4.3 Average rents – central London offices ‘Topped-up’ Po
Slide 79: 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 4.9 6 City Borders 5.0 5.9 5 Central London 4.3 5.2 Provincial 6.3 6.5 4 EPRA portfolio 4.3 5.2 3 2 2007 2008 2009 2
Slide 80: Appendix 17 – Context to yield movement
Appendix 17 – Context to yield movement • As at 31 Dec 2024 Valuation yields1 % • Derwent London true equivalent yield 5.73% 12 Derwent London true equivalent yield UK 10-year Gilt (+18bp in H1 2024; no change in H2 2024) BBB yield 10 • BBB yield 5.76% (+35bp in 2024) • UK 10-year Gilt yield 4.57% (
Slide 81: 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 82: Portfolio income profile
TITLE Portfolio income profile Appendices 19. Build-up of portfolio ERV 81 20. Available space and projects 82 21. Vacancy rate and lease expiry analysis 83 22. Lease expiry profile and lease length 84 23. Timing of the reversion 85 24. Portfolio summary 86 25. Major tenants 87 26. Rent and tenant b
Slide 83: 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 204.3 Contractual rental uplifts 80 Charlotte Street W1 11.4 1 Soho Place W1 5.5 1-2 Stephen Street W1 4.7 Brunel Building W2 4.3 The White Chapel Building E1 2.6 20 Farringdon Road
Slide 84: 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 2.4 -
Slide 85: Appendix 21 – Vacancy rate and lease expiry analysis
Appendix 21 – Vacancy rate and lease expiry analysis Vacancy rates • Derwent London EPRA vacancy rate1 3.1% at Dec 2024 % 10 Derwent London (by rental value) • 3.2% in Jun 2024; 4.0% in Dec 2023 9 CBRE central London offices (by floorspace) CBRE West End offices (floorspace) 8 • CBRE central London
Slide 86: 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 2025 2026 2027 2028 2029 Total Expiries 7 3 2 12 6 7 7 5 37 Rolling breaks 2 1 - 3 1 - - - 4 Single breaks 3 1 - 4 3 3 3 3 16 Total 12 5 2 19 10 10 10 8 57 Pr
Slide 87: Appendix 23 – Timing of the reversion
Appendix 23 – Timing of the reversion Contracted uplifts and pre-lets: £63.0m Reviews and expiries: £18.3m £m £m 25 10 Pre-let developments Expiries 2.2 Contracted uplifts and pre-lets 9 Reviews 20 8 9.1 7 15 6 7.6 20.3 5 10 0.4 4 12.7 3 1.4 5 5.3 1.4 6.4 2.4 2 2.4 1.8 1.3 1.6 2.0 0 1 1.3 1.5 (0.5)
Slide 88: Appendix 24 – Portfolio summary
Appendix 24 – Portfolio summary Floor area: 0.97m sq ft Rental income: £29.9m WAULT: 5.9 yrs Rent2: £48.02 Future ERV: £49.46 Proforma Core appraisal income for Old Street Pipeline Quarter EC1 51% 18% Potential projects 49% acquisition⁵ Floor area: 0.72m sq ft Floor area: 1.90m sq ft Rental income:
Slide 89: Appendix 25 – Major tenants
Appendix 25 – Major tenants ‘Topped-up’ Passing rent % rent % 01 Public sector1 6.0 7.4 02 Expedia 5.9 7.7 03 Burberry 5.5 6.7 04 Boston Consulting Group 5.1 3.4 05 PIMCO (pre-let) 4.0 - 06 G-Research 3.6 4.7 07 Arup 3.6 2.6 08 Fora 3.0 3.1 09 Apollo 2.9 1.9 10 Paymentsense 2.3 2.1 11 Moelis (pre-le
Slide 90: 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 5% Flexible office providers 5% Business £30-£40 psf 5% services £80+ psf 8% 19% 19% Technology 6% £40-£50 psf 12% Financial 7% 5.36m sq ft Public sector £204.3
Slide 91: Sustainability
TITLE TO BE UPDATED Sustainability Appendices 27. Portfolio EPC profile 90 28. EPC rating progression 91 29. Embodied carbon 92 1 Footnote Derwent London plc – Annual Results 2024 89
Slide 92: Appendix 27 – Portfolio EPC profile
Appendix 27 – Portfolio EPC profile Exempt Project A B C D E 0.3 ERV 11.0 9.9 48.0 17.7 8.2 4.9 2030 compliant: 69.2% 1.1 Floorspace 7.8 9.3 46.6 19.7 8.7 6.8 2030 compliant: 64.8% 0 10 20 30 40 50 60 70 80 90 100 London commercial portfolio (%) Derwent London plc – Annual Results 2024 90
Slide 93: Appendix 28 – EPC rating progression
Appendix 28 – EPC rating progression1 London commercial portfolio by ERV (%) 100 99.9 100.0 100.0 100.0 Dec 2021 Dec 2022 Dec 2023 Dec 2024 90 87.5 86.9 85.7 80 78.9 70 69.2 68.4 65.3 60 61.0 50 40 30 20 10 0 2023 compliant (A to E) 2027 compliant (A to C) 2030 compliant (A to B) 1 London commercial
Slide 94: 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 Scottish Land, Glasgow The Featherstone Bui
Slide 95: London office market
TITLE London office market Appendices 30. Take-up 94 31. Take-up by business sector 95 32. Take-up by type 96 33. Under offer and active demand 97 34. Vacancy rates 98 35. Availability by location 99 36. Supply 100 37. New construction starts 101 38. Prime office rents 102 39. Investment market 103
Slide 96: Appendix 30 – Take-up
Appendix 30 – Take-up Market statistics Office take-up Floorspace (million sq ft) 20 • Central London Central London 18 • 11.3m sq ft of take-up in 2024 16 • 3.9% increase on 2023 14 Average 12 • 7.8% below the LTA of 12.2m sq ft 10 • 4.8m sq ft in H1, 6.5m sq ft in H2 8 6 • West End 4 • 3.5m sq ft
