Derwent London plc
Report and
Accounts 2025
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Network
W1
Report and Accounts 2025
Derwent London plc
Strategic report
05
Derwent London at a glance
06 Our portfolio
08
Our year in review
10
Chairman’s statement
12
Chief Executive’s statement
16
Investment case
19
Regeneration projects
22
Strategic framework &
business model
26
Strategic objectives
30
Key performance indicators
35 Property review
52 Finance review
62
Going concern & viability
66 Responsibility
86
Task Force on Climate-related
Financial Disclosures
100 Managing risks
Governance
114 Introduction from the Chairman
116 Governance at a glance
118 Board of Directors
120 Executive management
122 Corporate governance statement
130 The Section 172(1) Statement
138 Nominations Committee report
142 Audit Committee report
154 Risk Committee report
164
Responsible Business Committee
report
172 Remuneration Committee report
210 Directors’ report
215
Statement of Directors’
responsibilities
Financial statements
218 Independent auditors’ report
226 Consolidated income statement
227
Consolidated statement of
comprehensive income
228 Consolidated balance sheet
229
Consolidated statement of
changes in equity
230 Consolidated cash flow statement
231
Notes to the consolidated
financial statements
276 Company balance sheet
277
Company statement of changes
in equity
278 Notes to the Company
financial statements
Other information
284 Ten-year summary
285 EPRA summary
288 Principal properties
290 List of definitions
294 Shareholder information
295 Awards and recognition
We are London’s largest office-focused
Real Estate Investment Trust (REIT). We
create stakeholder value through
property regeneration and asset
management, taking a returns-focused
approach to capital allocation.
We completed work at 25 Baker Street W1 in
August 2025 and practical completion at
Network W1 is imminent. The offices at 25
Baker Street were fully pre-let with the
scheme delivering strong returns, and all of
the office space at Network is under offer.
We also had a record year for asset
management transactions in 2025 with
leasing momentum gradually building
through the year.
Disposals in 2025 totalled £216m. Since the
start of 2026, we have exchanged contracts
on £33m with a further c.£240m under offer.
Our rental values have grown by around 8%
over the last two years and we are
upgrading our 2026 guidance to 4-7%.
01
Strategic report
Governance
Financial statements
Other information
25 Baker St
W1
Derwent London plc
Report and Accounts 2025
02
Our core business strategy is to balance
investment in future growth with
actions that enhance returns and
shareholder value over the near-term.
We are accelerating disposals, with a
target of £1bn over the next three
years. Proceeds will be redeployed into
selective developments including
Holden House W1 and 50 Baker Street
W1 where rents are growing strongly, as
well as considering alternative capital
allocation options.
05
Derwent London at a glance
06 Our portfolio
08
Our year in review
10
Chairman’s statement
12
Chief Executive’s statement
16
Investment case
19
Regeneration projects
22
Strategic framework &
business model
26
Strategic objectives
30
Measuring our performance
35 Property review
52 Finance review
62
Going concern & viability
66 Responsibility
86
Task Force on Climate-related
Financial Disclosures
100 Managing risks
Strategic report
03
Strategic report
Other information
Financial statements
Governance
White Collar Factory
EC1
Derwent London plc
Report and Accounts 2025
04
Core
income
58%
Future
opportunity
42%
Balanced
portfolio
A
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How we add value
Our portfolio is substantially income producing, with asset management
and regeneration potential. We create long-term value through delivery of
distinctive, design-led, amenity-rich offices predominantly in the West End. We
are accelerating the pace of disposals to provide capital for redeployment into
accretive opportunities to deliver sustainable growth in earnings and long-term
returns.
See page 22
Responsible
approach
We conduct business with
integrity and work with
a supply chain who share
our values and high ethical
standards. Through responsible
stewardship of our portfolio
and active engagement with
our communities, we aim to
deliver positive outcomes and
long-term value.
See page 66
Governance framework
Performance and remuneration
Success against our objectives
is measured using our KPIs
and rewarded through our
incentive schemes.
See page 30
Risk management
Our overall risk appetite is low.
Inherent and residual ‘risk ratings’
are used to identify risks and ensure
they are aligned with the Board’s
tolerance.
See page 102
Transport proximity (by value)
Returns-focused business model
Portfolio metrics
Derwent London at a glance
< 10 mins to Elizabeth line or mainline station
>10 mins
'Topped-up' rent (by floor area)
<£60 psf
£60-80 psf
£80-100 psf
>£100 psf
Use class (by income)
Offices
Retail
Residential
91%
8%
1%
88%
12%
43%
34%
17%
6%
05
Strategic report
Governance
Financial statements
Other information
Marylebone
Paddington
Our portfolio
Mayfair
Paddington
Marylebone
Valuation
£
5.1
bn
2024: £5.0bn
Buildings
61
2024: 62
Tenants
379
2024: 402
EPRA vacancy rate
4.1
%
2024: 3.1%
Annualised rent
1
£
210.4
m
2024: £210.7m
‘Topped-up’ WAULT
– to break
7.0
years
2024: 6.8 years
EPRA 'topped-up' initial yield
5.1
%
2024: 5.2%
True equivalent yield
5.71
%
2024: 5.73%
A unique 5.3m sq ft central
Key portfolio statistics
Location (by value)
West End
City Borders
Provincial
HQ vs Flex (by floor area)
HQ
Flex (inc. third party operations)
Capital value (by value)
<£1,000psf
£1,000psf-1,499psf
>£1,500psf
Occupiers (by rent)
Business services
Financial
Media
Retail HQ
1
Public sector
Retail
Other
75%
23%
2%
92%
8%
35%
13%
52%
23%
18%
14%
13%
7%
8%
17%
1
Retail HQs and online leisure.
1
Net effective rent - see page 292 for definition.
Derwent London plc
Report and Accounts 2025
06
Pimlico
Vauxhall
River Thames
River Thames
Tower
Gateway
DLR
Farringdon
Angel
Tottenham
Court Road
Whitechapel
Victoria
Euston
Barbican
Blackfriars
Bond Street
Elephant and Castle
Cannon Street
London
Bridge
Liverpool Street
King’s Cross
St. Pancras
Fenchurch Street
Waterloo
Soho /
Covent Garden
Holborn
Shoreditch
Old Street
Fitzrovia
The City
Victoria
Islington
Clerkenwell
Whitechapel
Southbank
Key
West End
City Borders
Conditional acquisition
07
Strategic report
Governance
Financial statements
Other information
Our year in review
Momentum built through
2025, with a record £58.9m of
asset management activity
driven by rent reviews, leasing
10% above ERV and disposals
totalling £216.1m.
Our total accounting return improved,
helped by ERV growth of 4.0%, stable
yields and development surpluses. As
expected, mid-year refinancing lifted our
average interest rate to c.4.1%, impacting
EPRA earnings in the second half.
Good progress was made on
developments with a new headlease
agreed at 50 Baker Street W1 and
commencement of Holden House W1,
which is opposite an Elizabeth line station.
Operational highlights
£
11.3
m
Lettings 9.9% above
December 2024 ERV
£
58.9
m
Asset management transactions
6.4% rental uplift
4.1
%
EPRA vacancy rate
(2024: 3.1%)
£
216.1
m
Disposals completed in 2025
(including trading sales)
Financial highlights
5.0
%
Total accounting return
R
(2024: 3.2%)
3,225
p
EPRA NTA per share
1,2
(2024: 3,149p)
£
406.3
m
Gross property & other income
(2024: £276.9m)
£
190.0
m
Net rental income
(2024: £189.6m)
98.4
p
EPRA earnings per share
1,2
(2024: 106.5p)
81.5
p
Dividend per share
(2024: 80.5p)
29.4
%
EPRA loan-to-value ratio
1,3
(2024: 29.9%)
9.0
x
Net debt/EBITDA ratio
3
(2024: 9.3x)
1
EPRA performance measure – see page 290 for definitions.
2
See note 37 on page 264 in the financial statements for reconciliation to IFRS figures.
3
See note 39 on page 270 in the financial statements for calculation.
R
Links to remuneration – see pages 30 to 34.
Derwent London plc
Report and Accounts 2025
08
Other highlights
125
kWh/sqm
Energy intensity
R
(2024: 137 kWh/sqm)
10,434
tCO
2
e
Operational carbon footprint (2024: 12,357 tCO
2
e)
86.5
%
Overall employee satisfaction
£
504
k
Community fund & sponsorship donations
committed
Portfolio highlights
1.7
%
Underlying capital growth (2024: 0.2%)
5.5
%
Total property return
R
(2024: 4.1%)
5.71
%
True equivalent yield (2024: 5.73%)
4.0
%
ERV growth (2024: 4.3%)
Charlotte Building
W1
09
Strategic report
Governance
Financial statements
Other information
Chairman’s statement
Delivering
value
and future
growth
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.
Mark Breuer
Chairman
The Board is pleased
to confirm a 0.5p
per share increase
in the final dividend
to 56.0p.
Derwent London plc
Report and Accounts 2025
10
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.
Mark Breuer
Chairman
25 Savile Row
W1
11
Strategic report
Governance
Financial statements
Other information
Chief Executive’s statement
Improving
business
momentum
and positive
outlook
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.
Portfolio activity – positive
momentum
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
Paul Williams
Chief Executive
Derwent London plc
Report and Accounts 2025
12
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.
90 Whitfield Street
W1
13
Strategic report
Governance
Financial statements
Other information
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.
Paul Williams
Chief Executive
Chief Executive’s statement
continued
Derwent London plc
Report and Accounts 2025
14
50 Baker Street
W1
15
Strategic report
Governance
Financial statements
Other information
Investment case
Our approach to
capital allocation
Returns-
focused capital
allocation
Accelerating pace of disposals,
targeting £1bn over three years
Actively reshaping the
portfolio to drive future returns
Capital to be redeployed into
accretive opportunities
Selective regeneration and
future potential value-
enhancing share buybacks
See page 18
25-30%
earnings growth
by 2030
Near-term reduction in
earnings until Network income
commences, with growth
anticipated in 2027
25-30% earnings growth
expected by 2030
Operational performance
enhanced by completion of
pre-let developments
Cost of debt largely stable until
2031 with overhead efficiency
programme underway
See page 53
01
02
We take a disciplined, returns-focused
approach to capital allocation, and are
accelerating disposals. Proceeds will be
redeployed into the most accretive
opportunities to maximise total accounting
return (TAR) over both the near and
long-term. In addition, it will enhance
financial flexibility and reduce leverage. This
is supported by an increasingly positive
market backdrop, as the London office
market continues to strengthen, with rental
growth benefitting from tightening supply
across our sub-markets.
The recently completed major project at 25
Baker Street W1, where the offices were fully
pre-let, generated a strong return for our
shareholders, achieving an ungeared IRR of
11.3% at practical completion. Work at our
other major scheme, Network W1,
completes imminently and all of the office
space is under offer. We expect rental values
to continue to grow for these well-located,
high quality buildings, enabling us to
capture further upside.
See page 19 for
further information on these projects.
Future projects will be delivered into a
stronger London office market as the supply
shortage of new space becomes more
entrenched, driving expectations of
sustained rental growth. Investor confidence
is further supported by favourable credit
market conditions.
Derwent London plc
Report and Accounts 2025
16
Positive
medium-term
TAR outlook
Earnings yield of c.3%
ERV-led capital growth
of 3-5% pa
Development surpluses
of 1-2% pa
Consider NTA and EPS
accretion via share
buybacks
See page 14
Strong
London office
market
Impending supply crunch
Low availability of right space
and constrained development
pipeline
Investment market liquidity
improving due to stronger
rental outlook
Leverage increasingly accretive
as rates move lower
See pages 41 to 46
Opportunity-rich,
well-located
portfolio
75% in West End; 88% within 10
minutes of Elizabeth line or
mainline station
Flex space to increase further
from 8% of portfolio
Mid-market rental tone offering
substantial upside potential
West End pipeline in sub-
markets with strong rental
growth
See page 06
03
04
05
Oliver's Yard
EC1
17
Strategic report
Governance
Financial statements
Other information
Accelerating disposals and use of proceeds
Capital recycling is the Group’s preferred source of funding
We will dispose of properties where we believe the capital can be
deployed more accretively, our asset management plans are
largely complete, or to crystallise development returns. We have
set a target to sell £1bn of property over the next three years.
Since the start of 2026, we have exchanged contracts for the sale
of £33m of property and are under offer on a further c.£240m.
We ensure alignment with emerging occupier trends when
making our investment decisions.
We recognise the importance of balancing investment in future
growth with actions that enhance earnings and shareholder
value over the near-term, while maintaining an appropriate level
of leverage and risk. Proceeds will be reinvested into a
combination of selective regeneration projects, acquisitions and
potential share buybacks.
Investment in projects
At 31 December 2025, expected future capex at the Group's
recently completed and on-site projects was c.£155m. This
includes Holden House W1 which is forecast to deliver an
attractive return, with upside potential from rental
outperformance. At Greencoat & Gordon House SW1 (capex
c.£57m) and 50 Baker Street W1 (capex c.£260m), preparatory
works are underway as the schemes advance towards proposed
commencement in mid-2026. At the year end, total committed
capex was £93m.
See target return expectations on page 47
Acquisition of Old Street Quarter
In 2021, we agreed to acquire Old Street Quarter EC1 for £239m
(plus transaction costs), with completion expected in late-2027.
We are looking to structure the site in a way that allows flexibility
of delivery which may include joint ventures, forward funding
and/or plot sales.
See page 21
Other accretive investment opportunities
After allowing for other commitments, £1bn of property disposals
could provide surplus capital of up to £250m. In an environment
where the cost of capital across the sector has increased, we will
consider investing in share buybacks where they are more
accretive to earnings and total return. Acquisitions will remain
under consideration where the strategic and financial rationale is
compelling.
Disposals
£1bn target over next three years
Mature / lower returning assets
Consider creation of co-investment vehicles
Balance sheet
Maintain strong
financial position
Net debt/EBITDA
<9.5x
Development
Value-driven,
selective approach
Targeting 10%+
ungeared IRR
Acquisitions
Future pipeline for
next decade
Old Street Quarter
EC1
Shareholder
distributions
Dividends
Share buybacks
Disciplined redeployment
Investment case
continued
Derwent London plc
Report and Accounts 2025
18
Regeneration projects
298,000 sq ft development
108% area uplift
Total capex:
£298m
plus estimated overage of £30m
Completed:
August 2025
Rent:
£21.7m pa
(headline) – Offices
100% pre-let
Residential
73% sold for £118m
(including affordable)
Returns:
Yield on completion
7.5
%
IRR (ungeared)
11.3
%
Well-located:
This mixed-use scheme, comprising 204,000
sq ft of Grade A offices, 41 private residential apartments
and 17 retail units, is situated in the heart of Marylebone
and conveniently located within a 10-minute walk of Bond
Street station (tube and Elizabeth line).
Generous amenity:
The office building features a
voluminous reception, best-in-class end of journey facilities
and an in-house café and lounge offering informal
collaborative space.
High sustainability credentials:
The office uses all-electric
heating and cooling with Intelligent Building technology,
and is rated BREEAM Outstanding with a 4.5 Star NABERS
target.
Value for other stakeholders:
The development also
delivered 7,000 sq ft of affordable housing and the creation
of a new landscaped, pedestrianised public courtyard.
Further value expected:
The offices were pre-let 16.5%
above our appraisal ERV. Recent local lettings have shown
rents continuing to grow at >5% pa, further increasing
reversion still to come.
25 Baker Street
W1
Network
W1
141,200 sq ft development
101% area uplift
Total capex:
£125m
Completion:
Imminent
Dec 2025 ERV:
£13.7m pa
(headline) – Offices
under offer
Expected returns:
Yield on completion
6.5-7.0
%
IRR (ungeared)
8-9
%
Excellent connections:
Located in the vibrant community
of Fitzrovia, this building benefits from a wide range of local
amenities and excellent access to transport links.
Building features:
The building features a double-height
reception, generous amenity provision, flexible floor plates,
and both communal and private terraces.
Reduced environmental impact:
Designed as our lowest
ever carbon building, it incorporates various circular
economy measures, including the reuse of raised access
flooring. Following its completion, the building aims to
achieve BREEAM Outstanding, LEED Gold, EPC A, and
NABERS 4.5 Star ratings.
Community benefits:
As part of this development, 23
affordable homes were built at nearby Tottenham Mews W1,
contributing positively to the wider community.
Offices under offer:
Broad range of occupier interest, both
for single occupancy and multi-let.
We completed 25 Baker Street W1 in August 2025. The offices were fully pre-let substantially ahead
of ERV and the project delivered strong returns. Practical completion at Network W1 is imminent
and all of the offices are under offer, supporting our attractive return forecast.
19
Strategic report
Governance
Financial statements
Other information
Regeneration projects
continued
Development and refurbishment
activity is a key component of our
total return model. We take a
disciplined and selective approach,
investing in projects where returns are
supported by a positive rental outlook.
We typically invest £150m to £200m in
capital expenditure each year in a
combination of major value-add projects
and smaller refurbishments. We take a
rigorous approach before committing to a
project, benchmarking returns against
other investment opportunities. We have
previously disposed of several potential
schemes prior to commencement based
on the relative return outlook.
Our current pipeline comprises:
Holden House W1;
Greencoat & Gordon House SW1;
50 Baker Street W1;
Plus a number of rolling refurbishments
across the portfolio, the most significant
being at 1-2 Stephen Street W1 and
Middlesex House W1.
The timing, pace and extent of rolling
refurbishments depend on when we take
space back from occupiers. We reposition
properties with enhanced amenity and
general upgrades to grow income and
future-proof asset value. Refurbishment
activity also includes EPC upgrade works.
Our potential future pipeline totals c.1.2m
sq ft. For some properties, alternative
uses may be the highest value
opportunity and we are actively exploring
several, mainly living-led, schemes. Where
appropriate, we will consider working with
specialist partners. At Old Street Quarter
EC1, we are working with Related Argent
to optimise the scheme and enhance
flexibility of delivery. In addition, we
worked with Astir at Blue Star House SW9
to secure a hotel-led planning consent in
2025.
All these projects are classified in the
‘With Potential’ or 'Under Development’
sections of our balanced portfolio. On
completion, properties move into the
‘Core Income’ category where we
continue to capture rental growth and
create value through asset management.
See page 22
On site
Holden House W1
Redevelopment behind façade
Target completion:
H2 2028
133,500
sq ft
Uplift: 47%
(from 90,600 sq ft)
c.£
160
m
Total capex
Proposed 2026 start
Greencoat & Gordon House SW1
Comprehensive refurbishment
Target completion:
H2 2027
107,800
sq ft
c.£
57
m
Total capex
50 Baker Street W1
Redevelopment
Target completion:
H2 2029
c.
236,000
sq ft
Uplift: 93%
(from 122,300 sq ft)
c.£
260
m
Total capex
On site and proposed 2026 starts
Derwent London plc
Report and Accounts 2025
20
Project timeline for major projects
2026
2027
2028
2029
2030+
Holden House
50 Baker Street
Greencoat & Gordon House
20 Farringdon Road
Old Street Quarter
230 Blackfriars Road
Rolling refurbishments
Next
phase
Longer term
On-
site
Rolling refurbishments
1-2 Stephen Street W1
£
87
+ psf
Estimated rental value
£
73
psf
Previous/passing rent
Middlesex House W1
£
85
+ psf
Estimated rental value
£
60
psf
Previous/passing rent
Future pipeline opportunities
20 Farringdon Road EC1
Comprehensive refurbishment
Potential start:
2027
Blue Star House SW9
Hotel-led refurbishment
Potential start:
2027
167,000
sq ft
86,100
sq ft
Consented
Uplift: 60%
(from 53,400 sq ft)
£
52
psf
Passing rent
£
90
+psf
Scheme ERV
Old Street Quarter EC1
Mixed-use campus redevelopment
Potential start:
2028+
230 Blackfriars Road SE1
Redevelopment
Potential start:
2030+
750,000
+ sq ft
Target
Uplift: 80%+
(from 400,000 sq ft)
200,000
sq ft
Target
Uplift: 300%+
(from 60,100 sq ft)
Blue Star House
21
Strategic report
Governance
Financial statements
Other information
Future
opportunity
19%
Under
appraisal
11%
Core
income
58%
Consented
3%
Major
projects
9%
A
s
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e
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:
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a
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t
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e
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)
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s
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n
d
Strategic framework & business model
to the Group’s 5.3m sq ft property portfolio using our
people, relationships and financial resources to add value
Core income
Vision
We craft inspiring and
distinctive space where
people thrive
Values
We build long-term
relationships
We lead by design
We act with integrity
Purpose
We design and curate long-life, low
carbon, intelligent offices that contribute
to London’s position as a leading global
city, while aiming to deliver above average
long-term returns for all our stakeholders
58%
Under development/potential
42%
How we add value for shareholders
Balanced portfolio
Derwent London plc
Report and Accounts 2025
22
1.
To optimise returns from
a balanced portfolio
Investment: disposals
Provide capital for future
investment opportunities
Investment: acquisition
Buy properties with modest
capital values and potential to
upgrade and/or add floor area;
usually income producing
Asset management
(pre-upgrade)
Explore the best strategy for
a building whilst maintaining
income; agree landlord
breaks at future dates which
provide flexibility over vacant
possession for regeneration
Refurbishment and
development
Secure planning consent;
refurbish or redevelop, adding
floor area where possible;
seek to de-risk with pre-let(s)
and fixed price construction
contracts
Asset management (core
income)
Continue to add value through
satisfying occupier needs,
minimising voids, growing
income and further upgrades
Share buybacks
Used appropriately, share
buybacks are an alternative
source of earnings and value
growth
2.
To grow recurring cash flow
3.
To attract, retain and
develop talented employees
4.
To design, deliver and operate
our buildings responsibly
5.
To maintain strong and
flexible financing
See page 26
Total accounting return
5.0
%
NTA per share
3,225
p
(+2.4%)
EPRA EPS
98.4
p
(-7.6%)
Dividend
81.5
p
(+1.2%)
Total property return
5.5
%
Value created for other stakeholders / See
page 24
Value created 2025
Strategic objectives
Core activities
23
Strategic report
Governance
Financial statements
Other information
Debt providers
Strategic framework & business model
continued
Value created for
other stakeholders
Occupiers
We provide high quality amenity,
such as our lounges, and have a
dedicated team who run a series of
events which support wellbeing and
encourage collaboration and
community. Our Asset and Property
Management teams maintain an
ongoing dialogue with our occupiers
and we take a collaborative
approach to sustainability,
supporting our tenants in meeting
their environmental commitments.
Employees are supported through an
inclusive working environment with
opportunities to develop their skills
and share feedback. Anonymous
annual employee surveys capture
workplace experiences and measure
satisfaction levels, helping to guide
enhancements. Our staff receive
training on a variety of topics and
are kept informed through CEO-led
town hall meetings and our intranet,
providing clarity on business
strategy and decision making.
We communicate in an open and
transparent manner with our debt
providers, providing timely access to
information and regular
opportunities for dialogue, to build
lasting relationships. Alongside
regulatory disclosures, we host
meetings, presentations and
property tours, providing visibility
over the Group’s strategy and
performance. In 2025, we completed
£700m of refinancing, including a
bond issue and a new £450m
unsecured revolving credit facility.
For further detail on our approach to stakeholder engagement, see pages 128 and 129
£
250
m
7-year bond issuance (June
2025) with a 5.25% coupon
Financing strategy / See page 27
86.5
%
overall employee
satisfaction
See page 78
>30
k
number of occupiers in our
buildings
Property Review / See page 44
Employees
Derwent London plc
Report and Accounts 2025
24
Central and local
government
Local
communities
Suppliers
We maintain proactive relationships
with local and central government
departments where we engage
across a variety of levels including
local planners, local action groups
and HMRC. The Group seeks to
positively impact policy through
involvement in various bodies, such
as Westminster Property Association
(WPA) and New West End Company
(NWEC).
>
£
300
m
paid to suppliers in 2025
Supply Chain Responsibility Standard / See
page 168
We build long-term, responsible
relationships with suppliers founded
on fair treatment and high ethical
standards. Our Supply Chain
Responsibility Standard promotes
safe working practices, strict
Modern Slavery standards and our
approach towards net zero carbon,
while prompt payment and regular
engagement support transparency,
stability and collaboration.
Our buildings are an integral part of
the communities in which they sit
and our engagement takes many
forms. This can be both financial
and non-financial. Employee
volunteering, work experience
opportunities and building open
days support social value by
developing skills and strengthening
local connections.
£
1.4
m
donated through our
Community Fund since
inception
See page 76
Commitment to use
Low carbon
concrete
See page 72
25
Strategic report
Governance
Financial statements
Other information
Strategic objectives
1
To optimise returns
from a balanced
portfolio
We seek to balance our portfolio between
properties with regeneration potential,
and assets already repositioned where our
asset management skills can drive further
income and value. We actively recycle
capital by disposing of properties where
most of the upside has been captured or
which no longer meet our investment
criteria.
The returns we generate from our current
and future regeneration pipeline help us
outperform our benchmark (the MSCI
Central London Office Index). Value is
created over several years through
planning uplift, regearing of headleases
and regeneration.
We typically commence development
projects speculatively, but seek to de-risk
by agreeing pre-lets during construction.
For our ‘core income’ properties we aim to
maintain or grow income through active
asset management with a focus on
customer relationships.
Our disciplined, returns-focused approach
to capital allocation enables us to achieve
the right balance of risk and return for
shareholders.
1
2
3
4
7
8
9
10
1
3
4
5
6
7
8
9
11
A
B
C
2
To grow recurring
earnings and
cash flow
Property valuations reflect both
contracted and expected future cash
flows with a market yield that considers
risk, growth expectations, asset quality,
environmental considerations and other
factors.
Implementing the right strategy for a
property can both add value and increase
cash flow, though typically at different
stages of the property cycle.
Value creation usually occurs first as
expectations of rental growth emerge,
with the uplift in cash flow captured later
through rent reviews, lease regears and
other forms of lease restructuring.
By creating the right space in well-
connected locations and providing
occupiers with flexibility, adaptability and
amenity (including DL/Member benefits),
we can generate stronger rental growth.
In combination with effective cost control,
this helps drive earnings growth.
1
2
3
4
7
9
10
1
3
4
5
6
7
8
9
11
A
B
C
D
3
To attract, retain and
develop talented
employees
Our employees are instrumental to the
successful delivery of our strategy and
long-term business performance and we
invest significant time and resources in
their development and growth.
We are an inclusive and respectful
employer that values diversity and
champions equality. We are focused on
embedding our diversity and inclusion
ambitions throughout the business. This is
supported by a progressive and
collaborative culture built on teamwork,
integrity and long-term relationships.
Our operational structure enables the
effective management of complex
transactions by bringing together
cross-disciplinary project teams to
encourage creativity and innovation.
We undertake an annual anonymous staff
survey to identify where we are making a
positive impact and where we can
improve further.
1
2
3
4
16
6
7
8
9
10
11
B
C
Derwent London plc
Report and Accounts 2025
26
4
To design, deliver and
operate our buildings
responsibly
Delivering well-designed, adaptable,
occupier-focused buildings with carefully
considered amenity is integral to our
business model, providing better value for
our customers and stronger returns for
shareholders.
Setting high standards for design and
environmental responsibility builds
flexibility, longevity and climate resilience
into our portfolio.
To meet our target of becoming a net
zero business by 2030, we must deliver
buildings that are increasingly energy
efficient, powered by renewable energy
and with very low embodied carbon. We
must also reduce the reliance on natural
gas across our managed properties.
We work with our stakeholders, including
local communities around our buildings,
to ensure we operate responsibly and
meet their expectations and standards.
1
2
3
9
11
12
13
14
15
1
6
7
8
9
10
A
C
D
5
To maintain
strong and flexible
financing
We finance our business using equity and
a moderate level of debt. We value
long-term relationships with our lenders,
prioritising the stability and
understanding this provides over pursuing
the very lowest funding cost, whilst also
striving to be progressive and innovative
in our approach.
Our core principle is modest financial
leverage with generous interest cover,
balancing the higher risk associated with
regeneration activity while supporting our
credit rating.
We use a combination of unsecured,
flexible bank facilities to meet day-to-day
requirements and longer term fixed rate
debt from a variety of sources. This
provides flexibility to take capital
allocation decisions which may affect the
size of our balance sheet, such as a return
of surplus capital.
We maintain considerable headroom
under our facilities, enabling us to act
quickly on acquisition opportunities and
providing confidence to stakeholders that
our development pipeline can be delivered
without overstretching the balance sheet.
1
3
4
5
6
7
1
2
3
4
6
7
8
9
10
11
D
Key
Performance measures
Principal risks
Emerging risks
Our REIT status
Derwent London plc has been a Real
Estate Investment Trust (REIT) since
July 2007. The REIT regime (see page
285) provides a structure which closely
mirrors the tax position of an investor
holding property directly and removes
tax inequalities between different real
estate investors. REITs are principally
property investors with tax-exempt
property rental businesses, but remain
subject to corporation tax on non-
exempt income and gains. In addition,
we are required to deduct withholding
tax from certain shareholders on
property income distributions and, in
2025, £11.0m was paid to HMRC.
Our 2026 priorities
Secure letting at Network W1
Execute property disposals of
>£350m
Progress plans for 50 Baker Street
W1
Progress Old Street Quarter EC1
planning application
Deliver cost efficiency programme,
building on savings delivered in 2025
Achieve completion at Lochfauld
solar park
Appoint new Chief Executive
27
Strategic report
Governance
Financial statements
Other information
Progress against 2025 priorities
Objective
2025 priorities
Progress
1
Complete projects at 25 Baker Street W1
and Network W1, including securing pre-lets
at Network, and further residential sales
and letting of the retail units at 25 Baker
Street
25 Baker Street reached practical completion in August 2025, with the
offices fully pre-let and three of the six retail units leased. 73% (by value)
of the private residential units were pre-sold. Network completion is
imminent and all of the office space is under offer
Commence redevelopment at Holden
House W1
Demolition works of this retained-façade development commenced in
early August. Main contractor engaged under a pre-construction
services agreement
Progress 50 Baker Street development
New long-term headlease agreed with the freeholder. Multiplex selected
as preferred contractor under a pre-construction services agreement.
Demolition tenders returned within budget
Continue to progress masterplans for Old
Street Quarter in advance of planning
application
Strategic partnership formed with Related Argent to support delivery of
a mixed-use, living-led planning consent ahead of site acquisition in
late-2027
Progress disposal opportunities
Disposals of £216.1m completed in 2025, including 4-10 Pentonville Road
NW1, Francis House SW1 and 24 of the 41 private residential units at 25
Baker Street
Review emerging acquisition opportunities
Explored several acquisition opportunities with regeneration potential
across a range of assets; disposals prioritised
2
Proactively manage upcoming reviews,
expiries/breaks and vacancies to retain or
increase income
Asset management activities totalling 909,200 sq ft (17% of portfolio)
completed, a record year, increasing rent by 6.9% to £58.9m. The
combined retention and re-let rate was 71% and the ‘topped-up’
average unexpired lease length is 7.0 years (2024: 6.7 years)
Continue to upgrade portfolio and drive
rents
Invested £28m on smaller upgrade projects, with particular focus on
decarbonisation works
Review opportunities to reduce EPRA cost
ratio
Administrative costs reduced 5% to £39.1m (2024: £41.1m). EPRA cost
ratio increased marginally to 27.3% (2024: 27.0%)
Complete majority of apartment sales at
25 Baker Street
24 of the 41 private residential sales completed for £115.8m (73% by
value)
3
Maintain focus on future succession
planning and employee upskilling
Paul Williams, Chief Executive, to retire when successor in place;
comprehensive recruitment process underway. Nigel George, Executive
Director, to retire in March 2026. Employee training and development
programme maintained, including executive coaching and mentoring
Consider appropriate action identified
following staff ‘pulse survey’
Long service award enhanced and employee recognition programme
introduced
Prepare and launch biennial employee
survey
Employee survey completed in October with 86% response rate; 86.5%
overall employee satisfaction rating
Analyse feedback from NES reassessment
report and refocus priorities
Conducted two focus groups on experience in workplace for those from
ethnically diverse backgrounds. Provided training on new employment
legislation on prevention of sexual harassment in the workplace
Continue with health and wellbeing
initiatives
All employees offered 1-1 health checks. Hosted ‘lunch and learn’
sessions covering wide range of health and wellbeing topics
Strategic objectives
continued
Strategic objectives
1
To optimise returns
and create value from
a balanced portfolio
3
To attract, retain
and develop
talented employees
2
To grow recurring
earnings and
cash flow
4
To design, deliver
and operate our
buildings responsibly
5
To maintain strong
and flexible financing
Derwent London plc
Report and Accounts 2025
28
Objective
2025 priorities
Progress
4
Maintain positive progress towards energy
intensity reduction targets
Energy consumption reduced by 6% to 48.7m kWh (2024: 51.8m kWh),
equivalent to a 9% reduction in energy intensity to 125 kWh/sqm (2024:
137 kWh/sqm)
Ensure our development pipeline continues
to meet our embodied carbon targets
2025 embodied carbon intensity target achieved at 25 Baker Street (594
kgCO
2
e/sqm) and on target at Network (c.530 kgCO
2
e/sqm)
Progress Lochfauld Solar Park including
commencement of solar panel installation
Installation of solar panels complete with cabling and other
infrastructure works progressing; on track for energisation mid-2026
Progress concrete decarbonisation and
circular economy initiatives
Low carbon concrete mixes selected for prototyping by AC-DG (see page
72) facilitated by member funding. Good progress on circular economy
with reuse and retention across both major and smaller projects
Review and expand material Scope 3
inventory elements
The decision was taken not to pursue further upstream supply chain
carbon emissions mapping at this stage
Launch of three-year funding option under
our Community Fund
£450,000 committed for community funds covering 2025-2027, with
three-year funding model in place
5
Repay convertible bonds due June 2025
£175m convertible bonds repaid on maturity in June 2025
Refinance main £450m bank facility
Signed new four-year £450m RCF to July 2029 plus two one-year
extension options
Consider refinancing options for LMS bonds
2026
New £250m 5.25% bond due in 2032 issued in June 2025
Maintain substantial headroom on financial
covenants
Interest cover remains strong at 3.1 times; property income could fall by
53% before breaching the interest cover covenant. High level of cash
and undrawn facilities maintained (£627m at December 2025) and EPRA
LTV remains low at 29.4%
Continue to maintain close relations with
existing lenders
Maintained regular dialogue with all our lenders throughout the year
and hosted a number of property tours
See Our 2026 priorities on page 27
Achieved
In progress
Not achieved
29
Strategic report
Governance
Financial statements
Other information
Key performance indicators
1. Total accounting return (TAR)
TAR is used to assess the value we have
delivered for investors and our goal is to
outperform the average of major UK real
estate companies (our ‘benchmark’).
Strategic objectives
1
2
3
4
5
A
R
Our performance
The Group’s TAR in 2025 was 5.0%
compared to the benchmark of c.4.9%
based on current estimates. Our average
annual return over the past five years is
-0.8%, a 3.6% pa underperformance
against the benchmark of 2.8%, mainly
due to the office sector performing less
well than other property sectors.
2. Total property return (TPR)
TPR is used to assess progress against our
property-focused strategic objectives.
Our aim is to exceed the MSCI Central
London Office Index on an annual basis
and the MSCI UK All Property Index on a
three-year rolling basis.
Strategic objectives
1
2
3
4
R
Our performance
Good progress on delivery and de-risking
of on-site projects resulted in a 0.7%
outperformance of the MSCI Central
London Office Index during 2025. The
Group’s three-year rolling average TPR is
0.8% pa, a 2.7% underperformance
against the MSCI UK All Property Index.
This was mainly due to the strength of
other sectors in previous years.
Financial
2022
2022
2021
2023
2024
2025
MSCI Central London Office Index
Derwent London
5.9
6.3
-7.3
4.8
-8.0
-7.9
-3.4
2021
Annual
5.5
1.3
4.1
2023
2024
2025
4.9
5.0
6.2
3.2
-0.6
-11.7
-14.1
-6.3
17.8
5.8
Weighted average of major UK REIT companies
Derwent London
Three-year rolling
2022
2021
2023
2024
2025
MSCI UK All Property Index
Derwent London
5.1
4.7
1.7
1.1
-1.5
2.1
-1.5
-2.2
3.5
0.8
We use a balance of financial and non-financial key performance indicators (KPIs) to measure our
performance and assess the effectiveness of our strategy. They are also used to monitor the impact of the
principal risks that have been identified and a number are used to determine remuneration.
Derwent London plc
Report and Accounts 2025
30
3. Total shareholder return (TSR)
TSR is used to measure the Group’s
success in providing above average
long-term returns to its shareholders. We
compare our performance against the
FTSE 350 Real Estate Supersector Index,
measured in accordance with industry
best practice.
Strategic objectives
1
2
3
4
5
R
Our performance
The fall in the share price during the year,
in comparison to those of our peers
mainly invested in other property sectors,
meant that the Group underperformed
its benchmark index in 2025.
4. EPRA earning per share (EPS)
EPRA EPS is the principal measure used to
assess the Group’s operating
performance and a key determinant of
the annual dividend. A reconciliation to
the IFRS profit can be found in note 37 on
page 265.
Strategic objectives
1
2
3
5
A
Our performance
EPRA EPS decreased 7.6% to 98.4p per
share in 2025. This was mainly due to
higher finance costs incurred in the year.
5. Gearing and available resources
The Group uses EPRA LTV and NAV
gearing to monitor its capital position.
The levels of cash and undrawn facilities,
and uncharged properties remain under
regular review to ensure sufficient
flexibility to take advantage of acquisition
and development opportunities.
Strategic objectives
5
A
Our performance
After net divestment in our portfolio of
£37.2m in 2025, cash and undrawn
facilities at year end increased to £627m.
EPRA LTV and gearing ratios have
reduced in the year and remain at
comfortable levels.
6. Interest cover ratio (ICR)
We aim for interest payable to be covered
by net rental income at least two times.
The basis of calculation, which is detailed
in note 39 on page 270, is in line with the
covenant which forms part of our
unsecured bank debt.
Strategic objectives
5
A
Our performance
Net property income increased in the
year but higher finance costs resulted in
ICR decreasing in 2025. We retain
substantial headroom to the main ICR
covenant of 1.45 times; rental income
would need to fall by 53% before it was
breached.
Strategic objectives
1
To optimise returns
and create value from
a balanced portfolio
3
To attract, retain
and develop
talented employees
2
To grow recurring
earnings and
cash flow
4
To design, deliver
and operate our
buildings responsibly
2022
2021
2023
2024
2025
-13.4
-5.4
-8.9
8.4
1.5
-31.1
-28.2
27.2
10.3
FTSE UK 350 Supersectors Real Estate Index
Derwent London
2022
2021
2023
2024
2025
98.4
106.5
102.0
106.6
108.5
5
To maintain strong
and flexible financing
Audited
A
Assured
A
Remuneration
R
2.9
2025
2024
EPRA LTV
29.4%
29.9%
NAV gearing
40.1%
41.9%
Cash and undrawn facilities
£627m
£487m
Uncharged properties
£4,754m
£4,665m
2022
2021
2023
2024
2025
3.1x
3.9x
4.1x
4.2x
4.6x
31
Strategic report
Governance
Financial statements
Other information
Key performance indicators
continued
7. Reversionary percentage (cash basis)
This is the percentage by which cash flow
from rental income would grow, assuming
passing rent increases to the estimated
rental value (ERV) and that on-site
schemes are completed and fully let.
This is used to monitor the Group’s
future income growth potential.
Strategic objectives
1
2
5
Our performance
ERV increased by £14.8m to £335.3m in
2025. This was due to rental growth across
the portfolio, partly offset by disposals in
the year. The £141m potential reversion at
December 2025 is 72% of passing rent
(£195m), of which 38% is contracted.
8. Development potential
We monitor the proportion of our
portfolio with refurbishment or
redevelopment potential to ensure it
contains sufficient opportunities for
future value creation.
Strategic objectives
1
R
Our performance
At the end of 2025, major projects
represented 9% of the portfolio with a
further 33% identified as potential
schemes. Including the conditional
acquisition of Old Street Quarter EC1, the
development potential increases to 46%.
9. Tenant retention
Maximising tenant retention, in the
absence of regeneration plans, reduces
void periods and vacancy levels,
contributing to net rental income.
Strategic objectives
1
2
4
R
Our performance
Our retention and re-let rate was 71% in
2025. This was partly due to timing of
breaks and expiries towards the end of
the year.
10. Void management
To optimise our rental income we plan to
minimise the amount of space
immediately available for letting. Our aim
is for this to remain below 10% of the
portfolio’s EPRA ERV.
Strategic objectives
1
2
R
Our performance
Our EPRA vacancy rate at year end was
4.1% and averaged 3.7% through 2025.
The increase compared to 2024 was
mainly due to vacancies arising in Q4
2025.
2022
2021
2023
2024
2025
42
47
44
43
48
2022
2021
2023
2024
2025
57
50
49
65
Non-financial
2025
2024
2023
2022
2021
Exposure (£m pa)
1
21.1
17.9
21.5
13.2
19.7
Retention (%)
51
76
62
59
47
Re-let (%)
20
9
3
20
30
Total (%)
71
85
65
79
77
1
Rental income subject to tenant breaks or expiries.
Year end
(%)
Average
(%)
2025
4.1
3.7
2024
3.1
3.2
2023
4.0
4.3
2022
6.4
5.7
2021
1.6
2.3
72
Derwent London plc
Report and Accounts 2025
32
11. BREEAM rating
BREEAM is an environmental impact
assessment for non-domestic buildings.
Performance ratings are: Pass, Good,
Very Good, Excellent and Outstanding.
We target minimum BREEAM ratings of
‘Excellent’ for major developments and
‘Very Good’ for major refurbishments.
Strategic objectives
4
Our performance
25 Baker Street W1 completed during the
year and received a final BREEAM rating
of ‘Outstanding’. Network W1 is expected
to receive a final rating of ‘Outstanding’
having received this at Design Stage.
12. Energy Performance Certificate (EPC)
EPCs indicate the energy efficiency of a
building. The ratings range from ‘A’ (very
efficient) to ‘G’ (inefficient). We target a
minimum EPC of ‘A’ for major
developments and ‘B’ for major
refurbishments.
Strategic objectives
4
Our performance
Following completion, 25 Baker Street
received an EPC rating of ‘A’.
13. Energy intensity
Energy intensity is measured as energy
consumption over the gross internal floor
area (kWh/sqm) across our managed
portfolio. In 2025, our energy intensity
milestone was 131 kWh/sqm, aligned with
achieving 90 kWh/sqm by 2030. Energy
intensity will continue to be a non-
financial KPI but will be removed as a
remuneration KPI from 2026.
Strategic objectives
4
A
R
Our performance
Energy intensity across our managed
portfolio decreased by 9% from 2024 to
125 kWh/sqm, a reduction of 25%
compared to the 2019 baseline. The
decrease relates to a series of proactive
initiatives implemented by the Property
Management team, including
decarbonisation works, continued
occupier engagement, MEP upgrades,
streamlined plant run-times and
enhanced out of hours usage monitoring.
14. Embodied carbon intensity
Embodied carbon intensity is measured as
the carbon emissions generated in the
construction of new developments
(upfront carbon, modules A1-A5) divided
by the new gross floor area, measured in
kgCO
2
e/sqm. Our embodied carbon
intensity targets are aligned with our net
zero by 2030 pathway.
Strategic objectives
4
R
Our performance
We worked closely with our designers and
contractors to reduce the embodied
carbon footprint at 25 Baker Street and
Network. Both projects have an
embodied carbon intensity of less than
600 kgCO
2
e/sqm, in line with our
corporate targets.
(a) Denotes metric has been subject to limited assurance by
PricewaterhouseCoopers LLP in accordance with the ISAE 3000
(Revised) and ISAE 3410 Standards.
Strategic objectives
1
To optimise returns
and create value from
a balanced portfolio
3
To attract, retain
and develop
talented employees
2
To grow recurring
earnings and
cash flow
4
To design, deliver
and operate our
buildings responsibly
5
To maintain strong
and flexible financing
Audited
A
Assured
A
Remuneration
R
Completion
Rating
25 Baker Street W1
H2 2025
Outstanding
Network W1
H1 2026
Outstanding
1
1
Certified at Design Stage.
Completion
Rating
25 Baker Street W1
H2 2025
A
Network W1
H1 2026
A
1
1
Targeted.
2022
2021
2023
2024
2025
125
(a)
137
149
142
139
Completion
kgCO
2
e/sqm
25 Baker Street W1
H2 2025
594
Network W1
H1 2026
c.530
33
Strategic report
Governance
Financial statements
Other information
Key performance indicators
continued
15. Accident Frequency Rate (AFR)
This is calculated by multiplying the
number of significant RIDDOR (Direct)
injuries and incidents during the year by
1,000,000 and dividing by the total work
exposure hours. This KPI, which was
introduced in 2024, was previously based
on total development RIDDOR injuries
only.
Strategic objectives
4
A
R
Our performance
In 2025, the RIDDOR (Direct) AFR was
0.44 with 1 RIDDOR (Direct) reported,
down from an AFR of 1.35 and 4 RIDDORs
in 2024.
16. Staff satisfaction
We assess employee satisfaction through
an annual staff survey, and target a
satisfaction rate above 80%.
Strategic objectives
3
R
Our performance
The measure of staff satisfaction was
86.5%. This strong level is testament to
our collaborative and supportive culture
and the pride our staff feel in working at
Derwent London.
2022
2021
2023
2024
2025
86.5
91.2
87.5
88.4
90.5
Non-financial
continued
(a) Denotes metric has been subject to limited assurance by
PricewaterhouseCoopers LLP in accordance with the ISAE 3000
(Revised) Standard
RIDDOR
(Direct) AFR
Construction
projects total
RIDDOR AFR
2025
0.44
(a)
3.94
2024
1.35
1.75
2023
n/a
4.38
2022
n/a
3.60
2021
n/a
1.26
Derwent London plc
Report and Accounts 2025
34
Property review
Network
W1
35
Strategic report
Governance
Financial statements
Other information
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%).
Valuation
Nigel George
Executive Director
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.
Property review
Derwent London plc
Report and Accounts 2025
36
0
2
4
6
8
10
12
%
2003
2001
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
Derwent London true equivalent yield
UK 10-year Gilt
BBB yield
5.0
4.5
4.0
5.5
6.0
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
%
(4)
(6)
6
25
25
(3)
3
3
0
(3)
1
(9)
(15)
(4)
42
42
18
0
(4)
2
Rent reviews and lease renewals
Under refurbishment / development
Available to occupy
Contractual rental uplifts (including pre-lets)
Contractual rent
Reversion %
0
25
50
75
100
Reversion (%)
0
100
200
300
400
Rental income (£m)
2021
2022
2023
2024
2025
Portfolio income potential
True equivalent yield
Valuation yields
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.
Members of the Investment and Valuation teams
37
Strategic report
Governance
Financial statements
Other information
(4)
(2)
0
2
4
6
%
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Derwent London H1 growth
Derwent London H2 growth
6.3
(3.4)
5.9
(8.0)
16.5
(9.1)
(7.3)
(7.9)
(12)
(9)
(6)
(3)
0
3
6
9
12
15
18
2021
2022
2023
2024
2025
%
(1.0)
4.1
5.5
1.3
5.5
6.0
4.8
Derwent London
MSCI Central London Offices¹
MSCI UK All Property¹
1
Quarterly index.
Rental value growth
Property review
continued
Valuation
continued
Total property return
Holden House
W1
Derwent London plc
Report and Accounts 2025
38
Portfolio statistics – rental income
Net
contracted
rental
income per
annum
£m
Average
rental
income
£ per sq ft
Vacant
space
rental value
per annum
£m
Lease
reversion per
annum
1
£m
Portfolio
estimated
rental value
per annum
£m
Average
unexpired
lease length
2
Years
West End
Central
108.3
48.43
57.1
56.0
221.4
7.8
Borders
18.1
49.50
0.3
0.8
19.2
4.4
126.4
48.58
57.4
56.8
240.6
7.3
City
Borders
65.5
50.83
10.7
12.2
88.4
3.7
Central London
191.9
49.33
68.1
69.0
329.0
6.1
Provincial
2.9
9.36
0.7
2.7
6.3
3.3
Total portfolio
2025
194.8
46.42
68.8
71.7
335.3
6.0
3
2024
204.3
43.65
34.9
81.3
320.5
5.9
1
Contracted uplifts, rent reviews/lease renewal reversion and pre-lets.
2
Lease length weighted by rental income at year end and assuming tenants break at first opportunity.
3
7.0 years after adjusting for ‘topped-up’ rents and pre-lets.
Portfolio statistics – valuation
Valuation
£m
Weighting
%
Valuation
1
performance
%
Let
floor area
2
‘000 sq ft
Vacant
available
floor area
‘000 sq ft
Vacant
refurbishment
floor area
‘000 sq ft
Vacant
project
floor area
‘000 sq ft
Total
floor area
‘000 sq ft
West End
Central
3,527.8
69
2.5
2,277
70
186
433
2,966
Borders
273.2
6
(1.5)
366
11
0
0
377
3,801.0
75
2.2
2,643
81
186
433
3,343
City
Borders
1,178.7
23
(0.9)
1,310
172
82
0
1,564
Central London
4,979.7
98
1.5
3,953
253
268
433
4,907
Provincial
114.2
2
13.1
309
42
0
0
351
Total portfolio 2025
5,093.9
100
1.7
4,262
295
268
433
5,258
2024
5,041.1
100
0.2
4,745
242
194
175
5,356
1
Underlying – properties held throughout the year.
2
Includes pre-lets.
Rental income profile
Accounting
rental uplift
£m pa
Accounting
rent
£m pa
Headline
rental uplift
£m pa
Headline
rent
£m pa
Annualised contracted rental income, net of ground rents
210.4
194.8
Contractual rental increases across the portfolio
–
53.5
Letting 295,000 sq ft available floor area
8.9
11.2
Completion and letting 268,000 sq ft of refurbishments
13.9
17.4
Completion and letting 433,000 sq ft of major projects
32.2
40.2
Anticipated rent review and lease renewal reversions
15.9
18.2
Portfolio reversion
70.9
140.5
Potential portfolio rental value
281.3
335.3
39
Strategic report
Governance
Financial statements
Other information
Central London office rent
‘Topped-up’ income
£0-£30 per sq ft
5%
£30-£40 per sq ft
9%
£40-£50 per sq ft
9%
£50-£60 per sq ft
20%
£60-£70 per sq ft
16%
£70-£80 per sq ft
18%
£80+ per sq ft
23%
Ten largest tenants
% of rental
income1
Expedia
8.0%
Public sector
7.6%
Boston Consulting Group
7.5%
G-Research
5.0%
Fora
4.0%
Paymentsense
3.2%
Sony Pictures
2.8%
Arup
2.8%
Adobe
2.2%
Burberry
2.0%
Tenant diversity
% of rental
income1
Business services
23
Media
14
Fintech
10
Online leisure
8
Retail & hospitality
8
Financial
8
Public sector
7
Technology
7
Flexible office providers
6
Retail head office
5
Other
4
1
Based upon contracted net rental income of £194.8m.
1 Stephen Street
W1
Property review
continued
Derwent London plc
Report and Accounts 2025
40
0
2
4
6
8
10
12
14
16
18
2001
2003 2005 2007 2009 2011
2013
2015
2017
2019
2021
2023 2025
Vacancy rate (%)
West End
City
Docklands
Central London
Source: CBRE
0
2
4
6
8
10
12
14
16
18
20
Take-up (million sq ft)
2001 2003 2005 2007 2009
2011
2013
2015
2017
2019
2021
2023 2025
West End
City
Docklands, Midtown & Southbank
Source: CBRE
Floorspace (million sq ft)
Vacancy rate (%)
2
4
6
8
10
12
2
4
6
8
10
12
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029
Under construction available
Under construction let/under offer
Completed
Completed average
Vacancy rate
Source: CBRE
Occupational market
Occupational activity across London continues to strengthen,
reflected in elevated levels of viewings and sustained demand
from a broad range of business sectors. Looking ahead,
sentiment remains positive, with 80% of take-up in 2025
reflecting growth/expansion moves and occupiers increasingly
focused on securing space in well-connected, central locations.
With a supply crunch anticipated in coming years and a strong
level of demand, competition for best-in-class, sustainable
buildings with good amenity and close proximity to the Elizabeth
line or other transport hubs will drive rental growth. We are
already seeing this growth spreading more broadly in respect of
price point and location, reflecting a deeper, more balanced
market which we expect to continue.
Supply constraints remain a structural characteristic of the
market. With limited new stock under construction, pre-letting
activity remains solid and grade A vacancy rates across central
London are sub-2%. This imbalance between supply and demand
is significant and scarcity of space of the quality the market is
looking for is expected to become more pronounced over the
coming years.
In this environment, we will see a continuation in the trend of
occupiers renewing where the space works for their businesses.
For occupiers, the ‘stay put’ option removes uncertainty and
cost. For landlords, it supports income security and creates
opportunities to extend lease lengths, enhance occupancy and
capture rental growth.
Central London office take-up
Available space by sub-market
Leasing and asset management
Central London Office Market
80%
of new leases are for expansion
Central London development pipeline
41
Strategic report
Governance
Financial statements
Other information
0
5
10
15
20
25
30
35
40
45
Rental income (£m pa)
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025YTD
2026
Non pre-let average
Pre-lets
Non pre-lets
Under offer
In negotiations
Rental income (£m pa)
Number of
transactions
0
20
40
60
8
0
10
0
12
0
14
0
0
10
20
30
40
50
60
70
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Rent reviews
Lease renewals
Regears
Number of transactions
Leasing and asset management
Emily Prideaux
Executive Director
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.
Property review
continued
Leasing analysis
Asset management activity
Derwent London plc
Report and Accounts 2025
42
Leasing activity in 2025 to date
Let
Performance vs
Dec 2024 ERV (%)
Area
‘000 sq ft
Income
£m pa
WAULT
1
Years
Open
market
Overall
2
H1 2025
99.4
4.3
4.6
8.4
-10.9
H2 2025
134.0
7.0
6.1
10.7
9.9
2025
233.4
11.3
5.5
9.9
0.9
Of which: F+F
3
46.2
2.7
2.4
3.6
3.6
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
Property
Tenant
Area sq ft
Rent £ psf
Total annual
rent £m
Lease term
Years
Lease break
Year
Rent free
equivalent
Months
The White Chapel Building E1
BE Offices
23,600
48.60
1.1
9.7
–
22
90 Whitfield Street W1
Validus Risk
Management
11,800
91.50
1.1
10
7
18, plus 6 if
no break
230 Blackfriars Road SE1
TP Bennett
1
14,600
49.50
0.7
3.7
1.7
0, plus 3 if
no break
90 Whitfield Street W1
BMJ
6,500
86.50
0.6
6.2
4.2
10, plus 4 if
no break
Morelands EC1
Ingeus
1
8,400
67.40
0.6
2.4
–
2
Morelands EC1
Exigere
8,200
70.00
0.6
5.2
–
13
White Collar Factory EC1
Adobe
13,400
39.50
0.5
13.3
8.3
17, plus 12
if no break
1-5 Maple Place W1
Union Maritime
1
5,900
68.20
0.4
5
3
4, plus 3 if
no break
230 Blackfriars Road SE1
Quantspark
7,300
45.00
0.3
5
2
6, plus 3 if
no break
25 Baker Street W1
Notto
3,300
89.90
0.3
10
–
15
1-2 Stephen Street W1
Sainsbury’s
4,600
65.40
0.3
15
10
9
1 Oxford Street W1
Donutelier
900
286.40
0.3
15
10
6
1
Space leased on a ‘Furnished + Flexible’ basis.
43
Strategic report
Governance
Financial statements
Other information
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
Number
Area
‘000 sq ft
Previous rent
£m pa
New rent
1
£m pa
Uplift %
New rent vs
Dec 2024
ERV %
Overall
Rent reviews
22
448.8
34.9
37.4
7.3
5.1
Lease renewals
39
157.2
5.5
5.7
3.4
-0.4
Lease regears
13
303.2
15.0
15.8
5.6
-0.6
Total
74
909.2
55.3
58.9
6.4
3.0
Activity excluding short-term development facilitation transactions
Lease renewals
37
149.0
5.4
5.6
3.5
2.1
Lease regears
11
297.1
14.8
15.7
5.9
0.1
1
Headline rent, shown prior to lease incentives.
