Results for the Year Ended 31 December 2025

Paul Williams, Chief Executive of Derwent London, said:

"We had an active 2025, with new lettings of £11.3m signed at 10% ahead of ERV and a record year of asset management activity. 2026 has started with strong momentum. We have completed £1.5m of new leases and are under offer on £14.4m of rent, including all of the offices at Network W1, with negotiations ongoing on an additional £4.4m across the portfolio. We have also exchanged contracts on disposals totalling £33m, with a further c.£240m under offer.

The investment market recovery has continued into 2026, with liquidity improving, particularly for larger lot sizes, and occupational dynamics remain strong. London is the HQ capital of Europe, attracting significantly more investment than any other European city and driving demand for offices against the current shortage of new space. This supports expectations for sustained rental growth, and our portfolio ERV guidance has been increased to 4% to 7% for 2026.

In 2025, our Total Accounting Return (TAR) increased to 5.0%. Looking ahead, we are targeting £1bn of disposals over the next three years and expect our TAR to reach 7% to 10% per annum as we redeploy proceeds into a range of accretive opportunities. We are forecasting 25% to 30% growth in EPRA earnings per share by 2030, driven mainly by the capture of growing reversion and the leasing of our developments."

Key financial highlights

1 Explanations of how EPRA figures are derived from IFRS are shown in note 26.

Operational activity

· £11.3m of new leases, 9.9% above ERV in 2025

· £1.5m of new leases YTD 2026, with £14.4m under offer (including all of the offices at Network) and £4.4m in negotiations

· £58.9m of asset management, 6.4% uplift in rents; a record year of activity

· £216.1m of disposals; £33m exchanged YTD 2026 with a further c.£240m under offer

· 25 Baker Street W1 completed and offices fully pre-let, 11.3% ungeared IRR

Financial highlights

· Increase in total accounting return to 5.0%, with NTA up 2.4% to 3,225p

· EPRA EPS of 98.4p after the effect of mid-year refinancing, but excludes 3.7p of trading profits

Outlook

· 2026 portfolio ERV growth of 4% to 7%

· Target acceleration in disposals to £1bn over next three years

· Near-term reduction in EPRA earnings until Network income commences, with growth anticipated in H2 2026 and into 2027; 25% to 30% growth expected by 2030

· Total accounting return outlook of 7% to 10% over the coming years

Webcast and conference call

There will be a live webcast together with a conference call for investors and analysts at 10.00 GMT today.

To participate in the call or to access the webcast, please register at www.derwentlondon.com

A recording of the webcast will also be made available following the event on www.derwentlondon.com

For further information, please contact:

We are targeting an acceleration in disposals now the investment market is improving to ensure the alignment of our portfolio to evolving market trends and to provide capital for accretive reinvestment. The Group's focus is on delivering sustainable long-term returns for shareholders through active portfolio management and development of high quality, design-led offices in the most connected and vibrant parts of London.

Development is a core part of our business model which has contributed to consistent outperformance of our benchmark, the MSCI Central London Office Index. At a time when the sector's cost of capital is elevated, however, we recognise the importance of balancing investment in future growth with actions that enhance returns and shareholder value over the near-term. While maintaining an appropriate level of leverage, disposal proceeds will be selectively reinvested into a combination of development projects, acquisitions where the strategic and financial rationale is clear, and share buybacks.

Succession planning has been, and remains, an important focus throughout the year. Shortly after year-end, Chief Executive Paul Williams announced his decision to retire. He will remain in his role until his successor is in place. Paul has made a substantial contribution to the business over the last 38 years, and there will be time to celebrate his many successes. A comprehensive recruitment process is underway.

Executive Director Nigel George had previously announced his decision to retire. Nigel steps down from the Board on 31 March 2026 and will continue as an employee for between 12 and 24 months, supporting a number of key projects. On behalf of the Board, I would like to thank Nigel for his dedication and contribution to Derwent London over many years.

Together with Damian Wisniewski, Chief Financial Officer, Emily Prideaux, Executive Director, and the senior management team, the Board is confident in the depth of experience and is fully focused on delivering the Group's strategy.

The Board is pleased to confirm a 0.5p per share increase in the final dividend to 56.0p, taking the full year dividend to 81.5p, a 1.2% uplift. This is consistent with our dividend policy and represents the 18th consecutive year of growth. Dividend cover remains healthy at c.1.2 times based on EPRA earnings. The final dividend will be paid on 29 May 2026 to shareholders on the register at 24 April 2026.

The London office market continued to strengthen in 2025, and momentum has accelerated into 2026. The business is well-positioned to benefit from this improvement. We have strong conviction in the medium-term outlook for earnings growth and total accounting return.

Portfolio activity - positive momentum

The London office sector faces a significant shortage of supply, particularly for well-located, good quality buildings and demand remains strong. Rents for these buildings have continued to grow and yields have stabilised. In addition, investment liquidity has been improving, particularly for larger lot sizes, supported by increasingly favourable credit conditions.

Our capital values increased by 1.7% overall in 2025, led by the West End, and developments again made a significant contribution. We also continued to capture the growing reversion with new leases signed nearly 10% ahead of ERV.

New leases of £11.3m completed in 2025, with open-market lettings agreed 9.9% ahead of December 2024 ERV. This includes £2.7m of Flex lettings, where demand remains strong. Operational momentum has stepped up into 2026. We have completed £1.5m of new leases and are under offer on £14.4m of rent, which includes all of the offices at Network W1. In addition, we are in negotiations on a further £4.4m across the portfolio.

Asset management activity on £58.9m of income is almost 30% higher than the previous peak in 2019. This included accretive major rent reviews at Brunel Building W2 and 80 Charlotte Street W1, reflecting strong rental growth, which we expect to continue, since the buildings completed. We also completed several successful lease regears with longstanding occupiers such as Adobe at White Collar Factory EC1 and Burberry at Horseferry House SW1. These transactions are evidence of the continued strong demand for our buildings and the quality of our occupier relationships.

We secured vacant possession at several properties ahead of project commencement, including Holden House W1, Middlesex House W1 and Greencoat & Gordon House SW1. Excluding these, our EPRA vacancy rate increased to 4.1% but remains low.

Overall disposal proceeds increased in 2025 to £216.1m. This included the sales of 4 & 10 Pentonville Road N1 and Francis House SW1 for a combined £80.1m, as well as £135.9m from trading disposals at 25 Baker Street W1.

With liquidity in the investment market improving, we are increasing the pace of disposals with a target of £1bn over the next three years. In 2026, we have exchanged contracts for the sale of 80-85 Tottenham Court Road W1 for £32.6m and are under offer on a further c.£240m.

Property valuations and financial performance - ERV upgrade

Development valuations were up 7.6% at 25 Baker Street W1, Network W1 and Holden House W1, while the standing portfolio delivered an uplift of 0.8%. ERV growth in the year of 4.0% was in line with our guidance. Our 2026 outlook is increased to 4% to 7%, from 3% to 6% in 2025.

The portfolio equivalent yield was stable at 5.71% (2024: 5.73%) but, excluding 25 Baker Street, it increased by 5bp. After allowing for additional future capex into the portfolio, underlying capital values rose by an overall 1.7% in 2025.

Our total property return of 5.5% outperformed the MSCI Central London Office Quarterly Index by 69bp. EPRA NTA was up 2.4% to 3,225p per share resulting in a total accounting return (TAR) of 5.0%. This is an increase from 3.2% in 2024, following the inflection in values in mid-year.