Slide 97: Appendix 31 – Take-up by business sector
Appendix 31 – Take-up by business sector Central London take-up by business sector (%) 100 Tech, media 90 & telecoms Public sector 80 Professional 70 Manufacturing, 60 industrial & energy Insurance 50 Consumer services & leisure 40 Business services 30 20 Banking & finance 10 0 2006 2008 2010 2012 2
Slide 98: Appendix 32 – Take-up by type
Appendix 32 – Take-up by type Floorspace (million sq ft) 18 Pre-let New completed 16 Secondhand modern Secondhand other 14 Average 12 10 8 6 4 2 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: CBRE Derwent London plc – Annual Results 2024 96
Slide 99: Appendix 33 – Under offer and active demand
Appendix 33 – Under offer and active demand Space under offer Floorspace (million sq ft) Space under offer 5.0 West End City Docklands Midtown Southbank • 2.6m sq ft under offer in central London 4.5 • Unchanged from Q4 2023 but down from 4.1m sq ft 4.0 in Q2 2024 3.5 Average • 24% below the 10-year
Slide 100: Appendix 34 – Vacancy rates
Appendix 34 – Vacancy rates % 16 West End City 14 Central London 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 – Annual Results 2024 98
Slide 101: Appendix 35 – Availability by location
Appendix 35 – Availability by location Floorspace (million sq ft) % 27 West End Tenant controlled % 90 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 2024 0 Source: CBRE Derwen
Slide 102: Appendix 36 – Supply
Appendix 36 – Supply Existing supply Office development pipeline Floorspace (million sq ft) Vacancy rate (%) • Central London vacancy rate 7.5% at 31 Dec 2024 12 Under construction available 12 Central London Under construction let/under offer • Down from 8.4% in Q2 2024 and 8.6% at Q4 2023 Complete
Slide 103: Appendix 37 – New construction starts
Appendix 37 – 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 – Annual Results 2024 101
Slide 104: Appendix 38 – Prime office rents
Appendix 38 – Prime office rents £ psf 180 Q2 2016 (EU referendum) Q4 2019 (pre-pandemic) Q4 2024 160 140 160 120 120 115 110 110 102.50 100 92.50 90 90 90 90 87.50 85 85 82.50 82.50 82.50 82.50 80 80 77.50 77.50 73 70 67.50 60 40 20 0 Mayfair Soho North of North of Midtown Victoria Paddington City
Slide 105: Appendix 39 – Investment market
Appendix 39 – Investment market Central London office investment • £4.9bn of investment transactions in 2024 £bn 22 H1 H2 • Lowest annual total since 1999 20 18 • 7% lower than 2023 16 • 57% below the LTA 14 Annual average 12 • 60% of transactions (by value) in H2 10 8 Half-year average 6 4 2 0 2000
Slide 106: Appendix 40 – Investment demand and yields
Appendix 40 – Investment demand and yields Investment demand by source Central London office yields Prime office yield (%) 7.0 West End City Middle 6.5 East 14% 6.0 UK & 5.5 Europe 33% 5.0 SE Asia 15% 4.5 £20.5bn 4.0 3.5 3.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 North Amer
Slide 107: Developments & refurbishments
TITLE Developments & refurbishments Appendices 41. Developments on site: profit on cost 106 42. Project summary: current projects 107 43. Project summary: future projects 108 44. Portfolio map 109 1 Footnote Derwent London plc – Annual Results 2024 105
Slide 108: Appendix 41 – Developments on site: profit on cost
Appendix 41 – Developments on site: profit on cost Summary £m End value 853 Less: Total cost1 742 Project surplus 111 Less: Booked to Dec 24 72 Surplus to come 39 Profit on total cost 15% Yield on cost2 6.1% Yield on completion3 6.9% Completion H1 2025 H2 2025 Sensitivity5 – project surplus (£m), pr
Slide 109: Appendix 42 – Project summary: current projects
Appendix 42 – Project summary: current projects Current Pre Total Current net scheme Proposed 2025 2026 2027+ 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 major developments 25 Baker Street W11 - 143 298
Slide 110: Appendix 43 – Project summary: future projects
Appendix 43 – 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 50 Baker Street W1 4.1 122 240 2026 4.1 1221 240 Under appraisal2 Middlesex House W1 3.2 51 50 2025 Excludes lower ground o
Slide 111: Appendix 44 – Portfolio map
Caledonian Road Camden Road Appendix 44 – Portfolio map Essex Road London Fields Camden Town Primrose Hill Carnegie St Islington Wharfdale Rd Angel Kings Cross Albany Regent’s Park S t Pancras Hoxton St International Th Maida Vale am es lin k Euston Old Street Up pe rW ob Old Street Clerkenwell urn
Slide 112: 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 113: 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