Derwent London Posts Modest NAV Growth and Raises Dividend for FY25

Derwent London (LSE:DLN) reported higher net asset value and a modest dividend increase for the 2025 financial year, supported by leasing activity and asset management gains across its portfolio.

Net asset value reached 3,225 pence per share at year-end, representing a 2.4% increase compared with the previous year. Earnings per share totalled 98.4 pence, while the company declared a full-year dividend of 81.5 pence per share.

During FY25, Derwent London completed new leasing agreements worth £11.3 million, achieved at rents 9.9% above estimated rental value. Since the start of the new financial year, the group has secured a further £1.5 million in leases, with £14.4 million currently under offer, including all office space at Network, and an additional £4.4 million under negotiation.

Asset management initiatives generated £58.9 million of activity, delivering rental uplifts of 6.4%. The company also progressed its capital recycling strategy, completing property disposals totalling £216.1 million during the year. A further £33 million has exchanged year to date, with roughly £240 million of additional transactions under offer.

The 25 Baker Street W1 development was fully pre-let, achieving an ungeared internal rate of return of 11.3%. The project delivered an accounting return of 5%, with earnings per share of 98.4 pence excluding 3.7 pence of trading profits.

Looking ahead, Derwent London expects estimated rental value growth across its portfolio of between 4% and 7% in fiscal year 2026. The company aims to complete £1 billion of disposals over the next three years and is targeting EPRA earnings growth of 25% to 30% by 2030.

Financial leverage remained stable, with net debt to EBITDA at 9 times, an interest coverage ratio of 3.1 times and a loan-to-value ratio of 29%, unchanged from the prior period.

The chief executive said the company expects continued increases in portfolio estimated rental values and EPRA earnings, while projecting total accounting returns of between 7% and 10% over the coming years.