Earnings form a key component of our TAR. Positive rental performance and cost efficiencies were offset by increased interest costs, following the refinancing at higher rates in the middle of the year and slightly higher average net debt levels. As a result, and in line with guidance, EPRA earnings reduced to 98.4p per share from 106.5p in 2024. Adjusted earnings, which include trading profits of £4.2m associated with 25 Baker Street, were 102.1p per share.

Our approach to capital allocation

Our business model is underpinned by capital recycling. Property disposals are currently our primary source of incremental funding and with liquidity improving, we are targeting an acceleration in sales over the next three years. Properties will be considered for sale where we believe the capital can be deployed more accretively, or where our asset management plans are largely complete. In addition, we will also look to crystallise development profits.

As the cost of capital increased across the sector during 2025, we have reviewed our approach to capital allocation. Out of the £1bn of target disposals, we have earmarked c.£500m for future development capex and, after taking account of the acquisition of Old Street Quarter EC1 for £239m in late-2027, this leaves a surplus of c.£250m for redeployment into other opportunities. These include acquisitions where the rationale is compelling and potential share buybacks which are an important tool to enhance both NAV and earnings per share over the short-term.

Development has been and remains an important driver of value creation and earnings accretion, having made a positive contribution to total accounting return every year since 2010. By investing in locations with strong fundamentals, we are significantly outperforming our appraisals, and our recent projects are good examples of this. However, we have always taken a disciplined approach and there have been several examples of projects we have chosen to sell rather than deliver ourselves.

Project pipeline

In 2025, property yields were stable and ERV growth outperformed build cost inflation. We started demolition works at Holden House W1 (133,500 sq ft redevelopment) last year where future capex is £135m. Greencoat & Gordon House SW1 (107,800 sq ft comprehensive refurbishment) and 50 Baker Street W1 (236,000 sq ft redevelopment) are proposed to commence later this year. Our appraisals show attractive yields on completion and minimum 10% ungeared IRRs, with rental growth expected to increase these further given the strength of the respective sub-markets.

Old Street Quarter EC1 represents a significant long-term regeneration opportunity. During the year we formed a strategic partnership with Related Argent to progress a best-in-class mixed-use, living-led project. The masterplan will be structured to provide flexibility through to delivery, including potential joint ventures, forward funding and plot sales. We are working towards a planning application later this year.

Strong London market

London maintains its status as Europe's business capital, and we are optimistic about the office market outlook, which is underpinned by strong fundamentals. We are entering a period of very low new supply while demand remains robust, sector diverse and increasingly focused on best-in-class space. This imbalance supports rental growth and continued improvement in investment activity.

One of London's key economic strengths is its diverse office demand and ability to attract both blue-chip corporates and high growth innovators, supported by leading levels of venture capital investment, including a top three global position for AI venture capital and Europe's largest concentration of generative AI businesses. While we recognise the ongoing debate around AI, we believe London's depth of talent, culture of innovation and global connectivity will allow the city to harness AI as a net positive for long term occupational demand and economic growth.

Confident outlook and guidance

Our underlying valuation ERV has grown by around 8% over the last two years and our guidance for 2026 is up from 2025 to 4% to 7%.

Rental growth is expected to continue to exceed cost inflation, supported by income from recently completed projects. We anticipate a near-term reduction in EPRA earnings, followed by growth in H2 2026 and into 2027.

Looking ahead, we forecast 25% to 30% growth in EPRA earnings by 2030 from 2025 levels. This will be driven by project completions, capture of rental reversion and cost efficiencies as well as disciplined capital allocation.

Assuming investment yields remain stable, we anticipate delivering a total accounting return of 7% to 10% per annum over the coming years.

Investment market

Transactional activity in central London strengthened markedly during 2025, with investment volumes rising to £7.1bn, a 46% increase year-on-year, with improved liquidity evident across core City and West End locations.

The average lot size also increased materially, with 20 transactions in excess of £100m, almost double the level seen in 2024. This re-emergence of demand for larger assets has improved pricing transparency, providing additional evidence across different sub-markets. Prime assets in the West End continue to command sharper pricing, while good quality, income-producing buildings outside the core are also attracting interest.

Investor sentiment was more cautious earlier in the year but improved towards the year end. The absence of material policy changes affecting commercial property in the Autumn Budget helped restore confidence, while ongoing geopolitical uncertainty has further reinforced London's position as one of the world's leading locations for long-term capital. Against this backdrop, a broader range of investors have been active in the market.

Looking ahead, more favourable credit market conditions and continued expectations of rental growth, combined with improving liquidity and clearer pricing, are expected to support investment activity through 2026. Demand remains focused on core-plus and value-add opportunities, where strong occupational fundamentals and supply-demand imbalances offer the potential for attractive returns.

While appetite for core income remains more selective, the gap in pricing between core and higher-returning strategies continues to narrow. Against this backdrop, conditions are increasingly supportive for disciplined capital recycling and selective value realisation.

See Appendix 2 for supporting graphs and tables

The Group's investment portfolio was valued at £5.1bn as at 31 December 2025, up from £5.0bn at the end of 2024. Including development properties, the underlying portfolio valuation increased by 1.7% with a surplus for the year of £67.5m which, after accounting adjustments of £10.8m, produced an overall increase of £56.7m.

Portfolio ERV growth, on an EPRA basis, was 4.0% over the year, in line with guidance. Following a period where property yields increased significantly, the portfolio's true equivalent yield, on an EPRA basis, was stable in 2025 at 5.71% (31 December 2024: 5.73%). However, excluding the impact of 25 Baker Street W1, which completed in H2, the equivalent yield increased marginally by 5bp. The EPRA initial yield was 4.0% (December 2024: 4.3%) which, after allowing for the expiry of rent frees and contractual uplifts, rises to 5.1% on a 'topped-up' basis (December 2024: 5.2%).

Our central London properties, representing 98% of the portfolio, were up 1.5%. Values in the West End increased 2.2%, outperforming the City Borders which declined slightly, at -0.9%. While the West End remains our strongest market, occupational demand is broadening across sub-markets, as cost and value become more important. The balance of the portfolio, our Scottish holdings, was up 13.1% following project completions and leasing activity.

We were on-site at three West End developments during the year. At 25 Baker Street W1, the offices and three of the retail units were pre-let with a further two retail units leased post-completion in Q3. At Network W1, the offices are now under offer ahead of project completion which is expected imminently. Remaining capital expenditure to complete these two developments totals £19m. At Holden House W1, demolition commenced in Q3. These three properties were valued at £709.1m as at 31 December 2025, representing 14% of the portfolio's valuation (December 2024: 12%). Adjusting for capital expenditure during the year, their values increased by 7.6%. Excluding these projects, the underlying portfolio valuation increased 0.8%.

The portfolio valuation uplift of 1.7% outperformed both the MSCI Central London Office Quarterly Index, which was up 1.1%, and the UK All Property Quarterly Index, which increased by 1.0%.

The stabilisation in valuation yields across the London office market contributed to a 5.5% total property return for our portfolio over the year. This compares to 4.8% for the MSCI Central London Offices Quarterly Index and 6.0% for the UK All Property Index.

Portfolio valuation performance

1 Underlying - properties held throughout the year. 2 On EPRA basis. 3 Three on-site developments in 2025: 25 Baker Street W1 (completed August 2025), Network W1 (completing imminently) and Holden House W1.

Portfolio reversion

Our contracted annualised cash rent roll as of 31 December 2025 was £194.8m, with £53.5m of contracted uplifts, primarily from rent-free expiries and fixed uplifts. Under IFRS, these contracted uplifts are straight-lined in the income statement. Our annualised accounting rent roll was £210.4m. With a headline ERV of £335.3m, the components of our £87.0m valuation reversionary potential are:

· Major projects: £40.2m of project ERV on a headline basis, or £32.2m on an accounting basis. This comprises the two on-site developments at Network W1 (100% of office space under offer) and Holden House W1 with an ERV of £28.9m. In addition to the developments, there are two large West End refurbishments at Greencoat & Gordon House SW1 and Middlesex House W1 with a combined ERV of £11.3m.