Members of the Development, Leasing and Marketing teams
Leasing and asset management
continued
Property review
continued
Derwent London plc
Report and Accounts 2025
44
0
1
2
3
4
5
6
7
8
9
10
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Vacancy rate (%)
Derwent London (by rental value)
CBRE central London offices (by floorspace)
CBRE West End offices (floorspace)
Source: CBRE
0
2
4
6
8
10
12
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
Years
West End
City Borders
Central London
Retained
Re-let
Vacant
Average retained/re-let (83%)
0
10
20
30
40
50
60
70
80
90
100
%
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
63
57
76
83
65
47
59
26
35
14
7
22
30
20
11
8
10
10
13
23
21
62
3
35
76
15
9
51
29
20
Members of the Asset, Property and H&S teams
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.
Lease expiry and break analysis
Average unexpired lease length
Ten-year vacancy trend
45
Strategic report
Governance
Financial statements
Other information
3.5
3.0
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Prime office yield (%)
2003
2001
2005 2007 2009 2011
2013
2015
2017
2019 2021 2023 2025
West End
City
Source: CBRE
0
2
4
6
8
10
12
14
16
18
20
22
Investment transactions (£bn)
2001
2003 2005 2007 2009 2011
2013
2015
2017
2019
2021
2023
2025
Average
Source: CBRE
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.
Central London office yields
Central London office investment transactions
Investment and regeneration
Central London Office Market
Central London office stock
Source: CBRE
West End
39%
City
33%
Midtown
11%
Southbank
9%
Docklands
8%
Derwent London plc
Report and Accounts 2025
46
Developments and refurbishments
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.
Paul Williams
Chief Executive
Nigel George
Executive Director
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.
47
Strategic report
Governance
Financial statements
Other information
Schemes
Status
Total
Network W1
Holden House W1
Greencoat & Gordon
House SW1
50 Baker Street W1
Imminent completion
On site
Proposed
Proposed
Type of scheme
Development
Development
Major refurbishment
Development
Commencement
H1 2022
H2 2025
H1 2026
2026
Completion
Feb 2026
H2 2028
H2 2027
H2 2029
Office (sq ft)
561,100
136,300
113,000
107,800
204,000
Residential (sq ft)
14,000
–
–
–
14,000
Retail (sq ft)
43,400
4,900
20,500
–
18,000
Total area (sq ft)
618,500
141,200
133,500
107,800
236,000
Est. future capex
1
(£m)
9
135
52
TBC
Total cost
2
(£m)
242
290
151
TBC
ERV (c.£ psf)
100
110
80
TBC
ERV (£m pa)
13.7
15.2
9.6
TBC
Embodied carbon intensity
(kgCO
2
e/sqm) – estimate
3
c.530
c.590
<250
c.530
BREEAM rating (target)
Outstanding
Outstanding
Excellent
Outstanding
4
NABERS rating (target)
4.5 Star or above
5 Star or above
–
5 Star or above
4
Green finance
Elected
Elect in 2026 (target)
To be elected
To be elected
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.
Members of the Development team
Property review
continued
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.
Derwent London plc
Report and Accounts 2025
48
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.
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 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.
Lochfauld solar park, Scotland
49
Strategic report
Governance
Financial statements
Other information
Property review
continued
Net property investment
Principal disposals in 2025
Property
Date
Area
sq ft
Total before
costs £m
Net yield %
Net rental
income £m
pa
4 & 10 Pentonville Road N1
Q1
54,800
26.0
–
–
25 Baker Street W1 – residential (private & affordable)
Q3
38,500
118.1
–
–
25 Baker Street W1 – retail & 30 Gloucester Place offices
Q3
31,000
17.8
–
–
Francis House SW1
Q4
43,000 (plus
9,000 sq ft
basement)
54.1
4.9
2.9
(
400)
(
300)
(
200)
(
100)
0
100
200
300
400
500
£m
2021
2022
2023
2024
2025
Acquisitions
Capital expenditure
Disposals
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).
Derwent London plc
Report and Accounts 2025
50
Sustainability
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.
Members of the Scotland and Sustainability teams
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 tCO
2
e 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.
9%
reduction in energy intensity
51
Strategic report
Governance
Financial statements
Other information
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.
Damian Wisniewski
Chief Financial Officer
Presentation of financial results
The consolidated financial statements have been prepared in accordance with UK
adopted International Financial Reporting Standards (IFRS). In common with usual
and best practice in our sector, alternative performance measures have also been
provided to supplement IFRS based on the recommendations of the European
Public Real Estate Association (“EPRA”). EPRA Best Practice Recommendations
(BPR) have been adopted widely throughout this report and are used within the
business when considering our operational performance as well as matters such
as dividend policy and elements of our Directors’ and senior staff remuneration.
Full reconciliations between IFRS and EPRA figures are provided in note 37 and the
EPRA definitions are set out on pages 290 to 291
.
Finance review
Derwent London plc
Report and Accounts 2025
52
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.
Total net assets
£
3,615.3
m
Dec 2024: £3,539.8m
EPRA NTA per share
3,225
p
Dec 2024: 3,149p
EPRA NDV per share
3,302
p
Dec 2024: 3,261p
Property portfolio at fair value
£
5,093.9
m
Dec 2024: £5,041.1m
Gross property and other income
£
406.3
m
Dec 2024: £276.9m
Net rental income
£
190.0
m
Dec 2024: £189.6m
IFRS profit before tax
£
161.5
m
Dec 2024: £116.0m
EPRA earnings per share (EPS)
98.4
p
Dec 2024: 106.5p
Interim and final dividend per share
81.5
p
Dec 2024: 80.5p
EPRA LTV ratio
29.4
%
Dec 2024: 29.9%
Net interest cover ratio
3.1
x
Dec 2024: 3.9x
Net debt/EBITDA
9.0
x
Dec 2024: 9.3x
Financial highlights
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.
53
Strategic report
Governance
Financial statements
Other information
3,225
3,149
(81)
98
51
+2.4%
6
2
2,500
2,750
3,000
3,250
3,500
Pence
Profit on disposal
Other
Revaluation surplus
31 Dec 2025
31 Dec 2024
EPRA earnings
Dividends paid
40
60
80
100
120
140
£m
106.5p
per share
98.4p
per share
102.1p
per share
119.5
3.5
(2.5)
2.4
(2.7)
(7.6)
(2.2)
110.4
4.2
114.6
2024 EPRA
earnings
Gross rental
income
Surrenders
and other
Property
expenditure
Admin
expenses
Net finance
costs
Other
2025 EPRA
earnings
Trading disposal
profits
2025 adjusted
earnings
214.8
4.6
3.0
6.3
(10.2)
(0.2)
218.3
0
50
100
150
200
250
£m
Developments
Breaks, expiries
& voids
Acquisitions
& disposals
31 Dec
2025
31 Dec
2024
Lettings & asset
management
current year
Lettings & asset
management
prior year
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.
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.
Finance review
continued
EPRA net tangible assets per share
EPRA earnings
Movement in gross rental income
Derwent London plc
Report and Accounts 2025
54
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 37.
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.
55
Strategic report
Governance
Financial statements
Other information
2025
p
2024
p
Opening EPRA NTA
3,149
3,129
Revaluation movement
51
(8)
Profit on disposals
2
2
EPRA earnings
98
106
Ordinary dividends paid
(81)
(80)
Other
6
–
Closing EPRA NTA
3,225
3,149
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.
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.
Finance review
continued
Derwent London plc
Report and Accounts 2025
56
230
30
118
475
250
127
82.5
182.5
100
450
0
100
200
300
400
500
600
£m
2026
2027
2028
2029
2030
2031
2032
2033
2034
Fixed rate bonds & USPPs
Drawn bank loans
Headroom
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.
Proforma maturity profile of debt facilities
1
Debt facilities and reconciliation to borrowings and net debt at 31 December 2025
Drawn
£m
Undrawn
£m
Total
£m
Maturity
Secured bonds
175.0
–
175.0
2026
Green bonds
350.0
–
350.0
2031
Non-green bonds
250.0
–
250.0
2032
Private placement notes
455.0
–
455.0
2026 – 2034
Non-bank debt
1,230.0
–
1,230.0
Revolving credit facility
–
100.0
100.0
2027
Revolving credit facility
–
450.0
450.0
2029
Term loan
82.5
–
82.5
2027
Term loan
82.5
–
82.5
2028
1
Term loan
100.0
–
100.0
2028
Committed bank facilities
265.0
550.0
815.0
Debt facilities
1,495.0
550.0
2,045.0
Acquired fair value of secured bonds less amortisation
1.8
Unamortised discount on unsecured bonds
(2.3)
Unamortised issue and arrangement costs
(7.9)
Borrowings
1,486.6
Leasehold liabilities
41.0
Cash and cash equivalents
(77.2)
Net debt
1,450.4
1
Maturity following the facility extension in January 2026.
1
Includes facility extension of £82.5m term loan, exercised in January 2026.
57
Strategic report
Governance
Financial statements
Other information
Finance review
continued
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.
Members of the Finance team
Debt: key stats
Dec 2025
Dec 2024
Hedging profile (%)
Fixed
82
80
Swaps
0
5
82
85
Percentage of debt that is unsecured (%)
88
88
Percentage of non-bank debt (%)
82
80
Weighted average interest rate for the year (%)
3.8
3.3
Weighted average interest rate (%)
4.06
3.53
Weighted average maturity of facilities (years)
4.0
3.4
Weighted average maturity of borrowings (years)
4.2
4.0
Undrawn facilities and unrestricted cash (£m)
627
487
Uncharged properties (£m)
4,754
4,665
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.
Derwent London plc
Report and Accounts 2025
58
Francis House
SW1
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.
59
Strategic report
Governance
Financial statements
Other information
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:
Green
project
80 Charlotte
Street W1
1 Soho Place
W1
The Featherstone
Building EC1
25 Baker Street
W1
Network
W1
Expected
completion
date
Completed in 2020
Completed in 2022
Completed in 2022
2025
2026
Category for
eligibility
Green building,
criterion 1 of section
3.1 of the Framework
(excludes Asta House
and Charlotte
Apartments)
Green building,
criterion 1 of section
3.1 of the Framework
Green building,
criterion 1 of section
3.1 of the Framework
Green building,
criterion 1 and 2 of
section 3.1 of the
Framework (excludes
retail and refurbished
residential)
Green building,
criterion 1 of section 3.1
of the Framework
Impact
reporting
indicator
Building certification
achieved (system &
rating)
Building certification
achieved (system &
rating)
Building certification
achieved (system &
rating)
Building certification
achieved (system &
rating)
Building certification
achieved (system &
rating)
Green
credentials
1
Achieved:
BREEAM Excellent
EPC B
LEED Gold
Achieved:
BREEAM
Outstanding
EPC B
LEED Gold
Achieved:
BREEAM
Outstanding
EPC A
LEED Platinum
25 Baker Street
offices
2
Achieved:
BREEAM
Outstanding
EPC A
Expected:
LEED Gold, on
target
30 Gloucester Place
2
offices
Achieved:
BREEAM Excellent
EPC A
Private residential
Expected
:
Home Quality Mark
4 Stars, on target
Achieved:
BREEAM
Outstanding
(design stage)
Expected:
BREEAM
Outstanding
(post-construction),
on target
LEED Gold, on
target
EPC A, on target
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.
Finance review
continued
Derwent London plc
Report and Accounts 2025
60
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
Subsequent expenditure
EGP
Look back
expenditure
£m
Q4 2019
– FY 2024
£m
2025
£m
Disposals/
transfer
£m
Cumulative
expenditure
£m
80 Charlotte Street W1
185.6
52.6
–
–
238.2
1 Soho Place W1
57.5
167.1
–
–
224.6
The Featherstone Building EC1
29.1
69.2
–
–
98.3
25 Baker Street W1
26.5
219.2
46.8
(86.6)
205.9
Network W1
23.8
47.4
42.1
–
113.3
322.5
555.5
88.9
(86.6)
880.3
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).
61
Strategic report
Governance
Financial statements
Other information
Going concern & viability
In accordance with the UK Corporate Governance Code 2024 (the Code), the Directors and senior management team
assessed the prospects of the Company and potential threats to its resilience:
in the short-term (over the next 12 months as required by the ‘Going concern’ provision); and
in the medium-term (a five-year period to 31 December 2030) as required by the ‘Viability statement’ provision.
This statement also contains references to the longer term threats to the Company’s resilience (beyond the five-year period).
Our resilience
Viability of our strategy
The Board formally reviews its strategy on an ongoing basis to
ensure it remains capable of sustainable value creation and is
responding appropriately to changing macroeconomic
conditions, work practices and stakeholder expectations.
When assessing the viability of the Group’s strategy, the Board’s
key qualifications and assumptions were:
focus on the central London office market to continue but
with a willingness to consider alternatives such as living-led
schemes where these produce better returns;
an accelerated strategy of recycling capital by selling
buildings when we have maximised their potential, or they no
longer meet our investment criteria, and purchasing buildings
where there is an opportunity to replenish our development
pipeline or add value via asset management or refurbishment;
debt facilities are refinanced on a timely basis with a balance
between flexible and longer term fixed rate;
a property portfolio containing income producing properties
with added income/asset management potential plus
development/refurbishment opportunities; and
a progressive dividend policy, whilst targeting dividend cover
around 125% or more over the medium-term.
The London office market has generally been cyclical in recent
decades, with strong growth followed by economic downturns,
sometimes precipitated by rising interest rates. The impact of
these cycles is dependent on the quality and location of the
Group’s portfolio. Occupier demand in London is good for the
right product in the right location.
The Board agreed that we have a proven business model which
has allowed us to remain flexible and resilient during previous
property cycles and periods of significant uncertainty.
Additionally, we have the ability to flex our business plan to react
to unforeseen circumstances by either selling a property to
generate additional cash flow or commencing, stopping or
scaling back projects to manage our capital expenditure.
The Board agreed that no material change was required to its
strategy, which continued to generate sustainable returns, but
there is more focus on accelerated disposals over the next three
to five years and a rebalancing of the portfolio targeting growth
in earnings.
Short-term
Under provision 30 of the Code, the Board is required to report
whether it considers it appropriate to adopt the going concern
basis of accounting in the preparation of our financial
statements. The assessment focused primarily on the short-term
and at least the next 12 months to March 2027.
The Directors’ assessment included consideration of:
the Group’s current financial position;
the latest rolling forecast for the next two years, in particular
the cash flows, borrowings and undrawn facilities;
the timing of repayment of existing financing facilities;
current and potential sources of replacement financing;
lease expiry profile; and
any material uncertainties or assumptions.
The Group is in a strong financial position. As at 31 December
2025, the Group has:
£627m of undrawn facilities and cash (2024: £487m);
an EPRA loan-to-value ratio of 29.4%;
an overall cost of debt with a weighted average interest rate
of 4.1%;
82% of our borrowings either fixed or hedged;
net debt/EBITDA of 9.0 times; and
significant headroom on our financial covenants.
The Group has sufficient access to finance in the short-term and
medium-term. At 31 December 2025, our average maturity of
borrowings was 4.2 years and average maturity of facilities was
4.0 years. Although £230m of USPP notes and bonds fall due for
repayment by March 2026, these are well covered by alternative
arrangements already in place and the Group has significant
liquidity to fund its ongoing operations. As noted above, it had
access to £627m of available undrawn facilities and cash at the
year end. Further information is on pages 56 and 57.
The Directors stress tested the latest rolling forecast against
various scenarios to determine whether they were likely to have a
significant impact on the Group’s solvency and liquidity in the
short-term. This included a reverse stress test scenario and
indicated that the Group has sufficient liquidity and plenty of
headroom before breaching financial covenants.
Derwent London plc
Report and Accounts 2025
62
Material uncertainties or assumptions
The Directors did not identify any material uncertainties to the
Company’s ability to continue to operate as a going concern over
the period of its assessment which is supported by the ability to
let vacant space, operate a strong asset management strategy
and secure refinancing.
However, with any business there are sources of uncertainty that
could impact on operations. The key sources of estimated
uncertainty in the next 12 months are considered to be:
the economic environment creating a more challenging
financial environment for occupiers;
execution of leasing transactions due to cautious decision
making and a more ‘stay put’ attitude adopted by some
occupiers; and
the extent to which liquidity returns for larger lot sizes in the
office investment market.
Related information is on the following pages:
Significant financial judgements / See page 144
Property review / See pages 35 to 51
Group’s Risk Register
The Schedule of Principal Risks contains the risks which are
currently impacting the Group or could impact it over the next 12
months. These risks are routinely subject to a comprehensive
review by the Executive Committee, Risk Committee and the
Board. Consideration is given to the risk likelihood, impact and
velocity (speed at which the risk could impact the Group). The
Board agreed that, given the level of headroom, none of the
changes in risk likelihood or probability during the year had a
significant impact on the Group’s short-term viability.
Our principal risks / See pages 104 to 109
Going concern statement
After making appropriate enquiries, the
Directors have a reasonable expectation
that the Group and Company have
adequate resources to continue in
operational existence until at least March
2027. Therefore, the Board continues to
adopt the going concern basis in preparing
the financial statements.
Medium-term
The Directors challenge the time period over which to assess the
Company’s medium-term viability on an annual basis. The
Directors determined that the five-year period to 31 December
2030 remains an appropriate period based on the following:
For a major scheme, five years is a reasonable approximation
of the time taken from obtaining planning permission for a
typical development to letting the property.
Most leases contain a five-year rent review pattern or break
options. Therefore, five years allows for the forecasts to
include the reversion arising from those reviews while also
assessing the potential impact of income lost from breaks
exercised. Our weighted average unexpired lease term is 7.0
years (‘topped-up’ including rent-frees and pre-lets).
The average maturity of borrowings is 4.2 years as at
31 December 2025.
As part of its assessment, the Board considered the Group’s
emerging risks (page 110), including how these are being
addressed. Emerging risks could involve a high degree of
uncertainty and are therefore factored into the Board’s medium-
term viability assessment and the long-term sustainability of the
Group. The methodology used to identify, assess and monitor
emerging risks is described in the risk management framework
on page 158. The Directors concluded that none of the individual
emerging risks would in isolation or collectively compromise the
Group’s viability over the five-year period to 31 December 2030.
The Board’s medium-term assessment focused on strategy,
finance and operations.
Sensitivity and scenario testing
A detailed five-year strategic review was conducted which
considered the Group’s cash flows, dividend cover, REIT
compliance and other key financial ratios over the period. These
metrics were subjected to sensitivity analysis to assess the
Group’s ability to deliver its strategic objectives.
The Directors stress tested the strategy against various scenarios
to determine whether they were likely to have a significant
impact on the Group’s solvency and liquidity in the short and
medium-term. The scenarios are amended each year, as
required, to reflect the key areas of concern identified by the
Board. The eight scenarios assessed were:
a ‘base case’ scenario;
a downside scenario which considers the impact of a fall in
property values of c.5% over two years;
an upside scenario which includes a combination of higher
ERV growth, yield compression and shorter letting voids for
major schemes; and
five scenarios covering varying disposals assumptions and
alternative capital structures.
The modelling indicated that under all scenarios the Group
would still be able to execute its strategic plan over the next five
years or modify it using reasonable assumptions without
breaching any covenants or experiencing liquidity concerns.
63
Strategic report
Governance
Financial statements
Other information
Going concern & viability
continued
Allocation of capital
Capital recycling is a key part of our business model. Our ability
to sell assets and reinvest these funds into higher-returning
opportunities is an important part of our strategy and future
performance.
We completed £216.1m of property sales in 2025 and investment
activity has recently improved, especially for larger lot sizes.
Since the year end we have agreed a further £32.6m of sales. We
are targeting £1bn of disposals over the next three years. A lower
level of disposals would impact our future capital allocation
decisions.
Regeneration opportunities are carefully appraised against clear
performance targets and benchmarking of costs. Rigorous stress
testing is carried out by flexing appraisal assumptions which
consider the potential impact of the key commercial risks of a
project, including the impact of rising construction costs,
fluctuating rents due to changes in occupier demand and
varying investment yields. To maximise returns, we may consider
alternative uses of an asset and may pursue strategic
partnerships with other investors. Where this is the case,
comprehensive due diligence is conducted to ensure the selection
of an appropriate partner.
The appraisal process is important given the long horizon,
typically 3-5 years, between approval to proceed and completion
of a project so we could end up delivering in a market that has
changed significantly. There is a possibility that capital allocated
to specific assets, use types or locations do not generate the
expected returns.
Viability of our finances
Derwent London could potentially become unviable if the Group
were unable to meet its financial covenants. If this occurred, we
would potentially need to refinance or repay debt facilities, likely
requiring the disposal of assets. As at 31 December 2025, the
Group had significant headroom over its covenants, as shown
below:
Covenant
31 Dec 2025
Loan to value (specific assets)
≤ 60%
1
51%
Ratio of unencumbered assets to
unsecured net debt
≥ 1.6 times
3.7 times
Group NAV gearing
≤ 145%
40.1%
Consolidated interest cover
> 145%
306%
1
6.5% secured bonds
Our covenant headroom was subject to sensitivity analysis and
scenario testing as part of the Group’s strategy review. Even in
the most extreme ‘downside’ scenario we modelled, the
covenant ratios are covered and sufficient cash and unutilised
facilities are available. For the Group to breach the NAV gearing
limit, the value of our portfolio would have to fall in excess of
£2,615m (or by a further 51%).
Valuations have generally increased since H2 2024 after a period
of significant declines and rental growth is now widely expected
to continue for good quality central London offices against a
background of relatively stable yields. Our portfolio has
continued to outperform the MSCI Central London Office Index
over recent financial periods, most recently by 69bp in 2025. Our
final secured facility, the £175m LMS bonds, are due for
repayment in March 2026 after which we will no longer have
asset specific covenants to manage.
During the year the Directors also reviewed:
a detailed five-year strategic review which included
assessment of the Group’s cash flows, dividend cover, REIT
compliance and other key financial ratios. These metrics were
subjected to sensitivity analysis to assess the Group’s ability to
deliver its strategic objectives under varying market
conditions;
the risks which could impact the Group’s liquidity and solvency
over the next 12 months, five years and the longer term; and
the Group’s emerging risks.
The Board’s assessment highlighted that, despite continuing
volatility and uncertainty in the macroeconomic environment
during 2025, the Group benefitted from:
reasonable income visibility for the life of our leases which on
2025 lettings averaged 5.3 years on the headline rent. In
addition, the Group has a known level of tenant lease expiries
and breaks which is actively managed by our Asset
Management team; and
a high quality customer base, with none of our occupiers
being responsible for more than 6.4% of total rental income
on a 'topped-up' basis and relatively low exposure to the retail
and restaurant sector.
Holden House
W1
Derwent London plc
Report and Accounts 2025
64
Refinancing risk
The availability of financing for good quality covenants generally
improved through 2025 and, though still subject to market
volatility, the cost of long-term debt moderated. In addition, UK
base rates fell through 2025 to end the year at 3.75% with a
consequent reduction in the cost of short-term bank debt.
We remained close to our existing lenders and were very active in
2025, repaying the £175m convertible bonds at maturity,
arranging £250m of new 7-year unsecured bonds in June and
refinancing £565m of bank facilities. We continue to review
market conditions and have facilities in place to repay £230m of
fixed rate debt maturing in early 2026.
Viability of our operations
The Board received an update from the Chairs of the Audit and
Risk Committees on the work performed during 2025 in respect
to risk monitoring and reviewing the effectiveness of internal
controls (see page 103).
There has been a heightened risk of cyber attacks amid
escalating geopolitical tensions. To date, Derwent London has
not experienced a significant increase in attempted cyber
attacks. Ongoing staff vigilance is critical to the prevention of
cyber attacks.
The Digital Innovation & Technology (DIT) team are proactive in
providing regular guidance and refresher training to all
employees on cyber security matters. We have a robust
approach to cyber security which is routinely subject to
independent testing (see pages 160 and 161).
Our Intelligent Building programme is a medium to long-term
initiative which will assist with meeting our net zero carbon
ambitions, strengthen our portfolio’s cyber security and help
realise cost savings for our occupiers.
Based on the Board’s assessments, none of the operational
principal or emerging risks currently facing the Group were likely
to have a material impact on the Group’s operations or cause it
to become unviable in the short to medium-term.
Related information is on the following pages:
Investing in our employees / See page 194
Disaster recovery and business continuity / See page 160
Mandatory compliance training / See page 163
Viability statement
Based on the Board’s assessments, the Directors have a
reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due
over the five-year period to 31 December 2030.
Long-term
The Board considered a number of longer term factors (which
could impact the Company and its business model in the next
five to 10 years) and how these were being addressed. These
factors included the impact of climate change and technology
advancement.
Related information is on the following pages:
Strategic framework & business model / See pages 22 and 23
Regeneration projects / See pages 19 to 21
Our portfolio / See pages 6 and 7
Climate change
Willis Towers Watson performed an updated independent
climate risk assessment and scenario analysis in 2024. The scope
of the assessment included our entire London-based investment
portfolio (including our head office) and our Scottish portfolio.
Of the risks identified, none were likely to have a substantial
impact on the viability of our business, although our cost profile
could increase.
Task Force on Climate-related Financial Disclosures / See pages 86 to 99
Technology advancements
Acceleration of technology is an emerging risk for the Group and
includes consideration of developments in Artificial Intelligence
(AI). Technology in our sector is advancing at a rapid pace.
The Executive Committee has monitored the phased roll-out of
Intelligent Building infrastructure during the year. The Derwent
London Intelligent Building programme seeks to enable our
buildings (where appropriate) to be digitally monitored and
operated more efficiently, driving down equipment faults (and
consequential maintenance) and delivering energy and
operational carbon savings.
During the year, the Risk Committee received a detailed overview
of the Group’s current cyber posture and how future
technological trends could impact on the Group’s future
performance (see pages 110 and 161).
Digital strategy risks / See page 161
Geopolitical instability
Geopolitical issues such as the ongoing war in the Ukraine and
the widening of the Middle East conflict remain a concern.
Despite the uncertainty, our supply chain has been relatively
unaffected due to our approach of early pre-ordering and
storage. Early supply chain engagement in project designs helps
with the identification of potential risks and alternative solutions.
65
Strategic report
Governance
Financial statements
Other information
Responsibility
Corporate responsibility underpins how we create long-term shareholder
value. It is embedded in our culture, guiding how we operate and
allocate capital across the business, from investment and development
decisions through to asset management and day-to-day operations.
This approach, grounded in our
commitment to integrity, transparency
and safety, supports positive outcomes
for our stakeholders, including local
communities, and the wider environment.
Our responsibility approach
and framework
Our responsibility strategy sets out how
we address the most material
environmental, social and governance
(ESG) issues to our business. It provides a
structured framework for action across
the Group, covering the full life cycle of
our developments and operations – from
reducing carbon and improving building
performance to supporting our people,
engaging with occupiers and maintaining
responsible supply chain standards.
This strategy is based around seven ESG
priorities and a series of targeted
frameworks. Together, these enable a
consistent approach to managing and
reporting on our ESG pillars.
Responsibility embedded in our
corporate strategy
Responsibility considerations are
embedded within our corporate strategy,
informing our strategic objectives, risk
management processes and investment
decisions. This is supported by clear
Board-level oversight and accountability
through dedicated committees.
Our executive remuneration policy
incorporates ESG measures, aligning
leadership incentives with long-term,
responsible performance. The composition
of our Board reflects the expertise,
independence and diversity required to
oversee responsible growth and uphold
high standards of governance.
Highlights of the year:
During the year, we made strong progress
across our responsibility priorities. These
achievements highlight the integral role
that responsibility plays in shaping our
business and creating sustainable,
long-term value.
Pillars
Environmental
Social
Governance
Priorities
1.
Designing and delivering
buildings responsibly
2. Managing our assets
responsibly
3. Creating value in the
community
4. Engaging and developing our
employees
5. Ensuring the highest standards
of health and safety
6. Protecting human rights
7. Setting the highest standards
of corporate governance
Frameworks
Net Zero Carbon Pathway
Responsible Asset Framework
Responsible Development Brief
Whole Life Carbon Assessment
Brief
Green Finance Framework
Social Value Strategic
Framework
Our Code of Conduct &
Business Ethics
Group Health & Safety Policy
Statement
Governance Framework
Our Code of Conduct &
Business Ethics
Supply Chain Responsibility
Standard
Modern Slavery Statement
Statement of Tax Principles
Key achievements include:
updated our Net Zero Carbon Pathway;
broader adoption of circular economy
principles;
supporting charities through utilisation
of our DL/Lounges;
updated our Supply Chain
Responsibility Standard;
launched employee ‘Rewards and
Recognition’ programme;
delivered H&S Legal Duties session with
100% Board and Director participation;
achieved embodied carbon target and
BREEAM 'Outstanding' at 25 Baker
Street following practical completion;
40% of managed portfolio buildings
now all-electric, from 6% in 2020; and
four new employee representatives
joined the RBC bringing new
perspectives to the employee voice.
Derwent London plc
Report and Accounts 2025
66
Fair Payment Code
2025 Bronze Award
ROSPA
Gold Award
Third consecutive year
Reduction in energy intensity
compared to 2019 baseline
25
%
Our updated Net Zero Carbon Pathway
Nature and
resilience
See page 73
Offsetting residual
carbon emissions
See page 73
Reducing the
embodied carbon of
development projects
See page 71
Procuring and
investing in
renewable energy
See page 70
Reducing operational
energy and carbon
emissions
See page 69
£
504
k
Community funds and
sponsorship donations committed
in 2025
16
%
Reduction in Scope 1, 2 and 3
operational carbon emissions
Overall employee satisfaction
86.5
%
2025 GRESB:
Greenstar status
A-rated public disclosure
Development – 5 stars
with a score of 98
Standing Investments
– 4 stars with a score
of 86
67
Strategic report
Governance
Financial statements
Other information
Double materiality
We recognise the role of materiality in determining the relative importance of key ESG issues to
the business and our stakeholders.
Responsibility
continued
Materiality assessments provide a
framework for prioritising issues and
ensuring our responsibility strategy and
management action are appropriately
focused and targeted.
We keep our material issues under review
to ensure changes are captured on a
timely basis and remain aligned with the
independent climate risk assessment and
scenario analysis which forms part of our
TCFD disclosure (see pages 86 to 99).
In 2024, we completed a double
materiality assessment, with support from
an independent third party consultant.
This identified 17 material topics, of which
12 were considered to have High or Very
High materiality under either the Financial
or Impact perspective – see chart. The
topics with Low or Medium materiality are
listed below.
The material topics were already known
and captured through our various
strategies and management procedures.
However, the assessment provided
additional insight to support the
prioritisation of future actions.
Our double materiality assessment is
aligned with our wider processes for
identifying and assessing the principal risks
we report in the Managing Risks section
(see pages 100 to 111).
Low/Medium materiality topics
Diversity, equity & inclusion
Health, safety & wellbeing
Operational water use & management
Operational waste management &
circular economy
Leasing transaction satisfaction
Our stakeholders identified these topics as
Low/Medium materiality. We continue to
monitor and prioritise them as appropriate
and will ensure resources are available as
required.
The table provides further detail of where
our material issues can be located within
our risk management and other reporting.
Most material topics
Page
1
Sustainable building
design & construction
Principal risk, ‘Our resilience to climate change’
108
Emerging risk, ‘The evolving nature of office
occupation’
110
TCFD transition risk, ‘Planning requirements’
92
2
Local economic growth
& placemaking
Our Communities
76 to 77
3
Operational GHG emissions
& energy efficiency
Principal risk, ‘Our resilience to climate change’
108
Emerging risk, ‘Climate-related risks’
110
Our Net Zero Carbon Pathway
69 to 73
4
Occupier wellbeing
Principal risk, ‘Health and safety’
108
Emerging risk, ‘The evolving nature of office
occupation’
110
Health and safety
80 to 81
5
Talent attraction, retention
& development
Responsible Business Committee report
164 to 171
Our people
78 to 79
6
Ethical & responsible
business conduct
Principal risk, ‘Non-compliance with law and
regulations’
109
Responsible Business Committee report
164 to 171
7
Responsible & local procurement
Responsible Business Committee report
164 to 171
8
Climate change adaptation
& resilience
Principal risk, ‘Our resilience to climate change’
108
Task Force on Climate-related Financial
Disclosures (TCFD)
86 to 99
9
Social value impact
Our Communities
76 to 77
Social Value Strategic Framework
76
10 Cyber security
Principal risk, ‘Cyber attack on our IT systems’
107
Principal risk, ‘Cyber attack on our buildings’
107
Emerging risk, ‘Accelerating technological
change’
110
Risk Committee report
154 to 163
11 Human rights & fair pay across
the value chain
Principal risk, ‘Non-compliance with law and
regulations’
109
Responsible Business Committee report
164 to 171
12 Biodiversity & urban greening
See page 12 and 15 of
Net Zero Carbon Pathway (2025)
These risks are monitored via the Group’s Risk Register which is not disclosed in the annual Report & Accounts. Refer
to pages 104 to 111 for the Group’s principal and emerging risks.
1
2
3
4
5
6
7
8
9
10
11
12
100%
75%
50%
25%
0%
Financial
0%
25%
50%
75%
100%
Impact
Environmental
Social
Governance
Derwent London plc
Report and Accounts 2025
68
Our commitment
We are committed to operating our investment portfolio on
a net zero carbon basis by 2030. This requires a sustained
and significant reduction in our energy consumption,
upgrading and retrofitting our properties to improve
efficiency and removal of gas use where feasible, as well as
close collaboration with our occupiers.
Actions and outcomes
Portfolio decarbonisation
In 2025, we continued to invest in decarbonisation works
across the portfolio. Following the installation of air source
heat pumps (ASHP) at 1-2 Stephen Street W1 in 2024, an
ASHP was installed at Charlotte Building W1 alongside a
broader mechanical, engineering and plant (MEP) upgrade.
We are also installing point of use electric hot water supplies
for WCs to decarbonise hot water supplies. 40% of buildings
in our managed portfolio are now all-electric. To enable
effective monitoring of mains water use across the managed
portfolio, a Smart Flow monitoring system was rolled out
across 70% of the portfolio.
Occupier engagement
Our recent ‘You Hold the Power to Save’ campaign
(launched in Q4) was well-received by occupiers across the
managed portfolio. To maximise impact, engagement was
focused on our 10 highest energy consuming buildings, which
represent 78% of managed portfolio energy. In total, we
engaged with 77% of occupiers in 2025.
Further energy reduction
Building on the significant 20% reduction in energy
consumption across our managed portfolio between 2019
and 2024, 2025 saw a further 6% decrease to 48.7m kWh.
Energy intensity of 125 kWh/sqm is down 9% compared to
2024 (137 kWh/sqm) and 25% below our 2019 baseline (166
kWh/sqm). This compares well to our 2030 target of 123 kWh/
sqm. When combined with ongoing decarbonisation of the
UK’s energy grid, our location-based operational carbon
footprint reduced 16% in 2025 to 10,434 tCO
2
e (2024: 12,357
tCO
2
e).
Responsibility – Environmental
Our Net Zero Carbon Pathway
1
Data relates to the Group's managed portfolio only.
Water and waste
Water consumption reduced 2% in 2025 compared to 2024.
The majority of the decrease is related to installation of
Smart Flow monitoring technology during 2025.
The managed portfolio waste recycling rate improved in
2025 to 72% from 69% in 2024. We maintained an active
programme of engagement, particularly targeting new
occupiers.
01
Reducing operational energy
and carbon emissions
Energy usage
1
(electricity and gas split in kWh)
0
10
20
30
40
50
60
70
kWh (millions)
49.7
2021
49.2
2020
50.4
2022
Gas
Electricity
2023
56.7
2024
51.8
2019
64.6
2025
48.7
Energy intensity
1
(in kWh/sqm)
0
20
40
60
80
100
120
140
160
180
kWh/sqm
2020
139
2021
140
2022
142
2023
149
2024
137
2019
166
2025
125
Operational carbon footprint
1
(Scopes 1, 2 & 3 in tCO
2
e)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
tCO
2
e
Scope 1
Scope 2
Scope 3
2023
4,364
2,795
7,211
14,370
2022
3,062
2,388
5,864
11,314
2024
2,736
2,705
12,357
6,916
2,126
2,340
10,434
5,968
2025
69
Strategic report
Governance
Financial statements
Other information
Responsibility – Environmental
continued
Our commitment
The Group is committed to ensuring that the energy we
consume is from renewable sources. For procurement, this
means contracting electricity on renewable tariffs backed by
Renewable Energy Guarantees of Origin (REGO) certificates
and gas contracts backed by Renewable Gas Guarantees of
Origin (RGGO) certificates. Our Scottish land also provides
several self-generation opportunities which we are progressing.
Actions and outcomes
Energy on renewable tariffs in 2025
Electricity (REGO-backed): 100% (2024: 99%)
Gas (RGGO-backed): 100% (2024: 100%)
As at 31 December 2025, 100% of our electricity and gas
contracts were on renewable tariffs backed by REGOs/
RGGOs
All REGO-backed electricity is procured from UK-based solar,
wind or hydro projects.
Investing in self-generation
Lochfauld Solar Park in Scotland
Following receipt of planning consent in 2023 for a c.100-acre,
18.4 MW solar park at our Lochfauld site in Scotland, significant
progress on site has been made. Installation of the frames and
photovoltaic (PV) panels, alongside supporting site
infrastructure has completed and panel connection and
inverter works are currently underway. Testing, commissioning
and grid connections are expected to complete in mid-2026,
followed by energisation thereafter. We expect the solar park
to generate c.40% of our London managed portfolio’s
electricity requirements (based on 2019 baseline energy
consumption).
London portfolio
Where feasible, we install PV panels on our buildings, six of
which now have PV arrays. In addition, we have a small PV
array at our Easter Cadder central hub in Scotland, covering
the electricity consumption of our Scottish office.
As part of our Section 106 agreement for 50 Baker Street W1,
we agreed with Westminster City Council to carry out a carbon
saving project at St Mary’s Bryanston Square Primary School.
We installed an 83 PV panel array, equivalent to 36 kW. The
first year of performance generated 24,400 kWh, in excess of
50% of the school’s electricity consumption, saving
approximately 5 tCO
2
e.
Lochfauld Solar Park
02
Procuring and investing
in renewable energy
Derwent London plc
Report and Accounts 2025
70
Our commitment
Under our Net Zero Carbon Pathway, new developments and
major refurbishments will be net zero carbon on completion. In
2024, we updated our reporting methodology to better align
the timing of emissions and offsetting. Forecast emissions from
major projects are recognised on a phased basis over the
construction period, with emissions offset over the same
profile.
Defining embodied carbon targets
Whole life carbon assessments are performed on our projects
to inform design decisions and report on the ‘Cradle to
Completed Development’ (A1-A5) aspects. Refer to our Whole
Life Carbon Assessment Brief at
www.derwentlondon.com/
news/publications/responsibility-policies
Our phased targets for commercial office new build
developments align with the Greater London Authority (GLA)
and LETI targets (under RICS v1, which excludes demolition):
From 2025: ≤600 kgCO
2
e/sqm
From 2030: ≤500 kgCO
2
e/sqm
For our next major redevelopment projects, Holden House W1
and 50 Baker Street, we intend to report embodied carbon
intensity under both RICS v1 and RICS v2, the latter of which
accounts for demolition and enabling works.
For major refurbishments, our target is ≤350 kgCO
2
e/sqm.
Actions and outcomes
We work collaboratively with our development supply chain to
assess and reduce a scheme’s embodied carbon footprint. At
each design stage, we hold detailed workshops with our teams
and ensure early engagement on procurement of low carbon
materials. The wider industry needs to adapt and work
together for us to fully achieve our aims and we are active in
this endeavour – see page 72 for details on our works to
accelerate the use of low carbon concrete and the circular
economy.
Our three major projects which were on site during 2025 are
being delivered to align with our 2025 target:
25 Baker Street W1 (completed Aug 2025): 594 kgCO
2
e/sqm
(a c.13% reduction compared to the Stage 4 estimate)
Network W1: c.530 kgCO
2
e/sqm
Holden House W1: c.590 kgCO
2
e/sqm
The current forecast for 50 Baker Street is c.530 kgCO
2
e/sqm.
03
Reducing the embodied carbon of
development projects
80 Charlotte Street
1 Soho Place
Embodied carbon intensity of major projects
0
100
200
300
400
500
600
700
kgCO
2
e/sqm
550
539
594
c.530
506
The Featherstone
Building
25 Baker Street
Including 30 GP &
100GS)
Network (stage 4
Estimate)
kGCO
2
e/sqm
DL embodied carbon target 2025
Embodied carbon (S3, C2) emissions recognised in year
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
tCO
2
e
2021
1,036
2022
32,869
2023
799
2024
19,136
2025
27,315
2020
19,790
71
Strategic report
Governance
Financial statements
Other information
Responsibility – Environmental
continued
Aiming to bridge the gap between supply of low
carbon concrete, specification needs and market
demand
Derwent London established the Accelerating Concrete-
Decarbonisation Group (AC-DG) in June 2024 and has
continued to lead the initiative. It is a UK developer-led,
industry-wide initiative to accelerate the adoption and
use of market-ready, technically viable low carbon
concrete mixes in construction projects.
The aim is to reduce the barriers for use of lower carbon
concrete, prototype testing and knowledge sharing,
ultimately reducing embodied carbon.
The lack of specific empirical test data is a key barrier,
preventing engineers and clients from specifying low
carbon concrete without adding technical, programme
and cost risks into projects.
By supporting more rapid collection and distribution of
critical data for these innovative concrete mixes, AC-DG
seeks to enable a faster route to market, facilitating
specification for construction projects.
The seven AC-DG workshops to date have been
informative, circulating knowledge more quickly across
the sector on low carbon concrete available for use in the
UK today, as well as the emerging suppliers.
Through the AC-DG, Derwent London and 30 other key
organisations have signed a collaboration agreement
enabling prototyping works and testing to commence in
H1 2026 on three low carbon mixes. These have the
potential to reduce concrete carbon emissions by up to
70%.
Derwent London is also 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.
Accelerating Concrete-
Decarbonisation Group
Optimising reuse across our portfolio and
reducing embodied carbon without
compromising on quality
Our circular economy approach goes hand in hand with
reducing embodied carbon.
In 2025, Derwent London strengthened its leadership in
circular economy practices, embedding resource
efficiency and material reuse across its development
pipeline and operational portfolio, alongside our partner
Material Index.
Since we formalised our circular economy strategy, c.500
tonnes of material have been donated or brokered.
At our smaller refurbishment projects, retention and
on-site reuse has averaged 44%. Examples include the
sale or donation of kitchenette units from Oliver’s Yard
EC1, and timber panelling from 1-2 Stephen Street W1.
The circular economy is also being incorporated across
our major projects:
– Network W1 is our first whole building redevelopment to
use refurbished raised access flooring.
– At Holden House W1, 64% of the temporary work steel
to retain the façade is reused, chimney stacks are being
reused and 95% of the glass has been recovered for
reprocessing. This is in addition to internal fittings,
finishes and lighting being donated. The bricks are
currently being tested for off-site reuse.
– At 50 Baker Street W1, we are pioneering the piece-wise
reuse of the existing concrete structure in what is the
largest scale project of this type in the UK.
– Greencoat & Gordon House SW1 is setting the blueprint
for retention and reuse across our refurbishment
projects.
Network
W1
Holden House
W1
Our circular economy approach
Derwent London plc
Report and Accounts 2025
72
Our commitment
The Group’s business model of office regeneration and
operation will, by its nature, result in the emission of
embodied and operational carbon across Scopes 1, 2 and 3.
For this reason, we will prioritise achieving our ambitious
targets to reduce our carbon footprint as far as possible. We
have committed to offset any residual carbon that we are
unable to either manage out or eliminate.
Actions and outcomes
We have a phased pipeline of regeneration schemes over the
coming years. Occupational market dynamics are forecast
to remain favourable and we expect to commence the next
phase of our pipeline over the coming year. Beyond this, we
have a longer term pipeline which is expected to commence
from 2027 onwards.
Forward purchase of carbon offsets
This project visibility allows us to forecast our embodied
carbon emissions and plan accordingly. The Group has
forward-purchased carbon offset credits equivalent to
c.195,600 tCO
2
e since 2020 for a combined consideration of
c.£4.9m or an average of c.£25/tCO
2
e. In 2020, we began
offsetting the embodied carbon associated with our
regeneration activity, through retirement of our carbon
credits, and have offset a cumulative c.100,945 tCO
2
e, of
which 27,315 were retired in relation to 2025. The remaining
offsets cover our forecast embodied carbon emissions to
2030.
Working with our offset partner, Climate Impact Partners,
we carried out significant pre-acquisition due diligence to
ensure the environmental projects meet our quality
standards. This includes being validated under a robust,
credible scheme such as the Verified Carbon Standard (VCS)
or the American Carbon Registry (ACR). We acknowledge
this is a changing landscape and refer to latest guidance
from the UKGBC (Carbon Offsetting & Pricing Guidance).
Tree planting
The Group continues to progress tree planting opportunities
across its Scottish land. Additional land has been identified
as potentially suitable for planting, subject to further
appraisals and planning consent.
Our commitment
Nature and resilience was added as a fifth pillar of our Net
Zero Carbon Pathway in 2025. We are committed to
enhancing biodiversity across our portfolio, including at both
standing investments and regeneration projects. To support
this, as well as ensuring our business resilience to a changing
climate, we will carry out climate risk and opportunity
assessments every three years as part of the WTW risk
assessment, to proactively manage our climate risk, which
includes biodiversity-related aspects.
Actions and outcomes
Biodiversity net gains at major projects
Each of our new build pipeline projects received planning
approval prior to the Biodiversity Net Gain (BNG) legislation
coming into effect. However, many boroughs already
required a minimum BNG of 10%. Consequently, all our
recently completed schemes and next phase of projects
have achieved, or intend to achieve, a BNG significantly
greater than 10%.
25 Baker Street W1: 180%
Network: 110%
Holden House: 210%
50 Baker Street: 273%
For our schemes which are currently in design, we expect to
achieve the agreed urban greening factor.
Scottish land
Part of our Scottish land at Bargenny Hill has been
designated as a Site of Special Scientific Interest (SSSI). The
site is one of the largest and best remaining examples of
lowland neutral grassland, which supports a variety of rare
plants, flowers and wildlife, in south-western Scotland. The
SSSI designation at this site forms part of a wider Agri-
Environment Climate Scheme (AECS). We have also
transitioned to more sustainable farming practices, utilising
green manure, creating grass strips and water margin in
arable fields as well as creating new wetlands.
Bargenny Hill
04
Offsetting residual
carbon emissions
05
Nature and
resilience
73
Strategic report
Governance
Financial statements
Other information
Responsibility – Environmental
continued
Streamlined Energy and Carbon
Reporting (SECR) disclosure
In line with SECR regulations, the adjacent
table sets out the carbon emissions
(tCO
2
e) across Scopes 1, 2 and 3 together
with relevant intensity ratios (kgCO
2
e/
sqm) from our managed portfolio. We
also show the global energy consumption
(kWh) used to calculate our emissions.
Energy efficiency actions
The Group undertook a number of energy
efficiency actions in 2025. These included:
decarbonisation initiatives at Charlotte
Building W1 (air source heat pump) and
9-10 Rathbone Place W1 (variable
refrigerant flow technology);
implementation of occupier
engagement strategy (‘You Hold the
Power to Save’), focused on the top 10
consuming buildings;
Data notes
Boundary
(consolidation approach)
We use the ‘operational control’ approach. This incorporates properties where the Group
has management control and influence over the operations, referred to as the ‘managed’
portfolio. This is located in central London (UK) and comprised 37 properties in total
during 2025. Landlord emissions from our retail park in Glasgow are also included.
Alignment with
financial reporting
The only variation from our financial reporting approach is the exclusion of energy data
and GHG emissions for buildings where the Group does not have control or influence.
These are our single-let properties (also referred to as FRI or the unmanaged portfolio).
Estimated emissions for these properties are disclosed as a footnote to the SECR table.
The rental income and valuation of these properties is included in the consolidated
financial statements.
Reporting method
GHG emissions reporting is in line with the Greenhouse Gas (GHG) Protocol Corporate
Accounting and Reporting Standard. Further details on our data calculation methodology
is set out in the Environmental Basis of Reporting within our
2025 Responsibility Report
.
Prior year restatements
No restatements have been made to 2024 data.
Emissions factor source
(location-based)
UK government emissions factors are used to convert energy usage into location-based
carbon equivalents. These can be found at
www.gov.uk/government/publications/
greenhouse-gas-reporting-conversion-factors-2025
Market-based emissions
The Scope 2 market-based factor is based on the provenance of energy supplies. In 2025,
100% of electricity was purchased on REGO-backed tariffs.
Embodied carbon
(Scope 3, Category 2)
Embodied carbon emissions from major projects (including refurbishments) are reported
annually on a phased basis. Total estimated emissions from the RIBA Stage 4 report are
spread equally over the construction period. Following practical completion, the as-built
embodied carbon assessment is reported, and any true-ups are captured in the final
reporting year. For smaller projects, embodied carbon is recognised in full in the year of
completion where feasible. The reported carbon tonnage is offset in the year of reporting.
Independent assurance
Selected 2025 metrics, denoted with an (a), have been subject to independent limited
assurance by PricewaterhouseCoopers LLP (PwC) in accordance with ISAE 3000 (Revised)
and ISAE 3410 Standards. Our Environmental Basis of Reporting and PwC's assurance
report can be found in the
2025 Responsibility Report
.
ongoing LED lighting and other MEP
upgrades across the managed
portfolio;
streamlined plant run times
implemented alongside relaxed
temperature set points, following
successful trials in 2024; and
enhanced out of hours usage
monitoring, facilitated by our metering
upgrade programme, and out of hours
lighting assessment.
As a result of these actions and
interventions, year-on-year energy
consumption reduced by 6% and energy
intensity by 9% in 2025. Compared to our
2019 baseline, energy intensity has
reduced by over 25%.
See page 69
Derwent London plc
Report and Accounts 2025
74
GHG emissions
tCO
2
e
% change
Location/
Market-
based
2025
2024
2025 vs 2024
Scope 1
Combustion of fuel
1
Location
1,852
2,378
(22)
Fugitive emissions
2
Location
274
358
(23)
Total Scope 1 emissions
Location
2,126
(a)
2,736
(22)
Scope 2
Total Scope 2 emissions – location-based
3
Location
2,340
(a)
2,705
(13)
Total Scope 2 emissions – market-based
3
Market
4
(a)
19
(76)
Total Scope 1 & 2 emissions
Location
4,466
5,441
(18)
Total Scope 1 & 2 emissions intensity (kgCO
2
e/sqm)
Location
11.4
13.6
(16)
Proportion UK-based
100%
100%
–
Scope 3 emissions
4
Category
1. Purchased goods and services (includes water)
36
30
20
2. Capital goods (embodied carbon)
27,315
(a)
19,136
43
3. Fuel and energy-related activities
1,235
1,283
(4)
5. Waste generated in operations
44
52
(16)
6. Business travel
60
117
(49)
7. Employee commuting
110
110
0
13. Downstream leased assets
5
4,482
5,324
(16)
Total Scope 3
33,283
(a)
26,052
28
Total Scope 1, 2 & 3 emissions
Location
37,749
31,493
20
Total Scope 1, 2 & 3 (excluding embodied carbon) emissions
10,434
12,357
(16)
1
Managed portfolio gas use and fuel use in Derwent London owned vehicles.
2
Managed portfolio refrigerant loss from air-conditioning and heating/chilling systems.
3
Managed portfolio electricity use for common parts and shared services (landlord-controlled areas).
4
Categories 4, 8, 9, 10, 11, 12, 14 & 15 are currently identified as non-material to scope of business or not relevant.
5
Emissions from tenant electricity consumption for the managed portfolio only. Where the Group does not exercise ‘operational control’ (the unmanaged portfolio, as well
as retail, residential and unmanaged office units within the managed portfolio), consumption is excluded from our global energy use and emissions are not reported
within our managed portfolio carbon disclosure (within Scope 3, Category 13). For completeness, using anonymised aggregated third party data, we estimate energy
consumption for the unmanaged portfolio at c.34.6m kWh, which equates to carbon emissions of c.6,176 tCO
2
e.
Global energy use
kWh
% change
2025
2024
2025 vs 2024
Total gas use
10,099,638
(a)
12,981,252
(22)
Electricity (consumption from landlord-controlled areas)
13,320,416
13,150,182
1
Electricity (consumption from tenant-controlled areas)
25,324,570
25,713,301
(2)
Total electricity use
38,644,986
(a)
38,863,483
(1)
Total energy landlord
23,420,054
(a)
26,131,434
(10)
Total energy use
48,744,624
(a)
51,844,735
(6)
Derwent London vehicles (fuel combustion)
16,416
16,278
1
Electricity intensity (kWh/sqm)
104
(a)
105
(1)
Gas intensity (kWh/sqm)
31
(a)
38
(19)
Energy intensity (kWh/sqm)
125
(a)
137
(9)
For more analysis of our GHG emissions, energy consumption and renewable energy generation, use and procurement, visit our
2025
Data Report
.
75
Strategic report
Governance
Financial statements
Other information
Our social contributions
Responsibility – Social
We strive to ensure our buildings deliver lasting social value for
the communities in which they sit and for all stakeholders.
Our approach to social value
Delivering social value is integral to our
business. We maximise positive impact
through targeted financial support
provided by our Sponsorship & Donations
Committee and our Community Fund.
This is complemented by active
engagement with local communities.
Volunteering, work experience and
opening our buildings up to community
groups help us stay connected to the
community so we can understand local
needs and deliver meaningful outcomes.
Our Social Value Strategic Framework is
based on three themes which guide how
we create meaningful impact in our
communities. We continued to deliver
against these themes in 2025. In 2026,
we intend to undertake a full review of the
framework, initially published in 2023, to
ensure it remains relevant and effective.
This will help us ensure our approach
continues to maximise our social impact
as community needs, societal
expectations and best practice continue
to evolve.
2025 highlights
Raised £232,000 for Teenage
Cancer Trust at our ‘Big Lunch’
event
– Received Special Recognition
Award as its longest-standing
corporate supporter
Delivered £1.4m in funding through
our community funds since their
inception in 2013
– Introduced a multi-year funding
model, giving charities greater
certainty and visibility for forward
planning
Committed £119,000 through our
Sponsorship & Donations
Committee to tackle homelessness
Progress against each theme in 2025:
‘Part of the neighbourhood’
Fitz Music supports Fitzrovia's cultural
heritage by delivering a free, inclusive
programme of cultural events. We have
committed three years of funding to
this initiative through our Community
Fund.
‘Great places to work’
We design buildings and spaces that
support connection, health and
wellbeing. In April, occupiers from
across the portfolio took part in the
White Collar Factory rooftop half
marathon to raise funds for charity.
‘A thriving local economy’
As part of the Network W1 construction
programme, our building contractor,
Kier, embedded a focused approach to
local employment, skills and progression
– delivering benefits to the local
community and economy.
£
504
k
Community funds & sponsorship
donations committed in 2025
20
Community Fund projects
supported in 2025
£
4.6
m
Sponsorship donations provided
to date
This year we partnered with Islington Council’s Youth Employability and Skills (YES)
programme and our front-of-house service partner PROception to create a tailored
work experience placement at 80 Charlotte Street W1. The YES programme supports
young adults aged 18-25 who face barriers to employment, offering pre-employment
coaching and real-world experience.
Through this collaboration, a young person gained hands-on front-of-house
experience in a professional environment, supported by PROception’s expert team.
The placement built the candidate’s confidence and customer service skills, and led
to further work experience at Brunel Building W1, thereby strengthening the
individual’s career prospects.
This initiative is a good example of how we work with local authorities and service
partners to deliver social value beyond funding by creating practical pathways into
employment and helping young people build sustainable futures.
Opening doors to opportunity
Derwent London plc
Report and Accounts 2025
76
Continued to support our
community funds
We operate two community funds:
Community Fund West (est. 2013) and
Community Fund East (est. 2016). These
funds support grassroots projects focused
on community events, environmental
improvements, health and wellbeing
activities, music and culture, and support
for marginalised groups. By extension, our
approach also promotes wider
engagement through corporate
volunteering, school partnerships, and
work experience.
Following the launch in 2013, over £1.4m
has been awarded, supporting more than
200 projects – from renewing children’s
playgrounds to running music sessions in
care homes and funding lunch clubs for
older people.
We introduced a new multi-year funding
model in 2025 – committing £450,000 for
2025 to 2027 – providing charities with
greater certainty and visibility for forward
planning.
Other activities
In 2025, our Sponsorship & Donations
Committee committed £350,000 in
charitable donations. Some of the ways
these funds were used to create value in
the community during the year included:
EY Foundation's Real Estate
Futures Programme
We supported work experience
placements and mentoring for young
people interested in real estate careers.
