12th Aug 2025 10:03
(Alliance News) - Derwent London PLC on Tuesday said the "fundamentals of the letting market continue to strengthen", as it upped its interim dividend and backed its full-year rental guidance.
Derwent shares were 4.1% lower at 1,840.00 on Tuesday morning in London. The stock is down 20% over the past 12 months.
The London office-focused real estate investment trust said EPRA net tangible assets per share was 3,187 pence on June 30, up 1.2% from 3,149p on December 31.
The trust swung to a pretax profit of GBP94.0 million in the first half of 2025, up from a GBP27.2 million loss a year before.
Driving this was a swing to a revaluation surplus on wholly-owned investment properties of GBP38.2 million, a "significant improvement" on the GBP87.2 million deficit realised a year earlier, Derwent said.
Gross rental income edged 1.5% higher to GBP109.1 million from GBP107.5 million, with gross property income improving 0.8% to GBP141.0 million from GBP139.9 million.
Derwent London said rents are continuing to grow across central London office markets, with this helping to support returns on both developments and refurbishments.
The trust reported a total property return for the half-year of 3.1%, outperforming the MSCI Central London Office Index's 1.9%.
The trust upped its interim dividend by 2.0% to 25.5p from 25.0p.
Derwent reported a 1.1% decline in net rental income to GBP94.0 million from GBP95.0 million, attributing the movement to the securing of vacant possession for future projects. This decline was offset by a 12% reduction in administrative expenses to GBP17.5 million from GBP19.8 million.
Net debt rose 13% to GBP1.55 billion from GBP1.37 billion a year earlier, which Derwent credited to "further investment in the portfolio".
Looking ahead, Derwent backed its estimated rental value guidance for the full-year of 3% to 6% on average across its portfolio, "with further rental increases expected to follow".
"The fundamentals of the letting market continue to strengthen, with demand well above the long-term average and a significant supply shortage at the top end," said Chief Executive Paul Williams.
"Central London office rents are growing and values continue to recover, reflected in the improving investment market...Looking forward, our total accounting return outlook is the strongest it has been for several years with yields past their peak, and we reiterate our 2025 rental guidance."
By Christopher Ward, Alliance News reporter
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