· Refurbishment projects: £17.4m of potential headline income from smaller projects (£13.9m accounting basis). These include rolling refurbishments at 1-2 Stephen Street W1 and Tea Building E1, as well as 1 Page Street SW1 where we are exploring alternative uses.

· EPRA vacancy: £11.2m of 'available to let' space (£8.9m accounting basis). This includes recently refurbished space at 1 Oliver's Yard EC1, 1-2 Stephen Street W1 and 90 Whitfield Street W1. Overall, this equates to a vacancy rate of 4.1%.

· Reviews and expiries: £18.2m (£15.9m accounting basis) is from future reviews (£6.2m) and expiries (£12.0m, of which £6.3m relates to near-term project commencements, mainly at 50 Baker Street W1 and 20 Farringdon Road EC1), less future fixed uplifts above the current ERV.

See Appendix 3 for supporting graphs

Leasing

In 2025, we completed £11.3m of new lettings across 233,400 sq ft, comprising 54 transactions, with open-market rents agreed 9.9% ahead of December 2024 ERV. Demand was resilient across the portfolio, broadly split between the West End and City Borders, and across HQ and Flex. Excluding pre-lets, leasing volumes for the year were in line with the Group's long-term average, demonstrating the underlying consistency of demand for the portfolio through the cycle.

Since the start of 2026, operational momentum has stepped up. We have completed £1.5m of new leases and are under offer on £14.4m of rent, which includes all of the offices at Network W1. In addition, we are in negotiations on a further £4.4m across the portfolio.

Leasing activity in 2025 to date

1 Weighted average unexpired lease term (to break). 2 Includes short-term lettings at properties earmarked for redevelopment. 3 'Furnished + Flexible'

Principal lettings in 2025

1 Space leased on a 'Furnished + Flexible' basis

Asset management activity

We had a record year of asset management in 2025 with £58.9m of completed transactions, nearly 30% above the previous strongest year (2019). The Group's main focus has been to capture reversion, extend income and align lease profiles with asset strategies and future development plans. On average, the 74 transactions delivered a 6.4% uplift in rent.

This exceptional level of activity was driven by early and proactive engagement with occupiers. Our relationship-led approach enables us to structure transactions that balance flexibility with longer-term income visibility, while mitigating void risk and capital expenditure.

Rent reviews totalled £37.4m and we saw strong reversion captured with reviews settled on average 7.3% ahead of the previous rent.

Key transactions include:

· Horseferry House SW1: a lease regear was completed with Burberry, extending the lease term from 2038 to 2043 (without breaks) and increasing the unexpired term to 17.6 years. The 2033 open market rent review and 2038 expiry were replaced with new five-yearly fixed uplifts, improving income visibility and providing greater certainty over future cash flows.

· White Collar Factory EC1: a major lease regear with Adobe, extending the lease term and increasing their total space by 25% to 67, 000 sq ft. The transaction aligned Adobe's leases to expire in 2038, with a tenant-only break in 2033, improving the income profile of the building, increasing the WAULT to break to 8.3 years. This was Adobe's fourth expansion since they first took occupation in 2017.

· 80 Charlotte Street W1: BCG's rent review across levels 4-8 (163,700 sq ft) secured an uplift of 8.4% against the previous rent and a 5.1% premium compared to the December 2024 ERV.

· Brunel Building W2: 2025 saw the completion of the first round of rent reviews since the building completed. The average uplift across all occupiers was 5.1% compared to the headline rent.

Asset management

1 Headline rent, shown prior to lease incentives

The weighted average unexpired lease term (WAULT) to break across the portfolio is 6.0 years and the 'topped-up' WAULT (adjusted for pre-lets and rent-free periods) is 7.0 years.

Portfolio vacancy

The EPRA vacancy rate increased by 100bp through 2025 to 4.1% (December 2024: 3.1%), with an ERV of £11.2m. In addition, there is a further £57.6m of rent classified as project space, split £40.2m at major projects and £17.4m at smaller refurbishments. In total, 71% of breaks/expiries were retained or re-let prior to the end of the year, excluding space taken back for projects and disposals. This is below the Group's 10-year average of 83% because units with a passing rent of £3.3m were vacated during Q4, leaving insufficient time to complete our asset improvement plans prior to year-end.

See Appendix 4 for supporting tables

We successfully completed our major development at 25 Baker Street W1 in H2 2025 and Network W1 is due to complete imminently, delivering high quality buildings into well-connected central London locations. At Holden House W1, which began in August 2025, good progress is being made with demolition, and strip-out works have just commenced at Greencoat & Gordon House SW1. Preparatory work continues for 50 Baker Street W1 with a proposed start in 2026.

Looking forward, Holden House, Greencoat & Gordon House and Middlesex House are expected to deliver a combined ungeared IRR of >10% and a yield on completion of >6.5%. At 50 Baker Street, we forecast an ungeared IRR of >12%. Located in strong occupier sub-markets, we are confident that we will outperform appraisal rents in the increasingly supply-constrained market, driving an increase in profitability.

The timing and phasing of future commitments will be considered within the context of our capital allocation framework, ensuring disciplined and flexible deployment of capital.

Completed/near completion projects - 439,200 sq ft

· 25 Baker Street W1 (298,000 sq ft) - office-led scheme in Marylebone: the office element 100% pre-let. Physical completion was achieved on programme; practical completion was slightly delayed to August 2025 due to timing of sign off by the Building Safety Regulator. With fit-out works progressing the first tenants are now in occupation, following lease commencements from September 2025. The scheme made a positive contribution to earnings in 2025. In addition, 24 of the 41 private residential units have been sold. Completion marks an important milestone in realising value from this major development, with a profit on cost of 21%, yield on completion of 7.5% and ungeared IRR of 11.3%.

· Network W1 (141,200 sq ft) - office-led scheme in Fitzrovia: completion is due imminently. All of the office space is under offer.

Major projects - 291,300 sq ft

· Holden House W1 (on-site H2 2025; 133,500 sq ft) - office-led scheme in Fitzrovia: good progress is being made on demolition works at this retained façade development. Kier has been appointed under a pre-construction services agreement for the main construction works. Located opposite the Dean Street Elizabeth line station, this scheme is well-located to benefit from current occupational trends and we are confident in its leasing prospects. Completion is expected in H2 2028.

· Middlesex House W1 (on-site H1 2026; 50,000 sq ft) - office-led scheme in Fitzrovia: early strip-out works underway and the main contractor has been appointed, with construction works commencing in H1 2026. The scheme, where we are appraising a managed solution as part of the repositioned product, is targeting completion in February 2027.

· Greencoat & Gordon House SW1 (proposed H1 2026 start; 107,800 sq ft) - comprehensive refurbishment: vacant possession is imminent and works are proposed to commence on site in H1 2026. Following successful leasing campaigns at the adjacent 6-8 Greencoat Place and Francis House, as well as the lack of competing heritage supply in Victoria, we are confident that there will be strong occupier demand. Completion is anticipated in H2 2027.

50 Baker Street W1 - 236,000 sq ft (proposed 2026 start)

· Office-led scheme in Marylebone: preparatory work continues for this high quality redevelopment located adjacent to 25 Baker Street, which is already reversionary. Detailed designs are progressing, a new long headlease was agreed in 2025 with The Portman Estate, the freeholder, and contractors have been engaged, as the scheme advances towards proposed commencement in the middle of 2026. Marylebone is one of London's strongest sub-markets and there is demonstrable demand for large floorplates which are in short supply in the West End.