Several employees acted as mentors,
helping participants develop skills and
confidence. We intend to participate in
the programme again in 2026.
Our long-standing relationships with
Teenage Cancer Trust (TCT) and
LandAid demonstrate the power of
sustained, high-impact community
investment. Together, they have raised
approximately £2.4m to date, delivering
measurable benefits in a cost-efficient
way.
These enduring collaborations reflect
our belief in long-term relationships
that deliver real social value and adapt
to changing needs over time.
Teenage Cancer Trust – Over 20
years of support
In 2025, our biennial Big Lunch
fundraiser raised £232,000, contributing
to total fundraising of more than £2.2m
since the partnership began in 2001.
This year, we were honoured with a
Special Recognition Award from TCT,
acknowledging our role as its longest-
standing corporate supporter and our
commitment to transforming the lives
of young people with cancer.
Enduring partnerships that make a difference
NSPCC Proper Trek
We sponsored NSPCC’s first property-
sector fundraiser, with White Collar
Factory EC1 acting as the penultimate
host building for the walkers.
Host the Teacher event
In collaboration with The Academy of Real
Assets, our White Collar Factory building
hosted an event bringing together
teachers, occupiers and service partners
to discuss career pathways for young
people within the real estate sector.
“Derwent London’s dedication to
supporting LandAid’s mission is
remarkable. From involvement in
our events, to the team’s impressive
fundraising skills, it’s a pleasure to
work alongside you. I look forward
to another meaningful year ahead,
particularly as we celebrate 40
years of impact in 2026. Thank you
for standing with us to end youth
homelessness – together, we are
making a real difference.”
Jess Strudwick
LandAid – National Partnerships
Manager
LandAid – 15 years of impact
Our partnership with LandAid reflects our
commitment to addressing youth
homelessness through targeted grants
and initiatives. By combining resources
and expertise, we help create safe,
supportive environments for vulnerable
young people across London and beyond.
Our support in 2025 included participation
in LandAid fundraising events and
sponsorship of its Gala Dinner, which
raised £364,000 on the night to help
change young lives. Since the partnership
began 15 years ago, we have raised
£218,000 directly for LandAid.
77
Strategic report
Governance
Financial statements
Other information
Responsibility – Social
continued
Our people
Our people are instrumental to the success of our
business. We aim to cultivate an inclusive, diverse and
collaborative culture that attracts and retains talented
individuals, while investing in their growth and
developing our next generation of leaders.
2025 highlights
Launched employee ‘Rewards and
Recognition’ programme
Achieved high satisfaction score of
86.5% in our employee survey
Improved Business Disability Forum
(BDF) Smart Self Assessment score
by 28%
Introduced ‘Lunchtime
conversations with the Directors’ to
foster open dialogue
Awarded 19 internal promotions
Attracting and developing talent
Our employees play a critical role in
delivering our strategy and long-term
performance. We are committed to
fostering a culture that empowers our
diverse workforce to thrive, have a voice
and contribute authentically.
As of 31 December 2025, our total
workforce comprised 206 employees (201
as of 31 December 2024) and during 2025
we maintained a high employee retention
rate of 91% (excluding contractors and
retirees). We seek to balance continuity
with fresh ideas, experience and skills, and
we welcomed 30 new joiners during the
year.
We actively support continuous
development, career progression and
succession planning, and encourage our
employees to pursue ongoing professional
growth. To facilitate this, we invest in our
employees by offering learning and
development opportunities at all levels.
These include core skills and technical
workshops, management skills training, as
well as one-to-one and team coaching.
Alongside annual objectives, employees
are encouraged to complete personal
development plans. In 2025 we awarded 19
internal promotions – 11 males and eight
females.
Employee engagement and insight
We value open dialogue and want our
employees to feel empowered to speak up.
Feedback is gathered through anonymous
annual employee surveys, providing insight
into engagement, workplace experiences
and satisfaction levels. This consists of a
short ‘pulse survey’ and a comprehensive
independent survey in alternative years.
Following feedback from our 2024 pulse
survey, in 2025 we refreshed and
relaunched our Refer a Friend Policy and
enhanced our Long Service Awards to
recognise employee five-year milestones.
In addition, we launched a new ‘Rewards
and Recognition’ programme to recognise
those individuals who embody our values
and demonstrate strong collaboration and
creativity in carrying out their role, with
nominations encouraged from across the
business.
Our biennial employee survey, conducted
in October 2025, achieved an 86%
response rate and reported an overall
satisfaction score of 86.5%. In 2026
members of our Responsible Business
Committee will hold focus groups to
gather insights and present any
recommendations to the Executive
Committee.
Derwent London plc
Report and Accounts 2025
78
Disability and accessibility
inclusion in action
In March 2023, we embarked on a
journey with the Business Disability
Forum (BDF) towards being fully inclusive
and accessible to anyone who works in,
lives in or visits our buildings. We began
by undertaking the BDF’s Disability
Smart Self-Assessment, which offered
valuable insights into our organisation’s
performance regarding disability
inclusion and established a benchmark
for measuring our progress. This also
highlighted priority areas for
improvement.
Using the BDF Framework, the D&I
Working Group worked to address several
key areas in collaboration with the
Health, Safety and Accessibility (HS&A)
Working Group. Key initiatives to date
include:
enhancing workplace adjustments to
support disabled employees entering
or returning to work;
improving accessibility to our buildings
in accordance with recommendations
provided by the external review
conducted by design consultancy firm
Motionspot;
providing autism awareness training in
partnership with the National Autistic
Society to our front of house,
reception, building management and
HR teams; and
recently completed BDF’s Disability
Smart Self-Assessment for the second
time, improving our score by nearly
28% over two years, demonstrating
meaningful progress and commitment
in our approach to disability inclusion.
Emphasis on health and wellbeing
We believe our people perform best when
they experience physical and mental
wellbeing and feel socially connected. In
addition to a comprehensive employee
benefits package, we provide access to
trained mental health champions, an
employee assistance programme and
occupational health support. We
encourage proactive self-care by offering
employees opportunities to broaden their
knowledge through resources on our
intranet, ‘lunch and learn’ sessions and
other wellbeing presentations. Our 2025
Health & Wellbeing plan included sessions
to raise awareness on topics such as
pensions, healthcare benefits,
musculoskeletal health, managing
anxiety, cholesterol, diabetes and blood
pressure. We also introduced on-site
health checks for all employees, with 62%
of the business participating.
To continue building healthy, nurturing
and supportive relationships, while
cultivating a genuine sense of community,
our Social Committee organises regular,
inclusive events. Numerous volunteering
opportunities are also available to all
employees, enabling them to contribute
positively to the local community.
Advancing diversity & inclusion
We are committed to fostering an
inclusive culture where diverse
perspectives are valued and respected. In
our 2025 employee survey, 83% of
employees agreed their ‘team provides an
inclusive environment where everyone’s
views are valued’. Our Diversity & Inclusion
(D&I) Working Group comprises 14
individuals and has been operational for
several years. Key activities carried out by
the group during the year included
campaigns to highlight Mental Health
Awareness Week, Pride Month and Black
History Month, as well as D&I newsletters
to maintain employee awareness. We
continued to review and enhance our
policies and benefits and this year
introduced a popular workplace nursery
scheme enabling working parents to pay
nursery fees via a salary exchange
arrangement.
Following our 2024 National Equality
Standard (NES) assessment, EY hosted
two focus groups to provide colleagues
from ethnically diverse backgrounds with
a confidential and anonymous forum to
share their experiences and explore the
survey findings in greater depth. Many
participants expressed appreciation for
the opportunity, reinforcing the value of
inclusive listening within the organisation.
Throughout the year, disability and
accessibility remained key priorities as we
advanced our commitment to disability
inclusion. For further details, refer to the
case study below.
“Derwent took a ‘best
practice’ approach to
completing BDF’s
online management
tool and it is a
privilege working
with their dedicated
and specialist
colleagues across the
HS&A and D&I
working groups.”
Sarah Eason
Business Disability Forum –
Head of Memberships
79
Strategic report
Governance
Financial statements
Other information
Health and safety
Responsibility – Social
continued
Embedding health, safety and wellbeing across our
business
Health, safety and wellbeing (HS&W) are embedded across every
aspect of our operations, shaping how we manage people,
assets and developments across London and Scotland. Our
objective is to create safe, healthy and secure environments for
colleagues, customers and contractors, supported by robust
systems and strong governance.
Our integrated approach ensures that HS&W is considered at
every stage of a building’s life cycle: from acquisition, through
development, leasing, management and disposal.
We achieve this by:
designing and proactively managing appropriate HS&W
systems;
establishing and maintaining policies and procedures that
meet current legislation;
assigning work to competent individuals and monitoring
through audits;
training and developing our people on legal responsibilities
and best practice to ensure competence in managing HS&W
risks;
reviewing performance at Board, Executive and Committee
levels; and
learning from accidents, incidents and near misses, and
implementing changes to prevent reoccurrence.
The health, safety and wellbeing of our people, occupiers, residents, service partners,
contractors and the public is a high priority for us. We manage this through a culture of shared
responsibility and robust, effective risk management.
2025 highlights
Achieved Royal Society for Prevention of Accidents (ROSPA)
Gold Award for the third consecutive year
Supported one of the UK’s first successful ‘Gateway 3’
submissions at 25 Baker Street
Delivered H&S Legal Duties session with 100% Board and
Director participation
Updated supplier due diligence to meet new building safety
requirements and Build UK standards
Launched H&S audit programme across our managed
portfolio service partners; all seven were audited in 2025
Enhanced contractor controls and safely prepared 25 Baker
Street W1 and 100 George Street W1 projects for occupation
Providing a safe work environment for our people
We prioritise both physical and mental wellbeing to create a
workplace where employees feel safe and supported. We achieve
this through clear communication and training on H&S
requirements, standards and best practice. This is reinforced
through collaboration across the business – from property
management and construction to marketing and events –
ensuring understanding, capability and accountability at every
level.
In 2025, we delivered 119 person days of training, alongside
formal courses, topical health and wellbeing webinars, toolbox
talks and tailored site inductions for new employees. These
initiatives strengthen understanding of health and safety
requirements and reinforce safe working practices. They are
supported by our H&S training matrix, which identifies role-
specific requirements and helps maintain competency across the
business.
Employee engagement is supported by our Health, Safety and
Accessibility Working Group, which meets bi-monthly to share
insights and outcomes with the Group H&S Committee. The
Property Management Sub-Committee also feeds outcomes into
the Group H&S Committee, ensuring clear governance and
accountability at every level.
Making our assets safe to occupy
We take responsibility for ensuring our occupiers, visitors and
those living and working in and around our buildings are safe and
healthy. Health and safety considerations are embedded
throughout design, construction, maintenance and operation,
supported by early intervention, recognised standards and best
practice across the business.
Our in-house H&S team works closely with our Property
Management team. Dedicated H&S Managers are assigned to
each building to ensure they are operated safely, supporting and
advising the local building management teams while monitoring
and auditing performance to minimise risk.
Our use of the RiskWise system provides live compliance
reporting, incident management and permit control across our
managed portfolio. Formal inspections including annual
‘Property Health Checks’ and Fire and Water Risk Assessments,
are complemented by ongoing reporting and monitoring of key
areas such as 'legionella' control, fire safety, asbestos
management and structural safety.
Derwent London plc
Report and Accounts 2025
80
Health and safety data
The table below details our key H&S statistics. Those denoted with an (a) have been subject to independent limited assurance by
PricewaterhouseCoopers LLP (PwC) in accordance with the ISAE 3000 (Revised) Standard. This data allows us to identify trends
and highlight areas of focus for the business. The Health and Safety Basis of Reporting and PwC's assurance report can be found
in the
2025
Responsibility Report
.
Employee
Managed portfolio
Construction projects
Totals
2025
2024
2025
2024
2025
2024
2025
2024
Indicators
Person hours worked
272,835*
259,822
1,008,304*
981,639
1,015,360
1,716,207
2,296,499
2,957,668
Minor injuries
3
2
18
23
6
18
27
(a)
43
Near miss
1
1
35
29
19
40
55
70
Lost time injuries
0
1
2
2
5
4
7
(a)
7
Lost time days
0
2
3
5
10
10
13
17
RIDDORs (TOTAL)
0
0
0
3
4
3
4
(a)
6
RIDDORs (Direct)
0
0
0
2
1
2
1
(a)
4
Dangerous occurrences
0
0
0
0
0
0
0
0
Fatalities
0
0
0
0
0
0
0
(a)
0
Improvement notices
0
0
0
0
0
0
0
0
Prohibition notices
0
0
0
0
0
0
0
0
Rates
Injury rate
11.00
7.70
17.85
23.43
5.91
10.49
11.76
(a)
14.54
Lost day rate
0.00
7.70
2.98
5.09
9.85
5.83
5.66
(a)
5.75
Severity rate
0.00
0.67
0.15
0.18
0.67
0.40
0.34
0.30
RIDDOR AFR (TOTAL)
0.00
0.00
0.00
3.06
3.94
1.75
1.74
(a)
2.03
RIDDOR AFR (Direct)
0.00
0.00
0.00
2.04
0.98
1.17
0.44
(a)
1.35
Document Compliance % score
(Quarter Average)
98.00
97.75
98.00
(a)
97.75
*
Denotes that person hours worked for ‘Employees’ includes ‘Derwent Lounges,’ but does not include Building Managers' and ‘Caledonian Properties’ employees’
working hours, which are subtracted from submitted internal ‘Employees’ data and added to ‘Managed portfolio’ data.
25 Baker St. W1 site
High health and safety standards on construction sites
We maintain strong relationships with our principal and main contractors and seek to
lead by example as an informed and responsible construction client. In 2025, we worked
with 25 different principal contractors across our development and managed property
portfolios.
Health and safety is central to our construction activities. We promote safer
environments through collaboration, client input, consistent standards, and a continued
focus on key industry risks. Performance monitoring is undertaken internally and
through external schemes such as the Considerate Constructors Scheme, providing
assurance and supporting continuous improvement.
In 2025, there were four construction-related RIDDORs (2024: three). Three of these were
relatively minor, being Indirect RIDDORs involving an 'over 7-day injury absence from
work'. The fourth was a Direct RIDDOR involving a 'specified injury' at Strathkelvin Retail
Park Project. While the Total RIDDOR AFR increased year-on-year, the construction-
related Direct RIDDOR AFR reduced to 0.98 (2024: 1.17).
The H&S and Development teams work closely on all projects with a dedicated Derwent
H&S Manager involved from the early design phase. This proactive approach enables
early identification of potential construction or operational risks, ensuring they are
eliminated or mitigated at an advanced design opportunity.
81
Strategic report
Governance
Financial statements
Other information
Responsibility – Governance
Responsibility governance
Acting in a transparent and responsible manner is fundamental to our business and underpins
our key governance practices.
2025 highlights
Updated our Net Zero Carbon Pathway
Published climate-related financial disclosures consistent
with TCFD Recommendations (Listing Rule 9.8.6 (8) (b))
Published our updated Supply Chain Responsibility
Standard and introduced a third party whistleblowing line
for existing suppliers
Consulted shareholders (equivalent to 68% of issued share
capital) on proposed Remuneration Policy changes
Delivered training to members of the Executive Committee
and other employees from across the business on the new
‘failure to prevent fraud’ offence under the Economic Crime
and Corporate Transparency Act 2023
Published our latest Modern Slavery Statement
Continued mandatory compliance training for all
employees, including the Board
A responsible business
Effective oversight of ESG matters is critical as it enables the
Board to understand the impact of its decisions on stakeholders
and the environment. It also helps the Board identify emerging
trends and risks, and stay alert to market changes, informing
strategic considerations.
We conduct business with integrity and work with stakeholders
who share our values and ethical principles.
ESG is overseen principally by the Board, Responsible Business
Committee and Sustainability Committee.
Our Chief Executive, Paul Williams, is the designated Director
with overall accountability for ESG matters, chairing the
Sustainability Committee and serving on the Responsible
Business Committee.
Governance Framework / See page 127
The Board
Executive Directors with assistance from the Executive Committee
Overall responsibility for ESG matters
Nominations
Committee
Audit Committee
Risk Committee
Responsible Business
Committee
Remuneration
Committee
Ensures ESG skills,
knowledge and
experience are
considered when
assessing the Board’s
composition and
skills gap
assessments
Monitors assurance
and internal financial
controls; ensures
ESG-related
expenditure is
accurately reflected
in financial
statements
Identifies and
evaluates key ESG
risks (principal and
emerging), ensuring
effective
management
Oversees corporate
responsibility,
sustainability and
stakeholder
engagement
Ensures relevant ESG
factors are included
in executive
remuneration
(annual bonus and
long-term incentive
plans)
Responsibility for oversight of the Group’s ESG initiatives
Sustainability Committee
Health and Safety
Committee
Sponsorship &
Donations Committee
Social Committee
Implements the Board’s
ESG strategy
Monitors health and
safety management and
performance
Oversees charitable
activities and donations
Promotes teamwork and
cross-department
collaboration through
social activities
Derwent London plc
Report and Accounts 2025
82
Climate change governance
The Board is ultimately accountable for
the governance of climate change risks
and opportunities. However, day-to-day
responsibility and management is
delegated to the Executive Committee,
and Sustainability and Investor Relations
teams.
The Board approves and monitors
progress against our Net Zero Carbon
Pathway targets, including energy and
carbon (both operational and embodied).
In 2025, we published an updated Net
Zero Carbon Pathway, introducing ‘nature
and resilience’ as a fifth pillar. During the
year, the Board, Responsible Business
Committee and Executive Committee
received formal updates on the Group’s
performance against targets.
Updated Net Zero Carbon Pathway
Following a competitive tender, PwC was
appointed as the new non-financial
assurance provider, providing limited
assurance over climate-related and
Health and Safety performance
indicators. PwC’s assurance statement is
available to view within the
2025
Responsibility Report
.
Green finance governance
Our Green Finance Framework (the
Framework) demonstrates the clear link
between our financing activities and our
broader environmental objectives. PwC
has provided reasonable assurance over
selected green finance KPIs for the year
ended 31 December 2025. Its assurance
statement is available to view within the
2025 Responsibility Report
.
The Framework has been prepared in
alignment with the Loan Market
Association (LMA) Green Loan Principles
2021 and International Capital Market
Association (ICMA) Green Bond Principles
2021 guidance document. It has also been
externally reviewed and a Second Party
Opinion (SPO) has been obtained. The
latest version of the Framework and the
accompanying SPO are available on our
website at
www.derwentlondon.com
.
Protecting human rights
Protecting human rights and
fundamental freedoms is a core ESG
priority for us, managed from an internal
(within our business) and external
perspective (with our supply chain and
our relationships with contractors).
Internally, the Board monitors culture to
uphold our values and high standards of
transparency and integrity. The biennial
employee survey provides valuable
insights and during the year 89% of
employees said that they were proud to
work for Derwent London. Our HR team
ensures effective systems and processes
are in place to strengthen and sustain our
culture. Based on our ongoing risk
assessment, we believe the residual risk of
slavery or human trafficking among our
employees is very low.
Promotes the desired culture and values / See
page 126
Externally, we actively communicate our
ESG standards to our supply chain and
during the year published an updated
Supply Chain Responsibility Standard.
Our supply chain governance procedures
clearly define these standards and ensure
our supply chain is aware that respecting
human rights is paramount to us. The full
Modern Slavery Statement is available at:
www.derwentlondon.com/investors/
governance/modern-slavery-act
Modern slavery / See page 169
Supply chain governance
We require our suppliers and construction
partners to operate responsibly and
uphold our ESG principles. Suppliers with
whom we spend more than £20,000 per
annum may be required to provide
evidence of how they are complying with
our Supply Chain Responsibility Standard.
In conjunction with the publication of our
updated Supply Chain Responsibility
Standard, a third party whistleblowing
line was introduced to enable suppliers to
report any concerns anonymously.
Supply Chain Responsibility Standard / See
page 168
Responsible payment practices
Responsible payment practices remain an
important area of focus for the Group as
we are committed to being clear, fair and
collaborative with our suppliers. The Fair
Payment Code (the Code) replaced the
Prompt Payment Code in December 2024,
with the new Code intended to set higher
standards, support businesses to improve
their payment practices, and create a
more robust approach to compliance.
During the year, the Group achieved
Bronze level accreditation. As the Group
continues to enhance its reporting
systems, we will have the ability to report
upon additional elements required to
achieve a higher level accreditation,
further demonstrating the Group’s
commitment to the prompt and fair
payment of suppliers.
Tax governance
The Group is committed to strong tax
governance and risk management
processes. Our Statement of Tax
Principles, approved annually by the
Board and overseen by the Audit
Committee, ensures transparency,
integrity and compliance and is available
at:
www.derwentlondon.com/
investors/governance/tax-principles
Responsibility for managing the Group's
tax affairs and implementation of our
Statement of Tax Principles is delegated
to the Head of Tax. The Group continues
to maintain a low appetite for tax risk,
applying robust internal controls and
processes, and does not engage in
aggressive tax planning. An open and
collaborative relationship with HMRC is
maintained, anticipating potential risk
early and clarifying any uncertainties as
they arise as well as proactively
supporting HMRC’s consultations. The
Group’s overall approach to tax
governance aligns with our ESG
commitments by promoting tax practices
that contribute to sustainable value
creation for our stakeholders.
83
Strategic report
Governance
Financial statements
Other information
Responsibility – Governance
continued
Reporting frameworks and ESG data
Non-financial reporting
As we have fewer than 500 employees, the non-financial and sustainability information statement (NFSIS) requirements contained in
the Companies Act 2006 do not apply to us. However, due to our commitment to promoting transparency, we have elected to provide
additional information in the table below to enhance clarity and accountability.
Category
Our key policies and standards
Additional Information
Environmental
matters
Responsibility Policy
Net Zero Carbon Pathway
Science-based carbon targets
Task Force on Climate-related Financial
Disclosures (TCFD)
Streamlined Energy and Carbon Reporting
(SECR) disclosure
2025 Responsibility Report
www.derwentlondon.com/responsibility/publications
Our Net Zero Carbon Pathway
Pages 69 to 73
Climate change governance
Pages 83 and 95
Risk management
Pages 159 and 100 to 111
Executive Directors’ LTIP 2025
Page 204
UN SDGs
Page 85
TCFD
Pages 86 to 99
SECR
Pages 74 to 75
Social and
employee aspects
Volunteer Policy
Equal Opportunities and Diversity Policy
Professional development and training
Shared parental leave
Smart Working Policy
Community Fund
Pages 76 to 77
Our people
Pages 78 to 79
Executive Directors’ annual bonus
Pages 201 to 202
Diversity and inclusion
Pages 170 to 171
Employees on a committee
Page 165
The Section 172(1) Statement
Page 130
Respect for
human rights
Individual Rights Policy
Health and Safety Policy Statement
Supply Chain Responsibility Standard
Modern Slavery Statement & Policy
Code of Conduct and Business Ethics
Health and safety
Pages 80 to 81
Human rights
Page 83
Modern slavery
Page 169
Supply Chain Responsibility
Standard
Page 168
Anti-corruption
and bribery issues
Anti-bribery Policy
‘Speak up’ Policy
Expenses Policy
Money Laundering and Terrorist Financing
Policy
Preventing Facilitation of Tax Evasion Policy
Prevention of Fraud Policy
Audit Committee report
Pages 142 to 153
Risk Committee report
Pages 154 to 163
Anti-bribery and corruption
Page 163
Our principal risks
Pages 104 to 109
Our emerging risks
Pages 110 to 111
Compliance training
Page 163
Fraud Risk Management
Page 148
Derwent London plc
Report and Accounts 2025
84
UN SDG disclosures
The United Nations Sustainable Development Goals (SDGs) are an international framework developed to support global change and
sustainable growth.
We have reviewed all 17 goals and identified those most relevant to our ESG priorities, informed by our double materiality assessment.
We believe that we have a role in supporting the UK in responding to this standard and helping positively effect change. Set out in the
table below is a summary of our progress against the selected goals.
Our ESG priority
UN SDG
Goal
Target
Indicator
Our progress
Creating value in
the community
and for our wider
stakeholders
4.4
4.4.1
Our Community Fund enables us to invest in and support groups which
develop skills and improve education outcomes for young people from
socially and economically challenged backgrounds. We support Team Up
for Social Mobility, a charity that works to recruit, train and support
volunteer tutors for 9-16 year olds from low-income backgrounds. Its
Tuition and Enrichment Programme helps young people to build
academic skills and confidence, supporting progression through GCSEs
and beyond.
4.a
4.a.1
Our Sponsorship & Donations Committee funded the participation of
two young people on the Ernst & Young (EY) Foundation’s Real Estate
Futures programme. The programme supports young people from
low-income backgrounds to develop workplace skills and career
aspirations, providing real estate sector insight, work experience and
access to a mentor for at least six months.
Protecting
human rights;
Engaging and
developing our
employees
5.1
5.1.1
Beyond our legislative requirements we are active in ensuring meaningful
gender equality across the business. In 2024, we achieved re-
accreditation for the National Equality Standard (NES), scoring in the top
5% of assessed organisations. Our Diversity & Inclusion Committee
continues to ensure progress is being made and best practice is
implemented. Our training and development initiatives are available
company-wide. We have adopted a smart working policy and offer
enhanced parental leave. Feedback from our employee surveys helps us
identify potential gender and ethnicity differentials.
5.5
5.5.2
Our gender balance ratio is 47%:53% male/female, with women
comprising 38% of our senior management team. In 2025, there were 19
internal promotions, 42% of which were women.
Designing and
delivering
buildings
responsibly;
Managing our
assets responsibly
7.2
7.2.1
We aim to purchase renewable energy across our managed portfolio. As
at the end of 2025, all electricity contracts were on renewable tariffs
backed by REGOs and gas contracts were RGGO backed. In support of
our net zero carbon programme, construction is underway on our
100-acre, 18.4 MW solar park on our Scottish land, which is due to
energise in mid-2026.
7.3
7.3.1
We have developed building-specific energy intensity reduction targets to
measure and improve the energy efficiency of our managed properties,
supporting progress towards net zero carbon.
Creating value in
the community
and for our wider
stakeholders
11.7
11.7.1
We actively promote the inclusion of public spaces in and around our
buildings and ensure they are fully accessible. In addition, we are
signatories of the Westminster City Charter, supporting Westminster City
Council in its ambition to become a zero carbon borough by 2040.
Managing our
assets responsibly
12.5
12.5.1
We have a portfolio-wide minimum recycling target of 75% (2025: 72%)
and a no waste to landfill policy. In 2025, we implemented a new circular
economy strategy covering both our managed properties and
regeneration projects.
12.6
12.6.1
We integrate comprehensive sustainability information into our company
and public reporting cycles.
Designing and
delivering
buildings
responsibly;
Managing our
assets responsibly
13.2
13.2.2
Our science-based carbon targets are aligned to a 1.5°C scenario, verified
by the Science Based Targets initiative (SBTi). In addition, we have set
embodied carbon and energy intensity reduction targets for our
developments and managed properties respectively. We are committed
to reducing carbon emissions and ensuring our portfolio is climate
resilient. In 2025, we updated our Net Zero Carbon Pathway, introducing
nature and resilience as a core focus.
85
Strategic report
Governance
Financial statements
Other information
TCFD compliance statement
Our disclosures in this section are consistent with the TCFD’s Recommendations and Recommended Disclosures. When assessing
the consistency of our disclosures, we have had due regard for all relevant guidance including the TCFD’s Guidance for All Sectors.
We have adapted our disclosure to reflect some of the key aspects within the sustainability disclosure standards IFRS S1 and S2
which were published by the International Sustainability Standards Board in 2023.
We separately publish a Responsibility Data Report alongside our annual Report & Accounts which provides more detailed
climate-related data sets and performance metrics.
This can be found at
www.derwentlondon.com/responsibility/publications
. We structure our reporting in this way to satisfy
the requirements of our various stakeholders.
TCFD directory
In line with the UK’s Financial Conduct Authority Listing Rules, we have identified in the table below where our responses to the
TCFD’s 11 recommendations are located. We retain sufficient evidence/records to support our compliance statement (on page 86)
and our data disclosures in our annual Report & Accounts and Responsibility Reports.
Governance
a) Describe the Board’s oversight of climate-related risks and opportunities
See pages 94 to 95
b) Describe management’s role in assessing and managing climate-related
risks and opportunities
See pages 90 to 95
Strategy
a) Describe the climate-related risks and opportunities the organisation has
identified over the short, medium and long-term
See pages 88 to 91
b) Describe the impact of climate-related risks and opportunities on the
organisation’s business strategy and financial planning
See pages 92 to 93
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or lower
scenario
See pages 88 to 91
Risk
management
a) Describe the organisation’s processes for identifying and assessing climate-
related risks
See pages 87 to 93
b) Describe the organisation’s processes for managing climate-related risks
See pages 108, 94 to 97
c) Describe how processes for identifying and managing climate-related risks
are integrated into the organisation’s overall risk management
See page 87
Metrics and
targets
a) Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process
See pages 74, 75 and 97
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks
See pages 74 to 75
c) Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets
See pages 69 and 97
Task Force on Climate-related
Financial Disclosures (TCFD)
Responsibility – Governance
continued
We are proactive in finding solutions to further reduce
emissions and develop renewable energy sources.
Derwent London plc
Report and Accounts 2025
86
The built environment
Climate change is a major global challenge which will impact
how business operates in the future. The built environment
contributes approximately 40% (including the residential
sector) to the UK’s overall carbon footprint. Consequently, we
take a proactive approach in finding solutions to further reduce
emissions and develop renewable energy sources (see pages 69
to 73).
As part of our commitment to being a net zero carbon
business by 2030, we are helping to lead the industry in
supporting the Government’s net zero carbon ambitions and
improving the carbon footprint of the built environment. We
are also helping to develop best practice guidance for our
sector through engagement with industry partners and
organisations such as the Better Building Partnership and the
British Property Federation.
Examples include:
Westminster City Council Sustainable City Charter:
We
were early signatories to the Westminster City Council
(WCC) Sustainable City Charter, which provides a
framework for reducing carbon emissions from non-
domestic buildings across Westminster; and
Sustainable Markets Initiative (SMI) Sustainable
Buildings Taskforce:
Our CEO, Paul Williams, sits on the
Sustainable Markets Initiative (SMI) Sustainable Buildings
Taskforce which is part of His Majesty King Charles III’s Terra
Carta. The aim of the initiative is to put nature, people and
the planet at the heart of global value creation.
Engagement
We seek to actively engage with our peers, occupiers and other
stakeholders to reduce energy use and carbon emissions within
the built environment. If you wish to discuss our Net Zero
Carbon Pathway, please email
sustainability@
derwentlondon.com
Our approach
Climate change is a material issue for our business. We deem an
issue to be ‘material’ when it is assessed as being sufficiently
important to both our business and our stakeholders. Our
properties are subject to climate-related risks such as increasing
temperatures which could lead to greater physical stresses. Our
strategy involves the acquisition and repositioning of older
properties and ongoing investment in more modern properties.
We ensure a high degree of resilience in our new developments
and repositioning of older properties by setting high standards
for sustainability. When managing our core income portfolio, we
focus on energy and carbon reduction (as dictated by our energy
intensity reduction targets), ensuring our buildings operate as
efficiently as possible. Our strategy centres around the concept of
continual improvement to ensure a high degree of both climate
and financial resilience. Our environmental priorities are on pages
69 to 73.
Climate risk assessment
We identify and monitor climate change risks and opportunities
as part of our wider risk management procedures which are
overseen by the Board and its principal committees (see pages
94 to 95 and 144).
We structure our risk management framework, which is disclosed
on page 158, into four stages. Our climate risk disclosures, shown
on pages 86 to 99, are structured in accordance with this
four-stage approach.
Owing to their complex nature, the identification and assessment
of climate-related risks and opportunities are undertaken with
the support of third party expertise. In 2024, Willis Towers Watson
(WTW) performed an updated independent climate risk
assessment and scenario analysis. The scope of the assessment
included our entire London-based investment portfolio (including
our head office) and our Scottish portfolio.
During our climate risk assessments, short, medium and long-
term time horizons were considered (see page 94 to 95). We
recognise that climate-related issues, in particular physical risks,
are often (but not exclusively) linked to the medium to long-term
and that the properties within our investment portfolio have a
long lifespan of many decades.
The climate risk assessments sought to identify the transition and
physical risks and opportunities applicable to the Group. As our
business is based in and solely focused on the UK, the risks/
opportunities were not considered on an international and/or
segmental basis.
Through this process we identified and reviewed nearly 35
transition and physical risks and opportunities. On page 88 we
have disclosed the most material risks and opportunities in terms
of impact, likelihood (transition risk) and exposure (physical risk).
Once the risks and opportunities had been identified, three
pre-defined climate scenarios were applied, where appropriate,
to test the resilience of our business, strategy and financial
planning.
Identification
Assessment
Monitoring
Response
See page 88
See page 90
See page 94
See page 96
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Strategic report
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Other information
Identification
Transition
Transition risks and opportunities are those which arise from the
transition to a low carbon economy. These were identified and
assessed, in terms of their impact and likelihood, via a facilitated
workshop with cross-functional representation from across our
business. As part of our risk assessment, we considered how
these risks changed under a 1.5°C aligned scenario (the ‘Low
Carbon World’). Overall, our transition risk exposure under the
‘Low Carbon World’ scenario was assessed to be low to moderate
in both the short-term (2030) and the medium-term (2040) (see
table below).
The impact and likelihood of each identified risk were challenged
in the context of the latest regulatory updates and WTW’s/our
experience with the real estate sector.
We also estimated the financial impact (whether to the balance
sheet or income statement) and assigned high and low impact
estimates to applicable cost components, depending on the
effectiveness of our planned mitigating actions. Through the
assessment process, we applied mitigation measures already
captured within the scope of our Net Zero Carbon Pathway and
those within our existing business processes, to define our
residual risk profiles. Due to the strength of our mitigation
strategies, the impact of these risks reduced significantly on a
residual basis.
Based on our assessment, the table below shows the most
material transition risks and opportunities applicable to our
business.
Material transition risks and opportunities identified:
Risk rating on a residual basis
‘Low Carbon World’ (~1.5°C)
Risks
Opportunities
0-5 years
5-15 years
0-5 years
5-15 years
Enhanced emissions reporting requirements
Low
Low
Change in customer demand
Moderate
Moderate
Emissions offsets
Low
Moderate
Planning approval changes
Moderate
Moderate
Cost of raw materials
Low
Low
Employee attitude to climate change and sustainability
Low
Low
Cost of low carbon emission technologies
Low
Low
Risk rating / See page 102
Responsibility – Governance
continued
Physical
Physical risks were identified and assessed through an asset-by-asset exposure/susceptibility analysis using a range of acute and
chronic climate hazards (risks). The scenarios were tested as at the present day, as well as for future projections under three climate
scenarios (see table below). This was supplemented by a climate risk modelling analysis, undertaken by WTW, for flood and
windstorm, as well as more chronic risks like heat, drought and subsidence. Physical assets were considered exposed if they are located
in an area where a climate hazard may occur. The degree of exposure was defined by the severity/intensity of that hazard, with each
hazard having its own intensity scale. If an exposure was deemed to be moderate or above it could have a material impact.
It should be noted that the scores were based on a global scale. For the UK, a modest increase in a chronic hazard, such as heat-stress
(heatwaves), from very low to low could have wider implications on properties and infrastructure.
Our exposure to physical risks increases into the medium and long-term and as global temperatures rise. Based on our assessment, we
consider windstorm and flooding to be the most material physical risks to our business. While subsidence is a material physical risk,
there is no clear financial quantification model available within the data sets used.
Material physical risks identified:
Short-term 0-5 years
Medium-term 5-15 years
Long-term 15+ years
Present day
‘Low Carbon
World’
(~1.5°C)
‘Current
Policies’
(~2 to 3°C)
‘Hot House
World’
(>4°C)
‘Current
Policies’
(~2 to 3°C)
‘Hot House
World’
(>4°C)
Heat stress
Very low
Very low
Very low
Low
Low
Low
Flooding
Low
Low
Low
Moderate
Moderate
Moderate
Drought
Very low
Low
Low
Low
Low
Moderate
Fire
Very low
Low
Low
Low
Low
Low
Windstorm (Severe weather event)
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Subsidence
High
High
High
High
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88
Phased decarbonisation
Working with our Asset and Property Management teams, as
lease expiries/breaks have occurred, c.80% of 1-2 Stephen
Street has now been converted to be all-electric, through the
installation of Air Source Heat Pumps (ASHP) and removal of
gas for domestic hot water. We are targeting full
decarbonisation by 2029.
When floors become available, retention and reuse is a priority,
with raised access floors being retained and MEP reused where
suited to the new ASHP system. We have worked closely with
the supply chain to develop a custom design-led low carbon
ceiling which meets quality, aesthetic and carbon
requirements. As floors return, we keep learning and improving
on our existing benchmarks.
Risk: Timing and cost
Our portfolio comprises buildings of different ages. Some
projects require a greater level of intervention (for example,
where on floor MEP equipment cannot be reused).
Consequently, some buildings may take longer to decarbonise
as we align our works with lease expiries and breaks to
minimise disruption.
Opportunity: Innovation
1-2 Stephen Street has helped us develop a phased
decarbonisation blueprint which allows us to continue
decarbonising our portfolio whilst limiting disruption to
occupiers. This approach is being rolled out across other
buildings within the portfolio, including 9-10 Rathbone Place
W1 and 17 Gresse Street W1 (Charlotte Building), where
projects were completed during 2025. This both aligns with our
Net Zero Carbon Pathway and improves EPC ratings.
Decarbonising our portfolio
9-10 Rathbone Place
W1
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Responsibility – Governance
continued
Assessment
Of the risks identified, none were deemed
likely to have an impact such that the viability
of our business would be interrupted, although
our cost profile could increase.
Testing our resilience
The risks and opportunities we identified were applied against at
least two climate scenarios for transition risk and three for
physical risk to test the resilience of our business, strategy and
financial planning.
Our approach to creating scenarios followed the updated
guidelines produced by the TCFD within its Guidance on Scenario
Analysis for Non-Financial Companies and aligns with IFRS S2. We
set out on page 99 the assumptions and risk data sources that
were used in our most recent climate scenarios.
When conducting the scenario analysis, we had due regard to the
following:
Forecasting:
scenarios are a way to imagine plausible states of
the world and plan for our resilience. They are not intended as
forecasts of the future.
Balance:
they should have aspects of quantification, but not
so much that it impairs strategic thinking.
Challenge:
they must ensure we challenge our own thinking
about our organisation and business model.
Certainty:
some drivers within the scenarios may be relatively
certain and predictable whilst others are highly uncertain as to
their development and impacts over time.
Breadth:
the resilience of our strategy should be investigated
under multiple scenarios, including a 2°C or lower scenario.
The tables on pages 92 and 93 illustrate how we have
incorporated these risks and opportunities into our strategy and
financial planning. Ultimately, we do not envisage having to make
changes to our overall strategic approach when considering
climate-related scenarios.
Risk rating / See page 102
Scenario 1
‘Low Carbon World’
~1.5°C
Assumptions
A low temperature rise scenario as the world
transitions to a low carbon economy
Pricing of voluntary carbon offsets increases significantly.
Increased stringency of building planning and design.
requirements to meet net zero targets.
Increased demand for lower emission technologies to enable
transition to a low carbon world.
Increased cost of high carbon raw materials (e.g. steel, glass
and concrete), which is further impacted by a carbon tax.
Increased demand for enhanced climate-related disclosures.
Climate change and sustainability remain concerns for
employees.
Transition risks
Low to Moderate
Our overall risk exposure under the ‘Low Carbon World’ (~1.5°C)
scenario is low to moderate in both the short-term (2030) and the
medium-term (2040). The most material transition risks identified
were EPC rating requirements, planning approvals and rising
emission offset prices.
Physical risk exposure
Very Low to
Moderate
Our physical risk exposure was low under this scenario. However,
our Scottish land had greater exposure to windstorm and river
floods in comparison to our London portfolio.
Potential financial impacts
Moderate
In 2021, approximately £97m of capex was identified to achieve an
EPC rating of B across our London commercial portfolio. This has
since been revised to £73.7m to reflect the latest scope (change in
building regulations), inflation, disposals, the acquisition of the
remaining 50% interest in 50 Baker Street W1, and the work carried
out to date.
We have mitigated the impact of near- to medium-term cost
increases in market pricing of carbon offsets by forward-
purchasing high quality, nature-based removal credits for our
regeneration pipeline to 2030. However, we remain vigilant to
pricing shifts in the voluntary carbon market.
Potential impact on strategy
Low
Our strategy and financial planning already reflect more stringent
planning and design requirements, guided by the introduction of
our Net Zero Carbon Pathway in July 2020 (updated in 2025). We
estimate that the cost impact of achieving our pathway
requirements is approximately 5% to 10% of our development costs
which is factored into our appraisals.
Over the long-term, we can reduce the cost impact of carbon
offsets on our financial returns by extending our carbon removal
projects (e.g. tree planting) on our Scottish land which will help to
reduce our reliance on the voluntary carbon market. However, in
this scenario we are unlikely to realise the full value for some time,
given such projects take time to yield a significant number of
credits. In 2020 and 2024, we forward-purchased c.195,600 carbon
credits for a combined price of c.£4.9m.
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Scenario 2
‘Current Policies’
~2°C to 3°C
Assumptions
The world follows the emissions trajectory based on
current policies/practices
Offset prices increase but not by as much as under the ‘Low
Carbon World’ scenario.
There are no changes to existing planning and design
requirements for developments.
No change in the demand for lower emissions technologies.
The increase in cost of low carbon materials is anticipated to
be lower than in the ‘Low Carbon World’ scenario.
No discernible change in demand for enhanced climate-
related disclosures.
No change in employees’ attitude to climate change and
sustainability.
Transition risks
Low to Moderate
Under this scenario, the risk impact and likelihood profiles for
transition risks were unchanged in comparison to the ‘Low Carbon
World’ scenario. This is because strategically we are expecting to
decarbonise in a shorter time frame compared to the current policy
approach.
Physical risk exposure
Low to Moderate
Within this climate scenario there was no scientific evidence to
suggest that intensity or frequency of windstorms would increase
significantly, therefore the risk profile has been deemed to be
broadly similar to that in the short-term. However, subsidence
starts to represent a material risk in this scenario, albeit currently
there is little or no data available on its impact, either financially or
structurally at the asset level. All our London portfolio assets are
either out of risk zones or are protected by the Thames Barrier. Four
agricultural assets in our Scottish portfolio are currently exposed to
very high flooding risk. Flooding consequently represents a
moderate risk in this scenario.
Potential financial impacts
Low to Moderate
Generally, the transition risk cost impact is lower than in the ‘Low
Carbon World’ scenario where demand for instruments such as
offsets is greater, leading to supply constraints.
Physical risk cost impact is not discernible in this scenario.
Potential impact on strategy
Low
Sustainability has always been part of our strategy. This puts us in
a good position to take advantage of market and occupier demand
for more sustainable spaces, and the associated higher rental
premiums. There are also operational cost savings that can be
achieved from reduced energy intensity of more efficient spaces.
Under this scenario, we would continue to retrofit and improve our
properties in line with our net zero strategy and overall business
model.
It is assumed the opportunities available in our Scottish portfolio
remain the same.
Scenario 3
‘Hot House World’
>4°C
Assumptions
A high carbon scenario where the world fails to
transition, and temperatures rise
No change in EPC rating requirements.
Current policies promoting sustainability are removed.
No carbon pricing exists.
Exploitation of abundant fossil fuel resources.
Little or no development in low carbon technology.
Adoption of resource and energy intensive lifestyles.
Transition risks
n/a
Transition risks were not modelled under this scenario. These risks
only arise if the world actively attempts to transition to a low
carbon economy.
Physical risk exposure
Moderate to High
Our London portfolio could see a moderate risk of drought, of
between three to four months per year, a notable increase over
today’s climate. Under this scenario, there is increased
susceptibility of subsidence, with all the London portfolio having
‘probable’ increases and instability issues in line with the wider
London area. There was no scientific evidence to suggest that
intensity or frequency of windstorms would increase significantly.
Consequently, the risk profile has been deemed to be broadly
similar to that in the ‘Current Policies’ scenario.
Potential financial impacts
Low
Within the next 10 years, modelling showed that there was a 10%
probability of windstorm damage to the portfolio costing
approximately £1.8m to £4.0m in the most extreme years. Likewise,
in the same extreme years flood damage could cost £0.3m to
£3.6m, rising to approximately £2.1m to £6.1m by 2050, across both
the London and Scottish portfolios.
Potential impact on strategy
Low
Drought might create water stress issues and shortages in the
water supply for London. Our water management strategy would
need to be adapted for more optimal water usage (reuse,
collections etc.) which could lead to higher maintenance and
regeneration costs.
Although overall flood risk is not significant, projected changes
indicate that the frequency of flood events could increase in the UK
(and more for Scotland) and create additional direct building and
infrastructure damage and more frequent interruptions. Flood risk
assessment forms part of our acquisition appraisal process.
Subsidence presents a risk to our London portfolio, although the
lack of data makes it difficult to ascertain the impact, if any, on
our business strategy.
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Other information
Assessment
continued
Impact on our strategy and financial planning
The outputs from the risk and scenario assessments (see pages 88 to 91) have been embedded into our business to ensure all of our
core activities accurately reflect the required actions and investments. Our strategy remains unchanged as we continue to develop
design-led, amenity-rich, low carbon office space in line with market and customer demand.
Strategic objectives
1
To optimise returns and
create value from a
balanced portfolio
2
To grow recurring
earnings and
cash flow
3
To attract, retain and
develop talented
employees
4
To design, deliver and
operate our buildings
responsibly
5
To maintain
strong and flexible
financing
Exposure
Material risk
0-5
years
5-10
years
15+
years
Impact on strategy
Impact on financial planning
Transition risks
Planning requirements
It is likely that the UK will
need to incrementally
increase the stringency of
building planning and design
requirements as part of its
efforts to meet its net zero
targets. This would affect our
development pipeline,
including increasing
development costs to ensure
all new buildings are net zero
carbon ready.
Our Responsible Development Brief and
updated Net Zero Carbon Pathway aim
to ensure that our properties are more
climate resilient, built for a longer life,
flexible to occupy and operate, less
reliant on mechanical cooling and free
from fossil fuel use i.e., all electric
heating and cooling.
Strategic objectives:
1
2
4
Business model:
Refurbishment &
Development
The requirement to be net zero aligned is
already factored into our development
appraisal process and ensures we have a
robust level of cost certainty and
financial forecasting ability. Access to
good quality, affordable finance is also
important to enable us to deliver our
development pipeline effectively. Further
information on our green finance
initiatives is on pages 60 to 61.
Emissions offsets
As more companies commit
to net zero, the demand for
high quality carbon removal
offsets is increasing, resulting
in higher prices. There is also
increasing reputational risk
associated with the use of
emission offsets if carbon
offsetting is chosen as the
only net zero measure,
instead of focusing on
reducing energy consumption
and emissions first.
We have put in place energy intensity
reduction targets for the properties in
our managed portfolio which look to
reduce intensity by c.4% year-on-year
between our 2019 baseline and 2030.
These are designed to ensure (alongside
our renewable energy procurement) that
we drive down operational carbon as
much as possible.
Our strategy has been to utilise our
Scottish land to generate our own
offsets, initially via tree planting
schemes.
Strategic objectives:
4
Business model:
All of our core activities
To offset our development-based residual
embodied carbon we use carbon removal
offsets purchased from the voluntary
carbon market. Our development
appraisals include a cost of carbon for
these offsets, currently set at £34 per
tonne, the price at which we forward-
purchased c.114,000 carbon credits in
2024 which covers our forecast embodied
carbon. This is complemented by our
stretching embodied carbon targets,
which aim to drive down the amount of
embodied carbon on scheme completion
and subsequently the need for and cost
of offsetting.
Responsibility – Governance
continued
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92
Exposure
Material risk
0-5
years
5-10
years
15+
years
Impact on strategy
Impact on financial planning
Physical risks
Windstorm
The risk arising from
windstorms is damage to our
buildings (which could include
façade and roof damage and
power outages), primarily
caused by flying debris.
Our buildings are in storm susceptible
regions, with our land in Scotland being
at highest risk. Overall, the impact of
windstorms on our portfolio does not
impact on our business strategy. We
have adequate building maintenance
and management measures in place.
Strategic objectives:
1
2
3
4
5
Business model:
All of our core activities
As modelling showed a minor potential
financial loss of approximately £2-4m in
an extreme year, we currently do not
believe that it will impact our financial
planning. Recommendations from the
climate assessments will be factored into
our property management strategy and
planned preventive maintenance
schedules.
Flooding
All of our London assets are
out of flood risk zones or
protected by the Thames
Barrier. In Scotland (c.2% of
our total portfolio), we have
locations, mainly used for
agricultural purposes, which
are currently exposed to very
high flooding risk.
The risks from flooding do not impact
our overall business strategy, albeit we
are likely to undertake a greater level of
due diligence during the acquisition
process given future purchase targets
could potentially be in flood zones.
Strategic objectives:
2
4
Business model:
All of our core activities
To ensure we understand the flood risk of
potential new acquisitions, our due
diligence procedures will need to be
enhanced to account for a greater level
of flood mapping to avoid introducing
higher levels of risk and loss exposure into
the portfolio.
Further information on how we have addressed these risks can be found on the following pages:
Our Net Zero Carbon Pathway / See pages 69 to 73
Occupier engagement on climate change / See page 69
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Monitoring
Role of the Board
The Board has overall accountability for climate-related risks and
opportunities. It is responsible for ensuring that climate change is
adequately reflected in the Group’s strategy to ensure our future
resilience. Due to its importance, climate-related matters are
regularly discussed during the Board’s strategy reviews and
factored into the Board’s viability assessment, with support from
third party experts as required (see page 65). The Group's
non-financial assurance tender (see page 145) was overseen by
the Audit Committee and approved by the Board. The
Responsible Business Committee approved publication of the
updated Net Zero Carbon Pathway.
Climate resilience has been classified as a principal risk for the
Group and is contained on our Schedule of Principal Risks (see
page 104). The Board reviews and approves the Group’s risk
registers on at least an annual basis and they are subject to
review by the Risk Committee regularly.
Climate-related topics are included on the agendas of several
Board committees, including: Responsible Business,
Sustainability, Risk and Audit. The climate risk governance
framework is on page 95.
To embed a further level of oversight, we have linked climate-
related performance measures into our Remuneration Policy for
the Executive Directors (see pages 178 to 187). These targets are
directly linked to our Net Zero Carbon Pathway.
Further information on the role of the Board and its committees
in respect of climate change is available on the following pages:
Audit Committee report / See page 142
Remuneration Committee report / See page 172
The Schedule of Matters Reserved for the Board outlines that
climate change and other environmental factors which could
impact the design or management of our portfolio is reserved for
the Board and two of its principal committees; the Responsible
Business and Audit Committees. This responsibility of oversight is
also formalised in the terms of reference of the respective
committees.
The Board’s assessment of its skills, experience and knowledge is
on page 135 and incorporates reference to environmental
matters, including climate change.
Role of management
As Chief Executive, Paul Williams has overall accountability for
climate-related issues. However, oversight of climate-related
issues (which includes identification) is delegated to the
Sustainability Committee. The Investment, Asset Management,
Property Management, Development and Company Secretarial
teams are responsible for day-to-day implementation as
appropriate.
Throughout the year, the Executive Committee reviews the
Group’s risk registers, which include sustainability/climate
change-related risks. These reviews consider the risk severity,
likelihood and the internal controls and/or mitigation actions
required to reduce our risk exposure, so that it is aligned with or
below our risk tolerance. This approach allows the effects of any
mitigating procedures to be considered properly, recognising that
risk cannot be eliminated in every circumstance.
The Sustainability Committee comprises key department leaders,
many of whom have a responsibility for implementing climate-
related issues within their department. At each meeting, a
‘performance and data’ dashboard is produced for discussion
and analysis.
Members from key departments were involved in the most recent
climate risk assessment and climate scenarios conducted with
WTW, the outputs of which underpin our disclosure.
Responsibility – Governance
continued
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Report and Accounts 2025
94
Climate risk governance framework
As climate risks and opportunities are likely to have an impact on various aspects of our business, all the Board’s committees are
involved in the oversight of climate-related matters. As illustrated below, the business has a ‘top-down, bottom-up’ approach to the
oversight of climate-related aspects, from individual departments to the Board.
Responsible Business Committee
Monitors the management of our climate-related risks and opportunities and meets at least twice
per year to ensure that the Board adequately reflects climate-related issues in its decision making.
Ensures climate and
environmental skills,
knowledge and experience
are a consideration when
assessing the Board’s
composition and identifying
any skills gaps. The
Committee meets as
required.
Responsible for ensuring our
development schemes
embed the required
climate-related and net zero
carbon aspects within their
design and delivery
programmes.
Ensures climate-related risks
and capital expenditure are
appropriately reflected in
our financial statements
and portfolio valuations.
The Committee typically
meets three times per year.
Responsible for ensuring our
properties are operated
efficiently e.g. building
energy consumption is
reducing in line with our
energy targets.
Responsible for ensuring
EPCs are tracked and
monitored across the
investment portfolio.
Responsible for ensuring
climate-related issues are
adequately reflected within
executive remuneration.
Board
Overall accountability for climate-related risks and opportunities
Oversight
Monitoring
Nominations
Committee
Development
Audit
Committee
Property Management
Ensures climate-related
aspects are appropriately
included in executive
remuneration. The
Committee typically meets
at least twice per year.
Remuneration
Committee
Asset Management
Ensures climate-related risks
are appropriately identified,
monitored and managed.
The Committee typically
meets three times per year.
Risk
Committee
Company Secretarial
Meets regularly and has overall responsibility for oversight of
climate-related risks and opportunities.
Typically meets quarterly and comprises key department
leaders; it is chaired by the CEO. The Committee is responsible
for monitoring our day-to-day climate-related progress and
performance.
Executive Committee
Sustainability Committee
Management
Sustainability strategy is set by the Executive Directors, in liaison with the
Responsible Business Committee.
Responsibility for day-to-day implementation is integrated across the business.
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Response
Capturing opportunities
As a responsible business, we understand, balance and manage
our environmental opportunities proactively; it is visible in our
culture and approach, and the design and management of our
buildings. Our management structure and style ensure that we
can respond to changes in regulation and occupier demand.
Likewise, this enables us to plan more effectively for the long-
term and ensure we are putting the right systems and processes
in place to maintain our position as London’s leading office-
focused REIT and capture the opportunities which arise.
Through our climate risk assessment, we identified the
opportunities that we could embrace. Of those identified,
changing occupier requirements and cost of debt through green
initiatives were considered most material. We detail below some
of the ways in which we are capturing climate-related
opportunities.
Oliver's Yard
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Responsibility – Governance
continued
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Report and Accounts 2025
96
Green finance
Our Green Finance Framework was specifically developed to link an element of our debt funding to our net
zero carbon ambitions and in particular our development and refurbishment activities. Our £350m green
bond, issued in 2021, is linked to our framework and provides an attractive source of finance to part-fund our
eligible projects. Further information on our Green Finance Framework is on pages 60 to 61.
Building
upgrades
Refurbishing space to optimise rents as vacancies occur is an integral part of our business model. In addition
to physical upgrades, we also seek to improve a building’s environmental credentials. Where appropriate, we
are removing gas from properties and where this is not possible, we are retrofitting specialist equipment to
enhance performance – see page 69 for further details. These works, which also form part of our strategy to
ensure compliance with evolving EPC legislation, are factored into all refurbishment projects. Since the
independent third party assessment in 2021, we have invested £24m of capital expenditure on EPC upgrade
works.
Operationalising
data
The volume and quality of environmental data we collect from our buildings continue to rise. As well as
retrofitting sensors as part of our refurbishment activity, we have developed a bespoke in-house
environmental database which operates alongside our Intelligent Building programme. Our building
managers now have better access to near-real time data, facilitating lower energy consumption and
delivering savings in cost and operational carbon to our occupiers.
Self-generation
The provenance of energy is under increasing scrutiny as businesses seek to optimise GHG emissions. Aligned
with this, we aim to procure 100% of the energy consumed across our portfolio on renewable contracts. Our
land in Scotland presents several opportunities for us to reduce our carbon impact, including self-generation.
Construction of our 100-acre, 18.4 MW solar park is nearing completion (total development cost c.£16m).
Energisation is due in 2026 and we expect it to generate in excess of 40% of the electricity needs of our
London managed portfolio.