Schemes

1 As at 31 December 2025. 2 Comprising book value at commencement, capex, fees and notional interest on land, voids and other costs. 3 Embodied carbon intensity estimate as at stage 4. 4 On main commercial building.

Future development projects - Four schemes totalling c.1.2m sq ft

The Group's medium to longer-term pipeline extends to c.1.2m sq ft across four major schemes. We are actively exploring alternative, including living-led uses, to maximise long-term value potential at several of these properties. Where appropriate, we will consider working with specialist partners.

· 20 Farringdon Road EC1 (167,000 sq ft) - potential to commence in H1 2027: an office-led repositioning and comprehensive refurbishment adjacent to Farringdon Elizabeth line station.

· Blue Star House SW9 (86,100 sq ft) - potential to commence in 2027: working with living specialist Astir, resolution to grant planning consent was obtained in H2 2025 for a hotel-led redevelopment with supporting workspace and public realm, designed to extend the existing structure and optimise the site's potential.

· Old Street Quarter EC1 (750,000+ sq ft) - potential to commence from 2028. The acquisition of this 2.5-acre island site is scheduled to complete from late 2027 (for £239m), conditional on delivery by the vendor of the new eye hospital at St Pancras and subsequent vacant possession. A strategic partnership with Related Argent has been formed to masterplan a flexible mixed-use, living-led campus-style redevelopment, targeting an increase in floor area of approximately 80%, which can be delivered in phases. A planning application is targeted for H1 2027.

· 230 Blackfriars Road SE1 (200,000+ sq ft) - potential to commence from 2030. Early feasibility work indicates capacity for a substantial mixed-use redevelopment of the existing 1970s building. There is potential to more than triple the current floor area, subject to regearing of the headlease.

Refurbishments

Alongside major projects, phased or rolling refurbishment is an important part of our approach to ensuring our buildings remain competitive as occupier requirements evolve. These projects are designed to deliver attractive rental uplifts, enhanced amenity and improved EPC ratings. Annual capital expenditure on rolling refurbishments is typically between£25-50m.

· Works completed at 1 Oliver's Yard EC1 (31,000 sq ft) in 2025, with upgrades to the courtyard, reception, workspace and amenities. The refurbishment has significantly improved product quality and rental performance, with space previously achieving £60 psf now targeting an ERV in excess of £70 psf. Further works on 25,000 sq ft are expected in 2026.

· Works continue at 1-2 Stephen Street W1 (27,200 sq ft), where the rolling refurbishment programme has driven a step-change in rental performance, with ERVs on this space ranging from £87.50 to £97.50 psf, compared with previous passing rents of c.£73 psf.

Lochfauld solar park, Scotland

Lochfauld solar park is a c.100-acre, 18.4 MW solar development forming part of the Group's Scottish portfolio and is an important component of our Net Zero Carbon Pathway. Once operational, the park is expected to generate c.40% of the London managed portfolio's electricity requirements, materially reducing reliance on external supplies.

During 2025, the majority of the construction and installation phases were completed. All solar panels have been installed, together with the supporting frames, cabling and the on-site electrical systems required for grid connection. Associated site infrastructure, including access roads, drainage and security systems, has also been completed. With these elements in place, power-on and energisation is expected in H1 2026.

Based on the current development appraisal, the project is expected to deliver an attractive yield on cost in excess of 9%, with net annual income of c.£1.5m after operating costs. The development delivers both a compelling financial return and long-term strategic value as part of the Group's sustainability and decarbonisation objectives.

DISPOSALS AND ACQUISITIONS

Disposals

Disposals in 2025 totalled £216.1m. The principal transactions in the year were:

· 4 & 10 Pentonville Road N1: sold with vacant possession for £26.0m, broadly in line with book value;

· 25 Baker Street W1 - Residential: completion on the sale of 24 of the 41 private residential units, plus the affordable residential for a total of £118.1m;

· 25 Baker Street W1 - Retail: as part of our strategic collaboration with The Portman Estate, we have completed works at the Loxton Walk retail, with £17.8m of proceeds received in 2025; and

· Francis House SW1: sold for £54.1m (after agreed deductions), broadly in line with the December 2024 book value, reflecting a net initial yield of 4.9%.

Since the start of 2026, we have exchanged contracts for the disposal of 80-85 Tottenham Court Road W1 for consideration of £32.6m, a 6.5% premium to the December 2025 book value. The property is being sold with vacant possession and completion is scheduled for June 2026. In addition, we are under offer on a further c.£240m of disposals.

Acquisitions

There were only £6.0m of acquisitions in 2025, principally the completion of the headlease regear at Morelands EC1 along with the simultaneous acquisition of the adjacent 74 Goswell Road EC1 for a combined £5.0m (before costs).

9% reduction in energy intensity

Following an 8% reduction in energy intensity (EUI) in 2024, we have delivered a further 9% reduction to 125 kWh/sqm in 2025 (2024: 137 kWh/sqm). Total energy consumption was also down 6% to 48.7m kWh (2024: 51.8m kWh), with gas 22% lower and electricity down 1%. Gas has reduced from 37% of total energy in 2020 to 21% in 2025 following portfolio decarbonisation activity and delivery of new all-electric developments. There are several drivers behind the reduction in energy consumption, including the full year benefit of initiatives implemented in 2024:

· installation of air source heat pumps at 1-2 Stephen Street W1 last year and Charlotte Building W1 in 2025, as well as removal of gas at 9-10 Rathbone Place W1;

· ongoing occupier engagement, with a focus on reducing out-of-hours usage; and

· continued roll-out of shorter plant run-times.

We published an update to our Net Zero Carbon Pathway in December. Our CRREM-aligned 2030 energy intensity target of 123 kWh/sqm is equivalent to a 26% reduction compared to our 2019 baseline of 166 kWh/sqm.

The Government's 2025 carbon conversion factors were released in early July. Electricity factors are 15% lower compared to 2024 as further progress has been made decarbonising the UK's electricity grid. Applying these factors to our 2025 consumption, our location-based operational GHG emissions (Scopes 1, 2 and 3, excluding embodied carbon) reduced by 16% to 10,434 tCO2e compared to 2024.

72% of our portfolio rated EPC A or B

To ensure compliance with evolving EPC legislation, we have a clear programme of upgrade works phased over the coming years. With 72% of our portfolio already rated EPC A or B (including 25 Baker Street W1 and Network W1) and a further 16% rated EPC C, we remain very well placed ahead of potential legislation changes in future.

Panel installation complete at Scottish solar park

See 'Developments and refurbishments' section for detailed update.

Circular economy embedded across portfolio

We have made good progress on the circular economy, in collaboration with Material Index, to optimise re-use across our portfolio, whilst brokering or donating opportunities to the wider circular economy market. Since we formalised our circular economy strategy, c.500 tonnes of material have been donated or brokered. To date, our rolling refurbishments have achieved an average 44% retention and on-site re-use rate.

A focus on low carbon concrete

In June 2024, we led the formation of a UK developer-led, industry wide initiative, the Accelerating Concrete-Decarbonisation Group (AC-DG), to accelerate the adoption and commercialisation of market-ready, viable low carbon concrete mixes. Significant progress has been made to date, with prototyping works due to begin in 2026 on several innovative low carbon mixes. Over the medium-term, these have the potential to reduce concrete carbon emissions by up to 70%.

In addition, Derwent London is a founding signatory of the Advanced Market Commitment (AMC), a government funded initiative aligned with the AC-DG. The aim of the AMC is to signal to the supply chain that low carbon concrete is a priority for industry. Derwent London has committed to procure at least 5% of concrete in line with AMC requirements.

Financial highlights

Introduction

Derwent London produced a solid financial performance in 2025 amid an increasingly encouraging backdrop for the London office sector. Our total accounting return for the year rose to 5.0% helped by a small rise in property income and portfolio valuations up by 1.7%. IFRS earnings per share increased by 39% to 143.5p and administrative expenses were reduced by 4.9% compared to 2024. Our development projects continued to add value and, looking ahead, we expect development returns and the subsequent growth from recently-completed schemes to continue to outperform. An increased level of disposals in 2025 of £216.1m included £135.9m of trading sales, helping boost operating cashflow strongly. It also led to reductions in borrowings and net debt with net debt/EBITDA falling back to 9.0 times and EPRA loan-to-value ratio to 29.4%. 

However, we know that there is more to do in 2026. With over £270m already exchanged or under offer in 2026 to date, we are targeting higher disposals into a more receptive investment market and have clear parameters for capital allocation into development and refurbishment projects. The cost of capital in our sector appears to have risen in 2025 and sets a high bar for real estate investment. This demands ever more vigilant cost analysis and discipline, meaning that some of our projects which were previously viable may now require alternative strategies. We are also looking at other forms of capital allocation that can bring nearer-term upside. 

For 2026, we are targeting further reductions in our cost base through process efficiencies and reducing irrecoverable property costs. Furthermore, substantial refinancing in 2025 has prepared us for the repayment of £230m of relatively expensive fixed rate debt in early 2026; however, the higher interest rates post refinancing in June 2025 caused EPRA earnings to decline in H2 2025. We now expect our average spot interest rate to fall slightly during 2026 and then remain relatively stable until 2031. 

Our well-located and amenity-rich product remains in strong demand in an increasingly supply-constrained market and we are expecting rents to continue outpacing costs for some time. After a dip in H1 2026 before rent at Network W1 is recognised in the income statement, we see EPRA earnings returning to growth in 2027 with our outlook for 2030 around 25-30% higher. The medium-term outlook for the Group's total accounting return (TAR) is also the strongest for some time, helped by the rental growth outlook, improving development returns and stable investment yields. 

Property and other income

Gross property and other income increased substantially to £406.3m for the year ended 31 December 2025 from £276.9m in 2024. This was mainly due to trading property proceeds of £118.1m (2024: £3.7m) from the sale of 24 out of 41 apartments at George Street W1, part of our 25 Baker Street W1 scheme. The related profit on sale was £4.2m after allowing for the cost of affordable housing. Additional proceeds of £17.8m (2024: £nil) came from the disposal of trading stock on retail units already passed over to the freeholder on re-gearing of the headlease.

Gross rental income also increased, rising to £218.3m from £214.8m in 2024 with 25 Baker Street contributing £5.4m of new rent. Other lettings and reviews were approximately matched by units becoming vacant including Middlesex House W1, Greencoat and Gordon House SW1 and Holden House W1 where schemes commenced or are planned. Surrender premiums fell to £0.3m from £2.7m the year before.

Irrecoverable service charge costs were unchanged at £6.6m but other property costs rose to £19.8m from £18.2m in 2024. Most of this increase came from £1.5m of additional legal and letting costs plus £0.7m of marketing costs, the latter principally at Holden House.

Impairment charges in relation to planning costs at Old Street Quarter EC1 increased to £1.4m from £0.2m in 2024 with a further charge of £0.5m (2024: £0.2m) relating to receivables. We have seen continued strong rental and service charge collection rates exceeding 99% through the last year.

Taking account of these costs, net rental income increased marginally to £190.0m from £189.6m in 2024. Taking further account of surrender premiums, the trading profits noted earlier, dilapidation receipts, other property income and management fees, net property and other income increased to £199.6m from £198.3m in 2024.

See Appendix 5 for graph showing movement in gross rental income

Administrative expenses and EPRA cost ratios

As noted last year, managing our costs and looking for efficiencies was a particular focus in 2025 and will continue to be so in 2026. As a result, the Group's administrative expenses fell to £39.1m from £41.1m a year earlier, the 4.9% decrease coming mainly from a 4.7% drop in staff costs despite increases averaging 5.9% for staff and 3.5% for directors. Out of £28.3m (2024: £29.7m) of staff costs, £2.7m (2024: £2.5m) of internal costs were capitalised in accordance with IAS16 and £2.7m (2024: £2.7m) was recovered via service charges. Total average headcount increased by eight, though five of these are recovered in full or in part via service charges. 

Our EPRA cost ratio excluding direct vacancy costs increased to 22.4% (2024: £21.7%) and, including direct vacancy costs, the figure increased marginally to 27.3% from 27.0% in 2024.

Other income statement items

After accounting adjustments which mainly comprise straight-lining lease incentives and grossing up headlease liabilities, the revaluation surplus on investment properties which passed through the income statement increased to £52.2m after a small deficit of £2.7m in 2024. In addition, the revaluation surplus for our head office was £4.5m in 2025 (2024: £2.9m); this was subject to a deferred tax adjustment of £1.1m (2024: 0.6m) as it is outside the REIT regime with both of these amounts included within the consolidated statement of comprehensive income rather than the income statement.

In addition to the trading activity noted earlier, we disposed of two investment properties during the year with combined proceeds of £80.2m. This was split £26.0m for the freehold interest in 4&10 Pentonville Road N1 and £54.1m for the freehold in Francis House SW1 and gave rise to a small combined loss on disposal of £2.2m after costs. In 2024, investment property disposal proceeds were slightly higher at £87.5m and provided a £2.1m net profit on disposal.

The profit from operations therefore increased to £210.5m in 2025 from £156.4m in the prior year.

The other main income statement items are finance income and costs. The net finance cost for 2025 increased to £48.4m (2024: £39.6m) partly due to higher average borrowings in 2025 but more impacted by the increase in our weighted average interest rate following the mid-year refinancing. Also included in finance costs in 2025 was a £1.2m settlement cost for an interest rate hedge taken out in connection with the £250m bond issue in June. Given the volatility at the time, we opted to hedge but rates fell through the period when pricing was at risk giving rise to this charge; we will get the benefit of slightly lower rates through the 7-year period of these 5.25% bonds. In 2025, we capitalised interest on projects totalling £14.1m (2024: £11.2m).

The Group's interest rate swaps also terminated in 2025 and showed a fair value loss on derivative financial instruments of £0.6m (2024: £2.3m loss).

There was no contribution from joint ventures this year but the prior year included a £1.5m profit from our share of the 50 Baker Street joint venture up to the point of termination in October 2024.

IFRS profit before tax and EPRA earnings per share

The IFRS profit before tax, which includes fair value movements such as the property revaluation passing through the income statement, increased to £161.5m (2024: £116.0m) and IFRS diluted earnings per share rose to 143.5p (2024: 102.9p).

EPRA earnings per share adjust for the fair value movements and certain other items. As previously guided, they were lower in 2025 at 98.4p per share (2024: 106.5p) largely as a result of the higher interest rates following refinancing during the year. Note that the £4.2m trading profits on residential apartment sales at George Street are excluded from EPRA's definition of earnings. Providing these apartments and affordable housing was an important and necessary part of our development activity at this mixed use scheme and adding these profits back for 2025 takes adjusted earnings per share to 102.1p. 

A table showing a reconciliation of the IFRS and adjusted results to EPRA earnings per share is included in note 26.