Metrics and targets
The Group reports annually on its progress towards net zero by
2030. A brief outline of our progress in 2025 is set out on pages
69 to 73. To help our stakeholders understand our performance,
our annual Responsibility Data Report, which sits alongside our
annual Responsibility Report sets out a broad range of climate
and energy performance data and metrics. This includes
extensive carbon reporting and historical performance data to
allow for trend analysis. Our Data Report and Responsibility
Report are available on our website.
We align our Responsibility Report disclosures to externally
recognised frameworks including the EPRA Sustainability Best
Practices Recommendations (sBPR) and the International
Sustainability Standards Board (ISSB). We participate in
internationally recognised indices, namely CDP and GRESB, and
our performance against these can be found on the inside back
cover.
Since 2023, embodied carbon reduction and energy intensity
reduction performance metrics have been included within the
Executive Director and Executive Committee incentive plan (the
PSP). This is currently being reviewed by the Remuneration
Committee as part of the 2026 Remuneration Policy
consultation. Further information is on pages 178 to 187.
In 2025 we updated our Net Zero Carbon Pathway. This is aligned
to the Better Buildings Partnership (BBP) Climate Change
Commitment, and includes a series of ambitious climate-related
targets, which we show on the right.
Energy and carbon reporting
We publish a full breakdown of our corporate carbon footprint
(inclusive of Scopes 1, 2 and 3) and energy usage in our
Streamlined Energy and Carbon Reporting (SECR) disclosure on
pages 74 to 75. Our Scope 1, 2 and 3 totals in 2025 have been
subject to independent limited assurance by PwC LLP in
accordance with ISAE 3000 (Revised) and ISAE 3410 Standards.
SECR disclosures / See page 74 to 75
Reducing operational energy
and carbon emissions
An annual reduction in energy intensity of our managed
portfolio to achieve 123 kWh/sqm by 2030.
Near-term: we commit to reduce absolute Scope 1 and 2
GHG emissions by 42% by 2030 from a 2022 baseline
(5,450 tCO
2
e) and to measure Scope 3 emissions.
Long-term: reduce absolute Scope 1, 2 and 3 GHG
emissions by 90% by 2040 from a 2022 baseline (44,183
tCO
2
e).
Reducing embodied carbon of development projects
New build commercial office schemes completing from
2025 to achieve: ≤600 kgCO
2
e/sqm (upfront carbon,
A1-A5, RICS v1).
New build commercial office schemes completing from
2030 to achieve: ≤500 kgCO
2
e/sqm (upfront carbon,
A1-A5, RICS v1).
Major refurbishments: ≤350 kgCO
2
e/sqm.
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Financial statements
Other information
EPC ratings
EPC ratings indicate the energy efficiency of a building. We are
following a phased programme of works to upgrade the EPC
ratings of our portfolio. We target a minimum EPC of A for major
new build schemes and ‘B’ for major refurbishments.
71.7
%
of our portfolio (by ERV) has an
EPC rating of A or B (including projects)
16.2
%
of our portfolio (by ERV) has an EPC rating of C
Percentage of portfolio (by ERV)
2025
2024
2023
Rated A
23%
10%
10%
Rated B
40%
48%
47%
Rated C
16%
18%
19%
Rated D
8%
8%
8%
Rated E
4%
5%
5%
Rated F
0%
0%
0%
Rated G
0%
0%
0%
Properties in development
9%
11%
11%
Exempt/under review/outstanding
0%
0%
0%
Renewable energy
The Group is committed to ensuring that all the energy we
procure, electricity and gas, is from renewable sources.
100
%
of our electricity is from renewable sources
100
%
of our gas is from renewable sources
2025
2024
2023
Percentage of electricity from
renewable sources
1
100%
99%
99%
On-site renewable energy
generation (kWh)
99,602
86,136
97,440
Percentage of gas from renewable
sources
2
100%
100%
99%
1
Electricity purchased on renewable tariffs backed by REGOs.
2
Gas purchased on renewable tariffs backed by RGGOs.
Responsibility – Governance
continued
Certification
BREEAM and LEED certifications recognise the sustainability of
our buildings, their construction and operation. We target
minimum BREEAM ratings of ‘Excellent’ for major developments
and ‘Very Good’ for major refurbishments (see page 33 for our
progress in 2025).
Percentage of portfolio
(by floor area – NIA)
2025
2024
2023
BREEAM certified
38%
33%
35%
LEED certified
27%
22%
22%
Our progress
As part of our commitment, we analyse our activities to ensure
we are reducing our carbon footprint across all our spheres of
influence. Our pathway focuses on five principal areas:
Reducing operational energy and carbon emissions through
setting annual reduction targets and engaging with our
occupiers.
Procuring and investing in renewable energy.
Reducing the embodied carbon of our future pipeline.
Offsetting residual carbon emissions we cannot eliminate.
Nature and resilience.
Further information on these commitments and our progress in
2025 is detailed on pages 69 to 73.
Future priorities
On page 27 we have outlined our priorities for 2026. In addition
to these focus areas, we intend to action the following:
Governance:
The Board will continue to build its competency
through training and monitoring of developing best practice.
Strategy:
Monitor construction of our 18.4 MW solar park in
Scotland which is expected to complete in H1 2026.
Derwent London plc
Report and Accounts 2025
98
Climate scenarios – assumptions and risk data sources
WTW risk assessment
Scenario Name
‘Low Carbon World’ (~1.5°C)
‘Current Policies’ (~2 to 3°C)
‘Hot House
World’ (>4°C)
Temperature range
1.4°C (median, 2100, IEA NZE2050)
~1.5°C (median, 2100, RCP2.6)
2.6°C (median, 2100, IEA STEPS)
~2.3°C (mean, 2100, RCP4.5)
~4.2°C (mean, 2100,
RCP8.5)
Sources
IEA – Energy Outlook 2021: NZE2050
IPCC, 2014: Synthesis Report: RCP2.6
Narratives for Shared Socioeconomic
Pathways (SSPs): SSP1
IEA – Energy Outlook 2021: STEPS
IPCC, 2014: Synthesis Report: RCP4.5
Narratives for SSPs: SSP2
IPCC, 2014:
Synthesis Report:
RCP8.5
Narratives for SSPs:
SSP5
Primary risks
Transition risks (2025 and 2030)
Moderate transition (2025 and 2030) and
physical risks (current, 2030, 2050)
Physical risks
(current, 2030,
2050)
Underlying assumptions
Global net zero achieved
by:
2050 (IEA NZE2050)
Not achieved before 2100
(IEA STEPs)
Not achieved
Carbon price
Advanced economies
2025:
$75/tonne
2030:
$130/tonne
2040:
$205/tonne
2050:
$250/tonne
(IEA NZE2050)
EU
2030:
$65/tonne
2040:
$75/tonne
2050:
$90/tonne
(IEA STEPs)
No carbon pricing in
existence. (SSP5)
Building sector policies
Implementation of more stringent
building energy conservation building
codes for existing and new buildings,
including net zero emission requirements
by 2030 and 85% of all buildings are zero
carbon-ready in 2050. (IEA NZE2050)
In the UK, Low Carbon Heat Support and
Heat Networks Investment Project; various
retrofit incentive schemes for improving
buildings efficiency as part of Plan for Jobs. It
does not however assume increasing
stringency of EPC requirements. (IEA STEPs)
Assumes current
policies promoting
sustainability are
removed. (SSP5)
Social assumptions
Assumes low growth in material
consumption and increasing consumer
pressure on businesses to drive
sustainability. (SSP1)
The world follows a path in which social,
economic and technological trends do not
shift markedly from historical patterns. Global
and national institutions work towards, but
make slow progress in achieving, sustainable
development goals. (SSP2)
The push for
economic and
social development
is coupled with the
exploitation of
abundant fossil fuel
resources and the
adoption of
resource and energy
intensive lifestyles
around the world.
(SSP5)
Technology assumptions
Promotion of alternative fuels and
technologies such as hydrogen, biogas,
biomethane and carbon capture
utilisation and storage across sectors. The
share of renewables by 2030 in the global
electricity supply would increase to
approximately 61%, shifting economies
from being fossil fuel-dependent to
renewable energy driven. (IEA NZE2050)
Phase out of traditional coal-fired power by
2024 in the UK and the Ten Point Plan, with up
to 40 GW offshore wind capacity by 2030.
Electrification component of the Sixth Carbon
Budget and Industrial Energy Transformation
Fund provides grant funding for energy
efficiency projects. (IEA STEPs)
Little to no
development in low
carbon technology.
(SSP5)
Physical risk data sources
Willis Towers Watson’s Global Peril Diagnostic and Climate Diagnostic tools, data from the MunichRe hazard databases, and the Intergovernmental
Panel on Climate Change (IPCC). For climate loss modelling, the catastrophe model of RMS (Risk Management Solutions) was used.
99
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Governance
Financial statements
Other information
Managing risks
Our risk profile
With our strong balance sheet, and an improving office investment market, we are well-
positioned with the right product and pipeline to capture London’s diverse demand.
As a predominantly London-based Group, we are particularly sensitive to factors which impact central London’s growth and demand
for office space. We are also impacted by the wider macroeconomic environment. Some of the external and property-related risks
which have impacted on the Group during 2025 are shown below. These risks are factored into the Board’s strategy discussions and
help to inform the scenarios chosen by the Board to stress test the viability of our business (see page 63).
External
The funding
environment
Interest rates
Geopolitical
instability
Climate change
Cyber
Regulatory and legal
See page 57
See page 57
See page 65
See page 86
See page 107
See page 109
Property-related
Property values
Capital recycling
Vacancy rates
Health and safety
Planning
requirements
Energy consumption
See page 39
See page 64
See page 45
See page 80
See page 92
See page 69
25 Baker St
W1
Derwent London plc
Report and Accounts 2025
100
An overview of the risks and uncertainties which
have impacted on the Group’s risk profile
During 2025, the UK economy recorded slow growth helped by
reductions in UK base rates and moderating inflation. However,
growth was constrained by rising tariffs, global trade tensions
and ongoing uncertainty of domestic policy.
Emerging and market risks
Whilst central London continues to experience strong
occupational demand, occupiers are proceeding with caution
particularly over the cost of relocation and ongoing operating
expenses. Additionally, rising construction costs, some yield
uncertainty and a prolonged planning process are contributing
to current market pressures. During the year, the Group has
continued to monitor the emerging and market risks that could
have an impact in the short to medium-term. In particular, in-
depth discussions were held around the potential impact of the
current UK Government’s policy agenda and the proposal to
abolish upward only rent reviews.
Property portfolio
Most office values increased moderately in both H1 and H2,
supported by rental growth and generally stable investment
yields. Demand, both for tenant occupation and investment
ownership, continues to be highest for good quality amenity-rich
buildings in the core West End and City.
Investment activity picked up over the year, and this included a
significant rise in the number of larger assets, particularly
investments over £100m, which provided more data point
evidence for property valuations. While UK investors were most
active, there was renewed demand from overseas capital,
particularly European and North American investors.
Health and safety (H&S)
Whilst our operations and developments take place in
environments that inherently involve higher-risk activities,
Derwent London remains committed to the continual
enhancement of our H&S controls and mitigation measures.
Reflecting the strength of our approach, we were proud to
receive the Royal Society for the Prevention of Accidents (RoSPA)
Gold Award for the third consecutive year. Further information
on H&S at Derwent London is available on pages 80 and 81.
Refinancing
Gilt yields have continued to remain relatively high but generally
reduced in the year alongside the cost of borrowing. Financial
risks for the Group have reduced in 2025 with the arrangement of
new £250m unsecured 7-year bonds issued in June and the
refinancing of the Group’s main £450m corporate Rolling Credit
Facility. The Group’s financial position has also been helped by
the easing of interest rates over the year with the Bank of
England reducing the base rate to 3.75% in December 2025.
Cyber security
Cyber attacks have dominated market headlines during 2025.
The Group has remained vigilant to its cyber security protocols,
with ongoing compliance training, attaining additional cyber
insurance cover and in-depth updates to the Risk Committee
(see pages 156 and 160). To note, there were no cyber-related
incidents during 2025.
Principal risks
The principal risks and uncertainties facing the Group in 2026
(as at 25 February 2026) are:
Market impact on Group’s strategy
Refinancing risk
Income decline
Fall in property values
Reduced development returns
Cyber attack on our IT systems
Cyber attack on our buildings
Our resilience to climate change
Health and safety
Non-compliance with law and regulations
Digital transformation risk
Our principal risks / See pages 104 to 109
Emerging risks
The emerging risks identified by the Board are:
The evolving nature of office occupation
Accelerating technological change
Climate-related risks
Geopolitical instability
Our emerging risks / See pages 110 and 111
Climate change
We identify and monitor climate change risks and
opportunities as part of our wider risk management
procedures. Our climate risk assessments have identified the
transition and physical risks and opportunities applicable to
our business:
Enhanced emissions reporting requirements
Change in customer demand
Emissions offsets
Planning approval changes
Cost of raw materials
Employee attitude to climate change and sustainability
Cost of low carbon emission technologies
Heat stress
Flooding
Drought
Fire
Windstorm
Subsidence
Task Force on Climate-related Financial Disclosures /
See pages 86 to 99
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Strategic report
Governance
Financial statements
Other information
Managing risks
continued
Managing risks
At Derwent London, the management of risk is treated as a critical and core aspect of our
business activities.
Risk management
The Board has ultimate responsibility for the Group’s approach to
risk management. On a regular basis, the Board reviews the
Group’s risk registers and conducts robust assessments of the
Group’s principal and emerging risks (see page 159).
Changes to our principal and emerging risks
During the year, the Board and Risk Committee conducted an
extensive review of the Group’s principal and emerging risks.
Schedule of Principal Risks
The review of the Schedule of Principal Risks was centred around
ensuring the risks remain appropriate and representative of the
main risks that could impact the Group over the next six to 12
months.
Following its review, the Risk Committee recommended
amendments to the titles of two principal risks to ensure they
more accurately reflect the Group’s evolving risk profile. The
updated titles are ‘Market impact on Group’s strategy’ and
‘Digital transformation risk’.
Schedule of Emerging Risks
A review of the Group’s emerging risks concluded that the
previously identified emerging risk relating to a potential
shortage of electrical power should be removed. This risk had
originally been included following discussions on how constrained
power capacity in London might affect future developments.
Given the Group’s satisfactory ongoing arrangements with
UKPN, this is currently not impacting any major projects.
To ensure the Group’s emerging risks continue to reflect the
Group’s risk profile, the titles of two emerging risks were
amended: ‘The evolving nature of office occupation’ and
‘Accelerating technological change’.
Risk rating
As part of the Directors’ assessment process, we estimate the likelihood of the risk occurring and the potential quantitative
and qualitative impacts. Risks are rated in accordance with the Board’s Risk Appetite Statement. A simplified version of our
risk rating criteria is provided below.
Impact
Insignificant
Minor
Moderate
Major
Significant
Likelihood
Rare
Unlikely
Possible
Likely
Certain
Very low risk
Low risk
Medium risk
High risk
Very high risk
The risk ratings for our principal risks are detailed below:
Principal risks
Inherent risk
(without controls)
Residual risk
(with controls)
Our risk
tolerance
Market impact on Group’s strategy
High
Medium
Medium
Refinancing risk
Medium
Medium
Medium
Income decline
Medium
Medium
Medium
Fall in property values
Medium
Medium
Medium
Reduced development returns
High
Medium
Medium
Cyber attack on our IT systems
Very high
Medium
Low
Cyber attack on our buildings
Medium
Medium
Low
Our resilience to climate change
Medium
Low
Low
Health and safety
Very high
Medium
Zero
Non-compliance with law and regulations
Medium
Very low
Zero
Digital transformation risk
Medium
Medium
Medium
Derwent London plc
Report and Accounts 2025
102
Effectiveness review
To ensure focused oversight, the Board operates a separate Risk
Committee (see pages 154 to 163). The Risk Committee reviews
the effectiveness of the Group’s risk management policies and
practices. This effectiveness review is conducted through
speaking with senior management directly, third party assurance
reviews, reports from internal and external audits, and
independent testing of our key controls.
The Audit Committee reviews the adequacy and effectiveness of
the Group’s system of internal financial controls (see page 149).
The Audit Committee remains satisfied that the review of
internal financial controls did not reveal any significant
weaknesses or failures, and that they continue to operate
effectively.
Following the Audit and Risk Committee’s reviews, the Chairs of
each Committee confirmed to the Board that they were satisfied
that the Group’s internal control framework (financial and
non-financial) and risk management procedures:
operated effectively throughout the period; and
are in accordance with the guidance contained within the
FRC’s Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting.
Risk appetite
Risk is inherent in running any business. At Derwent London we
aim to deliver on our strategic objectives for the benefit of our
shareholders and other stakeholders, whilst operating within the
risk tolerance levels set by our Board.
The Group’s risk appetite is set by the Board and is the level of
risk we are willing to accept to achieve our strategic objectives.
Our overall risk appetite is low with varying levels of risk
tolerance. This, alongside our culture, informs how our staff
respond to risk. Due to our open and collaborative working style,
any potential problem, risk or issue is identified quickly so
appropriate action can be taken.
The use of inherent and residual ‘risk ratings’ within our Schedule
of Principal Risks makes it easier for the Board to identify which
risks are not aligned with its tolerance on a residual basis (after
controls):
When assessing our health and safety risks, we consider all of
our core activities, including the work of our contractors on
site at our developments. Due to the nature of these
activities, health and safety is classified as a ‘medium risk’ at
residual level, which requires further contractor-led controls to
be implemented and the adoption of best practice standards.
As the Board is committed to promoting the highest health
and safety standards, its tolerance for health and safety risks
is set at zero. Further information on health and safety is on
pages 80 and 81.
Similarly, the Board’s tolerance for cyber threats is low. The
Board recognises that due to the pervasive nature of the
threat, it is difficult to reduce the residual risk from medium to
low. To provide the Board with comfort that our Digital
Innovation & Technology (DIT) team have adopted a
continuous improvement strategy towards our cyber security
posture, we commission regular independent reviews and
assessments as well as ongoing monitoring by the Risk
Committee. Further information is on pages 160 and 161.
Additional risk disclosures
Page
Double materiality assessment
68
Health and safety
80 and 81
Risk management structure
162
Risk documentation and monitoring
159
Digital security and strategy risks
160 and 161
Risk management framework
158
Risk Appetite Statement
Summary of risk tolerance
Operational
Health and safety
Zero
IT continuity (including cyber attacks)
Low
Staff retention
Medium
Climate change resilience
Low
Other operational risks
Medium
Financial*
REIT status
Low
Credit rating
Low
Decrease in asset value (>£100m)
Medium
Profits (>£5m)
Medium
Cost overruns (>5%)
Medium
Interest cover (<20%)
Medium
Reputational
Brand value
Low
Regulatory
Statutory
Zero
Governance
Low
*
Financial amounts are measures of deviation from Group annual budget.
Key
Zero
The Board has a zero-tolerance approach and is
committed to promoting full health and safety
and statutory compliance
Low
The Board is risk averse and is reluctant to take
risks
Medium
The Board is willing to take measured risks if they
are identified, assessed and controlled
High
The Board is willing to take significant risks
103
Strategic report
Governance
Financial statements
Other information
Imminent
< 1 year
Short-term
< 5 years
Medium-term
5 to 15 years
Long-term
15+ years
Managing risks
continued
Our principal risks
Our principal risks are not an exhaustive list of all risks facing the Group but are a snapshot of
the Company’s main risk profile as at 25 February 2026.
Time horizons
The Board seeks to assess and identify the risks facing the Group in the short, medium and long-term.
See pages / 110 and 111
See pages / 86 to 99
See pages / 104 to 109
Principal risks
Emerging risks
Climate-related risks
The Schedule of Principal Risks
The Board classifies the Group’s most material risks as its ‘principal risks’. Materiality is assessed based on the potential impact and its
probability of occurring within the next 12 months.
The Derwent London brand is well-regarded and respected within our industry and we are recognised for developing design-led
buildings. The protection of our brand and reputation is important to the future success of the Group. Our strong culture, low overall
risk tolerance and established procedures and policies mitigate against the risk of internal wrongdoing.
Strategic
The Group’s business model and/or strategy does not create the anticipated shareholder value or fails to meet investors’ and other
stakeholders’ expectations.
1. Market impact on Group’s strategy
Risk
Status
Our actions
The Group’s reliance on the successful execution
of its strategy and maintaining its ability to
respond appropriately to internal and external
factors including changing work practices,
occupational demand, economic and property
cycles.
Given the ongoing geopolitical
and economic uncertainties
compounded by the elevated
interest rates, there has been a
slower investment market.
However, the letting market in
London remains relatively strong
for the right product in the right
location.
Key performance indicators:
Total accounting return
Total property return
Interest cover ratio (ICR)
In addition, we also consider
inflation, interest rates and yield
changes.
The Board maintains a formal schedule of matters which
are reserved solely for its approval. These matters include
decisions relating to the Group’s strategy, capital
structure, financing, capital allocation, major property
acquisition or disposal, the Group’s risk appetite and the
authorisation of capital expenditure above certain limits.
An annual strategic review (including the five-year
forecast) and budget is prepared for Board approval
alongside two-year rolling forecasts which are prepared
during the year.
The Credit Committee’s terms of reference have been
revised during 2025 to focus on assessing and monitoring
the financial strength of potential and existing occupiers.
The Group’s diverse and high quality occupier base
provides resilience against occupier default.
The Board has an ongoing strategy to extend income
through lease renewals and regears. The Group seeks to
de-risk developments through the use of fixed price
contracts prior to the commencement of works on site
and appointing contractors appropriate to the project’s
scale and complexity as well as by often securing
pre-lets.
We develop properties in central locations where there is
good potential for future occupier demand and
connectivity, such as along the Elizabeth line.
A regular review of the portfolio and identification of
opportunities to dispose of non-core assets which are
not anticipated to produce required returns.
Maintain sufficient headroom against all key financial
ratios and covenants, with a particular focus on interest
cover and net debt/EBITDA.
Executive responsibility:
Paul Williams
Risk tolerance:
Medium
Strategic objectives:
1
2
4
5
Stakeholders:
Could potentially impact all our
stakeholders
Trend:
The London office market has generally been
cyclical in recent decades, with strong growth
followed by economic downturns, often linked to
a change in interest rates. The impact of these
cycles on the Group is dependent on the nature,
quality and location of its portfolio. Should the
Group fail to respond and adapt to such cycles
or execute the projects that underpin its
strategy, it may have a negative impact on the
Group’s expected growth and financial
performance.
Derwent London plc
Report and Accounts 2025
104
Financial
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.
2. Refinancing risks
Risk
Status
Our actions
The Group is unable to raise finance in a
cost-effective manner that optimises the capital
structure of the Group.
The availability of financing for
good quality covenants generally
improved through 2025 but the
cost of long-term debt has
remained higher than in the
preceding decade. We have
remained close to our existing
lenders and in 2025 put in place
£115m of new bank facilities
(subsequently reduced to
£82.5m), issued a £250m
unsecured bond, and extended
our £450m Revolving Credit
Facility for a new four-year term.
Key performance indicators:
Gearing & available resources
Interest Cover Ratio (ICR)
Net debt/EBITDA
Continue to review market conditions for long-term fixed
rate debt and engage with existing and potential debt
providers.
Early and frequent engagement with existing and
potential lenders to maintain long-term relationships.
Preparation of five-year cash flow and annual budgets
support the Group in raising finance in advance of
requirements.
The Group’s financial position is reviewed at Executive
Committee and Board meetings with an update on
leverage metrics and capital markets from the CFO.
Annual review with a credit rating agency with whom we
maintain a frequent dialogue.
Regular updates with our advisers to understand debt
market trends. This includes looking at new forms of
debt, considering whether security should be offered and
the appropriate terms.
Recycling of capital is a key assumption in our annual
budget and is updated in each rolling forecast.
Executive responsibility:
Damian Wisniewski
Risk tolerance:
Medium
Strategic objectives:
5
Stakeholders:
Shareholders and debt providers
Trend:
Gradual rise in overall interest costs incurred as
debt is refinanced over the next few years, with
a consequent impact on earnings and interest
cover.
3. Income decline
Risk
Status
Our actions
The Group’s income declines due to external
factors, many of which are outside of its control,
including:
geopolitical and macroeconomic factors;
recession;
occupier default or failure;
demand for office space;
the ‘grey’ market in office space (i.e.
occupier controlled vacant space); and
current proposals by UK Government to
prohibit upward only rent reviews.
The current economic climate
could lead to some of our
occupiers facing financial
challenges due to the impact of
the increases in the general costs
of running businesses. However,
due to the ongoing uncertainty in
the macroenvironment we could
see a rise in occupiers choosing to
renew leases.
Rent for office occupiers typically
represents a relatively small
percentage of business
overheads. Leasing transactions
can take longer to finalise as
occupiers tend to adopt a
‘wait-and-see’ approach leading
to a greater risk of aborted
transactions.
Key performance indicators:
Tenant retention
Void management
In addition, we consider the
following:
Lease expiries/breaks
Our Lease Incentive Debtor
balance
Level of rent deposits
The amount of ‘grey space’
The Credit Committee, chaired by the CEO or CFO,
conducts detailed reviews of all prospective occupiers
and monitors the financial strength of our existing
occupiers.
The Group maintains a diverse range of occupiers. We
focus on letting our buildings to large and established
businesses (headquarter spaces) where the risk of
default is lower, compared with SMEs.
A ‘tenants on watch’ register is maintained and regularly
reviewed by the Executive Directors and the Board.
The Leasing team monitors the vacancy rate closely with
a specific focus on upcoming vacancies.
Ongoing dialogue is maintained with occupiers to
understand their concerns, requirements and future
plans.
Active in-house rent collection, with regular reports to
the Executive Directors on day 1, 7, 14 and 21 of each rent
collection cycle.
The Group’s robust interest cover ratio and moderate net
debt/EBITDA reduces the likelihood that a fall in rental
income has a significant impact.
Rent deposits or guarantees are obtained where
considered appropriate.
Executive responsibility:
Paul Williams
Risk tolerance:
Medium
Strategic objectives:
1
2
5
Stakeholders:
Occupiers, shareholders and debt
providers
Trend:
Adverse macroeconomic conditions can lead to
a general property market contraction and a
decline in rental values and Group income. In the
event of occupier default, we could incur
impairments and write-offs of trade receivables
and/or IFRS 16 lease incentive receivable
balances (which arise from the accounting
requirement to spread any rent-free incentives
given to an occupier over the respective lease
term), in addition to a loss of rental income.
Strategic objectives
Trend
1
To optimise returns
and create value
from a balanced
portfolio
2
To grow recurring
earnings and
cash flow
3
To attract, retain
and develop talented
employees
4
To design, deliver
and operate our
buildings responsibly
5
To maintain
strong and flexible
financing
Increased
Decreased
Unchanged
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Governance
Financial statements
Other information
Managing risks
continued
4. Fall in property values
Risk
Status
Our actions
The economic and geopolitical
environment could have an adverse
impact on property values and heighten
the risk of a fall in property values.
2025 has seen property values rise
slightly in both H1 and H2. Whilst not the
central case, there remains the risk that
property values could fluctuate and
continue to be dependent on many
macroeconomic factors.
Key performance indicators:
Total property return
Void management
Reversionary percentage
The Group’s mainly unsecured financing makes
management of our financial covenants more
straightforward.
The Group’s moderate loan-to-value ratio reduces the
likelihood that falls in property values will have a
significant impact.
The impact of valuation yield changes on the Group’s
financial covenants and performance is monitored
regularly and subject to sensitivity analysis to ensure
that adequate headroom is preserved.
The impact of valuation yield changes and rent levels are
considered when potential projects are appraised.
The Group produces a budget, five-year strategic review
and three rolling forecasts each year which contain
detailed sensitivity analyses, including the effect of
changes to valuation yields.
Executive responsibility:
Nigel George
Risk tolerance:
Medium
Strategic objectives:
1
2
5
Stakeholders:
Occupiers, shareholders
and debt providers
Trend:
A fall in property values will have an
impact on the Group’s net asset value
and gearing levels.
Operational
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.
5. Reduced development returns
Risk
Status
Our actions
Returns from the Group’s developments
and refurbishments may be adversely
impacted due to:
Increased construction costs
Skilled labour shortages
Movement in valuation yields
Contractor or subcontractor default
Delays on delivery due to poor
contractor performance
Building Safety Regulator sign-off
where applicable
Unexpected ‘on-site’ issues
Adverse letting conditions
‘Tier 1’ contractors in central London are
becoming increasingly risk adverse to
engaging with complex projects on fixed
price contracts. There is also an
increased risk of insolvencies in the
industry as a result of rising inflation and
construction costs, which under fixed
price contracts are a particular risk for
the contractor and subcontractors.
Other consultants and advisers are at
some risk of insolvency.
Planning authorities have an increasing
preference for refurbishment ahead of
redevelopment. The Board is monitoring
the potential impact of a tighter
planning environment on our strategy
and future development returns.
Mixed-use projects with residential over
18 metres now fall into a category of
‘High-Risk Buildings’ as defined under
the Building Safety Act 2022 which may
adversely impact construction
programmes.
Key performance indicators:
Development potential
Total accounting return
Total property return
In addition, we consider the following:
Construction cost inflation
Project profitability status
Average payment days to our
suppliers
Project delays
Contingency tracker
We use known ‘Tier 1’ contractors on our major projects
with whom we have established working relationships
and regularly work with tried and tested subcontractors.
Prior to construction beginning on site, we conduct
thorough site investigations and surveys to reduce the
risk of unidentified issues, including investigating the
building’s history and adjacent buildings/sites.
Engagement with the Building Safety Regulator to
mitigate time required for Building Control approval.
Adequately appraise investments, through: (a)
benchmarking development costs; (b) following a
procurement process that is designed to minimise
uncertainty around costs and includes the use of highly
regarded quantity surveyors; and (c) value engineering
opportunities.
We collaborate with the supply chain through the main
contractor and engage in pre-construction service
agreements (PCSAs) as well as against an agreed target,
cost and programme.
Contractors are paid promptly and are encouraged to
pay subcontractors promptly. Payments to contractors
are in place to incentivise the achievement of project
timescales, with damages agreed in the event of delay/
cost overruns.
Regular on-site supervision by a dedicated Project
Manager who monitors contractor performance and
identifies problems at an early stage, thereby enabling
remedial action to be taken.
Post-completion reviews are carried out for all major
developments to ensure that improvements to the
Group’s procedures are identified and implemented.
Executive responsibility:
Paul Williams
Risk tolerance:
Medium
Strategic objectives:
1
2
Stakeholders:
Suppliers, occupiers and
shareholders
Trend:
Any significant delay in completing
development projects may result in
financial penalties or a reduction in the
Group’s targeted financial returns and a
deferral of rental income.
Financial
continued
Derwent London plc
Report and Accounts 2025
106
6. Cyber attack on our IT systems
Risk
Status
Our actions
The Group may be subject to a cyber
attack that results in it being unable to
use its information systems and/or losing
data.
There has been a heightened risk of
cyber attacks amid ongoing geopolitical
tensions. To date, Derwent London has
not experienced a significant increase in
attempted cyber attacks; however
ongoing staff vigilance is critical to the
prevention of cyber attacks. The Digital
Innovation & Technology (DIT) team is
proactive in providing regular guidance
and refresher training to all employees
on cyber security matters.
Key performance indicators:
Number of cyber security incidents
Vulnerability management risk scores
Percentage of high-risk employees
from cyber security awareness
perspective
Multifactor Authenticated requests
reported and confirmed as
fraudulent
Password health scores
Cyber resilience assessments based
on CIS controls and other frameworks
In addition, we consider any security
issues raised and the results of
independent assurance reviews.
Our IT systems are protected by anti-virus software,
24/7/365 threat hunting, security incident detection and
response, security anomaly detection and firewalls that
are frequently updated.
The Group’s Business Continuity Plan and cyber security
incident response procedures are regularly reviewed and
tested.
Security measures are regularly reviewed by the DIT team
and during the year cyber insurance was put in place to
support the strategy in mitigating the financial impact
of cyber attacks.
Independent internal and external penetration/
vulnerability tests and audits are regularly conducted to
assess the effectiveness of the Group’s security and the
Cyber Essentials Plus Certification has been obtained.
Multi-Factor Authentication is in place for all users with
access to our systems.
The Group’s data is regularly backed up and securely
replicated off site.
A gap analysis of the Cyber Governance Code of Practice
was performed and enhancements were made to the
Group’s security posture during the year, with additional
controls implemented as required.
Regular staff awareness and training programmes.
Executive responsibility:
All Executive
Directors
Risk tolerance:
Low
Strategic objectives:
1
2
3
4
5
Stakeholders:
Could potentially impact
all our stakeholders
Trend:
Such an attack could severely restrict the
ability of the Group to operate, lead to
an increase in costs and/or require a
significant diversion of management
time, in addition to potential
reputational damage.
7. Cyber attack on our buildings
Risk
Status
Our actions
The portfolio is exposed to potential
cyber threats targeting building IT
infrastructure, Operational Technology
systems, and Internet of Things devices.
Such incidents could adversely affect
occupiers and result in significant
operational disruption.
The Royal Institution of Chartered
Surveyors (RICS), in its recent
publication, 'Digital Risks in Buildings',
highlights the expanding cyber threat
landscape facing commercial properties.
This escalation is largely driven by the
convergence of operational technology
with information technology in
intelligent buildings, alongside the
growing use of Internet of Things devices,
which collectively increase system
exposure and vulnerability.
Key performance indicators (KPIs):
Could indirectly impact a number of our
KPIs.
In addition, we consider any cyber
security issues raised and the results of
independent assurance reviews.
Our IT systems are protected by advanced endpoint
protection software, 24/7/365 threat hunting, security
incident detection and response, security anomaly
detection, vulnerability management, firewalls and
infrastructure that is regularly updated.
Frequent staff awareness and training programmes.
Building Managers are included in cyber security
awareness training and phishing simulations.
Cyber security incident response procedures are regularly
reviewed and tested.
Physical segregation between the building’s core IT
infrastructure and occupiers’ corporate IT networks as
well as between buildings across the portfolio.
Multi-Factor Authentication, network segmentation and
security standardisation.
Unlimited support by our Managed Detection and
Response team is provided in the event of a malware
incident.
Independent security penetration testing on both
internal and externally facing systems.
A gap analysis of the Cyber Governance Code of Practice
was performed and enhancements were made to the
Group’s security posture with additional controls
implemented as required.
Cyber insurance is in place to support the strategy in
responding to the risk of cyber attacks.
Executive responsibility:
All Executive
Directors
Risk tolerance:
Low
Strategic objectives:
1
2
3
4
5
Stakeholders:
Could potentially impact
all our stakeholders
Trend:
A significant cyber attack targeting
buildings within the portfolio could
disrupt both landlord and occupier
operations and adversely affect the
Group’s reputation.
Strategic objectives
Trend
1
To optimise returns
and create value
from a balanced
portfolio
2
To grow recurring
earnings and
cash flow
3
To attract, retain
and develop talented
employees
4
To design, deliver
and operate our
buildings responsibly
5
To maintain
strong and flexible
financing
Increased
Decreased
Unchanged
107
Strategic report
Governance
Financial statements
Other information
Managing risks
continued
8. Our resilience to climate change
Risk
Status
Our actions
The Group fails to respond appropriately,
and sufficiently, to climate-related risks or
fails to benefit from the potential
opportunities.
With regard to reporting, the
Government’s consultation on the UK
Sustainability Reporting Standards (S1
and S2) closed in September 2025. We
await its publication in H1 2026.
The Group remains engaged on
forthcoming legislation, in particular
the UK Net Zero Carbon Building
Standard. Where appropriate, it
challenges the promotion of new
legislation to ensure it remains
appropriate to the overall net zero
carbon goal. We updated our net zero
targets in 2025 to ensure they remain
aligned to the latest climate science.
Key performance indicators:
Energy intensity
Embodied carbon intensity
BREEAM ratings
Energy Performance Certificates
(EPCs)
Our SBTi (Science Based Targets initiative) targets are
aligned to a challenging 1.5°C climate scenario in line
with our net zero carbon ambition.
We are progressing the construction of an 18.4 MW solar
park at Lochfauld (Scotland), with energisation
anticipated in 2026.
The Executive Directors receive regular updates and
presentations at both the Executive Committee and
Sustainability Committee meetings on environmental
and sustainability performance and management
matters, as well as progress against our pathway to
becoming net zero carbon by 2030.
Industry leadership through both the Circular Economy
initiative and Accelerating Concrete-Decarbonisation
Group.
Periodic multi-scenario climate risk assessments
(physical and transition risks), supported by third party
experts, to identify risks and agree mitigation plans.
Clear disclosure in Group results, Annual Report and
Responsibility Report/Data Report of key data and
performance points which are internally reviewed and
subject to external assurance.
Executive responsibility:
Nigel George
Risk tolerance:
Low
Strategic objectives:
1
2
3
4
5
Stakeholders:
Could potentially impact
all our stakeholders
Trend:
This could lead to reputational damage,
loss of income and/or a reduction in
property values. In addition, there is a risk
that the cost of construction materials
and providing energy, water and other
services to occupiers will rise.
9. Health and safety (H&S)
Risk
Status
Our actions
A major incident occurs at a development
scheme, a managed property or at head
office which leads to significant injuries,
harm, or fatal consequences.
Derwent London continues to ensure
high levels of H&S compliance across all
of our directly managed activities,
including our agriculture operations in
Scotland.
Construction activities can have a high
inherent risk for injury, harm or loss,
particularly in respect of our managed
portfolio with occupiers in situ,
demolition and early construction
phases. Across construction sites within
the UK, serious accidents involving falls
from height, pedestrian-vehicle collision,
and slips and trips are still experienced.
Key performance indicators:
RIDDOR Accident Frequency Rate
(AFR)
Managed Property statutory
compliance
In addition, we monitor:
compliance to the CDM Regulations
(as a ‘construction client’), from
early design stage, through
construction, to operational
delivery; and
audit programmes within the
managed portfolio (PHCs and site
visits) and construction projects
(monthly site inspections and CDM
duty holder audits).
Periodic review of relevant health, safety and fire
management policies and arrangements.
Ensure the Group has a competent and qualified
(CMIOSH) H&S team, whose performance is monitored
and reviewed by the CEO, and the H&S and Risk
Committees.
Check the H&S competence of our main contractors and
service partners is verified by the H&S team prior to their
appointment, based on risk profile of the project and/or
delivery.
Ensure our principal designers and principal contractors
submit suitable design stage reviews, pre-construction
information, construction phase plans, site management
plans (logistics, security, fire etc.) before works
commence.
The H&S team, with the support of external advisers and
audits, ensures our Construction (Design and
Management) (CDM) client duties are executed at all
project stages and are monitored on a monthly basis (on
construction sites).
The Board, Risk Committee and Executive Directors
receive frequent updates and presentations on key H&S
matters, including ‘Significant Incidents’, legislation
updates, and H&S performance trends across the
development and managed portfolio.
The H&S team work closely with HR on employee health
and safety proactive measures (such as the Heath &
Wellbeing Strategy and Plan) and reactive measures
(such as workplace adjustments, returning to work for
new/expectant mothers and workplace assessments).
Executive responsibility:
Paul Williams
Risk tolerance:
Zero
Strategic objectives:
1
2
3
4
5
Stakeholders:
Could potentially impact
all our stakeholders
Trend:
A major health and safety incident could
cause loss of life, life-changing injuries,
significant business interruption,
Company or Director fines or
imprisonment, reputational damage,
and/or loss of our licences to operate.
Operational
continued
Derwent London plc
Report and Accounts 2025
108
10. Non-compliance with law and regulations
Risk
Status
Our actions
The Group breaches legislation that forms
the regulatory framework within which
the Group operates.
The Group actively monitors the
proposed regulatory changes which
could have an impact on our business,
including the reform of the UK
Prospectus and Listing regime, and the
UK Economic Crime and Corporate
Transparency Act 2023 (ECCTA).
Following publication of the UK
Corporate Governance Code 2024, the
Board will ensure the Group is fully
compliant with the revised provisions by
the applicable dates, particularly in
respect of internal controls.
Key performance indicators (KPIs):
Accident Frequency Rate (AFR)
Managed property compliance
A significant diversion of time could
affect a wider range of KPIs
In addition, we consider compliance
training completion rates, compliance
with legislation through system based
controls and feedback received from
employee and occupier surveys.
The Board and Risk Committee receive regular reports
identifying upcoming legislative/regulatory changes.
External advice is taken on any new legislation, if
required.
Managing our properties to ensure they are compliant
with the proposed Minimum Energy Efficiency Standards
(MEES)legislation for Energy Performance Certificates
(EPCs).
Ongoing staff training and awareness programmes.
Group policies and procedures dealing with all key
legislation are available on the Group’s intranet.
Quarterly review of our anti-bribery and corruption
procedures by the Risk Committee.
A Group whistleblowing system (‘Speak-up’) for staff is
maintained to report wrongdoing anonymously.
A review of our procedures against the Home Office’s
guide in response to the new offence of ‘failure to
prevent fraud’ was introduced under ECCTA.
Executive responsibility:
All Executive
Directors
Risk tolerance:
Zero
Strategic objectives:
3
4
5
Stakeholders:
Could potentially impact
all our stakeholders
Trend:
Failure to apply with applicable laws and
regulations could result in significant
financial, operational and reputational
consequences for the Group, as well as
the diversion of management's time. This
could result in sanctions, fines or loss of
our licence to operate.
11. Digital transformation risk
Risk
Status
Our actions
Systems fail to be implemented or do not
deliver the anticipated benefits due to:
lack of clear scope and strategic
focus;
inadequate skills, resource and
transfer of knowledge;
underestimation of investment;
lack of project management and
governance;
inadequate support from
management;
inadequate communication to
stakeholders; or
neglecting the impact on
stakeholders and importance of
change management.
The Group is implementing a number of
applications/systems, including a new
finance system. These change initiatives
need to be carefully managed to ensure
they deliver the anticipated benefits
and mitigate any risks arising from the
implementation/transition process.
Key performance indicators (KPIs):
Regular reporting on key projects
Cost incurred against budget
A significant diversion of time could
affect a wider range of KPIs
In addition, we monitor key project
milestones and budget contingency
trackers.
Project scope and objectives are clearly defined,
documented, approved and communicated to all
stakeholders.
Before project approval, the costs of implementation are
budgeted, alongside the preparation of a detailed
resource plan, to ensure adequate contingency in case of
delays.
Budget contingency is monitored throughout the project
and reported to the Executive Committee and Board/
Committees, as required.
Project management resource is assigned to larger
projects, and they are required to follow good
governance and internal project management processes.
Provide clear and regular communication about key
projects to the whole business, throughout the project,
with support and leadership from the executive team.
Executive responsibility:
Damian
Wisniewski
Risk tolerance:
Medium
Strategic objectives:
1
2
3
5
Stakeholders:
Employees, occupiers and
suppliers
Trend:
Failure to successfully deliver system
changes that will help improve the control
environment could lead to errors in
financial accounting and reporting. It
could also lead to higher costs due to
inefficient existing processes, and impair
the organisation’s ability to scale and
compete effectively.
Strategic objectives
Trend
1
To optimise returns
and create value
from a balanced
portfolio
2
To grow recurring
earnings and
cash flow
3
To attract, retain
and develop talented
employees
4
To design, deliver
and operate our
buildings responsibly
5
To maintain
strong and flexible
financing
Increased
Decreased
Unchanged
109
Strategic report
Governance
Financial statements
Other information
Our emerging risks
Managing risks
continued
Emerging risks are conditions, situations or trends that could significantly impact on the Group’s financial strength, competitive
position or reputation within the next five plus years and are therefore factored into the Board’s viability assessment and strategic
planning process. Emerging risks could involve a high degree of uncertainty. The methodology used to identify, assess and monitor
emerging risks is described in the risk management framework on page 158.
Time horizon
1
Risk
0-5
years
5-10
years
15+
years
Impact
Our actions
A: The evolving
nature of office
occupation
Strategic
objectives:
1
2
4
The evolving nature of office occupancy in
London is driven by a strong demand for
premium spaces in prime locations, potential
changes in workforce structure given the
emergence of Artificial Intelligence (AI) and
hybrid working trends. While high quality real
estate remains resilient, occupier needs are
changing.
The Group needs to ensure it is thinking ahead,
so that our product remains attractive to
businesses, thereby retaining its competitive
edge. Buildings that are unable to meet these
objectives may suffer in value unless they can
be redeveloped or repurposed.
The Group continues to proactively deploy its
strategy, whilst maintaining close engagement
with occupiers and monitoring evolving market
trends to ensure a timely and appropriate
response. We believe our customer-focused
approach to delivering space in well-positioned
locations with creative design and enhanced
amenity at its core will exceed these evolving
requirements.
Our 'Furnished + Flexible' product also offers
accessible and high quality space, particularly to
small businesses. Regular reports on market
sentiment are presented to the Board to inform
decision making and assess how occupier trends
may impact broader business performance.
B: Accelerating
technological
change
Strategic
objectives:
1
2
3
The accelerating pace of technological
innovation (including AI) may disrupt existing
business models, operational processes, and
customer expectations. Failure to adopt
technology could result in reduced
competitiveness, increased obsolescence of
systems, and missed opportunities for efficiency
and growth.
If the Group fails to respond to occupier
demands for building-related technology, the
Group’s offering could become less desirable,
leading to potential vacancies and loss of rental
income. Whilst there is a demand for intelligent
buildings, this does result in increased cyber
risk.
The Group maintains a digital strategy that
includes the systematic evaluation of emerging
technologies to ensure that new systems and
services deliver appropriate value and align with
the Group’s technology framework. The Group
monitors developments in quantum computing
and conducts periodic reviews of its cyber security
service providers to ensure that they remain
responsive to evolving technological and security
risks.
Artificial intelligence (AI) considerations have been
incorporated into the Group’s IT Acceptable Use
Policy and into third party supplier due diligence
processes, to ensure appropriate governance and
risk management controls are applied.
C: Climate-
related risks
Strategic
objectives:
1
2
3
4
The climate-related emerging risks which are
considered to have the greatest impact on
Derwent London are:
Subsidence
Planning approval changes
Emissions (carbon) offsets
Windstorm
Flooding
These risks have the potential to materially
impact asset valuations, development viability,
cash flows and regulatory compliance across
the Group’s portfolio.
Through our ongoing development and
refurbishment programme, we continually
improve the energy efficiency of our buildings. In
addition to purchasing and self-generating
renewable energy, we are delivering a c.100-acre
solar park in Scotland to increase our own supply
base of renewable energy. Embodied carbon and
energy intensity reduction targets are included
within the Executive Directors’ long-term incentive
plan awards (PSP).
D: Geopolitical
instability
Strategic
objectives:
2
4
5
Continued geopolitical tensions could cause
prolonged global supply chain disruption,
commodity price inflation and market
uncertainty, causing delays or disruption to
occupier decision making and investor
sentiment. There is also a risk of increased cyber
attacks and social unrest.
Despite the uncertainty, our supply chain has
been relatively unaffected due to our approach of
early pre-ordering and storage. Early supply chain
engagement in project designs helps with the
identification of potential risks and alternative
solutions.
Due to the uncertain nature of emerging risks and trends, the time horizon indicates the time period over which the Board currently perceives these risks could have a
material impact on the Group.
Derwent London plc
Report and Accounts 2025
110
The evolving nature of office occupation
Emerging risk
The central London office market for good quality assets
remains resilient. However, the evolving nature of office
occupation is an emerging risk for the Group. Awareness of key
market drivers that could impact this risk is essential to ensure
the Group remains ahead of occupier trends and demands.
The key drivers that could influence occupier trends include:
strategic location of our buildings;
the need for adaptable and collaborative space to
accommodate hybrid working patterns and technological
advancements;
landlord services and amenities; and
integration of ESG.
The Group’s strategy of delivering high quality, amenity-rich
space in well-positioned locations remains central to
mitigating the emerging risk of the evolving nature of office
occupation. The following controls are in place to mitigate this
risk.
Engagement with occupiers
Regular engagement with occupier advisers as well as existing
occupiers allows the Group to monitor trends and understand
key factors impacting decision making. This informs the
Group’s strategy of developing a portfolio that meets evolving
demand.
Differentiating our portfolio
The Group’s portfolio is strategically considered to provide both
HQ offices and 'Furnished + Flexible' offices in appropriate
proportions to meet London’s office demand profile. All
workspace is now further supported by the DL/Member offer
which includes, DL/Lounges and the DL/App. This provides the
Derwent London occupier with high quality amenities and
services at portfolio level as well as within individual assets.
Understanding market sentiment
The Board receives regular updates and reports, from both
internal teams and external advisers, ensuring the Group has
visibility over shifts in market sentiment and key drivers which
ultimately inform strategic decision making as well as the
design of Derwent London's workspace and offer.
Integration of ESG
Understanding how our occupiers view ESG enables the Group
to respond to evolving expectations. Sustainability is
embedded throughout the Group’s strategy and this
integrated approach ensures our assets are aligned to
long-term occupier priorities and values. In 2025, a
portfolio-wide campaign was issued, ‘You Hold the Power to
Save’. This initiative allows the Group to work alongside
occupiers throughout a tenancy to achieve aspirations of
reducing carbon.
Furnished & Flexible Floor Oliver's Yard
EC1
111
Strategic report
Governance
Financial statements
Other information
Brunel Building
W2
Derwent London plc
Report and Accounts 2025
112
114 Introduction from the Chairman
116 Governance at a glance
118 Board of Directors
120 Executive management
122 Corporate governance statement
130 The Section 172(1) Statement
138 Nominations Committee report
142 Audit Committee report
154 Risk Committee report
164
Responsible Business
Committee report
172 Remuneration Committee report
210 Directors’ report
215
Statement of Directors’
responsibilities
Governance
113
Governance
Other information
Strategic report
Financial statements
Introduction from the Chairman
Board changes
2025 has been a busy year in implementing the agreed succession
plans for executive leadership.
Paul Williams announced his retirement as Chief Executive and
Director of the Company on 22 January 2026. The Board has now
engaged with an external search consultancy, with a key focus for
2026 being the appointment of Paul’s successor.
On 12 August 2025, Nigel George announced that he would be
stepping down from the Board on 31 March 2026. During the year,
progress has been made in ensuring a smooth handover of Nigel’s
responsibilities to members of senior management. Nigel has
agreed to continue to support the Group on a number of key
projects over the next two years.
On behalf of the Board, I would like to thank both Paul and Nigel
for their dedication and outstanding contribution to the
Company.
The Board remains confident in the composition of its Non-
Executive Directors and during the year saw the facilitation of a
smooth handover made to Madeleine McDougall as Chair of the
Responsible Business Committee and the designated director for
gathering the views of the workforce as Dame Cilla Snowball
stepped down from the Board at the 2025 AGM.
Stakeholder engagement
We understand the importance of gathering the views of our
stakeholders and ensuring proactive engagement (see pages 128
and 129). During the year, I sought engagement from the Group’s
largest shareholders to ensure the Board understands the wider
views of our shareholders.
The biennial employee survey was rolled out to all employees
during Q4 2025 and it was encouraging to receive an 86%
response rate.
2026 focus areas
To appoint a new Chief Executive
Ongoing review of the Group’s strategy
To put forward the 2026 Remuneration Policy at the AGM
and monitor the implementation
To continue to monitor the Group’s long-term succession
plan for senior management
Dear Shareholder,
On behalf of the Board, I am pleased to
introduce the 2025 Corporate governance
statement on pages 122 to 137.
2025
January
February
March
April
May
Board and
committee
meetings
Audit
Board
Remuneration
Board pre-
strategy meeting
Board
Nominations
Remuneration
Responsible Business
Risk
Key
announcements
25 Baker Street
W1 offices fully
pre-let
Full year results
announcement
Investor
meetings
2024 Report &
Accounts
Notice of AGM
Q1 Business update
£250m 7-year 5.25%
bond issuance in June
Mark Breuer
Chairman
Derwent London plc
Report and Accounts 2025
114
The Remuneration Committee engaged with the Group’s top 20
shareholders and proxy voting agencies in respect to the
proposed changes to the Remuneration Policy. The Board is
grateful to the shareholders who engaged and the proposed
2026 Remuneration Policy (as outlined on pages 178 to 187) will
be put forward to shareholders at the 2026 AGM.
Strategic review
The Board continues to proactively review and discuss the
Group’s strategy, and in June held its annual strategy meeting
over two days. During this time, the Board discussed the
strategic outlook of the Group’s portfolio, the development
pipeline, and the maintenance of strong and flexible financing.
With the appointment of a new Chief Executive, there will be
increased focus by the Board on strategy during 2026.
Corporate governance
The Board and its committees were subject to an external
evaluation facilitated by the third party, Independent Audit
Limited. No significant matters were raised in respect to the
operation of the Board and its committees (see page 137).
The Board confirms that for the year ended 31 December 2025
the principles and provisions of the UK Corporate Governance
Code 2024 (the Code), that became applicable from 1 January
2025, have been complied with and consistently applied (see
page 117). The Board continues to make good progress for
compliance with provision 29 that becomes applicable for the
year ending 31 December 2026 and during the year has remained
up to date on the Group’s preparation for compliance.
Annual General Meeting (AGM)
The forthcoming AGM will be hosted at DL/78 on 15 May 2026.
Alongside my fellow Directors, I hope that you will be able to join
us. If you wish to discuss any aspect of our governance
arrangements, please contact me via our Company Secretary,
David Lawler.
Telephone:
+44 (0)20 7659 3000
or
Email:
company.secretary@derwentlondon.com
Mark Breuer
Chairman
25 February 2026
Board engagement
During the year, the Board maintained open engagement
channels with its key stakeholders, ensuring the views of
stakeholders are considered in the Board’s decision making.
Remuneration Policy consultation
Shareholders were invited to engage in the Remuneration
Policy consultation on 14 April 2025. During the year, the
Remuneration Committee engaged with the Group’s top 20
shareholders and proxy voting agencies in respect to the
proposed changes to the Remuneration Policy. A series of
engagement meetings were held with shareholders to directly
receive their feedback.
Directors’ Remuneration Policy / See pages 178 to 187
Our Chairman’s engagement with shareholders
Mark Breuer wrote to the Group’s largest shareholders on
8 September 2025, seeking engagement to understand the
wider views of our shareholders. It was pleasing to receive
engagement and valuable feedback from six of our
shareholders.
‘Meet the Board’ event
Employees from across the business were invited to a ‘meet
the Board’ event on 22 September 2025 as the Board
continues to recognise the importance of building
relationships and enhancing employee engagement.
External Board evaluation
In accordance with the Group’s three-year cycle, an external
evaluation of the Board and its committees was facilitated
during the year by the third party, Independent Audit Limited.
No significant matters were raised in respect to the operation
of the Board and its committees
Ensures the long-term sustainable success of the Company / See
pages 136 and 137
June
July
August
September
October
November
December
Board strategy
meeting
Nominations
Remuneration
Audit
Board
Nominations
Remuneration
Risk
Board
Remuneration
Audit
Board
Risk
Board
Nominations
Remuneration
Responsible Business
Disposal of
Francis House
SW1 for £55.5m
Extension
of £450m
Revolving Credit
Facility
Interim results
New headlease
agreed at 50
Baker Street W1
Investor
meetings
Completion of
25 Baker Street
W1
Q3 Business
update
Planning approval at
Blue Star House SW9
2025 Net Zero Carbon
Pathway update
115
Strategic report
Governance
Financial statements
Other information
Governance at a glance
Transparency and strong corporate governance drives
long-term value for our stakeholders.
Board succession
Executive Directors
On 22 January 2026, Paul Williams
announced that he will be stepping down
as Chief Executive and Director of the
Company. The Board has commenced
the process to appoint Paul’s successor.
Nigel George announced his retirement
on 12 August 2026 and will step down
from the Board on 31 March 2026. A
smooth transition of Nigel’s
responsibilities to members of senior
management has been made during the
year.
Non-Executive Directors
As Helen Gordon and Lucinda Bell
approach their ninth anniversaries on the
Board, a key focus area for the
Nominations Committee is to identify
successors for the positions of Senior
Independent Director and Chair of the
Audit Committee.