Like-for-like rental income

Like-for-like (LFL) gross rental income increased by 2.4% in 2025, showing the impact of rental uplifts being captured on new lettings and reviews but also reflecting slightly higher vacancy across the portfolio. LFL net rental income was up 1.4% and LFL net property income, which takes account of dilapidations and other property income, was up 1.2%.

Taxation

The Group's tax charge for 2025 was £0.4m (2024: £0.1m). This was due to movements in deferred tax as a result of the utilisation of previously recognised tax losses and a reduction in the deferred tax asset on share based payments.

As in previous years, the majority of our income was exempt from corporation tax as it is derived from a qualifying property rental business under the UK REIT regime. The related requirement to pay a PID (property income distribution) meant that £11.0m (2024: £9.8m) of withholding tax was paid to HMRC instead.

Derwent London's principles of good governance extend to a responsible approach to taxation. Our tax affairs are led by an experienced Head of Tax, we have a low tax risk tolerance and continue to retain the low-risk status which HMRC granted in the Business Risk Review in July 2023. We have an open dialogue with HMRC in relation to our tax affairs, work collaboratively with them to ensure that we pay the correct amount of tax on time and engage proactively with them on proposed changes to legislation. 

Our statement of tax principles is available on our website www.derwentlondon.com/investors/governance/tax-principles and is approved by the Board in line with the Group's long-term values, culture and strategy. 

Dividend

Our policy aims for progressive annual increases but a payout well-covered by EPRA earnings after taking account of our duties to other stakeholders. The board is recommending another 0.5p per share increase in the final dividend to 56.0p, of which 40.0p will be a PID and the balance of 16.0p as a conventional dividend to be paid in May 2026. The Company's ISIN reference is GB0002652740.

Our dividend policy remains unchanged and this year's proposed final dividend will make this the 18th year of consecutive increases in our interim/final dividends since the formation of Derwent London plc in 2007. We also paid special dividends in 2017 and 2018. 

This will take the total dividend for the year to 81.5p, a 1.2% increase over the previous year. Dividends paid and declared in relation to 2025 earnings were 1.2 times covered by EPRA earnings and 1.3 times by adjusted earnings.

Net asset values and total return for the year

Derwent London's total net assets increased during 2025 to end the year at £3,615m, up 2.1% from £3,540m in 2024. EPRA Net Tangible Assets (NTA), our main net asset performance measure, increased to 3,225p per share on a diluted basis from 3,149p a year earlier. The principal movements during the year were our recurring income as measured by EPRA earnings, the revaluation surplus and overall profit from disposals less ordinary dividends and PID paid in the year.

Adding back dividends paid, our total accounting return (TAR) for 2025 was 5.0%, indicating a further improvement in conditions for our sector after several challenging years. In 2024, when valuation declines started to reverse, our TAR was 3.2% following negative returns in both 2022 and 2023. Most of these valuation impacts came from yield adjustments as the era of quantitative easing ended after a sustained period of very low interest rates. Modest rental growth continued during this time and has accelerated for the better-quality space in which we specialise while yields have essentially stabilised.

EPRA Net Disposal Value (NDV), which takes account of a positive £96.6m fair value adjustment from our fixed rate debt and bonds, increased to 3,302p per share from 3,261p at 31 December 2024.

See Appendix 5 for graph showing movement in EPRA net tangible assets per share

Property portfolio and other fixed assets

Our property portfolio is externally valued at six-monthly intervals by Knight Frank and, at 31 December 2025, the fair value increased to £5,094m from £5,041m a year earlier. We are required to make adjustments from fair value to carrying value for accounting purposes to recognise tenant incentives through earnings on a straight-line basis. In addition, letting costs are spread over the life of each lease and headlease liabilities are grossed up. After these adjustments, the total property carrying value was £4,915m at 31 December 2025 (2024: £4,861m).

Property additions in 2025 totaled £178.6m (2024: £242.0m), mostly made up of capital expenditure of £156.1m (2024: £182.1m) and capitalised interest and overheads of £16.5m (2024: £12.9m). The majority of expenditure in 2025 was incurred on the two large development projects at 25 Baker Street W1 and Network W1, costs on these alone totaling £82.6m. As these two projects were close to their maximum cumulative levels in 2025, capitalised interest was relatively high at £14.1m (2024: £11.2m) and we expect it to fall back considerably in 2026.

The combined carrying value of the property disposals noted above increased to £186.7m from 82.9m in 2024. Other property, plant and equipment increased to £68.1m from £52.0m in December 2024, the main reason being additions at our Lochfauld solar park in 2025 of £9.7m plus a transfer from prepayments of £2.5m as the costs now meet the criteria for recognition as fixed assets. Also included in this category is the owner-occupied property comprising our head office at 25 Savile Row W1, where the carrying value at 31 December 2025 was £53.5m (2024: £49.0m).

Old Street Quarter EC1

We are due to acquire this substantial Old Street site no earlier than mid-2027 subject to the vendor providing vacant possession. The agreed acquisition price is £239m less the £3m deposit paid at exchange. Including the deposit, we have now incurred costs associated with master-planning, design and planning application preparation totaling £12.0m net of impairment. In 2025, after a detailed review, we impaired a further £1.4m of these costs. At the point of acquisition, the balance of these costs will be allocated and included within investment property at fair value together with the remaining acquisition price paid. We are now working with our strategic development partner, Related Argent, to optimise our plans for this unique site. This will influence the future fair value at the point of acquisition and beyond.

Cash flow, borrowings and net debt

The cashflow generated from our operations increased substantially in 2025 due mainly to the sale of apartments at George Street W1, part of the 25 Baker Street scheme. The net cash from these sales received by the Group in 2025 was £115.8m after costs but including a small affordable housing receipt. We also received £17.8m in 2025 on the disposal of trading stock to the freeholder in relation to the same scheme. These expected cash inflows were explained in previous reports, offsetting the related cash outflows included as a deduction against operating cashflow in the last few years as we built out the trading properties and trading stock. Partly as a result, the net cash from operating activities shown within the consolidated cash flow statement increased from £64.6m in 2024 to £228.0m in 2025. We expect further sales to complete in 2026 but the figure will be substantially lower than in 2025.

Having issued new £250m unsecured bonds in June 2025, we ended 2025 with a higher cash balance than usual at £131.7m. Of this amount, £29.3m related to tenant rent deposits and £25.2m to service charge balances so the unrestricted cash available to the Group was £77.2m (2024: £15.4m).

Property disposals in 2025 brought net debt down to £1.45bn from £1.48bn in 2024, with net debt to EBITDA falling to 9.0 times (2024: 9.3 times) and EPRA loan-to-value ratio to 29.4% (2024: 29.9%). Both these 2025 year-end figures are within our target ranges. Year-end borrowings were marginally higher than 2024 at £1.49bn because we had no further revolving credit facilities to pay down. However, borrowings have fallen back in early 2026 as £55m of fixed rate private placement notes were repaid at maturity using the excess cash. Note that borrowings shown as current liabilities at the year end included these USPP notes and the £175m LMS bonds due in March 2026.

At 31 December 2025, available cash and undrawn facilities increased to £627m (2024: £487m). This figure will reduce in Q1 2026 as the £230m of USPP notes and bonds reach maturity.

See Appendix 5 for table showing debt facilities and reconciliation to borrowings and net debt

Debt and financing

Debt markets generally continued their improving trend through most of 2025, helped by a gradual reduction in UK base rates, moderating (but sticky) inflation and a reasonable UK growth outlook. Business and economic uncertainty was, however, a continuing theme through 2025 particularly in the middle part of the year leading up to the late November budget. 

Speculation remained as to where the 5- and 10-year gilt rates will eventually settle. Volatility has continued with the range of 5-year rates around 80bp over 2025, for example, but the general trend is modestly downwards. UK base rates, currently 3.75%, are also expected to fall to around 3.5% by the end of 2026. At 31 December 2025, the 5-year gilt was 3.9% but the 10-year remained stubbornly higher at 4.4%. Meanwhile, the 5-year SONIA swap continues to show a worthwhile benefit over the equivalent gilt and was as low as 3.6% at year-end.

Credit spreads in the bond market have also been relatively attractive and the banking market remains competitive for borrowers of good investment-grade credit-quality. In May, we maintained a Fitch issuer-default rating of BBB+ and A- for our senior unsecured debt rating, both with a stable outlook. Keeping our credit rating secure is a key business priority and we now target an EPRA LTV ratio below 30% and net debt/EBITDA below 9.5 times.

2025 was an active year for refinancing due partly to the maturity of £175m of convertible bonds last June but also because we opted to take advantage of the relatively favourable conditions in the bond and bank debt markets.

A new £115m unsecured term/revolving credit facility was signed with HSBC in February 2025. It comprised an £82.5m two-year term loan with a one-year extension option plus a £32.5m revolving component. 

The next transaction was to issue £250m of 7-year unsecured bonds with a semi-annual coupon of 5.25% in June. After a short roadshow, there was strong demand for the bonds, the margin at issuance was a competitive 105bp and the bonds have traded well on the secondary market. As at the year end, the implied interest rate was 4.97% reflecting a tightening of the spread to 95bp. 

Also in June, our £175m unsecured convertible bonds were repaid upon maturity at par and the £100m unsecured term loan arranged in 2024 with NatWest was extended by one year to a June 2028 maturity. 

Refinancing activity continued in the second half. The Group's £450m unsecured revolving credit facility (RCF) provided by our three longstanding UK relationship banks, Barclays, HSBC and NatWest, was refinanced with a new four-year term to July 2029 plus two one-year extension options. Pricing was similar to the previous facility, which had been due to reach maturity in October 2026. These banking relationships are highly valued by us. 

Our environmental sustainability criteria are well established and set out in our 'green finance framework' which was first published back in 2019. The green agenda is now firmly embedded in our corporate culture. Following discussions with our lenders, we decided to simplify the structure and classify the entire £450m RCF as a conventional (ie non-green) facility. Our £350m 2031 'green' bonds remain and we report in the section below under our green finance framework as usual. 

Following the extension of the main Group RCF, we cancelled the two £32.5m revolving credit tranches that formed part of the bilateral facilities arranged with Barclays and HSBC, thereby reducing future non-utilisation fees. The two £82.5m term loans remain and, at 31 December 2025, the HSBC loan had a maturity date of February 2027 but this was extended after the year-end to February 2028. 

In 2026 to date, we have repaid £55m of US Private Placement Notes which matured on 31 January and will redeem the £175m LMS secured bonds in March 2026. Both were classified as current liabilities at the year end. I would like to thank our USPP noteholders and longstanding bond holders, some of whom have held these bonds for many years, for their support. The LMS bonds have a coupon of 6.5% and we therefore expect our weighted average interest rate to fall to less than 4.0% by the end of Q1 2026.

Due to the refinancing carried out in 2025, it was inevitable that our weighted average interest rate would increase. At the year end, the rate was 4.06%, an increase from 3.53% at 31 December 2024 but slightly lower than the 4.11% at 30 June 2025. At the year end, 82% of our debt was at fixed rates (2024: 85%) and the weighted average maturity of borrowings was 4.2 years (2024: 4.0 years). 

Internal controls, assurance and the regulatory environment

During the year, we continued to strengthen our internal control environment, including the successful implementation of a new payroll system. We are also more than a year into the design and build of enhanced business processes and controls for our new finance system, scheduled to go live in late 2026. Across both the finance transformation and wider business change initiatives, we are increasingly leveraging advanced technologies, including AI, to streamline processes, improve operational efficiency and further enhance financial and operational controls.

We have maintained our approach to assurance, obtaining independent external assurance for areas of higher risk. This includes limited assurance over selected sustainability and health and safety data and reasonable assurance over green finance disclosures, external audits of service charge costs and our twice‑yearly external property valuations. We also receive useful oversight of key business risks through our Internal Audit function.

We achieved re‑accreditation of our Cyber Essentials Plus certification during the year, supported by independent verification of key cyber security controls and this remains an area of elevated focus for us.

In response to the new 'failure to prevent fraud' offence introduced under the Economic Crime and Corporate Transparency Act 2023, we have reviewed and strengthened our anti‑fraud procedures, providing a strong foundation for preventing and detecting fraud. Having defined and assessed our material controls over the past two years, we are well positioned to comply with Provision 29 of the revised UK Corporate Governance Code for the current financial year which commenced on 1 January 2026.

Reporting under the Green Finance Framework

Derwent London's Green Finance Framework (the Framework) has been prepared to align with the Loan Market Association (LMA) Green Loan Principles 2021 and International Capital Market Association (ICMA) Green Bond Principles 2021 guidance document. It has previously been externally reviewed and a Second Party Opinion (SPO) was obtained. The latest version of the Framework and the accompanying SPO are available on our website at www.derwentlondon.com.

Out of total debt facilities of £2.0bn, Green Financing Transactions (GFTs) now comprise only the £350m Green Bonds issued in 2021. This follows the refinancing in July 2025 of our main £450m revolving credit facility which previously included a £300m 'green' tranche.

In accordance with the reporting requirements set out in the Framework, we are disclosing the Eligible Green Projects (EGPs) that have benefitted from our GFTs, and the allocation of drawn funds to each project.

The projects eligible for funds from the GFTs are as follows:

1 Green EGP credentials disclosed in accordance with the Framework and the Green Finance Basis of Reporting, available on our website and within the Responsibility Report. 2 The development includes 206,000 sq ft of offices at 25 Baker Street and 12,000 sq ft of offices at 30 Gloucester Place.

Qualifying 'green' expenditure

The qualifying expenditure for each project as at 31 December 2025 is presented in the table below. This includes a 'look back' component, capturing capital expenditure incurred on projects prior to the point at which they received formal designation as an EGP. It also includes capital expenditure incurred on projects prior to October 2019, when the Group executed its first GFT.

Costs which form part of the initial project appraisal or which are associated with delivering the EGP through to practical completion are included within the eligible green expenditure of the project. Costs incurred following completion are generally excluded unless specifically elected as a green project.

25 Baker Street, which commenced on site in 2021, reached practical completion in H2 2025. Certain development costs were disposed of to the freeholder in 2025 and a number of the private residential units were also sold. In accordance with section 3.3 of the Framework, the expenditure allocated to these elements have been removed from the qualifying expenditure.

Cumulative expenditure on each EGP as at the reporting date

The total qualifying expenditure incurred in 2025 was £88.9m. As at 31 December 2025, the cumulative qualifying expenditure on the EGPs amounted to £880.3m, after deducting £86.6m of previously eligible expenditure related to the 25 Baker Street scheme.

In July 2025, the Group refinanced its £450m RCF, which included a £300m 'green tranche', with a new 'non-green' RCF. At the time of refinancing, the amount drawn on the 'green tranche' was £28.5m. Following this transaction, drawn borrowings from GFTs at 31 December 2025 comprised solely the £350m Green Bonds issued in 2021.

In line with the requirements of the Framework, the total cumulative qualifying expenditure on EGPs (£880.3m) therefore exceeds the amount of drawn borrowings from all GFTs (£350m).