86.5
%
overall employee
satisfaction
55.6
%
Board independence
(excluding the Chairman)
5.0
%
Total accounting return for
the year ended 31 December
2025
53
%
Female
representation in our
workforce
Further information /
See page 78
Further information /
See page 134
Further information /
See page 30
Further information /
See page 171
2025 governance highlights
Key governance activities in 2025
1 Soho Place
W1
Succession planning
Further information / See page 140
Fraud Risk Management
Further information / See page 148
Section 172(1) Statement
Further information / See page 130
Remuneration Policy
Further information / See page 178
Cyber security
Further information / See page 156
Non-financial assurance
Further information / See page 145
Economic Crime and
Corporate Transparency
Act 2023
Further information / See page 137
External Board
evaluation
Further information / See page 136
Net Zero Carbon
Pathway
Further information / See page 69
Derwent London plc
Report and Accounts 2025
116
Key changes
Applicable for the year ended 31 December 2025
Our response
Status
Board leadership and company purpose
Principle C:
To focus on board decisions and the outcomes in context of the
company’s strategy and objectives.
Our disclosure on ‘Board activities’ (see page 132) outlines
the key decisions made by the Board during 2025 with a
link to the Group’s strategic objectives.
Provision 2:
The board’s role to not only assess and monitor company
culture but to ensure the desired culture is embedded.
Details of how the Group’s culture has been monitored and
embedded are on page 126.
Composition, success and evaluation
Principle J:
To promote diversity, inclusion and equal opportunity when
appointing to the board.
The Nominations Committee report outlines the Board’s
recognition of the role of diversity when reviewing its
composition and making appointments to the Board (see
pages 138 to 141).
Provision 23:
Companies may have further initiatives in place alongside their
diversity and inclusion policy.
Our progress in diversity is included on page 141. Further
information on our diversity and inclusion initiatives is on
pages 170 and 171.
Audit, risk and internal control
Principle O:
The board to be responsible for maintaining the effectiveness of
risk management and the internal control framework.
The risk management structure outlines the Board’s
responsibility for maintaining the effectiveness of risk
management and the internal control framework (see
page 162).
Remuneration
Provision 37:
Director remuneration contracts/agreements should include
malus and clawback.
The provision of malus and clawback and the
circumstances in which it could be applied is detailed in
the Remuneration Committee report on page 183.
Provision 38:
Describe malus and clawback including the provisions that have
been used in the last reporting period.
Our progress to compliance with provision 29 of the Code
The Board continues to make good progress for compliance with provision 29 that will become applicable for the year ending
31 December 2026.
Key changes
Applicable for the year ending 31 December 2026
Our response
Status
Audit, risk and internal control
Provision 29:
To describe how the board has monitored and reviewed the
effectiveness of the framework.
A declaration of effectiveness of the material controls as at
the balance sheet date.
To describe any material controls that have not operated
effectively as at the balance sheet date.
During the year, significant work has been undertaken to
further develop the Group’s material controls framework in
preparation for the Board’s declaration on the
effectiveness of material controls in the 2026 Report &
Accounts. Further information on identifying our material
controls is on page 147.
In progress
Compliant
In progress
UK Corporate Governance Code 2024 – Compliance Statement
The FRC published a revised UK Corporate Governance Code (the Code) in 2024. The Board confirms that for the year ended
31 December 2025, the principles and provisions that became applicable from 1 January 2025 have been complied with and
consistently applied. We note that provision 29 is only applicable from 1 January 2026.
Further information on the Code can be found on the Financial Reporting Council’s website:
www.frc.org.uk
117
Strategic report
Governance
Financial statements
Other information
5
2
1
3
4
Board of Directors
5 – Paul Williams
Chief Executive
Board appointment: 1998
Paul is a chartered
surveyor who joined the
Group in 1987. He was
appointed Chief Executive
in 2019, and has overall
responsibility for Group
strategy, business
development,
sustainability, health and
safety and day-to-day
operations. Paul will retire
as Chief Executive of
Derwent London plc
following the
appointment of his
successor during 2026.
Other public
appointments:
Chair of Sadler’s Wells
Foundation, Chair of the
New West End Company
(NWEC), Board member
of the Westminster
Property Association and
member of the Real
Estate Committee of HM
The King SMI.
Committee:
Responsible Business.
4 – Sanjeev Sharma
Non-Executive
Director
Board appointment: 2021
Sanjeev is an independent
member of the Estates
Strategy Committee of
King’s College University
London. Sanjeev is on the
Patrons Committee of
Real Estate Balance and a
Trustee Director of the
Prudential Staff
Charitable Trust.
Other public
appointments:
Chief Property Portfolio
Officer at M&G Real
Estate – a leading
financial solutions
provider for global real
estate investors, which is
part of M&G plc’s £75bn
Private Markets business.
Sanjeev has announced
his intention to retire from
this role, with effect from
28 March 2026.
Committee:
Remuneration (Chair),
Audit,
Nominations, Risk.
3 – Lucinda Bell
Non-Executive
Director
Board appointment: 2019
Lucinda has significant
real estate, finance and
governance experience.
She has held a number of
Non-Executive Director
roles in different sectors
and has extensive
experience of chairing
Audit Committees. She
was CFO of The British
Land Company plc from
2011 to 2018, where she
also led on sustainability.
Prior to that she held a
range of finance and tax
roles at British Land.
Lucinda is a Fellow of the
Institute of Chartered
Accountants of England
and Wales.
Other public
appointments:
Non-Executive Director at
Man Group Plc.
Committee:
Audit (Chair),
Nominations,
Remuneration, Risk.
2 – Helen Gordon
Senior Independent
Director
Board appointment: 2018
Helen is Chief Executive
Officer of Grainger plc.
Previously, she was Global
Head of Real Estate Asset
Management of Royal
Bank of Scotland plc and
has held senior roles at
Legal & General
Investment Management,
Railtrack and John Laing
Developments.
Other public
appointments:
CEO of Grainger plc,
Board member and Past
President of the British
Property Federation, Vice
Chair and Board Member
of EPRA (European Public
Real Estate Association),
Non-Executive Director of
Business LDN.
Committee:
Risk (Chair), Nominations,
Remuneration.
1 – Damian
Wisniewski
Chief Financial
Officer
Board appointment: 2010
Damian is a chartered
accountant who held
previous senior roles
within the real estate
sector including Stanhope
Properties, Chelsfield plc
and Treveria Asset
Management. He has
overall responsibility for
financial strategy,
treasury, taxation,
financial reporting and
property management as
well as other operational
responsibilities.
Other public
appointments:
Member of the governing
body and Chair of Audit
Committee at the Royal
Academy of Music and
Deputy Chairman and
Chair of the Finance and
Business Development
Committee at the ABRSM.
Derwent London plc
Report and Accounts 2025
118
6
9
10
8
7
10 – Emily Prideaux
Executive Director
Board appointment: 2021
Emily Prideaux joined
Derwent London in 2010
and was appointed to the
Executive Committee in
2018 and the Board in
2021. She is responsible for
Leasing, Asset
Management, Corporate
and Property Marketing,
and plays an integral role
in design and
development of future
projects. Emily also leads
the DL/Member initiative,
driving customer service
and digital strategy to
ensure Derwent delivers
best-in-class workspace
for the next generation of
businesses.
Other public
appointments:
NLA Expert Panel
Member.
Committee:
Responsible Business.
9 – Nigel George
Executive Director
Board appointment: 1998
Nigel is a chartered
surveyor who joined the
Group in 1988. He is
responsible for leading
Derwent London’s
investment team
including valuations,
acquisitions, disposals and
analysis.
In addition, his
responsibilities include
overseeing the Group’s
Development and
Sustainability teams.
Nigel will retire as
Executive Director on
31 March 2026.
Other public
appointments:
Nigel is a co-opted
member of the Royal
Albert Hall Fabric
Committee.
6 – Mark Breuer
Chairman
Board appointment: 2021
Mark worked in
investment banking for 30
years and, in 2017, retired
from a 20-year career at
JP Morgan in London,
where he held the position
of Vice Chairman, Global
M&A and was a member
of the Global Strategic
Advisory Council. Mark is
a Fellow of the Institute of
Chartered Accountants of
England and Wales,
having qualified in 1987,
and has a BA from Vassar
College in the US.
Other public
appointments:
Chairman of DCC plc.
Committee:
Nominations (Chair),
Responsible
Business.
7 – Robert Wilkinson
Non-Executive
Director
Board appointment: 2024
Robert became Chief
Executive Officer from
1 January 2026 of
Hammerson plc, the
largest UK-listed,
pure-play owner and
manager of prime retail
and leisure anchored city
destinations across the
UK, France and Ireland.
Robert has significant real
estate and financial
services experience,
having previously served
as CEO and Chief
Investment Officer for
AEW Europe and a
Non-Executive Director of
Grainger plc.
Other public
appointments:
CEO of Hammerson plc
and Vice Chair of INREV’s
Management Board.
Committee:
Audit, Nominations.
8 – Madeleine
McDougall
Non-Executive
Director
Board appointment: 2024
Madeleine is the Head of
Corporate Sector
Coverage at Lloyds
Banking Group, looking
after clients in sectors
such as infrastructure,
energy, retail, leisure,
health, manufacturing
and technology. Before
this Madeleine was Head
of the Real Estate &
Housing team within the
Lloyds Banking Group
team.
Other public
appointments:
Managing Director, Head
of Corporate Sector
Coverage at Lloyds
Banking Group and
Honorary Treasurer of the
British Property
Federation.
Committee:
Responsible Business
(Chair), Nominations,
Risk.
119
Strategic report
Governance
Financial statements
Other information
Executive management
2
4
3
5
1
6
1 – Matt Cook
Head of Digital Innovation
& Technology
Joined Derwent London:
November 2015
Appointed to Executive Committee:
January 2024
2 – Jennifer Whybrow
Head of Financial
Planning & Analysis
Joined Derwent London:
June 2007
Appointed to Executive Committee:
January 2018
3 – Vasiliki Arvaniti
Head of Asset Management
Joined Derwent London:
September 2019
Appointed to Executive Committee:
January 2022
4 – John Davies
Head of Sustainability
Joined Derwent London:
January 2013
Appointed to Executive Committee:
January 2022
5 – Richard Dean
Director of Investment
Joined Derwent London:
January 2023
Appointed to Executive Committee:
July 2023
6 – Richard Baldwin
Director of Development
Joined Derwent London:
January 2011
Appointed to Executive Committee:
January 2011
7 – Robert Duncan
Head of Investor Relations
& Strategic Planning
Joined Derwent London:
September 2021
Appointed to Executive Committee:
January 2023
8 – Victoria Steventon
Head of Property Management
Joined Derwent London:
December 2019
Appointed to Executive Committee:
January 2022
9 – Philippa Abendanon
Head of Occupier Markets
Joined Derwent London:
April 2013
Appointed to Executive Committee:
July 2022
Derwent London plc
Report and Accounts 2025
120
11
10
8
9
7
12
13
10 – Jay Joshi
Group Financial Controller
Joined Derwent London:
April 2012
Appointed to Executive Committee:
April 2021
11 – David Lawler
Company Secretary
Joined Derwent London:
September 2017
Appointed to Executive Committee:
September 2017
12 – Katy Levine
Head of Human Resources
Joined Derwent London:
September 2008
Appointed to Executive Committee:
January 2023
13 – Julie Schutz
Head of Internal Audit
Joined Derwent London:
January 2023
Appointed to Executive Committee:
July 2024
Senior
Joined
Management
Derwent London
Lesley Bufton
Head of Property Marketing
2003
Tim Hyman
Group Architect
2008
Benjamin Lesser
Head of Design & Innovation
2010
Jonathan Theobald
Head of Investment Analytics
2012
Matt Massey
Head of Project Management
2014
Charlotte Maclean
Land & Asset Manager
2021
Matt Peaty
Head of Health & Safety
2022
Paul Atkins
Head of Tax
2024
Stef Doede
Head of Financial Reporting
2025
121
Strategic report
Governance
Financial statements
Other information
Monitors key
performance indicators
Facilitates
the sharing of
information
Allows our
stakeholders to inform
our decision making
Corporate governance is
essential to ensuring our
business is run in the
right way for the benefit of
all our stakeholders
Maintains a sound
system of risk
oversight and
management
Promotes the desired
culture and values
Ensures
accountability and
responsibility
Corporate governance statement
Our approach to governance
At Derwent London our approach to governance is rooted in the concepts of
fairness, transparency and accountability.
The Section 172(1) Statement
The Board of Directors confirm that during the year under review,
it has acted to promote the long-term success of the Company
for the benefit of shareholders, whilst having due regard to the
matters set out in section 172(1)(a) to (f) of the Companies Act
2006.
The Board is also kept fully informed of the material issues of
stakeholders through the Responsible Business Committee,
Executive Directors, reports from senior management and
external advisers. We utilise various engagement channels to
receive informative feedback from our key stakeholders which
can be factored into our principal decisions and activities.
Further information / See page 130
Public Interest Statement
We are aware of our wider obligations to be a responsible
business partner to our occupiers and to the communities in
which we operate. As our activities impact multiple stakeholder
groups, our Board ensures that stakeholder matters are central
to its decision making alongside the long-term financial success
of our business.
We extend our obligations beyond the statutory requirements to
add value and build long-term mutually beneficial relationships.
Our obligations are incorporated into our purpose, which strongly
influences our values (see pages 22 to 25).
We have detailed on pages 66 to 85 and 122 to 137 how we have
acted in the public interest during 2025.
Derwent London plc
Report and Accounts 2025
122
Running our business in the right way
Effective leadership
Our Board is composed of diverse professionals who bring a range
of skills, perspectives and corporate experience to our boardroom.
The composition of the Board is subject to periodic review by the
Nominations Committee to ensure it remains sufficiently
balanced and diverse to effectively oversee and determine the
Group’s strategy.
On 22 January 2026, Paul Williams announced his retirement as
Chief Executive and Director of the Company. The Board has
commenced the process to appoint Paul’s successor and will
ensure an effective handover of responsibilities is made.
Additionally, Nigel George announced his retirement as a Director
on 12 August 2025 and will be leaving the Group on 31 March
2026. Nigel will continue to support the Group on a number of key
projects over the next two years. During the year, a smooth
transition was made from Dame Cilla Snowball to Madeleine
McDougall as Chair of the Responsible Business Committee and
the designated director for gathering the views of the workforce.
To ensure sufficient time for discussion, the Board utilises its five
principal committees to effectively manage its time (see page
127). At each Board meeting, the agenda ensures sufficient time
for the committee chairs to report on the contents of discussions,
any recommendations to the Board which require approval, and
the actions taken. The Board, its principal committees and
individual Directors are subject to annual effectiveness
evaluations to identify areas for improvement or action (see
pages 136 and 137). The Chairman discusses with each Director
their training needs to ensure they keep their knowledge and skills
up to date.
Value creation and preservation
The role of the Board is to generate long-term value for
shareholders and other key stakeholders. The appropriateness of
our strategy is subject to a detailed review at the Board’s strategy
meeting which is held annually. Additionally, before making a
material decision, the Directors have due regard for the wider
context including the macroeconomic environment, property
cycle and the potential impact on our stakeholders and wider
society.
Some of the key aspects discussed by the Board during its
strategy discussions were:
a strategic outlook of our London portfolio;
the nature of office occupation;
our development pipeline in respect to its replenishment and
future potential;
a review of the five-year plan including the potential impact of
external risk factors on the business and our stakeholders;
maintenance of strong and flexible financing and the cost to
refinance; and
costs and efficiencies.
The Board required no significant changes to the Group’s strategy
during 2025, which continues to assist in the achievement of our
purpose and is aligned with our values. It is recognised that a key
priority for 2026 is the recycling of capital. As a business, we
continue to create value responsibly through responsible
initiatives, a conservative balance sheet and a resilient strategy
(see pages 22 and 23).
Applying best practice principles
During the year ended 31 December 2025, we have applied the
principles and complied with the provisions of good governance
contained in the UK Corporate Governance Code 2024 (the Code).
Our Compliance Statement for 2025 is on page 117. Further details
on how we have applied the Code can be found in the Governance
section on pages 122 to 137.
1
Board leadership and company purpose
Page
A
Effective Board
123
B
Purpose, values and culture
126
C
Governance framework and arrangements
127
D
Stakeholder engagement
128
E
Workforce policies and practices
124
2
Division of responsibilities
Page
F
Board roles
125
G
Independence
134
H
External appointments
134
I
Board activities
132
3
Composition, succession and evaluation
Page
J
Appointments to the Board
140
K
Board skills, experience and knowledge
135
L
Annual Board evaluation
136
4
Audit, risk and internal control
Page
M
Financial reporting
143
Internal audit
147
External audit
150
N
Review of the 2025 Report & Accounts
146
O
Internal financial controls
149
Risk management
154
5
Remuneration
Page
P
Linking remuneration with our purpose, values
and strategy
189
Q
Directors’ Remuneration Policy
178
R
Pay for performance
201
Strategic targets
202
123
Strategic report
Governance
Financial statements
Other information
Ensures accountability and responsibility
As a business, we seek to conduct ourselves with honesty and integrity and believe that it is our duty to take appropriate measures to
identify and remedy any malpractice within or affecting the Company. Our employees embrace our high standards of conduct and are
encouraged to speak out if they witness any wrongdoing which falls short of those standards.
Corporate governance statement
continued
Code of Conduct for Directors
The Institute of Directors (IoD) operates a voluntary Code of
Conduct for Directors, which is centred on six principles:
Leading by example
Integrity
Transparency
Accountability
Fairness
Responsible business
The Derwent London Board has confirmed that it has
complied with the IoD Code of Conduct and its principles for
director conduct during 2025. Further information on the IoD
Code of Conduct for Directors can be found here:
www.iod.
com
Workforce policies and practices
The Executive Directors have been delegated responsibility for
ensuring that policies and behaviours set at Board level are
effectively communicated and implemented across the business.
Policies are published on the intranet and where relevant
included in the employee handbook. To ensure policies are
embedded in our business practices, we operate a mandatory
training programme which aims to reinforce key compliance
messages in areas such as anti-bribery, fraud, modern slavery
etc. If the Board is concerned or dissatisfied with any behaviours
or actions, it seeks assurance that corrective action is being
taken. No such action was required during 2025.
Compliance training / See page 163
Anonymous reporting of concerns
All employees have access to our ‘Speak up’ system. Our
procedures are included within our employee handbook, on our
Group intranet and staff noticeboards. Our procedures aim to
support and reassure staff that they are able to raise genuine
concerns without fear of victimisation or unfair treatment, even
if they turn out to be mistaken.
In 2025, we transitioned to a new independent service provider,
which enabled the introduction and publication of a third party
reporting line to our existing suppliers, and was reflected in the
updated Supply Chain Responsibility Standard. Following this
transition, our ‘Speak up’ Policy (the Policy) and posters were
updated to ensure our employees and suppliers had clear
guidance on how to report concerns anonymously.
Following receipt of a message we have procedures in place to
ensure an independent and proportionate investigation. The
Policy outlines that the CEO and relevant committee Chair are
informed of all reports, unless they are indicated within the
report. Due to the ‘open door’ nature of our business, concerns
are often raised directly with management, the CEO or the HR
team.
Conflicts of interest
All employees (including the Board) are required to notify the
Company as soon as they become aware of a situation that
could give rise to a conflict or potential conflict of interest.
Prior to all major Board decisions, the Chairman requires the
Directors to confirm that they do not have a potential personal
conflict with the matter being discussed. If a conflict does arise,
the Director is excluded from discussions and voting, unless the
Board unanimously decides otherwise.
Independence / See page 134
Delegated authority limits
The Board maintains a formal schedule of matters which are
reserved solely for its approval. These matters include decisions
relating to the Group’s strategy, capital structure, financing, any
major property acquisition or disposal, the risk appetite of the
Group and the authorisation of capital expenditure above the
delegated authority limits. The delegated authority limits are
detailed below:
Board approval
is required for:
Level of
approval:
Major property
acquisition or disposal
Valued above £40m
Major capital
expenditure project
Projected costs above £20m
Material occupier
lease or contract
Rental income greater than 7.5%
of the Group’s total rental income
Although the Board is formally required to authorise capital
expenditure above this limit, the open nature of our business
means that the Board is aware of all active projects within our
portfolio.
If any Director has concerns about the running of the Group or a
proposed course of action, they are encouraged to express those
concerns which are then minuted. No such concerns were raised
during 2025.
All Directors have access to the services of the Company
Secretary, and any Director may instigate an agreed procedure
whereby independent professional advice may be sought at the
Company’s expense. No such advice was sought by any Director
during the year.
Governance framework / See page 127
Board activities / See pages 132 and 133
Derwent London plc
Report and Accounts 2025
124
Division of responsibilities
Chairman, Mark Breuer
Responsible for the effective running of the Board and ensuring
it is appropriately balanced to deliver the Group’s strategic
objectives
Promote a boardroom culture that is rooted in the principles of
good governance and enables transparency, debate and
challenge
Ensure that the Board as a whole plays a full and constructive
part in the development of strategy and that there is sufficient
time for boardroom discussion
Effective engagement between the Board, its shareholders and
other key stakeholders
Chief Executive, Paul Williams
Provide clear and visible leadership
Execute the Group’s strategy and commercial objectives
together with implementing the decisions of the Board and its
committees
Keep the Chairman and Board appraised of important and
strategic issues facing the Group
Ensure that the Group’s business is conducted with the highest
standards of integrity, in keeping with our culture
Manage the Group’s risk profile and ensure actions are
compliant with the Board’s risk appetite
Investor relation activities, including effective and ongoing
communication with shareholders
Senior Independent Director, Helen Gordon
Provide a ‘sounding board’ for the Chairman in matters of
governance or the performance of the Board
Available to shareholders if they have concerns which have not
been resolved through the normal channels of communication
At least annually lead a meeting of the Non-Executive
Directors without the Chairman present to appraise the
performance of the Chairman
Act as an intermediary for Non-Executive Directors when
necessary and act as Chairman of the Board, if the Chairman
is conflicted
Chief Financial Officer, Damian Wisniewski
Support the CEO in developing and implementing strategy
Provide financial leadership to the Group and align the Group’s
business and financial strategy
Responsible for financial planning and analysis, treasury and
tax functions, and overseeing change management systems
Responsible for presenting and reporting accurate and timely
historical financial information
Manage the capital structure of the Group
Investor relation activities, including communications with
shareholders, alongside the CEO
Designated director for gathering the views of our
workforce, Madeleine McDougall
Madeleine McDougall has been designated the director
responsible for gathering the views of our workforce. This is
achieved by:
Monitoring the effectiveness of engagement programmes
established for employees
Providing the Board with regular updates on workforce
sentiment to support informed and balanced decision making
Monitoring the outcome of employee surveys and providing
input on their design
Attendance at key employee and business events, including
property launches
Other Executive Directors
Support the CEO in developing and implementing strategy
Oversee the day-to-day activities of the Group, including the
design and implementation of appropriate risk management
and internal control systems (financial and non-financial)
Manage, motivate and develop staff
Develop business plans in collaboration with the Board
Ensure that the policies and practices set by the Board are
adopted at all levels of the Group
Investor relation activities, including communications with
shareholders, alongside the CEO
Non-Executive Directors (NEDs)
Provide constructive challenge to our executives, help to
develop proposals on strategy and monitor performance
against our KPIs
Ensure that no individual or group dominates the Board’s
decision making
Promote the highest standards of integrity and corporate
governance throughout the Company and particularly at
Board level
Determine appropriate levels of remuneration for the senior
executives
Review the integrity of financial reporting and that financial
controls and systems of risk management are robust
Company Secretary, David Lawler
Secretary to the Board and its committees
Develop Board and committee agendas and collate and
distribute papers
Ensure compliance with Board procedures
Advise on regulatory compliance and corporate governance
Facilitate induction programmes for Directors and assist with
their training and development, as required
Responsible for communications with retail shareholders and
the organisation of the Annual General Meeting
Available to support all Directors
125
Strategic report
Governance
Financial statements
Other information
Corporate governance statement
continued
Promotes the desired culture and values
Our culture has developed from our values and is a key strength of our business. The benefits of
a strong culture are seen in our employees’ engagement scores, retention rate and levels of
productivity.
Embedding our culture
The Board reinforces our culture and values through its decisions,
strategy and conduct. Culture and value ‘fit’ is a key
consideration during our recruitment process, which is reinforced
during our induction programme and town halls run by the CEO
and is monitored through performance appraisals.
As part of the performance appraisal process, all employees are
required to work towards achieving the following objectives:
active involvement in fostering, promoting and supporting an
inclusive culture; and
cross-team collaboration to deliver goals and build strong
trusting relationships.
These objectives reinforce the behaviours we wish to foster within
our workforce and link our culture to our reward mechanisms.
Assessing and monitoring our culture
The Board monitors the culture and values of the Group via:
Regularly meeting with management and inviting employees
to present at Board and committee meetings.
Receiving feedback via the four employee representatives that
sit on our Responsible Business Committee.
Assessing cultural indicators such as:
– management’s attitude to risk;
– health and safety data;
– compliance with the Group’s policies and procedures; and
– key performance indicators, including staff retention.
Feedback from our wider stakeholders, including from
occupier ‘pulse surveys’.
Promptness of payments to suppliers.
Independent assurance is sought via the internal audit
function and other advisers.
Key indicators in monitoring our culture
The feedback received from employee surveys provides valuable
insights into what is valued and seen as corporate norms. The
biennial employee survey includes a specific question on how our
employees would describe our culture.
If the Board is concerned or dissatisfied with any behaviours or
actions, it seeks assurance that corrective action is being taken.
No such action was required during 2025.
86.5
%
of employees are overall
satisfied with working at
Derwent London
(2023: 88%)
83
%
of employees said they are
comfortable to voice their
views even when different
from others
(2023: 73%)
91
%
of employees said they know
what is expected of them in
their role
(2023: 88%)
86
%
of employees said their skills
and expertise are well
utilised in their role
(2023: 77%)
Values
The qualities we embody
Our values articulate the
qualities we embody and our
underlying approach to doing
business.
Culture
How we work together
Our culture has developed
from our values and is a key
strength of our business.
Purpose
Why we do what we do
Our purpose communicates the
Group’s strategic direction and
intentions to our employees,
occupiers and wider
stakeholders.
Derwent London plc
Report and Accounts 2025
126
The terms of reference for each Board Committee are available on the Group’s website at
www.derwentlondon.com
Executive Directors
Supporting committees
Remuneration
Committee
The Board delegates certain matters to its five principal committees
Governance framework
Responsible
Business Committee
Risk
Committee
Audit
Committee
Nominations
Committee
Ensures the Board
(and its committees)
have the correct
balance of skills,
knowledge and
experience, and that
adequate succession
plans are in place.
Oversees the Group’s
financial reporting,
maintains an
appropriate
relationship with the
external Auditor and
monitors the Group’s
financial internal
controls.
Reviews and monitors
the Group’s principal
and emerging risks,
and the effectiveness
of the Group’s risk
management
systems and
non-financial internal
controls.
Monitors the Group’s
corporate
responsibility,
sustainability and
stakeholder
engagement
activities.
Establishes the
Group’s
Remuneration Policy
and ensures there is a
clear link between
performance and
remuneration.
The Board is primarily responsible for setting the Group’s strategy for delivering long-term value to our shareholders and other
stakeholders, providing effective challenge to management concerning the execution of the strategy and ensuring the Group
maintains an effective risk management and internal control system.
Engagement with shareholders and other stakeholders
Our strategy /
See page 22
Managing risks /
See page 100
The Section 172(1) Statement /
See page 130
Board activities /
See page 132
The Board delegates the execution of the Company’s strategy and the day-to-day management of the business to the Executive
Directors, assisted by other members of the Executive Committee.
Chief Executive’s
statement /
See page 12
Measuring our
performance /
See page 30
Property review /
See page 35
Executive management /
See page 120
The executives operate a number of supporting committees that provide oversight
on key business activities and risks, examples include:
Credit Committee
Health and Safety
Committee
Sustainability Committee
Cost Committee
Our shareholders and other key stakeholders play an important role in monitoring and safeguarding the governance of our Group.
Further information on how we engage with our key stakeholders is on pages 24, 128 and 129.
We pride ourselves on conducting our business in an open and transparent manner.
Our well-established culture ensures that our governance framework remains flexible, allowing for fast decision making, effective
oversight and clear accountability throughout the organisation.
The Board
See page 138
See page 142
See page 154
See page 164
See page 172
127
Strategic report
Governance
Financial statements
Other information
Our stakeholders
Corporate governance statement
continued
Our stakeholders
Why we engage
Our key priorities
Occupiers
Strategic objectives:
2
4
5
Our long-term success
depends on our ability to
understand and respond to
occupiers’ requirements.
Well-designed and sustainable buildings
Suitable lease terms
Adaptable space to accommodate new and
collaborative ways of working
Exclusive access to available amenities
Employees
Strategic objectives:
3
4
To benefit from the skills and
knowledge of our talent
base.
Overall health and wellbeing
A diverse and inclusive working environment
Opportunities for training, development and
progression
Local communities
and others
Strategic objectives:
3
4
To gather feedback on the
needs of the communities,
neighbourhoods and
charitable organisations.
Minimising local disruption
Impact on the local economy
Effective communication and engagement
Being a responsible neighbour
Shareholders and
debt providers
Strategic objectives:
1
5
To facilitate access to
long-term and cost-effective
finance and strategic input.
Financial performance
Environmental, social and governance performance
Openness and transparency
Payment of the dividend
Central and local
government
Strategic objectives:
4
To better understand public
policy and regulatory
frameworks, and influence
policy outcomes.
Openness and transparency
Proactive engagement with local authorities
Support for local economic plans and strategies
Compliance with legislation
Suppliers
Strategic objectives:
4
To partner with like-minded
businesses that engage and
promote ethical supply chain
practices.
Long-term partnerships
Collaborative approach
Open terms of business
Fair payment practices
We recognise our duty to act in the best interests of our stakeholders and are committed to
delivering long-term value.
2025
January
February
March
April
May
Key stakeholder
engagement
during 2025
DL/Lounge access
offered to
charities and
community
groups
Full year results
announcement
Received
engagement
from the local
government
regarding AC-DG
fundraising
White Collar
Factory charity
half marathon
organised
Hosted our 41st
Annual General
Meeting and approved
2024 Report &
Accounts
Derwent London plc
Report and Accounts 2025
128
How we engage
Value created in 2025
Occupier pulse surveys
Constructive and collaborative discussions on ESG
initiatives
Occupier-focused amenities
DL/App
Delivered the ‘You Hold the Power to Save’ campaign, achieving 60%
engagement rate and driving behavioural change.
Published our updated Net Zero Carbon Pathway, providing direction
for long-term sustainability.
Delivered a programme of portfolio-wide and building-specific events,
securing strong engagement, with seasonal and high demand
activities regularly selling out.
Biennial employee survey
Business Disability Forum
D&I Working Group
Health, Safety and Accessibility Working Group
Employee members on the Responsible Business
Committee
Achieved a significant improvement in the Business Disability Forum
Self-Assessment strengthening the Group’s approach to accessibility.
Circulated a series of diversity and inclusion newsletters that
increased engagement and shared lived experiences.
Implemented a ‘Rewards and Recognition’ programme that
encourages cross-team collaboration.
Operation of the Community Fund
Volunteering and charitable donations
Engagement throughout planning and development
processes
Work experience opportunities
Launched a multi-year funding option for Community Fund recipients.
Continued strong support for communities by ensuring ongoing
commitment for vital causes via our Sponsorship and Donations
Committee, with £350k committed.
Worked alongside ‘Tier 1’ contractors to create employment and
training opportunity proposals, tailored to support the resident-led
priorities of local boroughs.
Hosted 18 individuals on our work experience programme, including
two from the EY Foundation’s Real Estate Futures programme.
All material news published via Regulatory News
Services
Annual General Meeting
Investor meetings, presentations and property tours
Remuneration Policy consultation
Our annual Report & Accounts
Secured an extension of the £450m unsecured Revolving Credit
Facility.
Obtained £250m 7-year 5.25% bond issuance, strengthening the
Group’s long-term funding.
Maintained strong interest cover at 3.1 times.
Conducted shareholder meetings as part of the Remuneration Policy
consultation.
Ongoing engagement with local authorities to ensure
high quality planning applications are submitted
Regular dialogue and correspondence with
government departments such as HMRC
Led a fundraising initiative for AC-DG, raising £240k in total from 24
developers and contractors.
Contributed as an active member of Build UK, supporting efforts to
drive sustainable growth across the construction industry.
Engaged regularly with Business London, benefitting from thought
leadership and regulatory insights.
Supplier onboarding procedures
Our Supply Chain Responsibility Standard
Introduction of new third party whistleblowing line
for suppliers
Introduced a third party whistleblowing line for suppliers as a means
to report any concerns of wrongdoing.
Published a revised Supply Chain Responsibility Standard and latest
Modern Slavery Statement.
Achieved Bronze level accreditation for responsible payment practices.
Strategic objectives
1
To optimise returns and
create value from a
balanced portfolio
2
To grow recurring
earnings and cash flow
3
To attract, retain and
develop talented
employees
4
To design, deliver and
operate our buildings
responsibly
5
To maintain
strong and flexible
financing
June
July
August
September
October
November
December
Engaged with
suppliers on the
publication of
third party
whistleblowing
line
Remuneration
Policy
consultation:
engagement
with top 20
shareholders
Interim results
Launch of ‘You
Hold the Power
to Save’
campaign,
engaging with
occupiers
Employees were
invited to
participate in
the 2025
employee
survey
Portfolio-wide
donation drive
for the men’s
charity ‘Suited
& Booted’
Published an update
on the Group’s Net
Zero Carbon Pathwa
y
129
Strategic report
Governance
Financial statements
Other information
Allows our stakeholders
to inform our decision making
Corporate governance statement
continued
The Section 172(1) Statement
The Board of Directors confirms that during the year under review, it has acted to promote the long-term success of the Company
for the benefit of shareholders, whilst having due regard to the matters set out in section 172(1)(a) to (f) of the Companies Act
2006.
Informed decision making
The Board’s procedures require a stakeholder
impact analysis to be completed for all
material decisions requiring its approval that
could impact one or more of our stakeholder
groups. The stakeholder impact analysis
assists the Directors in performing their duties
under s.172 of the Companies Act 2006 and
provides the Board with assurance that the
potential impacts on our stakeholders are
being carefully considered by management
when developing plans for Board approval.
The key activities and principal decisions
undertaken by the Board in 2025 are detailed
on pages 132 and 133.
Principal methods used by the Board
in 2025
The main methods used by the Directors to
perform their duties include:
strategy reviews which assess the long-term
sustainable success of the Group and our
impact on key stakeholders;
the Responsible Business Committee
monitors the Group’s corporate
responsibility, sustainability and stakeholder
engagement activities and reports to the
Board on its activities (see pages 164 to
171);
assessing the potential impact of
significant capital expenditure decisions on
our stakeholders;
identifying the risks and potential
consequences of decisions in the short,
medium and long-term so that mitigation
plans can be put in place;
direct and indirect stakeholder engagement
(see pages 128 and 129);
external assurance is received from
stakeholder surveys, brokers and advisers;
and
specific training for our Directors and senior
managers, in addition to the mandatory
compliance training programme (see pages
135 and 163).
Issues, factors and stakeholders
Case studies have been included throughout the Governance section (see pages 131
and 169). Within each case study we have identified the s.172 factors which were
most relevant in the Board’s decision making. Additionally, we have provided an
explanation of how our stakeholders impacted on the Board’s discussions during
2025 on the following pages:
Holden House W1 / See page 131
Community Fund / See page 169
s.172 factor
Relevant disclosures
Page
a) the likely consequences of
any decision in the
long-term
Company purpose
22
Central London Office Market
41
Our business model and strategy
22
b) the interests of the
Company’s employees
Our people
78
Diversity and inclusion
170
Non-financial reporting
84
Employee engagement
78
c) the need to foster the
Company’s business
relationships with
suppliers, customers and
others
Social Value Strategic Framework
76
Responsible payment practices
168
Modern slavery
169
Supply Chain Responsibility Standard
168
d) the impact of the
Company’s operations on
the community and the
environment
Our Net Zero Carbon Pathway
69
Double materiality assessment
68
Community Fund
77
Streamlined Energy and Carbon
Reporting (SECR) disclosure
74
Task Force on Climate-related
Financial Disclosures (TCFD)
86
e) the desirability of the
Company maintaining a
reputation for high
standards of business
conduct
‘Speak up’ procedures
124
Purpose, values and culture
126
Internal financial controls
149
Risk management
159
Anti-bribery and corruption
163
Awards and recognition
295
f) the need to act fairly
between members of the
Company
Annual General Meeting
212
Voting
212
Rights attached to shares
213
Derwent London plc
Report and Accounts 2025
130
The Board approved the redevelopment of Holden House W1
in December 2024. The strip out and demolition commenced
in August 2025 with planned completion at the end of 2028.
The redevelopment will deliver a 133,500 sq ft modern
building, with an area uplift of 52%.
During these early discussions, the Board considered the
potential impacts of the redevelopment on its stakeholders
and received confirmation that the sustainability credentials
of the development were aligned with the Group’s net zero
carbon strategy.
Ahead of demolition commencing, a stakeholder impact
analysis was undertaken and early engagement sought to
ensure the decisions made by the Board were well informed
and considered all key stakeholders.
Key concerns of demolition
Noise, vibrations, dust.
General disruption to local occupiers and members of the
public.
Safety of pedestrians and vulnerable road users.
Waste strategy and material reuse.
Early engagement with stakeholders
A series of presentations and ‘drop in’ sessions were hosted at
DL/78 with both occupiers and members of the local
community invited with the objective of informing
stakeholders of the programme and to address any key
questions. Key feedback was to ensure that the proposed
programme of works would be clearly communicated, in
particular any periods of disruption or increased noise. It was
decided that Derwent London would issue ‘two-weekly
lookaheads’ to our own occupiers in neighbouring properties
to ensure that they were kept informed of the proposed works.
The Health and Safety Committee discussed the plans to
mitigate the risks of the demolition on road users, particularly
to pedestrians and cyclists. Additionally, engagement was
sought with Westminster City Council to discuss the site
logistics. As a result of discussions with and feedback from
Westminster City Council, an outline logistics strategy was
agreed and included within the enabling works tender
documents. Measures included within the outline strategy
included the position and dimensions of pitlanes, access
points into site and the implementation of additional road
barriers to help segregate vulnerable road users, such as
cyclists, from vehicles servicing the site. Regular liaison is
undertaken between the site team and Derwent London on all
aspects of the logistics arrangements. Additionally, reports
are submitted to the Risk Committee and Health and Safety
Committee to ensure regular monitoring of the works.
Community management
Engagement was sought with the main contractor, Erith, to
understand what opportunities, including apprenticeships,
were available. Derwent London worked alongside Erith to put
forward a proposal to Westminster City Council, tailored to
support its local priorities. Both Derwent London and Erith are
aligned in wanting to ensure the redevelopment of Holden
House W1 provides and promotes a range of opportunities
available on the site for Westminster residents. The Group
recognises that Holden House W1 presents a unique
opportunity to positively impact the local environment and
community within the borough of Westminster during
construction and into operation.
S.172 factors
C
D
E
Holden House
W1
Holden House
W1
131
Strategic report
Governance
Financial statements
Other information
Corporate governance statement
continued
Board activities
The Board met nine times during the year (including the Annual General Meeting).
An overview of our Board’s key activities in 2025 is provided below.
Recycling of capital
Recycling of capital
Investment activity is one of our core
activities. This involves the recycling of
capital, acquiring properties with
future regeneration opportunities and
disposing of those which no longer
meet our investment criteria and
forward return expectations.
During the year, the Board:
reviewed our portfolio pipeline for
future acquisition and disposal
opportunities;
approved the sale of Francis House
SW1 for £55.5m;
sold 24 apartments at 100 George
Street W1, with £115.8m proceeds
raised;
approved the comprehensive
refurbishment of Greencoat &
Gordon House SW1; and
received resolution to grant
planning permission at Blue Star
House SW9.
Construction projects
Received regular updates on key
construction projects and received
resolution to grant planning at our
c.240,000 sq ft 50 Baker Street W1
development.
Reached practical completion on
Building Safety Regulations at 25
Baker Street W1. Leases commenced
in September for the fully pre-let
204,000 sq ft office element.
Leasing activity
Monitored letting activity throughout
the year, which remained strong, with
open market lettings 9.9% above
December 2024 ERV.
Strategic objectives
1
2
4
S.172 factors
A
C
D
Strategy and financing
Strategy meeting
The Board strategy meeting was held
in June, and in order to adequately
prepare a pre-meeting was held to
agree the strategic challenges and
areas to be discussed.
Financing strategy
A strategic objective for the Group is
the maintenance of strong and
flexible financing. The Board received
updates throughout the year on the
Group’s financing strategy, including
the following refinancing activity:
A £115m unsecured term loan/
Revolving Credit Facility was signed
in February.
£250m 5.25% 7-year unsecured
bonds were issued in June.
The £175m 1.5% convertible bonds
were repaid upon maturity in June.
Additionally, both the £100m term
loan and the £450m Revolving
Credit Facility were extended by a
year to June 2028 and by four years
to July 2029, respectively. The
amended and extended Revolving
Credit Facility includes two
one-year extension options.
Two £32.5m Revolving Credit
Facilities were cancelled in July.
Costs and efficiencies
The Board discussed cost saving
opportunities to support efficiencies.
Dividends
Approved the interim and final
dividends to be paid in 2025.
Strategic objectives
1
2
4
5
S.172 factors
A
F
Risk management
and internal control
Internal Controls Project
The Internal Controls Project
continues to remain on track to
achieve compliance with provision 29
of the UK Corporate Governance
Code 2024 effective from 1 January
2026. During the year the Audit
Committee monitored the progress to
compliance with provision 29 in
respect to material controls. Further
information can be found on page 147.
Assurance
The Audit Committee tendered our
independent non-financial assurance
during 2025. Further details are on
page 145.
Principal and emerging risks
Approved the Group’s principal and
emerging risks, supported by an
in-depth benchmarking exercise.
Cyber security
In August, the Risk Committee
received a detailed presentation from
the Digital, Innovation and Technology
(DIT) team which provided an
overview of the Group’s cyber posture
and strategy. Additionally, following
the publication of the Cyber
Governance Code of Practice in April,
a gap analysis of the Group’s
procedures against the Cyber
Governance Code of Practice was
undertaken by the DIT team.
Fraud Risk Management
An internal assessment of the Group’s
Fraud Risk Management Framework
was conducted.
Strategic objectives
3
4
S.172 factors
D
E
Derwent London plc
Report and Accounts 2025
132
Strategic objectives
1
To optimise returns and
create value from a
balanced portfolio
2
To grow recurring
earnings and
cash flow
3
To attract, retain and
develop talented
employees
4
To design, deliver and
operate our buildings
responsibly
5
To maintain
strong and flexible
financing
Corporate reporting and
performance monitoring
Review of 2025 Report &
Accounts
Reviewed the 2025 Report & Accounts
to ensure it is fair, balanced and
understandable.
Reporting
Reviewed the rolling forecasts and
approved the 2026 budget.
Approved the full year and interim
results, in addition to the Q1 and Q3
business updates.
Reviewed and approved the Group’s
five-year plan and forecast.
Reviewed quarterly project cost
reports.
Approved the portfolio valuation as
at 30 June and 31 December 2025.
Finance system project
The Audit Committee received regular
updates on the implementation of the
new finance system and discussed the
expected benefits.
Net zero carbon
Published the updated Net Zero
Carbon Pathway, which confirmed
strong progress and a forward look
approach. Further details are on page
69.
Board evaluation
Following a tender, Independent Audit
Limited conducted the 2025 external
Board evaluation. The findings were
discussed at the Board meeting on
24 February 2026. Further details are
on page 137.
Strategic objectives
1
3
4
5
S.172 factors
A
E
Stakeholder engagement
‘Meet the Board’ event
On 22 September, employees from
across the business were invited to
meet the Board, recognising the
importance of employee engagement.
Employee survey
Sought feedback from our employees
during Q4 2025, in order to assess
staff satisfaction. The initial high level
feedback was reviewed by the
Responsible Business Committee in
December 2025.
Remuneration Policy
consultation
Engaged with shareholders and proxy
agencies on the proposed changes to
the Remuneration Policy in advance of
the 2026 AGM.
AGM
Hosted the 41st Annual General
Meeting (AGM) on 16 May 2025 at
DL/78, with a business update
provided by Paul Williams.
Chequeless dividend
Continued to notify and communicate
with shareholders that, from October
2025, dividend payments would no
longer be paid via cheque in order to
reduce the environmental impact.
Stakeholder consideration
The Responsible Business Committee
has continued to monitor and receive
regular updates on stakeholder
engagement.
Strategic objectives
1
3
S.172 factors
B
C
D
E
F
Governance
Corporate governance
Continued to monitor our progress
and compliance with the UK
Corporate Governance Code 2024.
Board skills matrix
A review of the Board skills matrix was
conducted and the new category of
‘people and talent’ was added.
Committee membership
The Chairman performed a review of
the Board committees’ memberships
to ensure each committee is
composed of the appropriate skills.
Modern slavery
Approved and published the 2025
Modern Slavery Statement.
Audit exemption
Approved the use of audit exemptions
under the Companies Act for a
number of subsidiary accounts.
Economic Crime and Corporate
Transparency Act 2023
The Board continued to receive regular
updates on the Group’s progress to
comply with the Economic Crime and
Transparency Act 2023, which
included all Directors completing the
ID verification process.
Health and safety training
Executive Directors, Non-Executive
Directors and members of senior
management received training on
health and safety management from
Mishcon de Reya.
Strategic objectives
1
3
S.172 factors
C
E
F
133
Strategic report
Governance
Financial statements
Other information
Policies and practices
Corporate governance statement
continued
Independence
The Non-Executive Directors play an important role in holding to
account the performance of executive management and
ensuring that no individual or group dominates the Board’s
decision making. It is therefore of paramount importance that
their independence is maintained.
The Board has identified in the table on page 135 which Directors
are considered to be independent. To safeguard their
independence, Non-Executive Directors are not permitted to
serve more than three three-year terms unless in exceptional
circumstances (see page 139).
The Board has reconfirmed that our Non-Executive Directors
remain independent from executive management and free from
any business or other relationships which could materially
interfere with the exercise of their judgement.
The Chairman held a number of meetings with the Non-
Executive Directors without executive management being
present. These meetings are useful to safeguard the
independence of our Non-Executive Directors by providing them
with time to discuss their views in a more private environment.
External commitments
The Board takes into account a Director’s other external
commitments when considering them for appointment, to
satisfy itself that the individual can discharge sufficient time to
the Derwent London Board and assess any potential conflicts of
interest. Our Directors are required to notify the Chairman of any
alterations to their external commitments that arise during their
tenure with an indication of the time commitment involved.
When assessing additional directorships, the Board considers the
number of public directorships held by the individual already and
their expected time commitment for those roles (see biographies
on pages 118 and 119).
Executive Directors may accept a non-executive role at another
company with the approval of the Board. Currently, none of our
Executive Directors are directors of other listed companies.
All Directors have confirmed (as they are required to do annually)
that they have been able to allocate sufficient time to discharge
their responsibilities effectively (see page 135 for Board meeting
attendance). Following a one-to-one meeting between each
Director and Independent Audit Limited, any feedback received
was provided to the Chairman with key areas to be addressed
during 2026 (see page 137).
Other publicly listed appointments
The Board takes into account guidance published by institutional investors and proxy advisers as to the maximum number of
public appointments which can be managed efficiently. For the table below, we have used the methodology contained in the ISS
UK and Ireland Proxy Voting Guidelines in respect of ‘overboarding’ to calculate our Non-Executive Directors’ mandates in respect
of their publicly listed appointments. Any person who holds more than five mandates at listed companies would be classified as
‘overboarded’. The Board confirms that none of our Directors are overcommitted and all Directors are capable of discharging
sufficient time to Derwent London.
Non-Executive Director
Board Chairman
Executive Director
Total
mandates
1
Appointments
Mandates
Appointments
Mandates
Appointments
Mandates
Mark Breuer
–
Derwent London plc
DCC plc
4
–
–
4
Lucinda Bell
Derwent London plc
Man Group Plc
2
–
–
–
–
2
Helen Gordon
Derwent London plc
1
–
–
Grainger plc
3
4
Sanjeev Sharma
Derwent London plc
1
–
–
–
–
1
Robert Wilkinson
Derwent London plc
1
–
–
Hammerson plc
3
4
Madeleine
McDougall
Derwent London plc
1
–
–
–
–
1
1
Inclusive of their appointment at Derwent London plc. For the purposes of calculating the number of total mandates: a non-executive directorship counts as one
mandate, a non-executive chairmanship counts as two mandates, and a position as executive director (or a comparable note) is counted as three mandates.
55.6
%
of the Board is independent (excluding the
Chairman), which exceeds the guidelines of
the UK Corporate Governance Code 2024
Related party disclosures / See page 263
Derwent London plc
Report and Accounts 2025
134
Training
With the ever-changing environment in which Derwent London
operates, it is important for our Executive and Non-Executive
Directors to remain aware of recent, and upcoming,
developments. We require all Directors to keep their knowledge
and skills up to date and include training discussions with the
Chairman in their annual performance reviews.
As required, we invite professional advisers to provide in-depth
updates. Updates and training are solely reserved for legislative
developments but aim to cover a range of issues including, but
not limited to, market trends, the economic and political
environment, environmental, technological and social
considerations. During the year, the Executive Committee and
members of senior management received training on the new
‘failure to prevent fraud’ offence that came into effect from
1 September 2025 under the Economic Crime and Corporate
Transparency Act 2023.
Our Company Secretary provides regular updates to the Board
and its committees on regulatory and corporate governance
matters. In addition, we invite our Directors to attend courses
hosted by the Deloitte Academy and PwC.
During 2025
The Risk Committee received the annual update on
upcoming legislative developments.
All employees (including Directors) participated in
compliance training courses on a range of topics including
fraud and market abuse, competition law, whistleblowing
and cyber security and data protection.
Directors attended regular external briefing sessions from
the major accountancy firms.
The Executive Committee and members of senior
management received training on the new ‘failure to
prevent fraud’ offence.
Board skills and experience
During the year, the Chairman has reviewed the Board’s skills and experience and the chart below provides an overview of the
skills and experience of our Directors as at 31 December 2025. To be counted for each skill area, a Director is required to have
executive or senior management experience. The Board remains well-equipped with a diverse range of skills and expertise to
contribute to achieving the Group’s long-term strategy. For the skill areas in which our Directors have less experience at executive
level, we provide training and regular updates either to the entire Board or to specific committees.
Board Skills Matrix
Executive/Strategic leadership
4
6
100%
Property, real estate or construction
4
5
90%
Listed PLC experience
4
6
100%
Financial and risk management (inc. tech and cyber)
2
6
80%
People and talent
1
6
70%
Corporate finance and capital markets
4
6
100%
Governance, legal and compliance (inc. H&S and ESG)
3
6
90%
Investor relations, engagement and marketing
4
6
100%
Board biographies / See pages 118 and 119
The Executive Directors have been delegated responsibility for
ensuring that policies and behaviours set at Board level are
effectively communicated and implemented across the business.
Policies are published on the intranet and where relevant
included in the employee handbook. To ensure policies are
embedded in our business practices, we operate a mandatory
training programme which aims to reinforce key compliance
messages in areas such as anti-bribery, fraud, modern slavery,
conflict of interest, etc.
Compliance training / See page 163
Board members and attendance in 2025
Independent
Number of
meetings1
Attendance2
Non-Executive
Chairman
Mark Breuer
3
Yes
8
100%
Executive Directors
Paul Williams
No
8
100%
Damian Wisniewski
No
8
100%
Nigel George
No
8
100%
Emily Prideaux
No
8
100%
Non-Executive
Directors
Lucinda Bell
Yes
8
100%
Helen Gordon
Yes
8
100%
Cilla Snowball
4
Yes
2
100%
Sanjeev Sharma
Yes
8
100%
Robert Wilkinson
Yes
8
100%
Madeleine McDougall
Yes
8
100%
1
The table excludes the pre-strategy discussion which took place on 30 April
2025.
2
Percentages are based on the meetings entitled to attend for the 12 months
ended 31 December 2025.
3
Mark Breuer was independent on his appointment as Chairman in February
2021.
4
Cilla Snowball stepped down from the Board on 16 May 2025.
Executive Directors
Non-Executive Directors
135
Strategic report
Governance
Financial statements
Other information
Final report discussed with the Chairman
Final report presented to the Board
Ensures the long-term sustainable
success of the Company
Annual Board evaluation
On an annual basis, an evaluation process is undertaken
which considers the effectiveness of the Board, its principal
committees and individual Directors. The review identifies
areas for improvement, informs training plans for our
Directors and identifies areas of knowledge, expertise or
diversity which should be considered in our succession plans.
The Board follows a formal three-year cycle that was
developed to enable reviews to be led from a fresh
perspective, each year.
Year 2
Internal evaluation
facilitated by the
Senior Independent
Director
Year 1
Externally
facilitated
independent
review
Year 3
Internal
evaluation
facilitated by
the Chairman
Evaluation for the year ended 31 December 2024
The 2024 Board evaluation was internally facilitated by Mark
Breuer, our Chairman, and was outlined in the 2024 Report &
Accounts on page 139. As a result of this evaluation, the Board
identified a number of areas which it wished to focus on in 2025.
Focus area
Actions during 2025
Include a greater
focus on the long-
term strategy
Facilitated by an additional strategy
pre-meeting in April, the annual
strategy meeting in June and a
follow-up meeting in September.
Continue to receive
contributions from
management
Facilitated with eight Board
meetings held in 2025, with a
cross-section of senior management
invited to present.
Balance the
Board calendar
An additional Board meeting was
held in September 2025 to ensure
regular Board meetings throughout
the year.
Timeline for 2025 external
Board evaluation
Corporate governance statement
continued
Q1 2026
Planning meeting held by Chairman with
Independent Audit Limited
Board questionnaire distributed to
Directors
Interviews with Executive and Non-
Executive Directors
Attended meetings of the Board, Audit,
Risk, Remuneration, Nominations and
Responsible Business Committees
Q4 2025
Tender process commenced and received
proposals from a number of providers
Independent Audit Limited selected as
external Board evaluator
Non-disclosure agreement signed
Q1 2025
Tender process approved by Chairman and
Senior Independent Director
Shortlist of potential evaluators approved
Q4 2024
Derwent London plc
Report and Accounts 2025
136
Evaluation for the year ended 31 December 2025
Our external Board evaluation for the year ended 31 December
2025 was externally facilitated by the third party Independent
Audit Limited, which is accredited by the Corporate Governance
Institute. A formal tender process was organised in order to select
a Board evaluator, with each firm required to provide a written
proposal. In selecting our 2025 external evaluator, the following
areas were considered by the Chairman, Senior Independent
Director and Company Secretary:
the evaluator’s proposed method and approach;
experience, skills and references;
any potential conflicts of interest; and
whether they were an accredited board reviewer.
2025 evaluation process
The evaluation process was tailored to Derwent London based on
discussions with the Chairman and the Company Secretary. The
Company Secretary provided the third party evaluator with the
requested information to facilitate the review.
The evaluation commenced with a short questionnaire completed
by each Director. The individual interviews with the Directors and
the Company Secretary, which were conducted during November/
December and typically lasted for one hour and 30 minutes. The
evaluator also attended a series of committee meetings in Q4
2025, including Audit, Risk, Remuneration and Responsible
Business.
Feedback from the 2025 Board evaluation
The Board review confirmed that Derwent London has the
characteristics of a well-functioning Board. It was recognised that
there was a good degree of trust, confidence and healthy respect
between the Executive and Non-Executive Directors.
A copy of the Board evaluation report will be shared with the new
CEO, who will have the opportunity to meet Independent Audit
Limited in order to discuss its findings.
The Board reviewed and discussed the report findings at the Board
meeting on 24 February 2026. Following this, a number of areas
for improvement were identified and will be considered during
2026.
Stakeholders
To ensure that key stakeholder relationships are developed and
maintained during senior management’s succession.
Board and committee meetings
All Non-Executive Directors will be invited to attend any
committee meetings of interest, of which they are not already
a member.
The Audit Committee will continue to oversee delivery of
benefits from the new finance systems.
The Risk Committee’s 2026 agenda will include a review of the
Company’s preparedness for a cyber attack.
Ad hoc Board meetings to be held at the start or end of the
day where possible.
Board dinners
To ensure that there are at least two Board dinners in 2026.
Board skills matrix and training
To identify any Board training requirements for 2026.
Re-election of Directors
In accordance with the Code, all Directors will be putting
themselves forward for re-election at the 2026 AGM, with the
exception of Nigel George who will be stepping down from the
Board on 31 March 2026. In respect to Paul Williams, he will put
himself forward unless a new successor is already in place.