PRINCIPAL RISKS AND UNCERTAINTIES

RISK MANAGEMENT AND INTERNAL CONTROLS

We have identified certain principal risks and uncertainties that could prevent the Group from achieving its strategic objectives and have assessed how these risks could best be mitigated, where possible, through a combination of internal controls, risk management and the purchase of insurance cover.

As a predominantly London-based Group, we are particularly sensitive to factors which impact upon central London's growth and demand for office space. Whilst central London continues to experience strong occupational demand, occupiers are proceeding with caution particularly over the cost of relocation and ongoing operating expenses. Most office values increased moderately during the year, supported by rental growth and generally stable investment yields. Demand for both tenant occupation and investment ownership continues to be focused on high quality, amenity-rich, well-located buildings.

Financial risks for the Group have reduced in 2025 with the arrangement of new £250m unsecured 7-year bonds and the refinancing of the Group's main £450m corporate Rolling Credit Facility. During the year, the UK economy recorded slow growth supported by the easing of interest rates and moderating inflation. Gilt yields have continued to remain relatively high but generally reduced in the year alongside the cost of borrowing.

The Group continues to monitor the risk of rising tariffs, global trade tensions and ongoing uncertainty of domestic policy.

The principal risks and uncertainties facing the Group in 2026 are set out on the following pages with the potential impact and the mitigating actions and controls in place. These risks are reviewed and updated on a regular basis and were last formally assessed by the Board on 24 February 2026.

The Group's approach to the management and mitigation of these risks is included in the 2025 Report & Accounts. The Board has confirmed that its risk appetite and key risk indicators remain appropriate.

Strategic risks

The Group's business model and/or strategy does not create the anticipated shareholder value or fails to meet investors' and other stakeholders' expectations.

Financial risks

The main financial risk is that the Group becomes unable to meet its financial obligations. The probability of this occurring is low due to our significant covenant headroom, modest leverage and strong credit metrics. Financial risks can arise from movements in the financial markets in which we operate and inefficient management of capital resources.

Operational risks

The Group suffers either a financial loss or adverse consequences due to processes being inadequate or not operating correctly, human factors or other external events.

Financial instruments - risk management

The Group is exposed to a range of financial risks through its activities, in particular credit risk, market risk and liquidity risk. These risks arise naturally from the Group's use of financial instruments in managing a large, London‑focused property portfolio, and the Group's framework for identifying, assessing and managing such risks remains well established. Further quantitative information in respect of these risks is presented throughout these financial statements.

While the overall risk profile has not changed materially from the prior year, the environment in which the Group operates continues to evolve. The Group's approach therefore reflects both prevailing market conditions and its long‑term strategic priorities. 

Financial instrument risk arises mainly from the Group's use of trade receivables, accrued income relating to lease incentives, cash deposits, trade and other payables, floating rate bank facilities, private placement notes, secured and unsecured bonds and interest rate derivatives. The Board is responsible for setting the overarching risk management objectives, with day‑to‑day monitoring and implementation delegated to the executive management team. The objective continues to be the conservative management of risk while maintaining the flexibility required to pursue value‑accretive development and investment opportunities.

Credit risk

Credit risk principally arises from amounts owed by tenants, reflecting the Group's position as a major central London landlord. It is the Group's policy to assess the creditworthiness of prospective tenants before entering into lease contracts. The Board's Credit Committee assesses each new tenant, drawing on financial statements, external ratings where available and, in some cases, forecast information and bank or trade references. Where appropriate, the Group may seek a rent deposit or guarantee. Existing tenant exposure is reviewed periodically, with additional focus on sectors experiencing structural pressures or where creditworthiness may be more variable. The Group has historically experienced low levels of tenant default, reflecting the strength of its tenant base and the effectiveness of its credit assessment and monitoring processes.

While the Group operates predominantly in central London and is therefore exposed to some geographical concentration risk, this is mitigated by the broad range of tenants across multiple industry sectors. In accordance with IFRS 9, trade receivables are assessed using an expected credit loss model, while lease incentive receivables are reviewed under IAS 36.

Credit risk arising from cash balances is controlled by depositing funds only with institutions that meet minimum investment‑grade criteria and by keeping maturities short. Across all financial assets, the carrying amounts recognised in the balance sheet represent the maximum exposure to credit risk.

Market risk

Market risk principally reflects the Group's exposure to movements in interest rates, given its mix of fixed and floating‑rate funding. The Group regularly monitors its interest rate exposure and performs sensitivity analysis to assess the potential effect of reasonably possible shifts in interest rates on profit and net assets. A 50‑basis point shift in interest rates would result in an increase or decrease in profit or loss and net assets of £1.3m (2024: £1.1m).

It is the Group's policy to maintain a significant proportion of expected borrowings at fixed rates, typically in the range of 60% to 85%, achieved through a combination of fixed‑rate debt and floating‑to‑fixed interest rate swaps. At 31 December 2025, 82% of the Group's debt was fixed (2024: 85%), in line with policy.

From time to time, when preparing for a public bond issuance, the Group may also make use of gilt locks to effectively hedge movements in the underlying gilt yield between launch and pricing, thereby providing certainty over the coupon payable on the forthcoming issuance. This forms part of the Group's broader interest rate risk management strategy and complements the use of interest rate swaps and fixed‑rate funding.

All variable‑rate borrowings continued to be denominated in Sterling. When raising new long‑term funding, the Group generally prefers fixed‑rate structures to support cashflow predictability and capital planning.

Liquidity risk

Liquidity risk arises from the need to meet the Group's financial obligations as they fall due, including interest payments, scheduled loan repayments and working capital requirements of the business.

The Group manages liquidity risk by maintaining appropriate headroom on its committed revolving bank facilities and by spreading debt maturity dates across a range of lenders. Cash flows and projected loan balances are monitored regularly by the executive management team as part of the Group's forecasting process, with forward‑looking assessments covering a range of scenarios, including downside cases.

The Group also supports liquidity stability by fixing interest rates (and therefore cash flows) on a substantial portion of long-term borrowings. At the balance sheet date, the Group's projections indicated that it held sufficient liquidity to meet its obligations under all reasonably foreseeable scenarios.

Capital management

The Group's capital structure comprises equity and net debt. Consistent with the strategy applied in recent years, the principal objectives of capital management are to ensure the Group remains financially robust and efficient, while being able to continue as a going concern.

Capital is monitored using key measures such as NAV gearing, loan-to-value ratio, interest cover and net debt/EBITDA, all of which are defined within the list of definitions at the end of this announcement and are derived in note 27.

The Group also maintains significant uncharged property, reflecting its predominantly unsecured financing structure. At 31 December 2025, there was £4.8bn (2024: £4.7bn) of uncharged property. This provides flexibility to raise some future secured finance if required and supports a diversified approach to funding. Adjustments to the capital structure are considered in the context of market conditions, financial covenants and the Group's future development and acquisition plans. Potential actions include varying dividend levels (within REIT rules), returning capital to shareholders, issuing or redeeming debt or disposing of assets to reduce gearing.

Directors' responsibilities

The Directors are responsible for preparing the 2025 Report & Accounts and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with UK-adopted international accounting standards and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law).

Under Company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing the financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· state whether applicable UK-adopted international accounting standards have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101 have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;

· make judgements and accounting estimates that are reasonable and prudent; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board

Paul M. Williams Damian M.A. Wisniewski

Chief Executive Chief Financial Officer

25 February 2026

GROUP INCOME STATEMENT

GROUP STATEMENT OF COMPREHENSIVE INCOME

GROUP BALANCE SHEET

GROUP STATEMENT OF CHANGES IN EQUITY