Following the formal performance evaluation, and taking into
account the Directors’ skills and experience (set out on page 135),
the Board believes that the re-election and election of all
Directors respectively is in the best interests of the Company.
Evaluation for the year ending 31 December 2026
In accordance with our three-year cycle, the performance
evaluation for the year ending 31 December 2026 will be
internally facilitated by the Senior Independent Director, Helen
Gordon.
Economic Crime and Corporate
Transparency Act 2023
The Economic Crime and Corporate Transparency Act 2023
(the Act) seeks to tackle economic crime and strengthen
corporate accountability. The Act has introduced a variety of
reforms with the aim of improving transparency from
corporate entities.
During the year, the legislative developments of the Act
have been closely looked into with the key changes identified
as:
enhanced powers for Companies House;
new filing requirements for entities;
mandatory identity verification for all directors, LLP
members, persons with significant controls and persons
submitting information to Company House; and
the introduction of a new corporate criminal offence,
‘failure to prevent fraud’.
We recognise the importance of early preparation with
legislative developments, and therefore during the year a
series of compliance exercises were undertaken. From April
2025, Companies House enabled directors to voluntarily
verify their identity. Each member of the Board of Directors
successfully completed the identity verification process
ahead of the legislation’s effective date of 18 November
2025.
By proactively completing the identity verification process
the Group is compliant with the new identity verification
requirements and is well-positioned to meet the enhanced
filing obligations in 2026.
In addition to the completion of the identity verification
process a series of activities have been undertaken during
the year in response to the other key changes under the Act.
Fraud Risk Management Framework / See page 148
Supply Chain Responsibility Standard / See page 168
Training on new ‘failure to prevent fraud’ offence / See page 155
137
Strategic report
Governance
Financial statements
Other information
Nominations Committee report
2026 focus areas
Appoint a new Chief Executive
Ensure an effective handover of responsibilities to a new
Chief Executive
Continue to support a smooth transition of responsibilities
from Nigel George to members of senior management
Review the tenure of Helen Gordon, as Non-Executive
Director
Continue to monitor the talent development pipeline
from across the business
To identify the Audit Committee chair successor as
Lucinda Bell approaches her nine-year tenure
Committee membership during 2025
Independent
Number of
meetings
Attendance
1
Mark Breuer
Yes
5
100%
Lucinda Bell
Yes
5
100%
Helen Gordon
Yes
5
100%
Sanjeev Sharma
Yes
5
100%
Cilla Snowball
2
Yes
1
100%
Robert Wilkinson
Yes
5
100%
Madeleine McDougall
Yes
5
100%
1
Percentages are based on the meetings entitled to attend for the 12
months ended 31 December 2025.
2
Cilla Snowball stepped down from the Board at the AGM on 16 May 2025.
Dear Shareholder,
I am pleased to present an overview of the
Committee’s work during the year. 2025 has
been a busy year, with significant focus on
succession planning of Executive Directors.
Over the coming years, the Committee will
continue to oversee and support a smooth
transition in executive leadership.
Executive Director
On 22 January 2026, Paul Williams informed the Board of his
retirement as Chief Executive and Director of the Company. The
Board has engaged an external search consultancy and
commenced the process to appoint his successor, which will form
a key area of focus for the Committee during 2026. To support
continuity and an effective handover of responsibilities, Paul has
agreed to remain as Chief Executive until his successor is
appointed.
Nigel George announced his retirement as a Director on 12 August
2025 and will stand down from the Board on 31 March 2026.
Considerable progress has been made in 2025 to ensure a smooth
transition of responsibilities amongst members of senior
management. Nigel has agreed to continue to support the Group
on a number of key projects over the next two years.
Succession planning / See page 140
Non-Executive Director succession
At the 2025 AGM, Dame Cilla Snowball stepped down from the
Board as she reached her ninth anniversary. A smooth transition
was made to Madeleine McDougall as the new Chair of the
Responsible Business Committee and the designated director for
gathering the views of the workforce. The Board continues to
consider the composition of the Board by regularly reviewing the
tenure of Non-Executive Directors.
Board composition and diversity
The Board continues to recognise the role of diversity in its
composition and remains compliant with the Listing Rules, FTSE
350 Women Leaders Review and the 2024 Parker Review target.
The Parker Review December 2027 target remains a work in
progress as we continue to aim for at least 15% of our senior
management team self-identifying as being of an ethnically
diverse background.
Our progress in diversity / See page 141
Further engagement
If you wish to discuss any aspect of the Committee’s activities, I
will be attending the forthcoming AGM on 15 May 2026 and would
welcome your questions. I am also available via our Company
Secretary, David Lawler.
Telephone:
+44 (0)20 7659 3000
or
Email:
company.secretary@derwentlondon.com
Mark Breuer
Chair of the Nominations Committee
25 February 2026
Mark Breuer
Chair of the Nominations Committee
Derwent London plc
Report and Accounts 2025
138
Committee composition and performance
Our Committee consists of five independent Non-Executive
Directors as well as our independent Chairman. At the request of
the Committee, members of the Executive Committee, Executive
Directors, members of the senior management team and
external advisers may be invited to attend all or part of any
meeting, as and when appropriate. During the year under review,
the Committee held five meetings (2024: four meetings).
The 2025 evaluation of the Board, its committees and individual
Directors was externally facilitated by the third party
Independent Audit Limited, in accordance with our three-year
cycle of evaluations (see page 137). The review raised no
significant matters or areas of concern in respect to the
operation of the Committee.
The Committee’s role and responsibilities are set out in the terms
of reference, which were last updated in June 2025 and are on
the Company’s website at:
www.derwentlondon.com/
investors/governance/board-committees
On a regular basis, the Committee considers the composition of
the Board and its committees in terms of its balance of skills,
experience, length of service, knowledge of the Group and wider
diversity considerations, alongside considering whether each
Non-Executive Director has sufficient time to discharge their
duties. The composition review conducted in 2025 confirmed that
the Board, and the membership of its five principal committees,
continues to be appropriate.
The Board’s diversity policy is on page 140. In respect of its
committees, the Board requires that each committee has at
least one female member and/or one member from an ethnically
diverse background.
Board and committee composition
The table below provides an overview of the composition of the
Board’s five principal committees as at 31 December 2025.
Audit
Risk
Remuneration
Nominations
Responsible
Business
Mark Breuer1
Chair
Helen Gordon
Chair
Lucinda Bell
Chair
Madeleine McDougall
Chair
Robert Wilkinson
Sanjeev Sharma
Chair
Number of independent
NEDs:
3
4
3
6
2
Number of Executive
Directors:
—
—
—
—
2
Number of employee
representatives:
—
—
—
—
4
Total membership:
3
4
3
6
8
1
Mark Breuer was independent on his appointment as Chairman in February 2021.
Following the Committee’s review, it was confirmed that the
membership of the five principal committees continues to be
appropriate, effective and in accordance with the UK Corporate
Governance Code 2024.
Non-Executive Directors’ tenure
The Committee monitors a schedule of the Non-Executive Directors’ tenure and reviews potential departure dates assuming the
relevant Directors are not permitted to serve more than three three-year terms (nine years) from their appointment date, unless in
exceptional circumstances.
2017
2018
2019
2020
2021
2022
2023 2024 2025 2026
2027
2028 2029 2030
2031
2032 2033
Helen Gordon
Lucinda Bell
Mark Breuer
Sanjeev Sharma
Robert Wilkinson
Madeleine McDougall
Succession planning / See page 140
Time remaining
Years completed
139
Strategic report
Governance
Financial statements
Other information
Succession planning
Nominations Committee report
continued
Executive Directors
The Committee considers the Group’s succession planning on a
regular basis to ensure that changes to the Board are proactively
planned and co-ordinated.
Paul Williams announced his retirement as Chief Executive and
Director of the Company on 22 January 2026 after 38 years of
service. A third party external search consultancy has been
appointed to commence the process to appoint a successor. It
has been agreed that Paul will remain as Chief Executive until his
successor has been appointed and an effective handover of
responsibilities has been made. The Committee will remain fully
engaged in the succession plans of a new Chief Executive in
2026.
On 12 August 2025, it was announced that Nigel George will step
down from the Board on 31 March 2026. Due to the size of the
business and current composition of the Board it was agreed
that a replacement would not be required for Nigel’s role on the
Board, and instead Nigel’s responsibilities will be allocated
amongst members of senior management. During the year, a
smooth transition of responsibilities has been made and Nigel
has agreed to continue to support the Group on a number of key
projects over the next two years.
Non-Executive Directors
Over the last couple of years, the Group has appointed two new
Non-Executive Directors following retirement tenures. Due to this
recent activity, it is envisaged that there will be no changes to
the composition of Non-Executive Directors during 2026 as the
Committee remains confident in the skills and knowledge of the
Board (see page 135).
Helen Gordon will reach her ninth anniversary as a Non-Executive
Director in December 2026. The Committee recognises Helen’s
in-depth knowledge of London Real Estate and therefore
proposes to extend Helen’s tenure for up to two years from
December 2026 in order to support in facilitating the transition
and succession of a new Chief Executive. Additionally, as Lucinda
Bell reaches her ninth year on the Board in 2027 the Committee
will start to consider a successor for the Chair of the Audit
Committee.
Appointment reviews
The external Board evaluation confirmed that the Board and its
committees continue to operate effectively supported by
leadership and constructive challenge from the Non-Executive
Directors. During the year, no appointment reviews were required
to be made for the Non-Executive Directors.
Board biographies / See pages 118 and 119
Non-Executive Director tenure / See page 139
Board appointments
The Board’s appointment policy requires that, where possible,
each time a Director is recruited at least one of the shortlisted
candidates is female and at least one of the candidates is from
an ethnically diverse background. Whilst we have identified areas
where we could further improve our diversity balance, principally
our ethnic diversity, we do not positively discriminate during the
recruitment process.
The Company provides new Directors with a comprehensive and
tailored induction process which includes visiting a number of the
Group’s properties, meetings with the Group’s audit partner and
corporate lawyer, together with meetings with the Executive
Directors, Executive Committee and senior management.
Induction programmes are developed by the Group’s Company
Secretarial team and approved by the Chairman. As the Group
prepares for the appointment of a new Chief Executive an
in-depth induction programme will be prepared. If considered
appropriate, new Directors are also provided with external
training that addresses their role and duties as a Director of a
quoted public company. We aim to limit the amount of
information provided as reading material during an induction
process. All new Directors are provided with access to our
electronic Board paper system.
Executive Committee
The Executive Directors are responsible for the Group’s succession
plans below Board level. The Committee receives periodic
updates on these succession plans and monitors the
development of the executive management team below the
Board, to ensure that there is a diverse supply of senior
executives and potential future Board members.
During the year, there were no new appointments to the
Executive Committee. As at 31 December 2025, the composition
of the Executive Committee consisted of four Executive
Directors, the Company Secretary and 12 senior managers. The
Executive Committee is now 41% female, achieving the FTSE 350
Women Leaders Review target of 40% (see page 141).
As Directors we have a duty to ensure the long-term success of the
Company, which includes ensuring that we have a steady supply of talent
for executive positions and established succession plans for Board changes.
Derwent London plc
Report and Accounts 2025
140
A diversified Board brings constructive challenge and fresh
perspectives to discussions. We consider diversity, in its widest
sense (and not limited to gender), during our Board and
committee composition reviews as well as during the
development of recruitment specifications.
We are pleased that Derwent London’s efforts to actively
promote the importance of diversity has ensured our Board
and senior management teams achieve the targets set by the
FTSE 350 Women Leaders Review, the Listing Rules and the
Parker Review.
Our progress in diversity
Our compliance
Our progress as at 31 December 2025
Targets
Status
Listing Rule
Parker Review 2024 target
Parker Review 2027 target
FTSE Women Leaders Review
Fully compliant:
In progress
The Listing Rules
The Listing Rules include specific diversity targets which require companies to report against on a ‘comply or explain’ basis.
Target
Status
At least 40% of the Board are women
40% of our Board are women
At least one of the senior Board positions is held by a woman
Helen Gordon is our Senior Independent Director
At least one member of the Board is from a minority ethnic background
Sanjeev Sharma joined the Board in October 2021
The Parker Review
The Parker Review continues to monitor and champion ethnic diversity on boards. In accordance with the Parker Review’s latest
recommendations, we have set a target of at least 15% of our senior management team self-identifying as being of an ethnically
diverse background by December 2027. The Board recognises that this is a challenging target.
December 2024 target
Status
At least one director from an ethnically diverse background
Sanjeev Sharma joined the Board in October 2021
December 2027 target
Status
At least 15% of our senior management team self-identifying as being of
an ethnically diverse background
8% of our senior management team self-identify as
being ethnically diverse
FTSE 350 Women Leaders Review
Women on
the Board
40
%
Women on the
Executive Committee
1
41
%
Female Non-Executive
Directors
2
60
%
Female direct reports
of the Executive Committee
3
50
%
Target
40
%
Female
Male
1
The combined diversity balance of the Executive Committee and its direct reports (excluding administrative and support staff) is 48% women.
2
Independent Non-Executive Directors, excluding the Chairman.
3
Direct reports to the Executive Committee, excluding administrative and support staff, is 50% women. Direct reports to the Executive Committee,
including administrative and support staff, is 56.3% women.
141
Strategic report
Governance
Financial statements
Other information
Audit Committee report
Dear Shareholder,
I am pleased to provide you with an overview
of the Committee’s main activities and areas
of focus during the year.
External Audit
As Sandra Dowling reached the end of her tenure as the Group’s
Audit Partner, a smooth transition has been made during the
year to Allan McGrath. The Committee continues to be pleased
with the performance and level of challenge provided by the
PwC external audit team.
External audit / See page 150
Non-financial assurance tender
During 2025, the Committee conducted a competitive tender in
respect to non-financial assurance. The tender was
comprehensive and saw the appointment of PwC. Following
completion of the 2025 non-financial assurance, the Committee
was pleased with the synergy achieved by PwC in providing the
combined assurance to the Group. We recognise that ESG
disclosures continue to be a key feature of reporting and
therefore during the tender, the opportunity was taken to further
align the key performance indicators that are assured with the
needs of our stakeholders.
Non-financial assurance tender / See page 145
Material controls
We remain on schedule for achieving compliance with the UK
Corporate Governance Code 2024 in respect to the new
declaration on the effectiveness of material controls to be
included in the 2026 Report & Accounts. During the year, updates
on the material controls project were provided to members of
both the Audit and Risk Committees, which included a ‘dry run’
of the material controls assurance pack.
Our material controls / See page 147
Finance system project
Significant progress has been made during 2025 on the finance
system project, which remains on target to ‘go live’ in 2026. The
Committee has received regular updates on the project and
discussed, in depth, the benefits and efficiencies to the wider
business that will come from a new cloud-based and better
integrated system solution.
Finance system project / See page 143
Further engagement
If you wish to discuss any aspect of the Committee’s activities, I
will be attending the forthcoming AGM on 15 May 2026 and
would welcome your questions. I am also available via our
Company Secretary, David Lawler.
Telephone:
+44 (0)20 7659 3000
or
Email:
company.secretary@derwentlondon.com
Lucinda Bell
Chair of the Audit Committee
25 February 2026
2026 focus areas
Ensure that the Board is well-positioned to make a
declaration on the effectiveness of material controls as at
31 December 2026
Monitor the implementation of the new finance system
during 2026
Review the appointment of Knight Frank as external
valuers of the Group’s portfolio in accordance with the
Valuer Appointment Policy
Committee membership during 2025
Independent
Number of
meetings
Attendance
1
Lucinda Bell
Yes
3
100%
Sanjeev Sharma
Yes
3
100%
Cilla Snowball
2
Yes
1
100%
Robert Wilkinson
Yes
3
100%
1
Percentages are based on the meetings entitled to attend for the 12
months ended 31 December 2025.
2
Cilla Snowball stepped down from the Board at the AGM on 16 May 2025.
Lucinda Bell
Chair of the Audit Committee
Derwent London plc
Report and Accounts 2025
142
Committee composition and performance
During the year under review, the Committee was composed of
independent Non-Executive Directors with a wide range of
experience, including real estate and finance (biographies are
available on pages 118 and 119). The Board considers that the
Committee (including its Chair, Lucinda Bell) is composed of a
sufficient number of financial experts to discharge its duties, with
an appropriate level of recent and relevant financial experience.
At the request of the Committee Chair, meetings are attended
by the Board Chairman, the Head of Internal Audit, the external
Auditors, and members of the Group’s senior management
team. To further facilitate open dialogue, the Committee holds
private sessions with the internal and external Auditors without
members of management being present.
During 2025, the Committee held three scheduled meetings
(2024: four meetings), two of which included an update from the
Group’s external property valuers.
The 2025 evaluation of the Board, its committees and individual
Directors was externally facilitated by the third party,
Independent Audit Limited, in accordance with our three-year
cycle of evaluations (see page 137). The review raised no
significant matters or areas of concern in respect to the
operation of the Committee.
The Committee’s role and responsibilities are set out in the terms
of reference, which were last updated in November 2024. The
Audit Committee terms of reference are available on the
Company’s website at:
www.derwentlondon.com/investors/
governance/board-committees
Financial reporting
One of the Committee’s principal responsibilities is to review and
report to the Board on the clarity and accuracy of the Group’s
financial statements, including the annual Report & Accounts
and interim statement. When conducting its reviews, the
Committee considers:
the appropriateness of accounting policies and practices
applied (see note 40 on pages 271 to 275) including in respect
to any significant transactions during the year;
material accounting assumptions and estimates made by
management (see note 3 on page 232);
significant judgements and key audit matters identified by the
external Auditor (see page 144 and pages 219 to 220);
the effectiveness and application of internal financial controls
(see page 149); and
compliance with relevant accounting standards and other
regulatory financial reporting requirements including the UK
Corporate Governance Code and European Single Electronic
Format (ESEF) requirements.
The Committee was pleased to be awarded ‘Audit Disclosure of
the Year’ by the Chartered Governance Institute UK & Ireland on
4 November 2025. The award recognised the high standard of
reporting and the Group’s ongoing commitment to informative
and transparent disclosures.
Finance system project
The Committee approved the commencement of the new
finance system project in April 2024 with the primary
objective of upgrading the core financial system to a cloud-
based solution with enhanced functionality, improved
integration and streamlined reporting.
Project leadership
To ensure the effective delivery and implementation of the
finance project, a dedicated project team was established.
The project team was tasked with evaluating the
requirements, ensuring an appropriate timeline, engaging
with key stakeholders and managing key risks throughout the
project.
Vendor selection and peer engagement
During the preliminary stages, the project team evaluated
various software solutions and made recommendations to
the Committee. Additionally, engagement was sought with
peers to obtain valuable insights on their experiences with
differing software solutions and transformation projects.
After deliberation, the Committee agreed with the project
team’s recommendation.
Risk management
The Committee continues to recognise the strategic
importance of the finance system transformation project and
therefore, alongside the Risk Committee, deemed it
appropriate to update the Group’s Schedule of Principal Risks
in 2024 to include a new risk: ‘Digital transformation risk’ (see
page 109).
Key milestones achieved
To date, the Committee is pleased with the progress made on
the implementation of the project but recognises that the
next six months are critical to achieve the target ‘go live’ in
2026.
Approval to commence project
Q2 2024
Software demonstrations
and peer engagement
Q3 2024
Business case and key vendors approved
Q4 2024
‘Go live’ date
Post-implementation review
H2 2026
Process scoping, detailed walkthroughs
and design workshops
Formal vendor assessments of
supplementary software suppliers
System design build
H1 2025
Development of detailed project plan
System build
Data cleansing and change management
Data migration and training
H1 2026
143
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Governance
Financial statements
Other information
Significant financial judgements, key assumptions and estimates
Any key accounting issues or judgements made by management are monitored and discussed with the Committee throughout the
year. The table below provides information on the key issues discussed with the Committee in 2025 and the judgements adopted.
Issue
Judgements or estimates
Outcome
Compliance with the Real Estate Investment Trust (REIT) taxation regime
Should the Group not comply with UK
REIT regulations, it could incur tax
penalties or ultimately be expelled from
the REIT regime, which would have a
significant impact on the financial
statements.
As a REIT, the Group benefits from tax
advantages. Income and chargeable gains
on the qualifying property rental business
are exempt from corporation tax. Income
that does not qualify as property income
within the REIT rules is subject to
corporation tax in the normal way. There
are a number of tests that are applied, and
in relation to forecasts, to ensure the Group
remains well within the limits allowed of
those tests.
The Group has a qualified and experienced
Head of Tax who the Committee meets at
least annually. The Committee noted the
frequency with which compliance with the
tests and regulations was reported to the
Board and considered the substantial
margin by which the Group complied.
Based on this, and the level of headroom
shown in the latest Group forecasts, the
Committee agreed that sound application
of judgement has been made.
Valuation on the Group’s property portfolio
Due to its size, nature and the direct
impact upon the Group’s net asset value,
the Committee reviews the assumptions
and estimates used in the valuation
carried out by the external valuers.
The valuation considers a range of
assumptions including future rental income,
investment yields, anticipated outgoings
and maintenance costs, future
development expenditure and appropriate
discount rates. The external valuers also
make reference to market evidence of
transaction prices for similar properties and
take into account the impact of climate
change and related environmental, social
and governance (ESG) considerations.
These are reflected in the financial
statements and valuations (see note 15 on
pages 243 to 247).
The valuation is performed twice yearly by
the external valuers. Due to its significance,
the valuation is also reviewed by the
external Auditor. The Committee reviewed
the underlying assumptions used in the
valuation of the Group’s development
property portfolio in addition to the
external valuer’s objectivity and
methodology. These procedures enabled
the Committee to be satisfied with the
assumptions and estimates used in the
valuation of the Group’s property portfolio.
(see note 15 on pages 243 to 247).
Audit Committee report
continued
25 Baker St
W1
Derwent London plc
Report and Accounts 2025
144
Portfolio valuation
An important area of reporting risk relates to the valuation of our
portfolio. Knight Frank have been our principal valuers since
December 2022 and are responsible for valuing the property
portfolio for both our interim and year end results. Additionally,
Knight Frank succeeded Savills as valuers of our Scottish
portfolio, which confirmed the Group’s full compliance with the
Royal Institution of Chartered Surveyors (RICS). In accordance
with the Group’s Valuer Appointment Policy, the Group’s external
valuer will be tendered at least every five years, subject to annual
assessment of their effectiveness and objectivity.
As at 31 December 2025, our portfolio was valued at £5.1bn
(2024: £5.0bn) and principally consists of 61 properties. Further
information on our valuation is on pages 36 to 40. The valuation
of our portfolio is a major component of EPRA net tangible
assets (NTA) and is a key determinant for our investors when
assessing our performance. Movements in the valuation are a
significant part of how we measure our progress and a material
determinant of the Group’s total accounting return.
Due to its significance, the biannual valuation is overseen by the
Audit Committee and is also subject to a detailed internal review
by our Investment team, which consists of experienced and
qualified professionals.
Key matters discussed during the meetings in 2025 included:
the impact of the macroeconomy and valuation outlook for
our London portfolio;
the cost of EPC improvements included in the valuation;
the progress of our major on-site developments and the
impact on the valuation, including 25 Baker Street W1 and
Network W1; and
rental growth and occupational demand within the portfolio.
Effectiveness of the Group’s valuers
A review into the effectiveness of the external valuer is
performed after the year end and interim valuations, with
assistance from Nigel George, Executive Director.
The effectiveness reviews for 2025 were conducted in February
and August and considered:
experience, qualification and objectivity of the Valuation
team;
quality of presentation and data; and
robustness of the valuation.
At both meetings it was concluded that the external valuer
performed to a high standard and the timetable for delivery was
achieved.
Property review / See pages 35 to 51
Regeneration projects / See pages 19 to 21
Central London Office Market / See page 41
Non-financial
assurance
The Group is committed to its sustainability initiatives and
continues to make good progress towards its target of net
zero carbon by 2030. The Committee ensures that the
effects and consequences of climate change are being
adequately reflected in our financial statements and
valuations.
Technical briefing
To further support the Committee’s oversight of non-
financial assurance, a technical briefing was held in
November 2025. The Committee remains committed to
monitoring developments in best practice and will continue
to seek training/professional guidance where required.
Non-financial assurance tender
In alignment with governance standards, the Committee
conducted a formal tender process for the role of non-
financial assurance provider during the year to cover both
sustainability and health and safety. Following the 2025
non-financial assurance audit, the Committee is pleased
with the synergy created by PwC in delivering the combined
assurance to the Group. PwC was selected as the Group’s
non-financial assurance provider following a comprehensive
process, including an in-depth evaluation of candidate
presentations and capabilities.
Impact of climate change and ESG on the valuation
Following an independent third party assessment in 2021,
approximately £97m of capital expenditure was identified to
achieve 2030 EPC compliance across our London commercial
portfolio. This figure is reviewed annually and has been revised to
£73.7m to reflect the latest scope (change in building regulations),
inflation, disposals, and the work carried out to date. Of this,
Knight Frank made a specific deduction of £31m in their December
2025 external valuation. In addition, further amounts have been
allowed for general upgrades between assumed tenant vacancies.
RICS valuation – Global Standards
Valuations are undertaken in accordance with the ‘RICS Valuation
– Global Standards’ (the Standards). Knight Frank are responsible
for monitoring any forthcoming regulation changes. The most
recent changes came into effect on 31 January 2025 and were
comprised of new Standards on automation, artificial
intelligence and ESG, detailing the ESG considerations that a
valuer should consider and report upon.
Old Street Quarter EC1
The Committee considered the work carried out by the Finance
team to determine the appropriate pre and post-acquisition
accounting for the Old Street Quarter EC1 site, anticipated to
complete no earlier than late 2027. The Committee considered the
anticipated cash inflows and outflows, the key assumptions made
including the mix of end use type and value, planning regulations,
inflation and likely project timeline.
145
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Governance
Financial statements
Other information
Review of the 2025 Report & Accounts
At the request of the Board, the Committee was asked to review
the Group’s Report & Accounts and to consider whether, taken as
a whole, it was fair, balanced and understandable. In carrying
out its review, the Committee had regard to the following:
Fairness and balance
Is the report open and honest?
Are we reporting on our weaknesses, difficulties and
challenges alongside our successes and opportunities?
Do we provide clear explanations of our KPIs and is there
strong linkage between our KPIs and our strategy?
Do we show our progress over time and is there consistency in
our metrics and measurements?
Understandable
Do we explain our business model, strategy and accounting
policies simply, using precise and clear language?
Do we break up lengthy narrative with quotes, tables, case
studies and graphics?
Do we have a consistent tone across the Report & Accounts?
Are we clearly ‘signposting’ to where additional information
can be found?
Specific considerations for the 2025 Report &
Accounts
Inclusion of an EPRA earnings and total accounting return
outlook in relation to the Group’s future prospects.
The macroeconomic factors influencing the property market
and the Group’s main focus areas.
Publication of updated Net Zero Carbon Pathway.
Consultation with top 20 shareholders and proposed 2026
Remuneration Policy.
The tender and appointment of PwC as the Group’s non-
financial assurance provider.
Disclosures in respect to Old Street Quarter EC1.
Enhanced disclosures on Fraud Risk Management in response
to the new corporate offence, ‘failure to prevent fraud’ under
the Economic Crime and Corporate Transparency Act 2023.
The preparations undertaken to achieve compliance with the
UK Corporate Governance Code 2024 in respect to the
effectiveness of our material controls from 1 January 2026
onwards.
Confirmation of our compliance with the Audit Committees
and the External Audit: Minimum Standard.
The Committee paid particular attention to these changes to
ensure they did not adversely impact the balance and clarity of
the Report & Accounts.
Following its review, the Committee confirmed to the Board that
the 2025 Report & Accounts is fair, balanced and provides
sufficient clarity for shareholders to understand our business
model, strategy, financial position and performance.
Audit Committee report
continued
Audit Committees and the External Audit: Minimum
Standard
The Committee confirms that for the year ended 31 December
2025, it has complied with the Audit Committees and the
External Audit: Minimum Standard (the Standard).
The Committee has outlined in the table below the activities it
has undertaken to meet the requirements of the Standard during
the year.
Reporting area
Our activities
Significant issues that the Committee
considered relating to the financial statements
See pages 143
and 144
Application of the entity’s accounting policies
See page 271
Shareholders’ request for certain matters to be
covered in an audit
1
See note 1
below
Assessment of the independence and
effectiveness of the external audit process
See page 150
External audit tender and appointment
2
See page 150
An explanation of how auditor independence
and objectivity has been safeguarded if
non-audit services are provided
See pages 150
and 151
Details of the findings of a regulatory
inspection of the quality of the company’s
audit
3
See note 3
below
1
As at 31 December 2025, we have not received any requests from shareholders
that certain matters be covered in an audit.
2
A competitive external audit tender was last conducted in 2023 and saw the
reappointment of PwC.
3
No regulatory inspection of the quality of the Company’s audit took place in
2025.
Monitoring future regulatory developments
UK Corporate Governance Code 2024
The revised UK Corporate Governance Code was published in
2024 and became applicable to financial years beginning on or
after 1 January 2025. As at 31 December 2025 the Group is
compliant with the Code, with the exception of provision 29,
regarding internal controls, which is applicable to financial years
beginning 1 January 2026.
During the year, significant work has been undertaken on the
Group’s material controls in preparation for the Board to make
an effectiveness declaration in the 2026 Report & Accounts. The
declaration on the effectiveness of material controls will include:
a description of how the Board has monitored and reviewed
the effectiveness of the risk management and internal control
framework;
a declaration of effectiveness of the material controls as at
the balance sheet date; and
a description of any material controls which have not
operated effectively as at the balance sheet date, actions
taken and/or proposed to improve them, and any action taken
to address previously reported issues.
Further information on the work undertaken to date is on page
147.
Derwent London plc
Report and Accounts 2025
146
Internal Audit
The Head of Internal Audit reports directly to the Committee and
administratively to the Chief Financial Officer, with a remit to
provide independent assurance over the Group’s key risks.
Internal Audit’s purpose, authority and responsibilities are
defined in the Internal Audit charter, which is periodically
reviewed and approved by the Committee.
Internal Audit’s activity is primarily driven by the annual internal
audit plan which is discussed with management and jointly
approved by the Audit and Risk Committees. The plan is a
mixture of assurance and advisory reviews and is aligned to the
Group’s principal risks. It is reviewed throughout the year to
ensure it remains appropriate, and any changes to the plan are
approved by the Committee.
Both the Audit and Risk Committees receive regular updates on
internal audit activity and monitor the implementation status of
recommendations.
Reviews performed by Internal Audit and external assurance
providers during 2025 include:
Procurement: Property Management
HR & Payroll Processes & Controls
Critical Incident Management Procedures
External & Internal Penetration Tests – Corporate & Portfolio
Procurement: Development Projects
Accounts Payable Processes & Controls
Failure to Prevent Fraud Compliance
Cyber Security Foundations
Annual review of the internal audit function
The Audit Committee reviewed the effectiveness of the internal
audit function in February 2026 and is satisfied that it operates
independently, objectively, and in accordance with relevant
professional standards and codes of practice. The Committee
considers internal audit to have provided robust assurance and
valuable insight during the reporting period, supporting the
Committee in fulfilling its oversight responsibilities.
2026 Internal Audit Plan
The 2026 Internal Audit Plan will be weighted towards the
provision of advisory reviews across various elements of the
finance system project, given the importance of successful
delivery of the project.
Preparations have continued throughout the year to ensure
readiness for compliance with the requirements of provision 29 of
the UK Corporate Governance Code 2024, for the year ending
31 December 2026.
We have defined our material controls as those that are most
important in mitigating key risks that threaten the long-term
sustainability of the business, and where a failure of their
effective operation, or a resulting omission and/or misstatement
of information caused by the control failure is likely to influence
decisions made by users of the information. They have been
grouped into six categories as set out in the diagram above.
Having undertaken a proactive and comprehensive programme
over the past two years to ensure readiness, Derwent London is
well-prepared to comply with the new requirements.
Key milestones achieved to date have included the review and
agreement of Derwent London’s material controls and an
assurance framework by the Board, supported by the Audit and
Risk Committees. A range of stakeholder engagement has taken
place, along with a ‘dry run’ of the draft assurance pack to
provide an example of the evidence that will be collated to
inform the declaration.
Our progress to compliance with provision 29 / See page 117
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147
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Other information
Audit Committee report
continued
Fraud Risk Management
During the year, both the Audit and Risk Committees received a
comprehensive update on the Group’s Fraud Risk Management
Framework, which helps Derwent London assess its fraud
maturity and ensures key elements of an effective control
environment are in place. Its existence, supported by a detailed
Fraud Risk Assessment, evidences the wide range of governance
and monitoring practices in place, demonstrating a commitment
to continuously review and enhance fraud controls. Together, the
Framework and Assessment enable Directors to report on the
adequacy of measures in place.
Fraud Risk Management Framework
The Group’s Fraud Risk Management Framework is comprised of
the following components:
Fraud Governance:
Well-protected organisations have a
strong governance and reporting structure with clearly
defined roles and responsibilities around fraud risk.
Fraud Risk Assessment:
A comprehensive assessment is
fundamental to capture key fraud risks, assess the impact and
identify key controls to prevent instances of fraud.
Fraud Prevention:
Operationally efficient controls that
protect the organisation from internal and external fraud.
Fraud Detection:
Processes and systems that actively look
for fraud in key risk areas.
Fraud Response:
The ability to rapidly and effectively
investigate fraud, learn from incidents, identify root causes
and prevent recurrences.
An internal assessment of Derwent London’s Fraud Risk
Management Framework was undertaken and it was determined
it remains strong, with no material deficiencies identified.
Fraud Risk Assessment
A Fraud Risk Assessment was conducted to assess inherent risk
(before controls) and residual risk (after controls) levels for key
fraud-related areas facing Derwent London’s operations. All
mitigated risk levels were within tolerances, and management
confirmed there were no known instances of fraud during the
year. Management remain committed to continuously improving
the control environment and opportunities to further strengthen
existing fraud controls will be leveraged as part of the new
finance system implementation.
Both the Fraud Risk Management Framework and Fraud Risk
Assessment provide a comprehensive overview of fraud risks and
controls in place. While fraud remains an inescapable threat,
with a suite of robust controls in place, supported by a culture
that has a zero-tolerance to fraudulent behaviour, Derwent
London is well-positioned to both prevent and detect fraud.
Throughout the year, the Committee has remained informed on
the new corporate offence, ‘failure to prevent fraud’ under the
Economic Crime and Corporate Transparency Act 2023 (the Act),
which became applicable from 1 September 2025.
The only defence available for an organisation is to have
‘reasonable procedures’ in place. An in-depth gap analysis
against the Home Office’s published guidance was undertaken to
review the Group’s procedures against the Home Office’s six
principles for establishing adequate procedures.
The Group’s compliance with the relevant part of the Act and the
strength of our ‘reasonable procedures’ were subject to
independent review and assessment by Internal Audit. The review
found a sound level of fraud prevention and detection controls to
be in place, with only minor opportunities for continued
improvement noted, reinforcing the Group’s commitment to
maintaining robust fraud governance procedures and the
importance of safeguarding both the Company and wider
stakeholder interests.
The following key prevention procedures are in place to mitigate
the risk of fraud occurring within the organisation.
During the year, a series of activities have been undertaken in
response to the legislative developments, including:
mandatory compliance training for all employees during Q2
2025. The training focused on fraud and market abuse, with a
dedicated module addressing the new ‘failure to prevent
fraud’ offence;
bespoke training from Burges Salmon for senior managers on
the new ‘failure to prevent fraud’ offence; and
publication of a third party whistleblowing reporting line to
existing suppliers.
Further information on the work undertaken to ensure
compliance with the Act is detailed on page 137.
Fraud prevention procedures
Top-level commitment
Continuous monitoring and reviewing
Communication and training
Due diligence
Risk-based procedures
Ongoing risk assessment
Derwent London plc
Report and Accounts 2025
148
Internal controls
Our internal control environment allows the Company to
safeguard its assets, prevent and detect material fraud and
errors, and ensure accuracy and completeness of its accounting
records which are used to produce reliable financial information.
Our internal controls continue to mature. During 2025, we have
undertaken the following key actions to further strengthen our
internal controls:
Implemented a new payroll system with controls that better
help prevent and detect potential fraud and errors.
Expanded the whistleblowing hotline to enable suppliers to
also report concerns of suspected wrongdoing (previously
limited to staff).
Implemented a data analytics tool to help streamline the data
collection and review process for VAT returns to ensure a
digital end-to-end process.
Enhanced the supplier portal to further streamline the set-up
process and strengthen due diligence checks performed prior
to onboarding.
Enabled an employee risk score feature in our cyber security
training platform to drive a more risk-based approach to
training that tailors content based on employee engagement,
knowledge and risk profile.
Implemented several system-based policies that provide
enhanced email security and better protect against email
spoofing of our domain.
Obtained our Cyber Essentials Plus recertification.
Implemented a range of recommendations raised by Internal
Audit and other external assurance providers to address
deficiencies in control design and effectiveness to further
strengthen the financial control environment for areas subject
to review.
Effectiveness review
The Committee receives detailed reports on the operational
effectiveness of internal financial controls from members of the
senior management team and Internal Audit throughout the
year. In addition, the outcome of the external audit at half year
and year end is considered in respect of ongoing enhancements
to internal controls.
On an annual basis, the Committee reviews the Group’s Fraud
Risk Management Framework (the Framework), and detailed
Fraud Risk Assessment. The Framework helps management
assess and improve upon its fraud resilience measures across a
range of key components, while the Fraud Risk Assessment sets
out the detailed controls which safeguard the Company and help
prevent and detect fraud and errors. These documents were
reviewed in light of the new ‘failure to prevent fraud’ offence and
updated accordingly. See page 148 for more details.
As training and staff awareness forms part of the Group’s
internal control framework, the Risk Committee receives updates
on key policies and procedures in place and how these are being
communicated and complied with by our staff. Further
information is on pages 124 and 163.
Following the Audit and Risk Committees’ reviews (see page 103),
the Chairs of each Committee confirmed to the Board that they
are satisfied that the Group’s internal control framework
(financial and non-financial) and risk management procedures:
operated effectively throughout the period; and
are in accordance with the guidance contained within the
FRC’s Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting.
Our internal financial controls operate within the following control environment and context:
Culture
Our values and strategic objectives are underpinned by our Code of Conduct and Business Ethics,
which sets clear expectations for ethical behaviour. Senior management and the Board set a
strong ethical tone and promote a culture that encourages employees to ask questions and
challenge requests that do not follow standard procedures.
Governance and oversight
An independent and engaged Board, Audit Committee and Risk Committee oversee internal
controls and risk management, with governance structures in place that support accountability,
transparency and collaboration. A relatively flat structure allows close supervision and monitoring
of key controls and business activity by members of the Executive Committee.
Group and organisational
structure
We operate within a simple and transparent Group legal structure. Roles, responsibilities and
authority levels are clearly defined, along with segregation of duties across all core business
processes.
Income/costs
Rent, service charge, administrative costs (mainly salaries), interest and other finance costs are
largely predictable. Quarterly management accounts analyse income and expenditure and are
compared against the prior year and budget, with unexpected variances investigated and
explained to management, who closely monitor financial performance.
Capital costs
Capital expenditure represents the Group’s largest costs, with all projects subject to prior approval
and ongoing budget monitoring. The majority of our significant payments are to development
contractors, whose invoices are signed off by external monitoring agencies before additional layers
of internal review, authorisation and payment.
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Other information
Qualification
and expertise
The qualification and
expertise of the Lead Audit
Partner and the wider
audit team
Resources
The availability of
resources to perform a
comprehensive and
timely audit
Non-audit services
Adherence to the
Non-Audit Services Policy
Judgements
and estimates
Quality of audit in respect
of key judgements and
estimates
Planning
Quality of planning and
ability to meet deadlines
Quality
Quality of the audit plan,
overall audit and
outcome report
The Committee has primary responsibility for managing the
relationship with the external Auditor, including assessing its
performance, effectiveness and independence annually and
recommending to the Board its reappointment or removal.
The Company has complied with the provisions of the
Competition and Markets Authority’s order for the financial year
under review in respect to audit tendering and the provision of
non-audit services. The Committee last conducted a competitive
external audit tender in 2023 and will conduct the next tender no
later than 2033.
The Committee conducts an effectiveness review of the external
Auditor on an annual basis which aims to ensure a robust audit is
performed, auditor performance is optimised and encourages
candid feedback and communication between the Auditor and
the Committee. The aspects considered by the Committee
during its review are detailed in the diagram below.
Audit quality can be challenging to define and measure. The
Committee utilises Audit Quality Indicators (AQIs) to assess
PwC’s audit quality. The Committee finds the use of AQIs an
effective addition to its review processes. The AQIs for the 2025
year end were:
experience and continuity of the audit team;
management and engagement team feedback;
success in achieving the agreed timetable;
number of audit misstatements, both adjusted and
unadjusted; and
number of control findings.
Audit Committee report
continued
After taking all of these matters into account, the Committee
concluded that PwC had performed their audit effectively,
efficiently and to a high quality.
An important aspect of managing the external Auditor
relationship is ensuring there are adequate safeguards to protect
auditor objectivity and independence. In assessing this matter,
the Committee considered:
the Auditor’s independence letter which annually confirms its
independence and compliance with the Financial Reporting
Council’s (FRC) Ethical Standard;
how the Auditor demonstrated professional scepticism and
challenged management’s assumptions, where necessary;
the tenure of the external Auditor and the Lead Audit Partner;
the outcome of the FRC’s latest inspection of PwC’s audit
quality; and
how the Auditor identified risks to audit quality and how these
were addressed.
In assessing how the Auditor demonstrated professional
scepticism and challenged management’s assumptions, the
Committee considered the depth of discussions held with the
Auditor, particularly in respect to challenging the Group’s
approach to its significant judgements and estimates (see page
144).
Annual effectiveness review of the external Auditor
External audit
Derwent London plc
Report and Accounts 2025
150
Audit and non-audit services in 2025
The audit fees incurred by PwC during the year totalled £644,160. In addition, PwC was remunerated £76,986 for the review of the
interim results and £204,550 for other assurance and non-audit related services, of which £93,200 related to sustainability assurance
and £70,000 related to the issuance of a corporate bond. The Committee confirmed that it does not believe that the level or nature of
the non-audit services provided during 2025 have impacted on PwC’s actual or perceived independence as Auditor.
Audit and non-audit fees
2025
2024
2023
£’000
%
£’000
%
£’000
%
Audit of Derwent London plc and subsidiaries
644
70
7041
79
620
90
Review of interim results
77
8
74
8
71
10
Other assurance services
203²
22
111
13
–
–
Other non-audit services
2
0
–
–
–
–
Total fees
926
100
889
100
691
100
Non-Audit Services Policy
Non-audit fees as a % of the average audit fee in the
last three consecutive financial years
32
28
12
Headroom relative to 70% limit
38
42
58
1
Includes a net cost overrun of £30k;
2
Including bond offering (£70k), green bond (£40k) and sustainability (£93k) assurance.
Audit exemption
For the year ended 31 December 2025, a number of the Group’s
wholly owned subsidiaries are entitled to exemption from audit,
under section 479A of the Companies Act 2006. We have
identified which subsidiaries intend to utilise the audit exemption
in the table on pages 282 to 283.
Derwent London plc is the ultimate parent company of these
subsidiaries and has unanimously agreed to the adoption of the
exemptions and to the granting of a guarantee in accordance
with section 479C of the Companies Act 2006.
Non-audit services
The objective of maintaining the Non-Audit Services Policy (the
Policy) is to ensure the independence of the external Auditor is
not compromised and that the provision of such services does
not impair the external Auditor’s objectivity. The Policy was last
approved by the Audit Committee in February 2026.
The Committee has provided pre-approval limits which allow
management to appoint the external Auditor to conduct
permissible non-audit services if they fall below an amount it
deems as immaterial. The approval limits for non-audit services
are provided below and are subject to review:
Value
Approval required
prior to engagement
Up to £25,000
Chief Financial Officer
£25,001 to £100,000
At least two members of the Audit
Committee (including the Committee
Chair)
£100,001 and above
Board of Directors
Summary of the Non-Audit Services Policy
Under the Policy, all services provided by the external Auditor
(other than the audit itself) are regarded as non-audit services.
Our Policy draws a distinction between permissible services
(which could be provided subject to conditions set by the
Committee) and prohibited services (which may not be provided
by the external Auditor except in exceptional circumstances
when the Auditor has been provided with approval by the
Financial Conduct Authority).
The type of non-audit services deemed to be permissible includes
a review of the half year results and assurance work on non-
financial data. In accordance with audit legislation, the total fees
for non-audit services provided by the external Auditor to the
Group shall be limited to no more than 70% of the average of the
statutory audit fee for the Company paid to the Auditor in the
last three consecutive financial years.
When reviewing requests for permitted non-audit services,
the Committee will assess:
whether the provision of such services impairs the Auditor’s
independence or objectivity and any safeguards in place to
eliminate or reduce such threats;
the nature of the non-audit services;
whether the skills and experience make the Auditor the most
suitable supplier of the non-audit service;
the fee to be incurred for non-audit services, both for
individual non-audit services and in aggregate, relative to the
Group audit fee; and
the criteria which govern the compensation of the individuals
performing the audit.
In accordance with the FRC Ethical Standard, the Committee
would also assess whether it is probable that an objective,
reasonable and informed third party would conclude
independence is not compromised.
151
Strategic report
Governance
Financial statements
Other information
Audit Committee report
continued
Assurance over external reporting
Our approach to assurance is influenced by our risk appetite,
our management approach and our culture.
Our approach
It is crucial that the information we disclose is relevant,
informative and sufficiently transparent, so that our stakeholders
can assess our performance and have trust in the integrity of our
reporting. To keep our shareholders and the wider market
informed, we release results on a half yearly basis, with a
business update at the end of the first and third quarters. Our
financial calendar for 2026 can be found on page 294.
Full year results announcement and
annual Report & Accounts
Our financial year is the 12 months to 31 December, and we
publish our full year results in late February. The disclosures
contained in this announcement form the foundation for our
annual Report & Accounts (principally the front end of the
Strategic report as well as the financial statements).
Our financial statements are subject to audit by our external
Auditor, PricewaterhouseCoopers LLP (PwC) and the entire
annual Report & Accounts is subject to a fair, balanced and
understandable review by both the Audit Committee and the
Derwent London Board (see page 146). In addition, any key
accounting issues or judgements made by management are
reviewed and agreed with the Audit Committee (page 144). The
main area of estimation uncertainty relates to the valuation of
our portfolio. Our property portfolio is valued by external valuers
for both our interim and year end results (see page 145).
Risks and uncertainties
Our principal and emerging risk registers are regularly reviewed
by the Executive Committee and Risk Committee, prior to
approval by the Board. As part of our review of principal risks, the
Risk Committee utilises a Board Assurance Framework which
identifies the key controls for each risk and the level of assurance
available.
Going concern and viability
In order to assure our stakeholders that the Company remains
viable for the next 12 months and into the medium-term (the
next five years), we have provided detailed disclosures on pages
62 to 65. The process and assumptions underlying the short,
medium and long-term assessments and scenarios, which form
the going concern and viability statements, are subject to a
detailed review by the Audit Committee and Board. As part of
their audit, PwC tested the integrity of the underlying
calculations within the going concern modelling, assessed the
appropriateness of the key assumptions and agreed the
underlying cash flow projections (see page 222).
Remuneration
Key disclosures in our Remuneration Committee report are
subject to independent audit by PwC. Our remuneration
disclosures are also reviewed by Deloitte LLP to ensure they are
aligned with best practice. In addition, Deloitte LLP
independently reviews the executive incentive outcomes under
the Performance Share Plan and annual bonus to provide
assurance to the Remuneration Committee that the outcomes
have been accurately calculated.
Environmental, social and governance (ESG)
We understand the importance of clear and accurate reporting
of key ESG data to our stakeholders. During the year, we have
obtained independent limited assurance from PwC in
accordance with ISAE 3000 (Revised) and ISAE 3410 Standards, in
respect of:
selected energy and carbon reporting metrics (energy data,
Scope 1, 2 and 3 greenhouse gas emissions data, and intensity
ratios); and
selected health and safety metrics (all RIDDORs, fatalities,
minor injuries, significant near misses and any enforcement
notices data).
In addition, PwC have provided reasonable assurance over
selected green finance KPI disclosures. The assurance statements
are published in our Responsibility Report which is available on
our website.
Historically, the Group has voluntarily disclosed under the Task
Force on Climate-related Financial Disclosures (TCFD) since the
2018 Report & Accounts. These disclosures are now mandatory,
and our TCFD disclosures are reviewed annually by PwC as part
of their review of the annual Report & Accounts.
Other annual Report & Accounts disclosures
The rest of our Strategic report and governance disclosures are
subject to detailed internal review and verification. Other key
audit matters which, in the external Auditor’s professional
judgement, were of most significance in the audit of the
financial statements and include the most significant assessed
risks of material misstatement were:
valuation of investment properties; and
valuation of investments in, and loans to, subsidiaries.
Information on PwC’s audit of these disclosures is provided on
pages 219 to 221.
Derwent London plc
Report and Accounts 2025
152
Half year results announcement
In respect to the valuation, a similar process to year end is
adopted with our investment properties being externally valued.
The valuation is then reviewed by the Audit Committee and
approved by the Board.
Although not legally required, our external Auditor performs a
review on our half year results announcement. Whilst this is not
to the same level of assurance as a year end audit, it does allow
an independent review of our half year results announcement
and any issues are raised and discussed with the Audit
Committee.
Investor presentations
We prepare detailed investor presentations for year end and half
year results. A significant amount of information contained in
our investor presentations is extracted from results
announcements released via the London Stock Exchange’s
regulatory news service (RNS). Any additional information is
subject to a detailed internal review.
Quarterly business updates
We provide a market update with portfolio information in April/
May and October/November. No financial numbers are provided,
nor do we revalue or provide any forecasts in respect to the
valuation of our portfolio. Due to the limited information
provided, no external assurance is provided or deemed necessary.
However, the announcements are subject to significant internal
review and verification.
Annual Responsibility Report and our
progress to net zero carbon
We publish an annual Responsibility Report which is structured
around our seven key ESG priorities (see page 66) and is available
to view on our website:
www.derwentlondon.com/
responsibility/publications
. Certain environmental and health
and safety metrics are subject to independent limited assurance
under the ISAE 3000 (Revised) and ISAE 3410 Standards. This
assurance captures the data we disclose on utility usage, energy
consumption, embodied carbon, waste generation and health
and safety.
In addition to TCFD (see pages 86 to 99), we report in
accordance with the EPRA Sustainability Best Practices
Recommendations and the International Sustainability Standards
Board (ISSB). Disclosures are prepared by the Sustainability and
Investor Relations teams. As well as being subject to detailed
internal reviews, key environmental and health and safety
metrics are reviewed by PwC as part of their external assurance
work.
Other reports
There are a limited number of other financial reports provided to
external stakeholders. These relate mainly to RNS and press
release announcements of transactions. The announcements are
subject to internal verification checks to ensure values, rental
levels, areas and yields are fairly stated and, where material, are
signed off by the CEO and CFO. In relation to acquisitions and
disposals, figures are reconciled to cash movements and
completion statements.
Key reporting
risk area
Current level
of assurance
Current
provider
Further
information
Financial statements
International Standards on Auditing (UK) and
applicable law
PwC
Pages 226 to 283
Key EPRA financial metrics
1
International Standards on Auditing (UK) and
applicable law
PwC
Page 285
Portfolio valuation
External valuation in accordance with RICS
Valuation Global Standards and the Red Book
Knight Frank
Pages 36 to 39
Environmental, energy and
carbon
Selected metrics subject to limited assurance
under ISAE 3000 (Revised) and ISAE 3410
standards
PwC
Pages 74 and 75
Health and safety statistics
Selected metrics subject to limited assurance
under ISAE 3000 (Revised)
PwC
Page 81
Green Finance Framework and
disclosures
Our Green Finance Framework received a Second
Party Opinion (SPO) from DNV that it is aligned
with the Loan Market Association’s Extended
Green Loan Principles 2021 and the International
Capital Market Association’s Green Bond
Principles 2021. PwC have also provided
‘reasonable assurance’ over selected green
finance KPI disclosures
PwC
Pages 60 and 61
1
EPRA earnings and EPRA NAV metrics (EPRA NRV, EPRA NTA and EPRA NDV).
153
Strategic report
Governance
Financial statements
Other information
Risk Committee report
Helen Gordon
Chair of the Risk Committee
2026 focus areas
Receive regular updates on central London market trends
which may impact the portfolio
Ensure health and safety risks continue to be managed
effectively
Receive updates on the Group’s main developments and
compliance with the Building Safety Act
Monitor the Group’s ongoing strategy in mitigating cyber
risk
Continue to monitor the Group’s principal and emerging
risks
Committee membership during 2025
Independent
Number of
meetings
Attendance
1
Helen Gordon
Yes
3
100%
Lucinda Bell
Yes
3
100%
Sanjeev Sharma
Yes
3
100%
Cilla Snowball
2
Yes
1
100%
Madeleine McDougall
Yes
3
100%
1
Percentages are based on the meeting entitled to attend for the 12
months ended 31 December 2025.
2
Cilla Snowball stepped down from the Board at the AGM on 16 May 2025.
Dear Shareholder,
I am pleased to provide a report on the
activities and focus areas of the Risk
Committee during 2025.
Risk profile of the Group
As a predominantly London-based Group, we are particularly
sensitive to factors that impact central London’s growth and
demand for office space. The Group’s risk profile has continued to
be elevated in 2025 characterised by uncertainty in the
macroenvironment and cost inflation.
Managing risks / See pages 100 to 111
Key activities of the Committee
During the year, the Committee has overseen four principal
areas: property and market, cyber security, people and
environment and compliance.
A particular focus of the Committee has been to continue to
monitor the emerging and market risks and how they might
impact the Group in the short to medium-term. In response to
this, the Committee has held in-depth discussions around the
potential impact of the UK Government’s current policy agenda
and the proposal to abolish upward only rent review clauses in
commercial leases.
The Committee also received training on the Building Safety Act
2022 with the objective of raising awareness at Board level. The
training related to two of the Group’s major developments, 25
and 50 Baker Street, and it was pleasing to note the Group’s
progress and compliance with the Building Safety Act.
Key activities of the Committee / See pages 156 and 157
Cyber security
During the year, the Committee continued to remain vigilant to
the ongoing risk of cyber crime and dedicated a significant
proportion of its meeting in August to receiving a thorough
update on cyber security, which provided an overview of the
Group’s cyber posture and strategy. Although no cyber-related
issues have arisen during 2025, cyber insurance has been
acquired to further support the Group in mitigating the risk of
cyber attacks.
Our disclosures on the work completed in respect of cyber
security have been expanded in this report to reflect the volume
of work that has been undertaken during the year.
Cyber security / See page 156
Health and safety
The Committee remains committed to prioritising the safety of
our people, contractors and occupiers. At each meeting a
detailed update on health and safety is provided and includes a
forward look at the potential risks across the managed portfolio
and major developments, including how they will be mitigated.
During the year, the Group’s ongoing commitment to health and
safety was reinforced through the delivery of health and safety
training by Mishcon de Reya to Executive Directors, Non-
Executive Directors and senior management.
Health and safety / See pages 80 and 81
Derwent London plc
Report and Accounts 2025
154
Key risk indicators
The Committee monitors a schedule of key risk indicators which
works to provide early warning signs of potential risks, helping
organisations to anticipate and mitigate risks before they
escalate. During the year, a comprehensive internal review of the
key risk indicators schedule was conducted. The review ensured
the indicators remain forward looking and continue to support
the Committee in identifying early warning signs of potential
risks approaching or exceeding tolerance levels. As part of the
review, enhancements were made to broaden the scope of the
schedule, with new areas identified for inclusion to strengthen
the overall risk monitoring framework.
Further engagement
The forthcoming AGM is on 15 May 2026 and I will be available to
answer any questions on the Committee’s activities that you
may have. If you wish to contact me, I am available via our
Company Secretary, David Lawler.
Telephone:
+44 (0)20 7659 3000
or
Email:
company.secretary@derwentlondon.com
Helen Gordon
Chair of the Risk Committee
25 February 2026
Committee composition and performance
The Committee’s membership for the year under review is
detailed in the table on page 154. In addition to the Committee
members, the Board Chairman, other Directors, senior
management and the internal and external advisers, are often
invited to attend all or part of any meeting as and when
appropriate or necessary.
In 2025, the Risk Committee met three times (2024: three
meetings). The meetings in August and November included a
joint session with the Audit Committee to review the outcome of
internal audits (see page 147).
The 2025 evaluation of the Board, its committees and individual
Directors was externally facilitated by the third party
Independent Audit Limited, in accordance with our three-year
cycle of evaluations (see page 137). The review raised no
significant matters or areas of concern in respect to the
operation of the Committee.
The Committee’s role and responsibilities are set out in the terms
of reference, which were last updated in August 2024, and are
available on the Company’s website at:
www.derwentlondon.
com/investors/governance/board-committees
Alongside the Audit Committee, the Risk Committee is
responsible for overseeing the Group’s non-financial internal
controls and risk management systems.
During the year, the Group has remained informed about
the new corporate offence, ‘failure to prevent fraud’ under
the Economic Crime and Corporate Transparency Act 2023
(the Act). The Act seeks to promote stronger anti-fraud
governance and strengthens corporate integrity by placing
an obligation on companies to ensure reasonable procedures
are in place to prevent fraudulent activity.
To ensure both compliance with the Act and to demonstrate
that the Group has reasonable procedures in place to
protect against fraud, the following activities were
undertaken during the year, in addition to the review and
update of the Fraud Risk Management Framework and
detailed Fraud Risk Assessment:
Gap analysis:
An in-depth gap analysis was conducted
using the Home Office’s guidance to understand how the
Group’s existing fraud controls compared to the six key
principles of a robust fraud prevention framework.
Training and awareness:
The Executive Committee
attended a training session hosted by Burges Salmon to
understand their obligations, liability and role in preventing
fraud within the organisation. Due to the positive feedback
and high level of engagement received, the training session
was extended to over 30 other employees who are involved
in the procurement of goods and services.
Independent review:
The Group’s compliance with the Act
and the strength of existing ‘reasonable procedures’ were
subject to independent review and assessment by Internal
Audit. The review found a sound level of fraud prevention
and detection controls to be in place, with only minor
opportunities for continued improvement noted.
The Risk Committee will continue to monitor the legal
developments under the Act and ensure that the Group’s
Fraud Risk Management Framework remains robust.
Director ID verification / See page 137
Fraud Risk Management / See page 148
Supplier whistleblowing line / See page 168
New ‘failure to
prevent fraud’ offence
Oliver’s Yard
EC1
155
Strategic report
Governance
Financial statements
Other information
Risk Committee report
continued
Key activities of the Committee
During 2025, the Committee focused on a variety of risks across four principal categories:
property and market, cyber security, people and environment, and compliance.
Property and market
Impact of current Government’s policies
Discussed the impact of the UK Government’s current
policy agenda on the central London property market and
both the opportunities and risks faced by the Group.
A detailed discussion was held on the Government’s
proposal to abolish upward only rent review clauses in
commercial leases.
Investment market
A comprehensive update on the London investment market
with an overview of both opportunities and risks from
CBRE.
Development risks
Regularly reviewed the key risks affecting the Group’s major
on-site developments. The Committee also received an
update on the construction market with a focus on the
supply chain challenges, tender price inflation and
construction costs.
Construction Market
An update on the Construction Market was provided to the
Committee and covered the following areas:
Construction costs
Supply chain challenges
Tender price inflation
Reviewed valuation in business rates
An overview of the 2026 reviewed valuation of business
rates was received and the Committee discussed how this
could impact the Group.
Insurance claims
The Committee reviewed the number of insurance claims
that have been incurred across the managed portfolio over
the last five years and discussed the controls in place to
continue to mitigate the risk.
Strategic objectives
1
2
4
Principal risks (see page 104)
1
3
4
5
Cyber security
Cyber security
In August 2025, the Digital, Innovation & Technology team
provided an in-depth presentation on the Group’s cyber
posture, layered defence model and strategy.
Cyber Governance Code of Practice
Following the publication of the Cyber Governance Code of
Practice in April 2025, the Committee received a
comprehensive gap analysis undertaken by the Digital,
Innovation and Technology (DIT) team and discussed the
timeline to implement the remaining recommendations.
Phishing tests
Updates were provided on the phishing tests conducted by
the Cyber and Infrastructure team.
Security penetration tests
Internal and external penetration tests were carried out by
an independent security adviser.
Software vulnerability tests
Manual and automated vulnerability testing of our
internally developed apps and solutions.
Employee risk score
During the year, we implemented a new employee risk
score feature to ensure that our training and prevention
measures are aligned with risk levels.
Crisis Management Team
The Crisis Management Team, reviewed its incident
playbooks with the assistance of external experts and
initiated a comprehensive revision of its Business Continuity
Plan (BCP).
Cyber insurance
Obtained cyber insurance cover and discussed how this
additional cover will supplement the existing cover in place.
Strategic objectives
3
4
Principal risks
6
7
Derwent London plc
Report and Accounts 2025
156
Strategic objectives
1
To optimise returns
and create value
from a balanced
portfolio
2
To grow recurring
earnings and
cash flow
3
To attract, retain and
develop talented
employees
4
To design, deliver and
operate our buildings
responsibly
5
To maintain
strong and flexible
financing
People and environment
Health and safety (H&S)
A detailed update on health and safety matters was
provided with key risks identified. During the year the
following areas were covered:
Key health and safety risks
An overview of the key health and safety risks across the
managed portfolio, construction sites and the Scottish
land, as well as a forward look at the Group’s major
projects were outlined and discussed by the Committee.
Health and safety training
Senior management received training on health and safety
management from Mishcon de Reya, as well as attending
health and safety leadership tours across the Group’s
major developments. The engagement of the Board in
health and safety matters reinforces the Board’s
commitment and visibility to health and safety.
Building Safety Act 2022
An in-depth training session on the Building Safety Act
took place which supported raising awareness across the
business.
Occupier health risk
The Committee received an update on the Group’s
occupiers’ covenant and financial ‘health’ as well as
assurance that the process which assesses proposed
occupier covenant strength remains robust.
Service charge
Discussed the market factors contributing to the rates of
service charges and benchmarked the Group’s service
charge expenditure.
Environmental risk
Environmental risks are reserved for the Board and two of
its principal committees; the Responsible Business and
Audit Committees. Further details are included on page 94.
Strategic objectives
3
4
Principal risks
8
9
10
Compliance
Internal audits
Alongside the Audit Committee, the Committee received
regular updates on the work performed by internal audit,
including the Fraud Risk Management Framework and
Fraud Risk Assessment.
Legal updates
The Committee reviewed the Group’s status against recent
legislation developments and received updates from
management on the preparation for any upcoming legal
developments. In particular, the Committee has monitored
the developments of the Economic Crime and Corporate
Transparency Act 2023.
Key risk indicators
The key risk indicators were subject to a thorough review to
ensure they remain forward looking and provide a holistic
overview of all key areas across the business.
Group risk registers
The Committee reviewed the Schedules of Principal and
Emerging Risks and in particular discussed whether the risk
registers sufficiently cover:
geopolitical risks; and
the ability to sell assets in a challenging market.
Anti-bribery and corruption
The Committee continued to review the Hospitality & Gift
Register at each meeting. The Register provides an
overview of the returns of all employees each quarter.
Compliance training
The Committee continued to monitor the completion rates
and engagement received with the compliance training
programme. During the year, c.99.6% of employees
completed quarterly compliance training (see page 163).
Strategic objectives
3
4
Principal risks
10
157
Strategic report
Governance
Financial statements
Other information
Risk Committee report
continued
Risk management framework
Our risk management framework is summarised below:
Identification
Assessment
Monitoring
Response
Independent
assurance
Identification
Top down approach to identify the principal risks that
could threaten the delivery of our strategy:
At the
Board’s annual strategy review, scenarios for the future are
considered which assist with the identification of principal
and emerging risks and how they could impact our strategy.
The continuous review of strategy and our environment
ensures that we do not become complacent and that we
respond in a timely manner to any changes.
Bottom up approach at a departmental and functional
level:
Risks are principally identified by the Executive
Committee and members of senior management, through
analysis, independent reviews and use of historical data and
experience. Risk registers are maintained at a
departmental/functional level to ensure detailed monitoring
of risks, where necessary. Risks contained on the
departmental registers are fed into the main Group Risk
Register depending on the individual risk probability and
potential impact.
Assessment
Following the identification of a potential risk, the Executive
Committee seeks to:
gain sufficient understanding of the risk to allow an
effective and efficient mitigation strategy to be determined;
allow the root cause of the risk to be identified;
estimate the probability of the risk occurring and the
potential quantitative and qualitative impacts; and
understand the Group’s current exposure to the risk and the
‘target residual risk profile’ (in accordance with the Board’s
risk tolerance) which will be achieved following the
completion of mitigation plans.
Where necessary, external assistance is sought to assess
potential risks and advise on mitigation strategies. Emerging
risks are kept under review at each Risk Committee meeting
and are reassessed during the Board’s annual strategy review.
Monitoring
As part of our risk management procedures, the Executive
Committee and Risk Committee routinely conduct monitoring
exercises to ensure that risk management activities are being
consistently applied across the Group, that they remain
sufficiently robust and identify any weaknesses or
enhancements which could be made to controls. Monitoring
activities include:
the regular review and updating of the Schedule of Principal
Risks, Schedule of Emerging Risks and the Group’s Risk
Register;
alerting the Board to new emerging risks and changes to
existing risks;
monitoring how the risk profile is changing for the Group;
and
providing assurance that risks are being managed
effectively and, where any assurance gaps exist, identifiable
action plans are being implemented.
Response
We implement controls and procedures in response to
identified risks with the aim of reducing our risk exposure, so
that it is aligned or below our risk tolerance. The successful
management of risk cannot be done in isolation without
understanding how risks relate and impact upon each other.
The mitigation plans in place for our principal risks are
described on pages 104 to 109. We use insurance to transfer
risks which we cannot fully mitigate.
Insurance
The Group has a comprehensive insurance programme. We are
advised by insurance brokers, who provide a regular report to
the Risk Committee. We have a long-standing relationship
with our property insurers, who perform regular reviews of our
properties that aim to identify risk improvement areas. Due to
our proactive risk management processes, Derwent London
has a low claims record which makes us attractive to insurers.
Our risk management procedures seek to ensure that all foreseeable and emerging risks are
identified, understood and managed.
Derwent London plc
Report and Accounts 2025
158
Risk management
At Derwent London, the management of risk is treated as a
critical and core aspect of our business activities. Although the
Board has ultimate responsibility for the Group’s risk
identification and management procedures, certain risk
management activities are delegated to the level that the Board
judges is most capable of overseeing and managing the risks. In
order to gain a comprehensive understanding of the risks facing
the business and the management thereof, the Risk Committee
invites senior managers and external advisers to present at its
meetings.
A robust assessment of the principal risks facing the Group is
regularly performed by the Directors, taking into account the
risks that could threaten our business model, future
performance, solvency or liquidity, as well as the Group’s
strategic objectives over the coming 12 months.
Our principal risks are documented in the Schedule of Principal
Risks (see pages 104 to 109) which includes a comprehensive
overview of the key (financial and non-financial) internal controls
in place to mitigate each risk and the potential impact. The
Directors also review an assurance framework which evidences
how each internal control is managed, overseen and (where
appropriate) independently assured.
Due to its importance, material changes to the Schedule of
Principal Risks can only be made with approval from the Risk
Committee or Board. Further information on the Group’s risk
registers subject to review by the Risk Committee are detailed in
the table below.
Health and safety
training at Board level
Risk documentation and monitoring
Schedule of Principal
Risks
(See page 104)
Contains the risks which are classified as the Group’s main risks which do or could impact the Group
over the next 12 months. The Schedule of Principal Risks also includes an assurance framework to
evidence how each control is managed, overseen and independently verified. As at 31 December 2025,
the Schedule of Principal Risks contains 11 risks (2024: 11 risks).
Schedule of Emerging
Risks
(See page 110)
Contains the internal and external emerging risks that could significantly impact the Group’s financial
strength, competitive position or reputation within the next five plus years. Emerging risks could involve
a high degree of uncertainty. As at 31 December 2025, the Schedule of Emerging Risks contains four
risks (2024: five risks).
Group Risk Register
Risks not deemed to be principal to the Group are documented within the Group Risk Register, which is
maintained by the Executive Directors, with assistance from the Executive Committee. The Board
reviews and approves the Group Risk Register and it is reviewed by the Risk Committee on an annual
basis. As at 31 December 2025, the Group Risk Register contains 50 risks (2024: 48 risks).
Key risk indicators
The Risk Committee has identified risk areas which could indicate an increase in the Group’s risk profile.
These indicators are reviewed at each Risk Committee meeting and are compared against the Board’s
Risk Appetite Statement (see page 103). During the year, the key risk indicators were subject to a
thorough internal review to ensure the indicators remain forward looking and continue to support the
Committee in identifying early warning signs of potential risks approaching or exceeding tolerance
levels. Any deviance or significant increase is subject to challenge by the Risk Committee.
Functional/
departmental risk
registers
Risk registers are maintained at a departmental/functional level to ensure detailed monitoring of risks,
where necessary. These registers are the responsibility of each department and are periodically
reviewed by the Risk Committee during risk-specific presentations. Examples of these registers are the
development risk registers for each building project and the ‘tenants on watch’ register.
During the year, the Board’s ongoing engagement in, and
commitment to, health and safety was reinforced through
the delivery of health and safety training to Executive
Directors, Non-Executive Directors and senior management.
The training session was led by Mishcon de Reya, with the
objective of updating and refreshing senior management’s
understanding of evolving health and safety obligations,
responsibilities and the importance of proactive risk
management.
The training session focused on:
recent developments in health and safety legislation;
contractual implications of health and safety compliance;
identification and mitigation of workplace risks;
corporate and director’s duties under current regulations;
best practice guidance tailored for executive and
non-executive roles; and
a review of Derwent London’s health and safety
governance structure.
“To see so much active
participation at both sessions
was a credit to all those involved.”
Matt Peaty
Head of Health and Safety
159
Strategic report
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Other information
Digital security risks
We adopt a layered defence approach to cyber security which
provides multiple levels of security controls to protect against
cyber attacks.
The Group’s cyber security framework is subject to regular
independent review and testing, the outcomes of which are
reported to the Risk Committee. During H1 2025, engagement
was sought with a CREST-accredited security consultant for a
comprehensive penetration test to be conducted across all of the
Group’s infrastructure. The scope of this testing included both
external and internal assessments and encouragingly, no critical
vulnerabilities were identified. We operate a layered defence
model that applies multiple, complementary security controls
across our technology environment, reducing reliance on any
single control and mitigating single points of failure.
Our Security Information and Event Management (SIEM)
platform continuously aggregates and analyses telemetry from
across our systems and infrastructure, providing real time
visibility of security events. This capability is supported by a 24/7
Security Operations Centre (SOC), which proactively monitors for
indicators of compromise and anomalous activity. Potential
incidents are investigated promptly, and confirmed events are
managed in accordance with established incident response
playbooks to ensure timely containment, remediation and
recovery. To maintain preparedness, we regularly review and
update these incident response playbooks and participate in
table-top exercises designed to test decision making, escalation
processes and recovery arrangements. These activities help
ensure that our response capabilities remain effective and
aligned to evolving threats. These preventative, detective and
responsive controls are complemented by regular vulnerability
assessments, independent penetration testing and ongoing
control assurance activities. Together, they strengthen our ability
to identify emerging risks, minimise potential impact and
enhance our overall cyber resilience.
Risk Committee report
continued
In June 2025, following the publication by RICS on ‘Digital Risk in
Buildings’, the Group commissioned WiredScore to pilot the newly
developed Cyber Foundations Assessment at one of its flagship
properties. The assessment, conducted through an on-site review
supported by documentation, evaluated 16 criteria across four
key domains: Governance, Building Systems, Cyber Controls, and
System Vulnerabilities. The outcome demonstrated an overall
maturity level of ‘advanced’ across the categories assessed,
underscoring the Group’s commitment to maintaining high
standards of digital resilience within the portfolio. Opportunities
for further enhancement identified during the process will be
reviewed and considered for application across the wider
portfolio.
Key risk indicators
The Committee reviews a dashboard of key risk indicators at
each meeting, incorporating information security and cyber risk
related KPIs. During the year, an in-depth review was undertaken
to ensure the indicators remain forward looking and continue to
support the Committee in identifying early warning signs of
potential risks or tolerance levels being exceeded.
As part of this review, cyber risk indicators were updated to
reflect the evolving threat landscape. A significant enhancement
was the introduction of employee risk scores within the Group’s
security training platform, enabling a data-driven approach to
identifying and mitigating potential vulnerabilities among
employees. This strengthens the Group’s cyber resilience by
directing training at employees with the greatest need. Risk
scores are derived from engagement with training modules,
performance in cyber security assessments, and responses to
simulated phishing exercises. Employees identified as higher risk
are now monitored with targeted interventions including
additional training and phishing simulations where necessary,
until their risk levels fall within acceptable thresholds. To reinforce
these measures, all employees were required to complete
mandatory compliance training during the year, which included
a Cyber Security and Data Protection module.
Disaster recovery and business continuity
Derwent London has formal procedures in place for use in the event of an emergency that disrupts normal business operations.
These consist of:
Business Continuity
Plan (BCP)
Crisis Management
Team (CMT)
Off-site disaster
recovery
Testing and
review
The BCP serves as the
centralised repository for
the information, tasks and
procedures that would be
necessary to facilitate
Derwent London’s decision
making process and its
timely response to any
disruption or prolonged
interruption to our normal
activities. The aim of the
BCP is to enable the
recovery of prioritised
business operations as
soon as practicable.
The CMT is composed of
key personnel deemed
necessary to assist with
the recovery of business.
The BCP empowers the
CMT to make strategic and
effective decisions to
support the recovery of
business until we are able
to return to normal
working.
An off-site disaster
recovery data centre is
available in the event of an
emergency, to provide
continued access to IT
services and data to our
staff.
The strength of our
business continuity and
disaster recovery plans are
regularly tested and
continually refined to
reduce the potential for
failure.
Derwent London plc
Report and Accounts 2025
160
Digital strategy risks
As we increase the digitalisation of our business model through
our Intelligent Building programme, our potential exposure to
digital risks also increases. A cyber attack on our buildings has
been identified as a principal risk for the Group, and our key
controls to mitigate these risks are detailed on page 107.
Artificial Intelligence (AI)
Technological advancements, particularly in the form of AI, are
an emerging risk for the Group (see page 110). While the rapid
pace of change offers the potential for efficiency gains across the
business, AI can introduce new cyber security vulnerabilities and
amplify data privacy concerns. Our Acceptable Use policy has
been amended to reference the responsible use of AI and during
2026 we are looking to develop a responsible AI framework based
on transparency, security, human oversight and ethical use. We
continually review emerging AI tools and platforms to identify
those that can safely and meaningfully add value across the
business.
Intelligent Building programme
The Derwent London Intelligent Building programme aims to
improve building performance through enhanced monitoring,
reduced equipment faults, and lower energy use and operational
carbon. In 2025, the Executive Committee continued to oversee
the programme and received ongoing updates on its progress
and impact.
AI is being harnessed to enhance efficiency across our portfolio
by improving energy management, predictive maintenance and
operational decision making. It enables richer data insight to
support design, leasing and customer experience, while
automation can free teams to focus on higher-value, creative
and strategic work.
Cyber Governance Code
In April 2025 the Cyber Governance Code of Practice (the Code
of Practice) was published by the UK Government with the aim
of demonstrating to boards how to manage digital risks and how
to protect their organisations from cyber attacks. The Code of
Practice outlines recommendations across five categories:
Risk management
Strategy
People
Incident planning, response and recovery
Assurance and oversight
Following the publication of the Code of Practice, a
comprehensive gap analysis was undertaken by the Digital,
Innovation and Technology (DIT) team with a discussion held on
the timeline to implement the remaining recommendations.
Data protection
Derwent London is perceived as being relatively low risk from a
data protection perspective, as the amount of personal data
that we hold and process is limited. We have robust procedures
in place to safeguard the security and privacy of information
entrusted to us. As part of the Committee’s key risk indicator
schedule, we monitor the number of ‘near miss’ data breaches
and how these have been addressed.
Our procedures ensure that we:
maintain the confidentiality, integrity and availability of data
and safeguard the privacy of our customers and employees,
to ensure that the business retains their trust and confidence;
protect the Group’s intellectual property rights, financial
interests and competitive edge;
maintain our reputation and brand value; and
comply with applicable legal and regulatory requirements.
We operate a Data Protection Steering Committee which meets
on a quarterly basis and comprises of Data Protection
Champions from each department. Our DIT team routinely
conducts supplier information security due diligence assessments
as part of the onboarding process for all new suppliers of digital
services to help provide assurance on the risk profile of our
suppliers and reduce the risk of supply chain attacks. Data
Protection Impact Assessments (DPIAs) are also completed for
any new projects or changes to processes that involve data
processing, to help identify and mitigate any data privacy risks.
Derwent London operates a Crisis Management Team that is
comprised of key personnel deemed necessary to assist with
the recovery of the business.
During the year, the Group initiated a comprehensive
revision of its Business Continuity Plan (BCP) to ensure it
remains robust, modern, and aligned with industry best
practice. As part of this update, we have introduced a
formal Gold-Silver-Bronze (GSB) command structure. This
framework provides clear strategic, tactical and operational
roles during an incident, enabling more effective decision
making and co-ordinated responses across the organisation.
The revised BCP is aligned with our separate building
incident response plans and the DIT incident response plan
and associated ‘playbooks’, ensuring that all response
procedures are fully integrated and mutually supportive. This
unified approach strengthens our overall resilience, enhances
clarity during critical events, and ensures consistent
communication and leadership throughout any disruption.
Crisis Management Team
25 Savile Row
W1
161
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Financial statements
Other information
Risk Committee report
continued
Risk management structure
Reviews the Board’s risk registers
and determines the nature
and extent of the principal and
emerging risks facing the Group
Manages the internal audit process
jointly with the Audit Committee
Works alongside the Board to set
risk tolerance levels
Receives updates on key risk
areas and monitors the Group’s
risk indicators and non-financial
controls
Ensures the design and implementation of appropriate
risk management and internal control systems that
identify the risks facing the Group and enable the
Board to make a robust assessment of the principal risks
Maintains the Group’s risk registers
Manages the Group’s risk management procedures
Reviews the operation and effectiveness of key controls
Provides guidance and advice to staff on risk
identification and mitigation plans
Engages with the Executive Directors and senior
management to identify risks
Allocates ‘risk managers’ and oversees their response
Risk management is devolved to the appropriate level
most capable of identifying and managing the risk
Overall responsibility for risk
management and internal control
Sets strategic objectives and
risk tolerance
Sets delegation of authority
limits for senior management
Ensures that a healthy purposeful
culture has been embedded
throughout the organisation (with
input from the Executive Directors)
Agrees the Group’s strategy
to managing climate change
resilience, approving and
monitoring progress against
our Net Zero Carbon Pathway
(with input from the Responsible
Business Committee)
Ensures the Board (and
its committees) have
the correct balance of
skills, knowledge and
experience
Ensures that adequate
succession plans are
in place for the Board,
Executive Directors and
the wider talent pipeline
Reviews the assurance
received for the
information published in
our financial statements
and key announcements
Manages the external
audit process and
reviews internal audit
findings jointly with the
Risk Committee
Monitors the internal
financial control
arrangements, and
satisfies itself that
they are functioning
effectively, and that
corrective action is being
taken where necessary
Oversees the Group’s
policies in respect of
modern slavery, the
protection of human
rights, achieving our
Net Zero Carbon
Pathway, and employee
satisfaction and
wellbeing etc.
Monitors the Group’s
corporate responsibility,
sustainability and
stakeholder engagement
activities
Monitors the Group’s
diversity and inclusion
initiatives
Ensures that
remuneration and
reward arrangements
promote long-term
sustainable performance
and retention of key
talent
Monitors the incentive
framework to ensure
it does not encourage
Executive Directors to
operate outside the
Board’s risk tolerance
In addition to the Risk Committee, the Board’s other principal committees
manage risks relevant to their areas of responsibility.
Executive Directors, with assistance from the Executive Committee
Heads of Department
Nominations
Committee
Audit
Committee
Responsible Business
Committee
Remuneration
Committee
The Board
Risk Committee
Derwent London plc
Report and Accounts 2025
162
Anti-bribery and corruption
We are committed to the highest standards of ethical conduct
and integrity in our business practices and adopt a zero-
tolerance approach to bribery and corruption. The Company has
assessed the nature and extent of its exposure to bribery and
corrupt practices and, overall, considers our residual exposure to
be low. To address the risk areas identified, and other risks that
may arise from time to time, the Company has established
procedures which are designed to prevent bribery and corrupt
practices from occurring. An overview of our policies and
procedures in this area is contained in the table below.
The greatest potential risk area for Derwent London is in respect
of our long supply chains. Our zero-tolerance approach to any
form of bribery or corruption is communicated to all of our
suppliers, contractors and business partners. Before we enter into
a new business relationship, our due diligence procedures
determine if a third party has previous convictions under the
Bribery Act. All contracts with suppliers or contractors prohibit
the payment of bribes, or engaging in any corrupt practice, and
we have the right to terminate agreements in the event a bribe is
paid or other corrupt practices are undertaken.
Compliance training
The Group operates a compliance training programme which is
mandatory for all employees and members of the Board. The Risk
Committee oversees the programme, approves the topics to be
covered and receives an update on completion rates. The
programme covers a range of risk and compliance topics
(including anti-bribery and corruption, diversity and inclusion,
data protection, fraud and modern slavery).
At the launch of each training topic, an introductory email is sent
to participants advising them why the training is important and
providing links to further information (including Company policies
and guidance notes). The topics covered over the past two years
are:
anti-money laundering;
modern slavery transparency;
tackling tax evasion;
recognising sexual harassment in the workplace;
fraud and market abuse;
competition law;
whistleblowing; and
cyber security awareness.
The Committee was pleased with the level of engagement from
employees with, on average, a c.99.6% completion rate for
quarterly compliance training.
Procedures and controls to prevent bribery and corruption
Corporate hospitality
Hospitality must be reasonable in value, appropriate to the occasion and provided openly and
transparently. It must not compromise, nor appear to compromise, the Group nor the business
judgement of our staff.
Business gifts
Generally, gifts should not be accepted unless valued at less than £50, are not cash or a cash
equivalent (e.g. gift certificate), are appropriate to the circumstances and are not given with the
intention of compromising or influencing the party to whom it is being given.
Hospitality and Gift
Returns
All staff are required to complete quarterly Hospitality and Gift Returns which document all
instances of third party hospitality or gifts (given or received) over that three-month period if the
value is in excess of £50 for hospitality and £10 for gifts. The Hospitality and Gift Returns are
subject to review by the Risk Committee.
Political donations
The Company strictly prohibits any political donations being made on its behalf.
Charitable donations
Charitable donations are handled by the Sponsorship and Donations Committee. ‘Know your
client’ procedures are applied to charitable organisations to ensure we are dealing with a valid
body acting in good faith and with charitable objectives.
Supply Chain Responsibility
Standard
Our greatest potential risk area is in respect of our long supply chains. The Supply Chain
Responsibility Standard contains the minimum standards we expect from major suppliers (further
information is on page 168).
Payments and expenses
All payments made must be warranted, transparent and proper. All payments must be accurately
recorded through the normal accounting and financial procedures without any deception or
disguise as to the recipient’s identity or the purpose of the payment in question. No one approves
their own expense claim. All expense claims must be approved by a Director or senior manager.
Facilitation payments
Facilitation payments are bribes and are strictly prohibited.
Conflicts of interest
All conflicts of interest or potential conflicts of interest must be notified to the Company Secretary
and a register of such notifications is maintained. The Corporate governance statement on page
124 explains our process for managing potential conflicts.
Training
We provide our employees with guidance notes and regular training on anti-bribery, corruption,
fraud, ethical standards and the prevention of the facilitation of tax evasion.
‘Speak up’ procedures
A confidential hotline is available for staff and suppliers to report concerns anonymously (see page
124).
Fraud prevention
The Company strictly prohibits any type of fraud (see page 148).
163
Strategic report
Governance
Financial statements
Other information
Responsible Business Committee report
Dear Shareholder,
I am pleased to present a report on the
Responsible Business Committee’s focus areas
and activities during the year. This is my first
report as Chair, since succeeding Dame Cilla
Snowball on 16 May 2025.
Diversity and inclusion
The Committee continues to be proud of the Group’s progress in
relation to diversity and inclusion and throughout the year has
received regular updates on the activities of the Diversity &
Inclusion (D&I) Working Group. For further information see page
170.
A key focus of the D&I Working Group has been the resubmission
of the Group’s Disability Smart Audit Self-Assessment, completed
in June 2025. It was pleasing to see the significant progress that
has been made over the last two years and the Group’s ongoing
commitment to disability and accessibility working in conjunction
with the Health, Safety and Accessibility Working Group.
The Board has continued to engage in the importance of diversity
through the targets set by the FTSE 350 Women Leaders Review,
the Listing Rules and the Parker Review (see page 141). In
accordance with the latest Parker Review recommendations, the
Board has previously set a challenging target for 15% of the senior
management team self-identifying as being of an ethnically
diverse background. The Company continues to voluntarily report
progress against this target and as at 31 December 2025 8% of
senior management self-identify as being of an ethnically diverse
background. The target remains sensitive to changes in the
composition of senior management and the size of the business.
Our stakeholders
The Committee has continued to receive regular updates on
community engagement, with the Group’s ongoing commitment
to the Community Fund having resulted in 200 projects and
initiatives invested in across the portfolio since 2013. The
Committee also discussed the ongoing role of ESG through the
lens of our occupiers and investors; with an in-depth discussion
around the importance of responsible developments, and the
growth of the circular economy initiative.
Employee engagement
The sixth biennial employee survey was rolled out during October
and received a pleasing 86% response rate. The employee
members of the Committee have initiated a series of structured
focus groups to engage employees in meaningful dialogue and
gathered additional insights. Alongside HR, the employee
members will address feedback and drive continuous
improvement across the Group during 2026.
Net Zero Carbon Pathway
The Group remains committed to being a net zero carbon
business. During the year, the Committee reviewed the significant
progress that has been made over the last five years and
discussed the longevity of the targets through the updated Net
Zero Carbon Pathway, as it is recognised that the Group’s
responsibility of net zero carbon extends further than 2030 (see
pages 69 to 73).
2026 focus areas
Deepen understanding of employee needs by reviewing
and responding to the 2025 Employee Survey
Track impact of new ‘Rewards and Recognition’ initiative
and launch new mentor programme
Receive regular progress updates on the Group’s Net Zero
Carbon Pathway
Continue to monitor the Group’s community and
charitable initiatives
Monitor the Group’s progress on disability and
accessibility in line with the Business Disability Forum
Committee membership during 2025
Independent
Number of
meetings
Attendance
1
Madeleine McDougall
Yes
2
100%
Mark Breuer
Yes
2
100%
Cilla Snowball
2
Yes
1
100%
Emily Prideaux
No
2
100%
Paul Williams
3
No
1
50%
Carys Grieve
Employee
2
100%
Amy Hulbert
Employee
2
100%
Bryan Vasquez
Employee
2
100%
William Waples
Employee
2
100%
1
Percentages are based on the meetings entitled to attend for the 12
months ended 31 December 2025.
2
Cilla Snowball stepped down from the Board at the AGM on 16 May 2025.
3
Paul Williams was unable to attend the meeting in May due to his
involvement in the Remuneration Policy consultation.
Madeleine McDougall
Chair of the Responsible Business Committee
Derwent London plc
Report and Accounts 2025
164
Circular economy
The objective of the circular economy initiative is to reuse and
repurpose materials through developments and refurbishments.
The Committee has continued to discuss the progress made to
date on the circular economy and the benefits being achieved. To
further the initiative, a focus for 2026 is to consistently report on
the role of the circular economy initiative and better quantify the
costs, savings, value and carbon impact being created.
Further engagement
If you wish to discuss any aspect of the Committee’s activities, I
will be attending the forthcoming AGM on 15 May 2026 and
would welcome your questions. I am also available via our
Company Secretary, David Lawler.
Telephone:
+44 (0)20 7659 3000
or
Email:
company.secretary@derwentlondon.com
Madeleine McDougall
Chair of the Responsible Business Committee
25 February 2026
Employees on the
Responsible Business
Committee
Having employee members on a Board level
committee enables the diverse voice of our
employees to be brought directly into our
boardroom, providing invaluable insight and
feedback.
During the year, the employee members were fully
engaged in all aspects of the Committee’s activities,
with regular updates provided on the proposals for,
and implementation, of key initiatives. The valuable
work of the Committee was communicated to the
wider workforce through the issue of two
newsletters.
A key focus of the employee members during the
year was to respond to the feedback received from
the 2024 ‘pulse survey’. As a result of this, a new
initiative was launched with a focus on rewarding
employees who have gone above and beyond to
achieve the Group’s values and to further encourage
collaboration. Additionally, the Group’s Long Service
Policy was reviewed and annual leave entitlements
updated for eligible long-serving employees.
A key focus of the employee members for 2026 will
be to respond to the feedback received from the
2025 employee survey and, alongside HR, conduct
focus groups to delve deeper into the themes that
have arisen.
Carys Grieve
Senior Financial
Accountant
Joined Derwent London: 2021
Appointed to the RBC: Q1 2025
Amy Hulbert
Assistant Company
Secretary
Joined Derwent London: 2021
Appointed to the RBC: Q1 2025
Bryan Vasquez
Data Lead Analyst
Joined Derwent London: 2022
Appointed to the RBC: Q1 2025
Will Waples
Associate, Asset Manager
Joined Derwent London: 2020
Appointed to the RBC: Q1 2025
Committee composition and performance
During 2025, our Committee consisted of Madeliene McDougall
(Non-Executive Director), Mark Breuer (Chairman), Paul Williams
(Chief Executive) and Emily Prideaux (Executive Director) as well
as four employee members. At the request of the Committee,
members of the Executive Committee, senior management
team, other Board members and external advisers were invited
to attend all or part of any meeting, as and when appropriate.
During the year under review, the Committee held two formal
meetings in May and December (2024: two meetings).
The 2025 evaluation of the Board, its committees and individual
Directors was externally facilitated by Independent Audit
Limited, in accordance with our three-year cycle of evaluations
(see page 137). The review raised no significant matters or areas
of concern in respect to the operation of the Committee.
The Committee’s role and responsibilities are set out in the terms
of reference, which were last updated in December 2025 and are
available on the Company’s website at:
www.derwentlondon.
com/investors/governance/board-committees
165
Strategic report
Governance
Financial statements
Other information
Responsible Business Committee report
continued
Key activities of the Committee
During 2025, the Committee continued to monitor and have oversight of the responsible business practices of the Group, prioritising
employee wellbeing and engagement with key stakeholders.
Responsible business
ESG and diversity and inclusion through the lens
of Investors
The Committee reviewed the role of ESG and diversity and
inclusion (D&I) from the perspective of UK investors, noting
how sustainability is embedded in the Group’s processes from
development to leasing and portfolio management.
Net Zero Carbon Pathway
The Group continues to recognise its responsibility to commit
to net zero carbon and the impact on our occupiers, assets
and employees.
During the year, the Committee reviewed the Group’s
progress to achieve net zero carbon by 2030, and approved
the new net zero carbon targets and updated Net Zero
Carbon Pathway. The updated Pathway reflects that the
Group’s commitment does not stop at 2030 and therefore a
series of longer term goals have been proposed.
Circular economy
Continued to monitor progress on the circular economy
initiative, aimed at extending, reusing and repurposing
materials through developments and refurbishments. Further
discussion outlined the benefits and outcomes being realised
from this initiative.
Supply Chain Responsibility Standard
The Supply Chain Responsibility Standard (the Standard) sets
out the principles for environmental, social, ethical and
governance expectations within our supply chain. During the
year the Standard was reviewed to ensure our expectations
are clearly communicated as well as being updated to
introduce a confidential reporting line to our existing suppliers
as a means to report any concerns of wrongdoing or
breaches of the Standard anonymously.
Modern slavery
During the review of the Standard a thorough review was
conducted on the modern slavery section to ensure the
Group’s position on modern slavery is clearly communicated
to the supply chain.
2025 marked 10 years since the Modern Slavery Act (the Act)
was enacted. The Act has played an important role in raising
awareness and driving greater corporate accountability.
44
%
average retention and reuse on site
across completed refurbishments as
part of the circular economy
initiative
Stakeholder engagement
Occupier engagement
The ‘You Hold the Power to Save’ occupier campaign was
launched in September 2025, with 60% of occupiers having
actively engaged during the year.
Employee engagement
A ‘meet the Board’ event was arranged with employees from
across the business on 22 September 2025 as the importance
of building relationships and enhancing employee
engagement continues to be recognised.
All employees were invited to participate in a new initiative
‘lunchtime conversations with the Directors’ with the aim of
encouraging open informal discussions between our Directors
and employees.
Local community engagement
£450,000 has been committed to the Community Fund for
three years, shared equally between the Community Fund
West and Community Fund East.
During the year, the Committee has continued to receive
regular updates on the Group’s community initiatives and
engagement, including, but not limited to:
participation in Resurgo’s Spear programme, an
employment support programme focused on providing 16
to 24 year olds with the vital skills needed to succeed in
long-term employment; and
a new initiative supporting charities by offering space at
the DL/Lounges for meetings or events, with £25,000
allocated to fund this initiative.
Sponsorship & Donations Committee
The Sponsorship & Donations Committee ensures that the
decisions and commitment to invest in stakeholders and the
communities surrounding our buildings is aligned with the
Group’s values. £350,000 was committed in 2025 with a focus
of supporting homeless charities within the portfolio as a key
priority.
The Sponsorship & Donations Committee will continue its
strong support for communities by ensuring ongoing
commitment for vital causes.
86.5
%
of employees said they were overall
satisfied with working at Derwent
London
Derwent London plc
Report and Accounts 2025
166
Diversity and inclusion
D&I Working Group
The D&I Working Group focuses on encouraging an inclusive
culture that attracts talented individuals and celebrates the
diverse voice of all employees.
The D&I Working Group is comprised of 15 members, with
four new members welcomed to the D&I Working Group in
December.
The importance of D&I has been well communicated across
the business through town halls, inductions, and the intranet.
Additionally, D&I newsletters were circulated to raise
awareness of D&I in the workplace and has covered the
following topics:
Nurturing young talent
Disability and long-term conditions in the workplace
Business Disability Forum Self-Assessment
Supporting parents in the workplace
‘Understanding Autism’ training
Creating inclusive spaces across our portfolio
Business Disability Forum (BDF)
In June, the Business Disability Forum self-assessment was
resubmitted, with a score of 58.39% achieved which is a
27.51% increase from the Group’s first self-assessment
submission in June 2023.
The Health, Safety and Accessibility Working Group continues
to work collaboratively with the D&I Working Group to further
the Group’s commitment to disability and accessibility.
National Equality Standard
Following the Group’s reaccreditation of the National Equality
Standard, a ‘deep dive’ into the experience of a number of
volunteer ethnically diverse employees was conducted in
June.
Work experience programme
Derwent London continued to operate work experience
programmes and in particular supported the EY Foundation’s
Real Estates Futures programme, offering two candidates a
week’s work experience as well as support from two mentors
for a period of six months.
83
%
of employees agree that their team
provides an inclusive environment
where everyone’s views are valued
Employees
Employee survey
The sixth biennial employee survey was rolled out to all
employees during October and received an 86% response
rate. The Committee received an overview of the results and
discussed the timetable moving forward to respond to the
feedback.
Employee members
The Responsible Business Committee continues to include
four employee members in its composition to enable the
voice of employees to be heard in the boardroom.
The Committee’s employee members continue to play an
active and critical role in the Committee’s activities and
facilitate engagement between the wider workforce and the
Board.
Employee initiatives
During the year, a new ‘Rewards and Recognition’ initiative
was rolled out following feedback from the 2024 pulse survey.
The initiative aims to recognise employees who have
embodied Derwent London’s values and to encourage
cross-team collaboration.
Additionally, the Group’s Long Service Policy was reviewed
during the year and resulted in enhancements to annual
leave entitlements for eligible long-serving employees.
RBC and D&I newsletters
RBC and D&I newsletters were rolled out across the business
throughout the year to ensure employees remain up to date
on initiatives, including sharing employee lived experiences
around long-term conditions/disabilities.
Health & Wellbeing plan
The 2025 Health & Wellbeing plan included informative
sessions on a range of topics:
Healthcare benefits
Musculoskeletal health
Managing anxiety
Understanding and managing cholesterol
Additionally, all employees were offered one-to-one health
checks, which received a positive take-up of 112 employees.
86
%
response rate on the Group’s sixth
biennial employee survey
167
Strategic report
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Financial statements
Other information
Supply Chain Responsibility Standard
Responsible Business Committee report
continued
The primary purpose of the Supply Chain Responsibility Standard
(the Standard) is to clearly set out our principles and
expectations in terms of the environmental, social, ethical and
governance issues which relate to our supply chains. The
Standard renews our commitment to ensuring our supply chain
remains as engaged as we are in setting the highest standards.
A review of the Standard was conducted to ensure its continued
relevance, leading to an updated version issued in 2025. Using a
risk-based approach, work was conducted with departments to
ensure effective circulation to key suppliers working in our
portfolio. The fundamental principles of the Standard are
detailed in the table below and a copy is available to view at:
www.derwentlondon.com/responsibility/environmental
It is our standard practice that all new suppliers must read,
acknowledge and adhere to these standards. We conduct risk
reviews every two years, focusing on suppliers with an annual
spend of over £20,000 and may ask these suppliers to complete a
more detailed questionnaire on key risk areas. All responses are
reviewed to ensure compliance, and we provide additional
support to suppliers if needed to improve their controls.
Responsible payment practices
Responsible payment practices remain an area of important
focus for the Group as we are committed to being clear, fair and
collaborative with our suppliers. The Fair Payment Code (the
Code) replaced the Prompt Payment Code in December 2024,
with the new Code intended to set higher standards, and to
create a more robust approach to compliance. During the year,
the Group completed the application process and achieved the
Bronze level accreditation. As the Group continues to enhance its
reporting systems, we will have the ability to report upon
additional elements required to achieve a higher level
accreditation, further demonstrating the Group’s commitment
to the prompt and fair payment of suppliers.
During the year, significant work has been completed in
respect to the new legislation under the Economic Crime
and Corporate Transparency Act 2023. Further information is
on page 137.
A key element of this is the communication of fraud
prevention policies internally and externally. This
communication includes the Supply Chain Responsibility
Standard where the Group’s zero tolerance to fraud is
referenced. As a result of this, our whistleblowing reporting
line has been extended to enable third parties to also submit
any concerns anonymously. The Supply Chain Responsibility
Standard was updated to include details of both the third
party whistleblowing line as well as requiring suppliers (who
are subject to regulatory requirements) to commit to, or
have ambitions of, having their own whistleblowing system
in place for the reporting of wrongdoing or misconduct.
Supplier
whistleblowing line
Fundamental principles of the Supply Chain Responsibility Standard
Fundamental principles
Minimum standard
Governance
We will not tolerate any form of fraud, corruption, bribery or anti-competitive behaviour/
actions in our supply chain
Information security
and data protection
Suppliers to have a comprehensive set of IT governance policies and procedures that are
communicated to all employees through periodic training on data privacy and
protection
Employment and labour practices
Suppliers to comply with relevant employee-based legislation
Modern slavery
Suppliers to comply with the Modern Slavery Act 2015
Diversity and inclusion
Suppliers to comply with the Equality Act 2010
Payment practices
To aim to pay our suppliers within 30 days or in accordance with specified contract
conditions
Health, safety and wellbeing
Suppliers to annually review their Health and Safety Policy Statement and management
systems
Environmental and social
Suppliers to have robust environmental management policies and procedures in place
appropriate to the nature and scale of their business
Network
W1
Derwent London plc
Report and Accounts 2025
168
Modern slavery
Preventing modern slavery from all supply chains is vital and we
remain committed to eradicating any possibility of modern
slavery or human trafficking occurring in our operations.
2025 marked 10 years since the Modern Slavery Act (the Act) was
passed. Not only has the Act raised awareness, it has formed the
groundwork for continued progress driving businesses to take
greater responsibility for their supply chains. To ensure
organisations remain progressive, there has been a call for
businesses to understand, on a deeper level, how to prevent
modern slavery. As a result new statutory guidance has been
published, ‘Transparency in Supply Chains’, with key updates
addressing enhanced due diligence, transparency, accountability,
an increased focus on supplier collaboration and greater
alignment with global standards. In response, we will continue to
work with our supply chain to understand how best to work
towards continuous improvements in line with the new guidance.
A summary of our key practices to prevent modern slavery is
outlined below. Our latest Modern Slavery Statement is available
to view on our website:
www.derwentlondon.com/investors/
governance/modern-slavery-act
Risk
The greatest potential risk exists in the supply
chains of our construction contractors as well as
the property management suppliers and
maintenance contractors used in our buildings.
Governance
The Modern Slavery Act 2015 requires companies
with an annual turnover of £36m to provide a
modern slavery statement. Where legally
required, our suppliers publish a modern slavery
statement. Regardless of this threshold we
encourage all suppliers to adhere to the Act.
Suppliers are expected to provide modern slavery
training to employees and ensure they have
provisions in place for full compliance.
Policies
We have a number of internal policies that
promote an ethical culture and expected
behaviours in accordance with the Act’s
objectives.
Engagement
We are clear on our zero-tolerance position and
all suppliers have access to Derwent London’s
latest Modern Slavery Statement. We endeavour
to obtain modern slavery statements from all
suppliers, where they are bound by the Act. We
expect our main contractors to conduct due
diligence within their own supply chains to ensure
that the risk of modern slavery and human
trafficking is mitigated.
Effectiveness
All new starters are required to complete a ‘core
skills’ programme which includes training on
modern slavery risks. Ongoing training initiatives
and our mandatory compliance training
programme ensures that employees are kept up
to date with the latest requirements.
Community Fund
Derwent London has a dedicated voluntary Community
Fund as part of its ongoing sustainability programme and
commitment to developing community engagement (see
pages 76 and 77).
The Group has previously received feedback from charities
expressing a greater need for certainty and continuity in
funding for the longer term. The ongoing economic
challenges, particularly faced by small charities and
community groups, are recognised by the Group and in
response to this feedback, it was agreed to introduce the
option for charities to apply for multi-year funding.
The Responsible Business Committee continues to oversee
the Group’s corporate social responsibility activities and
provides updates directly to the Board. Overall, it is pleasing
to report that £450,000 has been allocated to the Derwent
London Community Fund for the period 2025 to 2027, which
reinforces the ongoing commitment to social responsibility.
S.172 factors
C
D
E
Dende Collective – Community Fund West
169
Strategic report
Governance
Financial statements
Other information
Responsible Business Committee report
continued
Diversity and
inclusion
At Derwent London, having a diverse, highly skilled and talented
workforce across all levels is integral to our continued success.
We believe that fostering diversity and inclusion not only enriches
our culture but drives innovation and creativity by welcoming
new ideas and perspectives.
The Diversity & Inclusion Working Group
The Diversity & Inclusion Working Group (the D&I Working Group)
consists of 15 members and meets monthly to discuss the
progress being made towards the Group’s diversity and inclusion
vision, strategy and KPIs.
During the year, the Committee received updates from the D&I
Working Group on disability and accessibility, wellbeing
initiatives, internal communication of D&I, the work experience
programme, feedback from the 2025 Employee Survey and
actions following the National Equality Standard reaccreditation.
During 2026, the D&I Working Group will focus on:
launching a new mentoring programme;
continuing to increase and improve communication around
D&I initiatives;
encouraging employee lived experiences to be shared
internally;
hosting two sessions of the ‘lunchtime conversations with the
Directors’ initiative; and
continuing to work on the Disability & Accessibility assessment
in conjunction with the Business Disability Forum Framework.
The Board has established clear focus areas which aim to build an inclusive culture that promotes, encourages and celebrates the
importance of diversity and inclusion.
Diversity and inclusion focus areas
Actions taken during 2025
Attracting diverse, highly skilled and talented employees
Tackle any unconscious bias
All shortlists to have due regard for diversity considerations
(not limited to gender and ethnicity)
Recruit from a wide pool of talent (including parents
returning to work)
Worked with EY following the National Equality Standard
reaccreditation, which included speaking to a number of employees
through a series of focus groups
Relaunched the recruitment process and guidelines
Retaining the best talent
Focus on supporting persons returning to work
Promote the importance of health and wellbeing initiatives (one-to-
one health checks)
Prioritise training and development and equal opportunities for all,
with support of career progression
Ensure open two-way communication
Held core skills workshops, team days and one-to-one coaching
Continued to provide a wellbeing programme, encouraging
employees to take proactive measures
Rolled out a ‘Rewards and Recognition’ initiative to recognise
employees who have embodied the Company’s values and to
encourage cross-team collaboration
Promoting diversity
Gender balance within our internships and work experience
placements
Aim to attract more women to the construction and property
industry
Heads of Departments to lead by example demonstrating inclusive
leadership qualities
Monitored the trends of joiners and leavers
Increased communication on D&I through newsletters and the
Company’s intranet
Delved deeper into individuals’ experiences and any variances
Throughout the year, the Group continued to strengthen
employee engagement through a series of D&I newsletters.
This year a new feature was introduced ‘Get to know your
colleagues’, aimed at encouraging employees to share their
experiences and to promote greater understanding across
the workforce. Key features included:
Supporting parents in the workplace
Employees shared their experiences of returning to the
workplace following periods of maternity leave, offering
insights into the challenges and opportunities faced by
working parents. In January 2025, the Group introduced a
new workplace nursery benefit, enabling eligible employees
to pay nursery fees through a salary sacrifice arrangement.
The initiative has been positively received by parents from
across the business.
‘Understanding Autism’ training
In partnership with the National Autistic Society, training
was delivered to 44 employees. The training was designed
to enhance understanding of autism and to equip
employees with the skills and awareness to better support
autistic colleagues and visitors.
Disability and long-term conditions in the
workplace
Employees shared their stories relating to disability and
long-term conditions, helping to raise awareness and foster
a more inclusive and supportive working environment.
These contributions encouraged employees to consider the
diverse needs of their peers and to adapt to working
practices where appropriate.
2025 D&I Newsletters
Derwent London plc
Report and Accounts 2025
170
The Group’s composition and diversity
The information below provides a breakdown of our diversity as at 31 December 2025. Further information on the Board’s composition
is shown on page 141. The variance between genders in response to employee surveys is taken into account by the Remuneration
Committee when determining the annual bonus payout for Executive Directors in relation to the staff satisfaction metric (see page
202).
Gender diversity and ethnic origin
1
Total employees
2
Executive Committee and
its direct reports
3
Board
4
Senior
positions on
the Board
5
Number
%
Number
%
Number
%
Number
Gender
Men
96
47%
40
52%
6
60%
3
Women
110
53%
37
48%
4
40%
1
Other
–
–
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
–
–
206
77
10
4
Ethnicity
White British/White Other
150
73%
69
90%
9
90%
4
Mixed/Multiple Ethnic Groups
12
6%
3
4%
–
–
–
Asian/Asian British
26
13%
3
4%
1
10%
–
Black/African/Caribbean/Black British
15
7%
1
1%
–
–
–
Other Ethnic Group
2
1%
1
1%
–
–
–
Not specified/prefer not to say
1
0.5%
0
0%
–
–
–
Total
206
77
10
4
1
The information disclosed, and the format of the table, is prescribed by Listing Rule 9.8.6R(10).
2
Total employees include the Board of Directors.
3
Includes the Executive Committee and its direct reports (excluding administrative and support staff).
4
The Board includes the Chairman, Executive Directors and Non-Executive Directors.
5
Senior positions on the Board include the CEO, CFO, Chairman and Senior Independent Director.
Diversity key performance indicators
53
%
of employees are female
as at 31 December 2025
(2024: 51%)
37
%
of new recruits during 2025 were from
an ethnically diverse background
(2024: 36.1%)
56
%
of the Executive Committee and its
direct reports are women
(2024: 42%)
Length of service
Employees by age
Years
Under 3
3–4
5–9
10–14
15–19
20+
Age
20–29
30–39
40–49
50–59
60+
40%
25%
13%
12%
10%
37%
20%
19%
9%
7%
7%
171
Strategic report
Governance
Financial statements
Other information
Sanjeev Sharma
Chair of the Remuneration Committee
2026 focus areas
Approve the remuneration package for the new CEO
Ensure the 2026 Remuneration Policy is effectively
implemented following shareholder approval in May 2026
Operation of the 2026 annual bonus and grant of 2026
long-term incentive awards
Continue to keep wider workforce remuneration
arrangements under review, taking these into account
when considering remuneration arrangements for
Executive Directors
Committee membership during 2025
Independent
Number of
meetings
Attendance
1
Sanjeev Sharma
Yes
7
100%
Lucinda Bell
Yes
7
100%
Helen Gordon
Yes
7
100%
1
Percentages are based on the meetings that each member is entitled to
attend for the 12 months ended 31 December 2025.
Annual statement
Dear Shareholder,
As Chair of the Remuneration Committee and
on behalf of the Board, I am pleased to
present our report on Directors’ remuneration
for 2025. This includes:
my
Annual statement
as Chair of the Remuneration
Committee (pages 172 to 175);
our new
Directors’ Remuneration Policy,
which will be
subject to a binding shareholder vote at the 2026 AGM (pages
178 to 187); and
the Annual report on remuneration
(pages 188 to 209),
describing how the Remuneration Policy has been applied for
the year ended 31 December 2025 and how we intend to
implement the Policy for 2026.
The Remuneration Committee report (excluding the
Remuneration Policy) will be subject to an advisory shareholder
vote at the 2026 AGM.
Performance outcomes in 2025
Based on performance against the financial and strategic
targets, the incentive outcomes for 2025 were as follows:
Annual bonus outcome of 55.5% of the maximum opportunity
(equivalent to 83.3% of base salary) based on the outcome of
the relative total accounting return and total property return
performance targets and strategic objectives (see page 201).
2023 performance share award outcome of 3.6% of the
maximum opportunity. The proportion of the award subject
to relative total shareholder return, relative total property
return and energy intensity reduction performance targets
lapsed in full. The proportion of the award subject to
embodied carbon reduction performance targets vested at
71.2% of maximum (see page 203).
The Committee considered the formulaic vesting outcomes
against broader perspectives including underlying business
performance and affordability; the experience of shareholders;
and the experience of employees and other stakeholders.
The Group has continued to perform strongly relative to central
London office-based real estate peers (the Group’s 2025 total
property return performance was 5.5% compared to the MSCI
Quarterly Central London Offices Total Return Index of 4.8%) in
the face of a subdued market and continued economic
uncertainty, which is testament to the execution of the strategy
over multiple years, the performance and commitment of our
executive leadership team and the quality of the portfolio they
have assembled.
The Directors recommend a final dividend of 56.0p per ordinary
share for the year ended 31 December 2025. When taken
together with the interim dividend of 25.5p per ordinary share
paid in October 2025, this results in a 1.2% increase in total
dividend for the year.
Remuneration Committee report
Derwent London plc
Report and Accounts 2025
172
The Committee also recognises that shareholders have been
impacted by the Group’s absolute share price performance during
recent years.
A dedicated section is included within this report which
incorporates several disclosures to demonstrate the Committee’s
belief that remuneration arrangements for Executive Directors are
fair and appropriate in the context of pay policies and practice
across the wider workforce (see pages 194 to 197). In particular, it
is noted that all eligible employees received a bonus for 2025 and
92.5% received a grant under the Employee Share Option Plan in
2025.
No discretion was applied to adjust the formulaic outcome of the
annual bonus or performance share awards. With regard to
provision 41 of the UK Corporate Governance Code, the Policy
operated as intended in terms of Company performance and
quantum.
Departures from the Board and treatment of
remuneration
Paul Williams, Chief Executive
As announced on 22 January 2026, after 38 years of service, Paul
Williams will retire as Chief Executive and Director when a
successor has been appointed and is in place. Paul will remain a
full-time employee until 21 January 2027 and will assist the Board
and the incoming CEO through an orderly transition. He will
continue to receive his salary, benefits and pension until that date.
Paul was eligible for a bonus for the year ended 31 December 2025
and will be eligible for a bonus for the year ended 2026. He will not
be granted a long-term incentive award in 2026. Paul will be
treated as a good leaver in respect of his outstanding deferred
bonus awards (which will vest at the normal time) and his
outstanding performance share awards, which will be capable of
vesting at the normal time subject to performance. Any amounts
that vest will be subject to a holding period which ends on the
second anniversary of the date that he steps down as CEO.
Paul will also be required to hold shares following his retirement
from the Board in accordance with the Group’s post-employment
shareholding. Further information is set out on page 199.
Nigel George, Executive Director
As announced on 12 August 2025, after 37 years of service, Nigel
George will retire and stand down from the Board on 31 March
2026. Nigel will remain a full-time employee until 11 August 2026
and will then continue to support the business as a consultant
working on a number of projects expected until March 2028. Nigel
will continue to receive his salary, benefits and pension until
11 August 2026.
Nigel was eligible for a bonus for the year ended 31 December
2025 and will be eligible for a bonus for the period 1 January to
11 August 2026. He will not be granted a long-term incentive
award in 2026. Nigel will be treated as a good leaver in respect of
his outstanding deferred bonus awards (which will vest at the
normal time) and his outstanding performance share awards,
which will be capable of vesting at the normal time subject to
performance and any amounts that vest will be subject to a
two-year holding period.
Nigel will also be required to hold shares following his retirement
from the Board in accordance with the Group’s post-employment
shareholding guidelines. Further information is set out on page
199.
Remuneration Policy review
Our current Remuneration Policy, approved by shareholders at the
2023 AGM (with a vote in favour of 95%), is approaching the end
of its three-year term. The Committee has undertaken a
comprehensive review of the Policy and executive incentive
structure, which included extensive consultation with the
Company’s major shareholders (representing c.70% of the
Company’s issued share capital) and proxy voting agencies over a
six-month period. The Committee is very appreciative of the time
taken by shareholders to provide their feedback.
The review was informed by the following objectives:
The incentive structure should support an effective pay for
performance culture, rewarding the delivery of the Group’s
strategy and strong market outperformance, and promote
long-term sustainable decision making throughout the
property cycle.
The total remuneration package should be competitively
positioned against the market and, together with the incentive
structure, appropriately incentivise Executive Directors, who are
highly regarded in the market, and ensure that the Group can
attract talented and experienced Executive Directors in the
future.
The incentive structure should address the challenges of
operating in a cyclical sector and against the backdrop of
continued market uncertainty. In particular, the long-term
incentive structure should enable the delivery of stable and
competitive reward outcomes, which fairly reflect performance
and the ongoing execution of the Group’s strategy throughout
the cycle, and the experience of shareholders over the longer
term.
Proposed change to the long-term incentive structure
The Group has operated a Performance Share Plan for several
years for Executive Directors and broader Executive Committee
members, and the Committee believes that performance share
awards should continue to form a significant part of the incentive
structure. Performance share awards support an effective pay for
performance culture and maximum vesting can only be achieved
for the delivery of strong market outperformance.
The Committee also recognises the importance of long-term
incentive structures that, within a cyclical sector, effectively
support executives to build up their shareholding, thereby
fostering stewardship and promoting the long-term decision
making which is critical in our industry, as well as act as an
effective retention mechanism. In this regard, the Committee
discussed moving from performance share awards to restricted
share awards (i.e. a share award which vests subject to continued
employment and underpins; and is not subject to performance
measures), noting that there are examples of UK real estate
companies operating restricted share awards. The Committee
concluded that operating only restricted share awards would not
be consistent with the Policy review objectives. In particular, the
approach would not support a pay for performance culture, nor
be in the best interest of shareholders. Instead, after careful
consideration, the Committee is proposing to introduce a hybrid
long-term incentive structure whereby both performance share
and restricted share awards are granted to Executive Directors
173
Strategic report
Governance
Financial statements
Other information
and broader Executive Committee members, with the
performance share awards forming a significant proportion of the
overall long-term incentive potential.
The Committee is mindful that hybrid structures are currently
relatively uncommon in the UK, particularly where organisations
have limited US exposure. However, the UK remuneration
landscape is evolving to allow for more tailored structures,
provided that there are clear and demonstrable links to: (i) the
business and talent strategy of the company; and (ii) the long-
term interests of shareholders. The Committee has approached
the review of the long-term incentive structure with this mindset.
The Committee firmly believes that the proposed hybrid structure
is the right fit for Derwent London and strikes a balance between:
continuing to incentivise executives to deliver the Group’s
strategy and strong market outperformance (via the
performance share awards); with
fostering stewardship and long term decision making by
supporting executives to build up their shareholdings, fairly
rewarding executives for performance in executing the
strategy, and acting as an effective retention mechanism
throughout the property cycle (via the restricted share awards).
Award opportunity
The maximum performance share award opportunity under the
current policy is 200% of salary. The Committee considers this to
be a market competitive performance share award opportunity
taking into account Derwent London’s size and complexity, and it
has therefore been used as a basis for determining the proposed
quantum under the hybrid structure.
The Committee also believes that the performance share awards
should form a significant proportion of the overall opportunity
under the hybrid structure, to continue to support a pay for
performance culture.
The following quantum is therefore proposed, in accordance with
the Investment Association guidelines:
Performance share award with a maximum opportunity equal
to 150% of salary.
Restricted share award with an opportunity equal to 25% of
salary.
Meaning an overall maximum opportunity equal to 175% of
salary under the hybrid structure.
The restricted share award opportunity has been discounted by
50% compared to the equivalent performance share award
opportunity, in line with guidance set out in the Investment
Association’s Principles of Remuneration and general shareholder
expectations.
Performance share award measures
The 2025 performance share award measures (and weightings)
are:
Total shareholder return vs the FTSE 350 Super Sector Real
Estate Index (excluding agencies) (50%)
Total property return vs the MSCI UK All Property Index (40%)
Embodied carbon reduction (5%)
Energy intensity reduction (5%)
Remuneration Committee report
continued
For 2026, a change to the total property return comparator is
proposed from the MSCI UK All Property Index to the MSCI UK All
Office Index.
Derwent London is a central London office-focused REIT and
therefore the Committee firmly believes that the MSCI UK All
Office Index provides closer alignment with our strategic focus
and key competitors. In proposing the change in comparator, the
Committee has been mindful that:
Different total property return comparators will continue to
apply under the annual bonus (MSCI Central London Office
Index) and the performance share awards (MSCI UK All Office
Index).
Executive Directors will continue to be incentivised to
outperform the UK real estate market more generally under
the annual bonus and the performance share awards. The
annual bonus will continue to include a total accounting
return performance measure (30% of the award) vs a peer
group made up of real estate companies operating across
different asset classes and regions. It is proposed that 10% of
the performance share awards will continue to be based on
environmental performance, which will comprise solely of an
embodied carbon reduction measure. This recognises that
reducing the embodied carbon of developments will have the
greatest positive environmental impact and is fully within
Derwent London’s control. The performance share awards will
continue to include a total shareholder return performance
measure (50% of the award) vs a peer group also made up of
real estate companies operating across different asset classes
and regions.
In summary, the proposed 2026 performance share award
measures (and weightings) are:
Total shareholder return vs the FTSE 350 Super Sector Real
Estate Index (excluding agencies) (50%)
Total property return vs the MSCI UK All Office Index (40%)
Embodied carbon reduction (10%)
Restricted share award underpins
The vesting of restricted share awards will be subject to
underpins that safeguard the financial stability of the business
and provide sufficient focus on corporate governance and health
and safety responsibilities. If the Committee considers that the
underpins have not been met, then it would consider whether it
is appropriate to scale back the vesting (including to nil vesting if
considered appropriate) of the restricted share awards.
The proposed underpins for the 2026 restricted share awards are
as follows:
No breach of financial covenants.
Satisfactory underlying performance.
No material failure in corporate governance or health and
safety resulting in significant reputational damage and/or
financial loss.
Furthermore, the Committee will have discretion to reduce the
vesting level of the restricted share awards (as well as the
performance share awards) if it is not reflective of the Group’s
overall financial or non-financial performance, individual
performance, or the experience of shareholders or other
stakeholders during the vesting period.
Annual Statement
continued
Derwent London plc
Report and Accounts 2025
174
Shareholder feedback
The Committee is pleased with the level of support received for
the proposed changes to our Remuneration Policy. Shareholders
and proxy voting agencies largely understood the Committee’s
strategic rationale for introducing such a structure, and were
particularly supportive that:
1
the restricted share awards is a modest proportion (c.15%) of
the overall long-term incentive potential; and
2
a 50% discount (in terms of conversion from performance
share to restricted share awards) is being applied.
During consultation, some shareholders questioned the proposed
introduction of a hybrid structure given it is relatively uncommon
in the UK and that relative performance measures (total
shareholder return and total property return) with the current
performance share awards help protect against the cyclical
nature of the industry, and asked the Committee to elaborate
further on its rationale. The Committee agrees that relative
performance measures do, in theory, provide some protection,
and performance measures have been considered as part of the
Policy review.
As noted above, the Committee is proposing a change to the
total property return comparator group. However, relative
performance measures are still imperfect and have practical
challenges. For example, comparator group selection. Derwent
London is a central London office-focused REIT. The total
shareholder return and total property return comparator groups
used in recent years include real estate companies operating in
different geographies across the UK and asset classes, meaning
they are impacted by different economic headwinds and
tailwinds. This can then adversely impact Derwent London’s
relative performance against comparator group constituents.
Furthermore, operational and strategic decisions taken by
management today are to support long-term sustainable value
creation and may not yield immediate shareholder returns or
increases in NAV, particularly in a subdued market. The three-
year performance period attached to performance share
awards, whilst reflective of standard market practice in the UK,
can often be misaligned with the longer term nature of Derwent
London’s strategy.
The Committee therefore strongly believes a hybrid structure,
with performance share awards forming a significant proportion
of the overall long-term incentive potential, is the right approach
for the Group at this time. Furthermore, the proposed restricted
share award underpins, the ability to apply discretion to the
vesting outcome, and the fact that a significant majority of the
long-term incentive structure remains subject to challenging
performance targets will ensure that there are appropriate
safeguards in place to ensure reward outcomes are aligned to
performance and the experience of shareholders.
The initial and closing letters sent to shareholders and proxy
voting agencies as part of the consultation process are included
on the Company’s website at:
www.derwentlondon.com/
investors/governance/board-committees
Implementation in 2026
Base salaries
No increases were made to Executive Directors’ base salaries for
the year beginning 1 January 2026. Accordingly, Paul Williams’
salary will remain at £732,000 and at £564,600 for the other
Executive Directors. Base salary increases across the wider
workforce were in line with the average inflationary increase of
3.0%. The average actual increase in base salaries for all
employees eligible for a pay rise (inclusive of promotions, career
progression and market salary alignments) effective from
1 January 2026 was 3.6%.
Annual bonus and long-term incentive
The annual bonus opportunity of 150% of salary and financial
metrics (which make up 75% of the award) remain unchanged
for 2026. The Committee reviewed the strategic objectives
(which make up the remaining 25% of award) and have made
some refinements to ensure the objectives remain appropriately
aligned with the Group’s strategic priorities. The 2026 strategic
scorecard will comprise capital recycling, leasing, cost savings,
staff satisfaction and health and safety objectives (see page
190).
Subject to shareholder approval of the Remuneration Policy,
Executive Directors will be granted performance share and
restricted share awards as detailed above. Details of the
performance share award measures and restricted share award
underpins are set out on page 191.
Non-Executive Chairman and
Non-Executive Director fees
No increases were made to the Non-Executive Chairman’s fee or
the Non-Executive Directors’ base fees for the year beginning
1 January 2026. This is consistent with the approach taken for
Executive Directors.
Further engagement
I look forward to receiving your support at our 2026 AGM, where I
will be available to respond to any questions shareholders may
have on this report, the proposed Remuneration Policy, or in
relation to any of the Committee’s activities. In the meantime, if
you would like to discuss any aspect of our Remuneration Policy
or incentive framework, please feel free to contact me through
the Company Secretary, David Lawler (email:
company.
secretary@derwentlondon.com
).
The Directors’ remuneration report has been approved by the
Board of Directors and signed on its behalf by:
Sanjeev Sharma
Chair of the Remuneration Committee
25 February 2026
175
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Governance
Financial statements
Other information
Our Remuneration Policy is designed to be transparent and to promote effective
stewardship that is vital to the delivery of the Group’s purpose and strategy.
Remuneration at a glance
Wider stakeholder considerations
The Committee considers pay policies and practices
for employees, as well as feedback from key
stakeholders, when making remuneration decisions
for Executive Directors.
Reward linked to performance
Performance-based remuneration achieved for the year ended 31 December 2025 as a percentage of base salary.
Further information on annual bonus and performance share award outcomes is available on pages 201 to 204.
Maximum opportunity (% of salary)
Annual bonus
Performance share
award
Single figure of remuneration (£’000)
Paul Williams, CEO
Other Executive Directors
Annual bonus
Long-term incentive
Performance-based
Total remuneration
+
1.2
%
+
95
%
increase in the total
dividend (2024 to 2025)
of votes cast in favour of
our revised Remuneration
Policy at the 2023 AGM
+
3.6
%
16:1
average increase in
base salaries for all
employees eligible for
a pay rise effective
from 1 January 2026
CEO pay ratio at 50th
percentile (median)
for 2025 (see page 197)
Variable pay
Fixed pay
Base salary
Benefits
Pension
Remuneration Policy summary
Fixed pay
Pay for performance (and other items in the name of remuneration)
Remuneration Committee report
continued
Annual Statement
continued
83.3%
3.6%
200%
150%
2024
2025
2024
2025
872
648
845
651
678
499
658
502
Derwent London plc
Report and Accounts 2025
176
Component
2023 Remuneration Policy
2026 Remuneration Policy
Base salary and
benefits
Attract and retain high calibre executives.
No change.
Pension
In line with the contributions available for the majority of
the wider workforce (currently 15% of salary).
No change.
Annual bonus
Maximum opportunity: 150% of salary
No change.
At least 75% of bonus based on financial measures with up
to 25% based on strategic objectives.
Majority of bonus based on financial measures with
remainder based on strategic objectives.
Any amount earned in excess of 75% of salary is deferred
into shares, which are released after three years subject to
continued employment.
No change.
LTIP
Performance share award
Performance share and restricted share awards
(hybrid)
Maximum opportunity: 200% of salary
Maximum opportunity:
Performance share award: 150% of salary
Restricted share award: 25% of salary
Restricted share award is discounted by 50% vs
performance share award equivalent.
Performance share award measures reviewed annually
reflecting the Group’s strategy and metrics relevant to the
business.
No change.
Restricted share plan underpins reviewed annually
and designed to safeguard the financial stability of
the business and provide sufficient focus on
corporate governance and health and safety
responsibilities.
Three-year performance period plus two-year holding period
No change.
Committee discretion
The Committee has discretion to adjust the vesting
outcome of annual bonus and LTIP awards if not deemed to
reflect appropriately the underlying financial or non-
financial performance of the business, the performance of
the individual or the experience of shareholders.
No change.
Shareholding guidelines
200% of salary for all executives.
No change.
Remuneration Policy review process
The major focus area of the Committee during the year was the Remuneration Policy review.
14 April 2025
Invitation
to engage
Q2 2025
Review
Remuneration
Policy
with external
advisers
July 2025
Initial
consultation with
shareholders and
proxy agencies
Q3 2025
Meetings
held
with
shareholders
and proxy
agencies
Q4 2025
Finalisation of
Remuneration
Policy with
Remuneration
Committee
October 2025
Feedback to
shareholders and
proxy agencies
May 2026
Shareholder
approval
at AGM
April 2026
Publish
Remuneration
Policy report
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Other information
Directors’ Remuneration Policy
The following part of the report sets out the Remuneration Policy for the Group (Policy). This
Policy will be put forward to shareholders for their binding approval at the AGM on 15 May 2026
and will apply to payments made from this date. Further details regarding the operation of the
Policy for the 2026 financial year can be found on pages 190 to 191.
Changes to the Directors’ Remuneration Policy
The Committee has undertaken a comprehensive review of the Policy and executive incentive structure. After careful consideration,
the Committee is proposing to introduce a hybrid long-term incentive structure whereby both performance share and restricted share
awards are granted to the Executive Directors and broader Executive Committee members, with the performance share awards
forming a significant proportion of the overall long-term incentive potential. The Committee’s rationale and context for this proposed
change is set out on pages 173 to 175. A summary of the proposed changes to the Remuneration Policy and executive incentive
structure is set out in the remuneration at a glance section on page 177.
Summary of decision making process
In determining the Policy, the Committee followed a robust process which included discussions on the content of the Policy at seven
Remuneration Committee meetings during 2025. The Committee considered input from management and our independent advisers,
and consulted with major shareholders, including taking account of the recently published Investment Association guidelines.
Management did not take part in any decision making discussions regarding changes to the Policy or executive remuneration
framework in order to avoid any conflicts of interest.
Factoring our stakeholders into our decisions
Engaging with our shareholders
The Committee actively seeks dialogue with shareholders and values their feedback. As part of the Remuneration Policy review, the
Committee undertook an extensive consultation with the Company’s major shareholders (representing c.70% of the Company’s issued
share capital) and proxy agencies over a six-month period, and the Committee carefully considered the feedback received as part of
its decision making (see page 175, Remuneration Committee Chair’s Annual statement). The Committee is very appreciative of the
time taken by shareholders to provide their feedback.
On an ongoing basis, any feedback received from shareholders is considered as part of the Committee’s annual review of
remuneration. The Committee will also discuss voting outcomes at the relevant Committee meeting and will consult with
shareholders if and when any significant changes to the way the Remuneration Policy are implemented.
Engaging with our employees
We have an open, collaborative and inclusive management structure and our employees are provided with the means to engage on a
range of matters. The Committee considers pay across the Group, as well as any employee feedback, when making decisions on
executive remuneration. A dedicated section is included within this report which incorporates several disclosures to demonstrate the
Committee’s belief that remuneration arrangements for Executive Directors are fair and appropriate in the context of pay policies and
practice across the wider workforce (see pages 194 to 197).
Remuneration Committee report
continued
Derwent London plc
Report and Accounts 2025
178
Executive Director policy table
The policy table below sets out the key elements of the remuneration package for Executive Directors.
Element
Purpose and link
to strategy
How
operated
Maximum
opportunity
Performance
measures
Base salary
To recruit, retain and
motivate high calibre
executives. Reflects
experience and
importance to the
business.
Normally reviewed annually. Any
increase is usually effective from 1
January.
Factors taken into account in the
review include, but are not limited
to:
the role, experience and
performance of the individual
and the Company;
pay and conditions throughout
the business; and
practice in companies with
similar business characteristics.
No maximum salary or
salary increase, but
increases will normally be
consistent with the policy
applied to the workforce
generally (in percentage of
salary terms).
Increases above this level
may be awarded in certain
circumstances such as, but
not limited to:
where there is a change
in role or responsibility;
an Executive Director’s
development or
performance in role (e.g.
to align a new hire’s
salary with the market
over time);
where there is a
significant change in the
size and/or complexity
of the Group; and
where there is a
significant change in
market practice.
A broad assessment
of personal and
corporate
performance is
considered as part of
the salary review.
Benefits
To provide a market
competitive benefits
package to help
recruit and retain
high calibre
executives and to
support their
wellbeing.
Benefits include, but are not
limited to, private medical
insurance, car and fuel allowance
and life assurance.
Executive Directors may
participate in the Sharesave Plan
and any other all-employee plans
on the same basis as other
employees up to HMRC approved
limits.
In certain circumstances, the
Committee may also approve
additional one-off or ongoing
allowances or benefits relating to
the relocation of an Executive
Director as may be required to
perform the role.
The Committee has the ability to
reimburse reasonable business-
related expenses and any tax
thereon.
The Committee may introduce
any other benefits if it is
considered appropriate to do so.
Whilst there is no
prescribed maximum cost
of providing benefits, the
value of benefits is set at a
level which the Committee
considers to be
appropriate taking into
account relevant factors
including but not limited
to the overall cost to the
Company in securing the
benefits, individual
circumstances, benefits
provided to the wider
workforce and market
practice.
None.
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Other information
Element
Purpose and link
to strategy
How
operated
Maximum
opportunity
Performance
measures
Pension
To provide an
appropriate level of
retirement benefit.
The Company operates a defined
contribution pension scheme.
Executive Directors may receive
cash payments in lieu of some or
all of their contributions where
considered appropriate (for
example where contributions
would exceed either the lifetime or
annual contribution limits).
The maximum Company
contribution or cash
supplement (or a mix of
both) for Executive
Directors is aligned with
the contribution available
to the majority of the
wider workforce (currently
15% of salary).
None.
Annual
bonus
To incentivise the
annual delivery of
stretching financial
targets and strategic
goals. Financial
performance
measures reflect
metrics relevant to
the business.
Bonus awards are based on
performance measures set by the
Committee (typically measured
over a financial year) against key
performance measures and
objectives, and continued
employment.
Maximum opportunity of
up to 150% of salary may
be awarded in respect of a
financial year.
Bonuses up to 75% of
salary are paid as cash.
Amounts in excess of 75%
are normally deferred into
shares for three years
subject to continued
employment. The
Committee may decide to
pay the entire bonus in
cash where the amount to
be deferred into shares
would, in the opinion of
the Committee, be so
small it is administratively
burdensome to apply
deferral.
Dividend equivalents may
accrue on deferred shares.
Such amounts will
normally be paid in shares.
Malus and clawback
provisions apply (see table
on page 183).
The Committee has
discretion to adjust the
payment outcome if it is
not deemed to reflect the
underlying financial or
non-financial performance
of the business, the
performance of the
individual or the
experience of shareholders
or other stakeholders over
the performance period.
The majority of the
annual bonus will
normally be based on
financial measures
with the remainder
based on strategic
objectives.
Financial measures
Up to 22.5% of each
bonus element will be
payable for threshold
performance, with
full payout for
maximum
performance. No
amount is payable for
achieving below
threshold
performance.
Strategic objectives
Vesting will apply on
a scale between 0%
and 100% based on
the Committee’s
assessment of the
extent to which
performance against
the strategic
objectives has been
met. Performance
measures are
reviewed annually
reflecting the Group’s
strategy and metrics
relevant to the
business.
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Derwent London plc
Report and Accounts 2025
180
Element
Purpose and link
to strategy
How
operated
Maximum
opportunity
Performance
measures
Performance
share
awards
To align the long-
term interests of the
executives with those
of the Group’s
shareholders. To
incentivise executives
to deliver the Group’s
strategy and strong
market
outperformance.
Award of performance shares
which vest after three years
subject to performance measures
set by the Committee and
continued employment.
Awards will be subject to a
two-year post-vesting holding
period.
Dividend equivalents may accrue
on performance shares. Such
amounts will normally be paid in
shares.
Malus and clawback provisions
apply (see table on page 183).
The Committee has discretion to
adjust the vesting outcome if it is
not deemed to reflect
appropriately the underlying
financial or non-financial
performance of the business, the
performance of the individual or
the experience of shareholders or
other stakeholders over the
performance period.
Maximum opportunity of
up to 150% of salary may
be awarded in respect of a
financial year.
Performance
measures and their
weightings are
reviewed annually
reflecting the Group’s
strategy and metrics
relevant to the
business.
Details of the
performance
measures for the
2026 awards are set
out on page 191.
Up to 22.5% of each
element of an award
vests for achieving
threshold
performance, with
full vesting for
achieving maximum
performance.
No award vests for
achieving below
threshold
performance.
Restricted
share
awards
To align the long-
term interests of the
executives with those
of the Group’s
shareholders.
To support
stewardship and
long-term decision
making.
Award of restricted shares which
vest after three years subject to
underpins set by the Committee
and continued employment.
Awards will be subject to a
two-year post-vesting holding
period.
Dividend equivalents may accrue
on restricted shares. Such
amounts will normally be paid in
shares.
Malus and clawback provisions
apply (see table on page 183).
The Committee has discretion to
reduce the vesting outcome if it is
not deemed to reflect
appropriately the underlying
financial or non-financial
performance of the business, the
performance of the individual or
the experience of shareholders or
other stakeholders over the
vesting period.
Maximum opportunity of
up to 25% of salary may
be awarded in respect of a
financial year.
Underpins are
reviewed annually.
The Committee may
reduce the vesting
outcome if one or
more of the underpins
are not achieved.
Details of the
performance
underpins for the
2026 awards are set
out on page 191.
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Financial statements
Other information
Element
Purpose and link
to strategy
How
operated
Maximum
opportunity
Performance
measures
Share
ownership
guidelines
To provide alignment
with the long-term
interests of
shareholders and
support stewardship.
Within-employment: Executive
Directors are expected to build up
and retain a shareholding equal to
200% of salary. Until the
shareholding guideline is met,
50% of any deferred bonus
awards or performance share
awards vesting (net of tax)
normally must be retained.
Post-employment: Executive
Directors who step down from the
Board are normally expected to
retain a holding in ‘guideline
shares’ equal to:
200% of salary (or their actual
shareholding at the point of
stepping down if lower) for the
first 12 months following
stepping down as an Executive
Director.
100% of salary (or their actual
shareholding at the point of
stepping down if lower) for the
subsequent 12 months.
‘Guideline shares’ do not include
shares that the Executive Director
has purchased or which have been
acquired pursuant to deferred
share awards or performance
share awards which vested before
1 January 2020.
Unless the Committee determines
otherwise, an Executive Director
or former Executive Director shall
be deemed to have disposed of
shares which are not ‘guideline
shares’ before ‘guideline shares’.
The Committee retains discretion
to waive this guideline if it is not
considered to be appropriate in
the specific circumstance.
The number of shares subject to
the post-employment
shareholding guideline is
confirmed to the Executive
Director on stepping down from
the Board. The Committee will
monitor the former Executive
Directors’ compliance with the
guideline. Should the former
Executive Director breach
compliance, the Committee may
reduce any unvested share awards
held by the former Executive
Director.
n/a
n/a
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Derwent London plc
Report and Accounts 2025
182
Information supporting the Policy
Malus and clawback
It is a condition of the grant of any awards that the Executive Directors agree to the terms of the relevant Plan rules and, in particular,
the operation of malus and clawback provisions. A summary of our malus and clawback provisions is provided below.
Malus
Clawback
Annual bonus
To such time as payment is made.
Up to two years following payment.
Deferred bonus
To such time as the award vests.
No clawback provisions apply (as malus
provisions apply for three years from the date
of award).
Performance share awards
To such time as the award vests.
Up to two years following vesting.
Restricted share awards
To such time as the award vests.
Up to two years following vesting.
The circumstances in which malus and clawback provisions could be applied:
1
Material misstatement of financial results.
2
An error in assessing performance conditions which has led to an overpayment.
3
Serious or gross misconduct.
4 Serious reputational damage.
5 Corporate failure.
A clawback period of two years following payment of an annual bonus and vesting of performance share and restricted share awards
is considered appropriate on the basis that:
it is reasonable to assume that a material misstatement of financial results relating to the performance/vesting period, an error in
assessing performance measures or underpins, or an event, act or omission which occurred during the performance/vesting period
resulting in serious reputational damage, or corporate failure, would be discovered within a two-year period;
it is considered a reasonable period to support the enforceability of clawback; and
it is aligned with market practice across the FTSE 250.
Choice of performance measures
The performance measures used for the annual bonus and performance share awards reflect the short and long-term financial and
strategic priorities of the business, and are aligned with performance measures used by our real estate sector peers.
A significant proportion of annual bonus and performance share awards are subject to performance relative to the real estate sector.
This helps support an incentive framework whereby Executive Directors may be fairly and equitably rewarded for outperforming peers
and delivering shareholder value in a cyclical market. For relative performance measures, performance targets are set each year
relative to the real estate comparator group.
For strategic measures, targets are set taking into account the Group’s strategic plan. Maximum vesting will only occur for what the
Committee considers to be outstanding performance.
The underpins for the restricted share awards are designed to protect the financial stability of the business and provide sufficient focus
on governance and health and safety.
Details of the performance measures for the 2026 annual bonus and performance share awards, and underpins for the 2026 restricted
share awards are set out on pages 190 and 191.
The Committee retains the ability to adjust or set different performance measures, underpins or targets if events occur (such as a
change in strategy, a material acquisition and/or divestment of a Group business or a change in prevailing market conditions) which
cause the Committee to determine that the performance measures, underpins and/or targets are no longer appropriate and the
amendment is required so that they achieve their original purpose and are not materially less difficult to satisfy.
Share awards may be adjusted in the event of a variation of share capital or a demerger, delisting, special dividend or other event that
may affect the Company’s share price.
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Other information
Legacy arrangements
The Committee retains discretion to make any remuneration payment and/or payments for loss of office (including exercising any
discretions available to it in connection with such payments) which are outside of the Policy set out here:
where the terms of the payment were agreed before this Policy came into effect (provided that the terms of the payment were
consistent with the shareholder approved Directors’ Remuneration Policy (if any) in force at the time they were agreed);
where the terms of the payment were agreed at a time when the relevant individual was not a Director of the Company (or other
persons to whom the Policy set out above applies), and in the opinion of the Committee, the payment was not in consideration of
the individual becoming a Director of the Company or such other person; and
to satisfy contractual arrangements under legacy remuneration arrangements.
For these purposes ‘payments’ includes the Committee satisfying awards of variable remuneration and, in relation to an award over
shares, the terms of the payment are ‘agreed’ no later than at the time the award is granted. This Policy applies equally to any
individual who is required to be treated as a Director under the applicable regulations.
The Executive Directors’ legacy arrangements include unvested performance share awards (see page 209). Emily Prideaux holds
unexercised ESOP options which were granted to her prior to her becoming an Executive Director (see page 209).
Non-Executive Director policy table
The policy table below sets out the key elements of the remuneration package for Non-Executive Directors.
Operation
Determination of fees
Chairman
The remuneration of the Chairman is set by the Board
(excluding the Chairman). The Chairman receives an
annual fee. The fee may be paid wholly or partly in cash
or Company shares. The Company will pay reasonable
expenses incurred by the Non-Executive Chairman and
may settle any tax incurred in relation to these. Other
benefits may be provided if considered appropriate. The
Chairman does not receive a pension or participate in
incentive arrangements.
Fees are set taking into account:
the time commitment and
responsibilities expected for the
roles;
pay and conditions throughout the
business; and
practice in companies with similar
business characteristics.
Fees are normally reviewed annually.
Overall fees paid to the Chairman
and Non-Executive Directors will
remain within the limits set by the
Company’s Articles of Association.
Non-Executive Directors
The remuneration for Non-Executive Directors is set by
the Executive Directors. The fees may be paid wholly or
partly in cash or Company shares. Non-Executive
Directors receive a base fee plus additional fees for
committee chairmanship, committee membership and
for the Senior Independent Director. Additional fees may
be paid to reflect additional Board or committee
responsibilities or time commitment as appropriate. The
Company will pay reasonable expenses incurred by the
Non-Executive Directors and may settle any tax incurred
in relation to these. Other benefits may be provided if
considered appropriate. Non-Executive Directors do not
receive pension contributions or participate in incentive
arrangements.
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Derwent London plc
Report and Accounts 2025
184
Minimum
Target
Maximum
Maximum
+ 50%
Total £1,959,800
Total £1,959,800
Total £1,410,800
Total £861,800
Fixed elements
Annual variable element
100%
61%
39%
44%
56%
44%
56%
Minimum
Target
Maximum
Maximum
+ 50%
Total £2,999,265
Total £2,505,240
Total £1,425,443
Total £811,440
Fixed elements
Annual variable element
Performance Share element
Restricted Share element
83%
17%
47%
30%
13%
10%
26%
34%
34%
6%
23%
28%
42%
7%
Minimum
Target
Maximum
Maximum
+ 50%
Total £373,609
Total £373,609
Total £269,196
Total £164,784
Fixed elements
Annual variable element
100%
61%
39%
44%
56%
44%
56%
Paul Williams
The Committee aims to provide a significant
part of the Executive Directors’ total
remuneration through variable pay and the
adjacent diagrams illustrate the remuneration
opportunity provided to the Executive
Directors for various indicative levels of
performance.
For the purpose of this analysis, the following assumptions have
been made:
Minimum
performance
Fixed remuneration
100% of the restricted share
awards vest
On-target
performance
Fixed remuneration
50% of the annual bonus is earned
22.5% of the performance share
awards vest
100% of the restricted share
awards vest
Maximum
performance
Fixed remuneration
100% of the annual bonus is earned
100% of the performance share
awards vest
100% of the restricted share
awards vests
Maximum
performance + 50%
share price growth
As per the maximum performance
illustration, but also assumes, for
the purposes of the performance
share and restricted share awards,
that share price increases by 50%
over the performance/vesting
period
1
‘Fixed remuneration’ includes salary (which applies from 1 January 2026),
pension and other benefits.
2
Pension is based on the salary and pension policy applying from 1 January 2026.
3
LTIP: Paul Williams and Nigel George will not receive an LTIP award in 2026, due
to their pending retirements. Therefore, no 2026 LTIP award is included in the
diagrams.
4
As Nigel George will resign and stand down on 31 March 2026, his fixed
remuneration and annual bonus shown in the diagrams relates to the period
1 January 2026 to 31 March 2026.
Damian Wisniewski and Emily Prideaux
Nigel George
Remuneration scenarios for Executive Directors
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Other information
Service contracts and compensation for loss of office
Executive Directors’ service contracts do not have a fixed expiry date; however, they are terminable either by the Company providing
12 months’ notice or by the executive providing six months’ notice. Further details are set out below. Executive Directors’ service
contracts are available to view at the Company’s registered office. The principles on which the determination of compensation for loss
of office will be approached are set out below.
Policy
Payments in
lieu of notice
Service contracts include a payment in lieu of notice clause which provides that payments may be made based on the value of
salary, benefits and pension that would have accrued over the unexpired proportion of the notice period. The Company would
normally make a series of monthly payments, or may instead make a lump sum payment.
Payments in lieu of notice are subject to mitigation.
Annual
bonus
The extent to which any bonus will be paid out will be determined in accordance with the annual bonus plan rules. Executive
Directors must normally be in employment on the payment date to receive an annual bonus. However, if an Executive Director
leaves as a ‘good leaver’, the Executive Director will normally be considered for a bonus payment.
It is the Committee’s policy to ensure that any bonus payment reflects the departing Executive Director’s performance. Unless the
Committee determines otherwise, any bonus payment will be paid at the usual time following the determination of performance
measures and be subject to a pro rata reduction for time served during the performance period.
Deferred
bonus shares
The extent to which any unvested awards will vest will be determined in accordance with the deferred bonus plan rules.
Unvested awards will normally lapse on cessation of employment. However, if an Executive Director leaves as a ‘good leaver’, the
awards will continue and will normally vest at the normal vesting date. In exceptional circumstances, the Committee may decide
that the Executive Director’s deferred share awards will vest at the date of cessation of employment.
Performance
share and
restricted
share
awards
The extent to which any unvested share awards will vest will be determined in accordance with the Performance Share Plan rules.
Unvested awards will normally lapse on cessation of employment. However, if an Executive Director leaves as a ‘good leaver’, other
than by reason of death, their unvested awards will continue and will normally remain capable of vesting at the normal vesting
date. To the extent that awards vest, up to a two-year holding period would then normally apply unless the Committee determines
otherwise. In exceptional circumstances, the Committee may decide that the Executive Director’s awards will vest and be released
early at the date of cessation of employment or at some other time.
If a participant dies, their unvested award will normally vest (and, in the case of an award subject to a holding period, be released)
on the date of their death.
In all cases, vesting will depend on the extent to which the performance measures or underpins have been satisfied and will be
subject to a pro rata reduction of the awards for time served from the grant date to the date of cessation of employment
(although the Committee has discretion to disapply time pro rating if the circumstances warrant it).
If an Executive Director leaves for any reason (other than summary dismissal) after an award has vested but before it has been
released (i.e. during a holding period), their award will ordinarily continue to be released at the normal release date. In exceptional
circumstances, the Committee may decide that the participant’s award will be released early at the date of cessation of
employment.
Change of
control
Deferred bonus shares will vest in full in the event of a change of control or substantial exit.
Performance share and restricted share awards will vest early in the event of change of control or substantial exit. The level of
vesting will be determined taking into account the extent to which performance measures and underpins are satisfied at the date
of the relevant event and, unless the Committee determines otherwise, awards will be pro rated for time served from the grant
date to the date of the relevant event.
Other
payments
In appropriate circumstances, payments may also be made in respect of items such as accrued holiday, outplacement and legal
fees.
Awards under the Sharesave Plan may vest and, where relevant, be exercised in the event of cessation of employment or change of
control in accordance with the Sharesave Plan rules. The terms applying to any buy-out awards on cessation of employment or
change of control would be determined when the award is granted. Such terms would normally be consistent with the principles
outlined above. The Committee reserves the right to make payments by way of settlement of any claim arising in connection with
the cessation of employment.
‘Good leavers’ includes: cessation of employment by reason of death, retirement, injury, ill health, disability, redundancy, transfer of
employment outside of the Group, or any other reason as determined by the Committee.
Service contracts
Executive Directors’ service contracts do not have a fixed expiry date; however, they are terminable either by the Company providing
12 months’ notice or by the executive providing six months’ notice. Executive Directors may accept a non-executive role at another
company with the approval of the Board. The Executive Director is entitled to retain any fees paid for these services.
Date of service contract
Paul Williams1
22 November 2018
Damian Wisniewski
10 July 2019
Nigel George
2
10 July 2019
Emily Prideaux
26 February 2021
1 Paul Williams will step down from the Board during 2026 once his successor has been appointed and is in place. Further information is set out on page 199.
2 Nigel George will step down as a Director on 31 March 2026. Further information is set out on page 199.
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Derwent London plc
Report and Accounts 2025
186
Letters of appointment
The Chairman and Non-Executive Directors do not have service contracts but are appointed for initial three-year terms which
thereafter may be extended, subject to re-election, at each AGM. Details are set out in the table below. Further information on
Non-Executive Director tenure and recruitment is on pages 139 and 140 of the Nominations Committee report. The Chairman’s and
Non-Executive Directors’ letters of appointment are available to view at the Company’s registered office.
Date of latest
appointment letter
Latest appointment letter
expiry date
Mark Breuer
3 November 2023
1 February 2027
Helen Gordon
3 November 2023
31 December 2026
Lucinda Bell
7 August 2024
31 December 2027
Sanjeev Sharma
7 August 2024
1 October 2027
Robert Wilkinson
31 May 2024
1 June 2027
Madeleine McDougall
15 October 2024
31 October 2027
Recruitment and promotion policy
The remuneration of a new Executive Director will normally include salary, benefits, pension and participation in the annual bonus and
long-term incentive arrangements in accordance with the policy for Executive Directors’ remuneration. In addition, the Committee
has discretion to include any other remuneration component or award which it feels is appropriate taking into account the specific
circumstances of the recruitment, subject to the principles and limits set out below. The key terms and rationale for any such
component would be disclosed as appropriate in the Directors’ remuneration report for the relevant year.
Policy
Salary
Salary will be set taking into account the individual’s experience and skills, prevailing market rates in companies of comparable
size and complexity and internal relativities.
Where appropriate the Committee may set the initial salary below the market level (e.g. if the individual has limited PLC board
experience or is new to the role), with the intention to make phased pay increases over a number of years, which may be above
those of the wider workforce, to achieve the desired market positioning. These increases will be subject to continued
development in the role.
Buy-out
awards
Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous employer as a result of
appointment, the Committee may offer compensatory payments or awards, in such form as the Committee considers
appropriate, taking into account all relevant factors including the form of awards, expected value and vesting time frame of
forfeited opportunities. When determining any such ‘buy-out’, the guiding principle would be that awards would generally be on
a ‘like-for-like’ basis unless this is considered by the Committee not to be practical or appropriate.
Where possible the buy-out award will be accommodated under the Company’s existing incentive plans, but it may be necessary
to utilise the exemption provided in the Listing Rules. Shareholders will be informed of any such payments in the following year’s
Annual report on remuneration.
Maximum level
of variable
remuneration
The maximum level of variable remuneration which may be granted (excluding buy-out awards) is 325% of salary, which is in line
with the current maximum limit under the annual bonus, and performance share and restricted share awards.
Other
elements of
remuneration
Other elements may be included in the following circumstances:
An interim appointment being made to fill an Executive Director role on a short-term basis.
If exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on a
short-term basis.
If an Executive Director is recruited at a time in the year when it would be inappropriate to provide an annual bonus
award, performance share and/or restricted share awards for that year. Subject to the limit on variable remuneration set
out above, the quantum in respect of the period employed during the year may be transferred to the subsequent year.
If the Executive Director is required to relocate, reasonable relocation, travel and subsistence payments may be provided
(either via one-off or ongoing payments or benefits).
In the case of an internal appointment, any ongoing remuneration obligations or variable pay element awarded in respect of the prior
role shall be allowed to continue according to its original terms, adjusted as relevant to take into account the appointment.
Fees payable to a newly appointed Chair or Non-Executive Director will be in line with the fee policy in place at the time of
appointment.
187
Strategic report
Governance
Financial statements
Other information
Annual report on remuneration
(unaudited unless otherwise indicated)
The annual report on remuneration (pages 188 to 209) explains how we have implemented our
Remuneration Policy during 2025. The Remuneration Policy in place for the year was approved by
shareholders at the 2023 AGM and is available to download from our website at:
www.derwentlondon.com/investors/governance/board-committees
Role of the Remuneration Committee
The role of the Committee is to determine and recommend to
the Board the Remuneration Policy for Executive Directors, and
set the remuneration for the Chairman, Executive Directors and
Executive Committee (including the Company Secretary). In
doing so, the Committee has due regard for the remuneration
arrangements available to the entire workforce and ensures that
our Remuneration Policy supports our strategy, the achievement
of our purpose, and is aligned with our values. We detail the
Group’s key remuneration principles, which inform our
remuneration structure, in the table below.
The Committee’s role and responsibilities are set out in the terms
of reference, which were last updated in August 2025 and are
available on the Company’s website.
Structure of the annual report on remuneration
The Committee has structured this report to demonstrate that
the remuneration arrangements for Executive Directors are fair
and appropriate in the context of pay policies and practices
across the wider workforce, mitigating risk and rewarding
genuine outperformance. Key sections include:
Aligning remuneration with our purpose, values and strategy
(see page 189)
Risk management (see page 192)
Remuneration decisions in context (see page 194)
Executive Director remuneration in 2025 (see page 198)
Implementation of proposed Remuneration Policy in 2026 (see
pages 190 to 191)
Our remuneration principles
The Committee ensures that the remuneration arrangements for Executive Directors are aligned with our key remuneration principles
which are detailed below.
Attract, retain and motivate
Support an effective pay for performance culture which enables the Company to attract,
retain and motivate Executive Directors who have the skills and experience necessary to deliver
the Group’s purpose.
Clarity and simplicity
Ensure that remuneration arrangements are simple and transparent to key stakeholders and
take account of pay policies for the wider workforce.
Alignment to strategy and
culture
Align remuneration with the Group’s objectives and long-term strategy and reflect our culture
through a balanced mix of short and long-term performance-related pay and ensure that
performance metrics remain effectively aligned with strategy.
Risk management
Promote long-term sustainable performance through sufficiently stretching performance
targets, whilst ensuring that the incentive framework does not encourage Executive Directors
to operate outside the Group’s risk appetite (see page 103). Further information on risk
management within our remuneration structures is on page 192.
Stewardship
Promote long-term shareholdings by Executive Directors that support alignment with long-
term shareholder interests. Executive Directors are subject to within-employment and post-
employment shareholding guidelines. Once performance share awards and restricted share
awards have vested, there is a two-year holding period during which Executive Directors are
not able to sell their shares (net of tax) to support sustainable decision making.
Predictability
Details of the maximum potential values that may be earned through the remuneration
arrangements are set out in our Remuneration Policy on pages 178 to 187.
Proportionality and fairness
Total remuneration should fairly reflect the performance delivered by the Executive Directors
and the Group. The Committee takes into account underlying business performance and the
experience of shareholders, employees and other stakeholders when determining vesting
outcomes, ensuring that poor performance is not rewarded. The Committee considers the
approach to wider workforce pay and policies when determining the Remuneration Policy to
ensure that it is appropriate in this context.
Remuneration Committee report
continued
Derwent London plc
Report and Accounts 2025
188
Aligning remuneration with our purpose, values and strategy
Remuneration that aligns with our values
Our core values are reflected in our remuneration arrangements in the following ways:
Remuneration that supports our strategy and helps us to achieve our purpose
We seek to create above average long-term returns for our shareholders, retain and develop our talented workforce, design ‘long-life,
low carbon’ space, and work towards achieving our net zero carbon ambitions.
Our Remuneration Policy has been designed to support our strategy by aligning our performance-based pay with our strategic
objectives and Net Zero Carbon Pathway. We have ESG-related metrics within the annual bonus and long-term incentive.
Our ability to provide above average returns to our shareholders is a substantial element of our performance share awards (see page
204). Our total shareholder return is ranked against the FTSE 350 Super Sector Real Estate Index (excluding agencies) and vesting of this
element only occurs if we reach or exceed median. Further information on the rationale for the Committee’s chosen strategic
performance targets is on page 183.
How our KPIs are embedded within the executive remuneration framework
Success against our strategic objectives is measured using a range of financial and non-financial key performance indicators (KPIs),
which are largely embedded within the executive remuneration framework as illustrated by the chart below.
KPIs
Financial
Non-financial
Total accounting return
B
Reversionary percentage
Total property return
1
B
P
Development potential
B
Total Shareholder Return (TSR)
P
Tenant retention
B
EPRA Earnings Per Share (EPS)
Void management
B
Gearing & available resources
BREEAM rating
Interest cover ratio (ICR)
Energy Performance Certificates (EPCs)
B
Annual bonus
P
Performance Share Plan
Energy intensity
P
1
Total property return performance for the annual bonus is assessed against the
MSCI Quarterly Central London Office Total Return Index (see page 201). From 2026,
total property return performance is assessed against the MSCI UK All Office Total
Return Index under the performance share awards (see page 203).
Embodied carbon intensity
P
Accident Frequency Rate (AFR)
B
Staff satisfaction
B
We build long-term
relationships
We seek to create long-term
collaborative relationships with our
occupiers and employees. The annual
bonus contains strategic targets for
tenant retention and staff
satisfaction. A staff satisfaction
metric helps the Committee, and the
Board, monitor the wellbeing of the
wider workforce and gauge our ability
to retain key talent.
We lead by design
Our Remuneration Policy has been
designed with key objectives in mind
(see page 173) and to reflect our key
remuneration principles (see page
188). Incentive arrangements reward
genuine outperformance and progress
against our strategic objectives, foster
stewardship and promote long-term
sustainable decision making. The
structure of our Remuneration Policy is
kept under routine review.
We act with integrity
Total remuneration fairly reflects the
performance delivered by the
Executive Directors and the Group. The
Committee takes into account
underlying business performance and
the experience of shareholders,
employees and other stakeholders
when determining vesting outcomes,
ensuring that poor performance is not
rewarded.
Environmental
As delivering on our net zero carbon
commitments is a fundamental part
of Derwent London’s long-term
strategy, sustainability performance
metrics are included within the
Executive Directors’ performance
share awards.
Social
All employees receive at least the
London Living Wage. Our generous
benefit package includes a 15%
company pension contribution. We
continue to invest significantly in our
employees to ensure that everyone
thrives in their roles, feels valued and
supported and has the opportunity of
continuous growth and development.
Governance
Risk management is factored into the
design of our remuneration
arrangements and the setting of
targets. We seek to ensure fairness
and transparency in our disclosures,
and voluntarily report on our CEO pay
ratio on page 197.
189
Strategic report
Governance
Financial statements
Other information
Shareholder engagement
We always seek to engage with shareholders when considering material changes to our remuneration policies or practices (see page
178).
Annual report on remuneration
(2025 AGM)
Remuneration Policy
(2023 AGM)
Votes cast in favour
93.5m
98.2%
91.6m
95.0%
Votes cast against
1.8m
1.8%
4.8m
5.0%
Total votes cast
95.3m
100%
96.4m
100%
Votes withheld
0.5m
0.0m
Implementation of Remuneration Policy for 2026
Base salaries
No increases were made to Executive Directors’ base salaries for the year beginning 1 January 2026. Accordingly, Paul Williams’ salary
will remain at £732,000 and at £564,600 for the other Executive Directors. Base salary increases across the wider workforce were in line
with the average inflationary increase of 3.0%. The average actual increase in base salaries for all employees eligible for a pay rise
(inclusive of promotions, career progression and market salary alignments) effective from 1 January 2026 was 3.6%.
Non-Executive Chairman and Non-Executive Director fees
No increases were made to the Non-Executive Chairman’s fee or the Non-Executive Directors’ base fees for the year beginning 1 January
2026. This is consistent with the approach taken for Executive Directors.
Non-Executive Chairman and Non-Executive Director fees
2026 fee
Non-Executive Chairman fee
£289,800
Base fee
£59,000
Audit Committee Chair
£12,938
Other Committee Chairs
£10,350
Senior Independent Director
£12,938
Committee membership
£5,175
Benefits and pension
Benefits will continue to include a car allowance, private medical insurance and life assurance. Company pension contribution and/or
cash supplement for the Executive Directors remains aligned with the majority of the wider workforce (currently at 15% of salary).
Annual bonus
The maximum bonus potential for Executive Directors for 2026 is 150% of salary. Bonuses are subject to the following performance
measures:
Performance measure
Weighting % of bonus
Targets
Total accounting return
30%
Performance measured against a comparator group
of real estate companies. The comparator group for
2026 is the same as 2025 with the addition of
Grainger plc (see page 201). Targets and amounts
vesting for threshold and maximum performance
are outlined on page 201.
Total property return
45%
Performance measured against the MSCI Quarterly
Central London Offices Total Return Index. Targets
and amounts vesting for threshold and maximum
performance are outlined on page 201.
Strategic objectives
25%
Specific and measurable objectives relating to
capital recycling, leasing, cost management, staff
satisfaction and health and safety (accident
incident rate). The targets are considered to be
commercially sensitive at this point in the year and
will be fully disclosed in the 2026 Directors’
remuneration report.
Executive Directors will be required to defer any annual bonus earned above 75% of salary into shares for three years.
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
190
Long-term incentives
Subject to shareholder approval of the Remuneration Policy, Executive Directors will be granted performance share awards with a
maximum potential of 150% of salary and restricted share awards with a potential of 25% of salary. The proposed performance share
award targets are as follows:
Measure
Basis of calculation
Weighting of
performance
share award
Threshold
1
Maximum
Total shareholder return
Position of the Company’s total shareholder
return against the total shareholder return
of the ranked members of the FTSE 350
Super Sector Real Estate Index (excluding
agencies) assessed over the three-year
performance period ending 31 December
2028
50%
Median
Upper quartile
and above
Total property return
The Company’s annualised total property
return calculated on a compound annual
growth basis relative to the MSCI Quarterly
UK All Office Total Return Index assessed
over the three-year performance period
ending 31 December 2028
40%
At Index
Index +2%
Embodied carbon
intensity
2
Weighted average embodied carbon for all
projects during the three-year performance
period ending 31 December 2028
10%
600 kgCO
2
e/m
2
500 kgCO
2
e/m
2
1
For achieving the threshold performance target, 22.5% of the maximum award will vest.
2
Our embodied carbon performance will be independently assured by an external third party.
The vesting of restricted share awards will be subject to underpins that safeguard the financial stability of the business and provide
sufficient focus on corporate governance and health and safety responsibilities. If the Committee considers that the underpins have
not been met, then it would consider whether it is appropriate to scale back the vesting (including to nil vesting if considered
appropriate) of the restricted share awards.
The proposed underpins are as follows:
No breach of financial covenants.
Satisfactory underlying performance.
No material failure in corporate governance or health and safety resulting in significant reputational damage and/or financial loss.
Furthermore, the Committee will have discretion to reduce the vesting level of the restricted share awards (as well as the performance
share awards) if it is not reflective of the Group’s overall financial or non-financial performance, individual performance, or the
experience of shareholders or other stakeholders during the vesting period.
191
Strategic report
Governance
Financial statements
Other information
Risk management
We are transparent about our pay practices which aim to incentivise our employees to achieve our strategy and generate sustainable
value for our stakeholders. Risk management is a key remuneration principle and has been incorporated into our Remuneration Policy,
principally through:
Stretching performance
targets
Malus and clawback
provisions
Discretion
Shareholding
guidelines
Sufficiently stretching
performance targets which
promote long-term sustainable
performance.
Enables the Committee to
recover sums paid, or cancel
awards, in specific
circumstances
1
.
The Committee has the
means to apply discretion
and judgement to vesting
outcomes.
Requirement to build up and
retain a shareholding in
Derwent London during and
post-employment.
Pages 201 and 202
Page 183
Page 204
Pages 182 and 192
1
The Company has not needed to use the malus and clawback provisions in the last five years (including the latest reporting period).
Shareholding guidelines
As at 31 December 2025, all Executive Directors have exceeded the within-employment shareholding guideline, except Emily Prideaux
who was appointed an Executive Director from 1 March 2021. Emily Prideaux is working towards achieving the within-employment
shareholding guideline.
Executive Directors
Beneficially
held shares
2025 salary
1
% of base salary
Value of
beneficially
held shares
2
Target
Achieved
Paul Williams
95,757
732,000
200%
241%
£1,761,929
Damian Wisniewski
71,931
564,600
200%
234%
£1,323,530
Nigel George
105,732
564,600
200%
345%
£1,945,469
Emily Prideaux
6,081
564,600
200%
20%
£111,890
1
The base salaries shown in the table above are as at 31 December 2025. Further information on fixed pay during 2025 is provided on page 200.
2
The value of the Executive Directors’ beneficially held shares has been calculated using the average closing share price during the year ended 31 December 2025 of £18.40.
All other employees granted long-term incentive awards are expected to work towards holding shares in Derwent London plc
equivalent to 50% of base salary. The share ownership guidelines require Executive Directors and relevant employees to retain at least
half of any deferred bonus shares or performance share awards which vest (net of tax) until the guideline is met. Only wholly owned
shares will count towards the guideline. There is no shareholding guideline for Non-Executive Directors. Due to the relatively large
shareholdings of our Executive Directors, a small change in our share price would have a material impact on their wealth. For example,
a 5% drop in our share price would result in a loss of value for our Chief Executive, Paul Williams, equivalent to approximately 12% of
his base salary.
Independent advice
The Committee has authority to obtain the advice of external independent remuneration consultants. Deloitte LLP has been
appointed as the Committee’s principal consultants since July 2018, following a competitive tender process. The Committee has been
fully briefed on Deloitte’s compliance with the voluntary code of conduct in respect of the provision of remuneration consulting
services. During the year under review, Deloitte provided independent assistance to the Committee in respect of, among other things,
the following matters:
Review of the Directors’ Remuneration Policy.
Performance assessment against annual bonus and performance share award targets.
Benchmarking of Executive Director remuneration.
Review of an Executive Director’s remuneration arrangements on retiring from the Board.
Market practice and corporate governance updates.
The fees paid to Deloitte for their services to the Committee during the year, based on time and expenses, amounted to £129,840.
Separate teams at Deloitte LLP also provided sustainability and health and safety limited assurance under the ISAE 3000 (Revised)
Standard for 2024, in addition to corporate tax consultancy services to the Group in 2025. The Committee took this work into account
and, due to the nature and extent of the work performed, concluded that it did not impair Deloitte’s ability to advise the Committee
objectively and free from influence. It is the view of the Committee that the Deloitte engagement team which provides remuneration
advice to the Committee does not have connections with Derwent London or its Directors that may impair its independence. The
Committee therefore deems Deloitte capable of providing appropriate, objective and independent advice.
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
192
25 Baker St
W1
193
Strategic report
Governance
Financial statements
Other information
Remuneration decisions in context
The Committee is kept informed of salary increases for the wider workforce, as well as any
significant changes in practice or policy, which are taken into consideration when making
remuneration decisions for Executive Directors.
The Committee has introduced this dedicated section (pages
194 to 197) which incorporates several disclosures to
demonstrate the Committee’s belief that remuneration
arrangements for Executive Directors are fair and appropriate
in the context of pay policies and practices across the wider
workforce.
Investing in our employees
We recognise that our employees are our brand ambassadors
and vital to the successful delivery of our strategy and
long-term business performance. We continue to invest
significantly in our employees to ensure that everyone thrives
in their roles, feels valued and supported, and has the
opportunity of continuous growth and development.
We run a detailed induction programme, hold CEO-led town
halls, provide a series of core skills workshops, internal
technical workshops, mandatory compliance training and
various management and leadership initiatives (including
one-to-one and team coaching). In addition, we support and
sponsor further professional qualifications and encourage
internal and external personal development opportunities
wherever possible. This is coupled with six-monthly
performance reviews and optional Personal Development
Plans, alongside regular dialogues with line managers to
discuss performance, identify training requirements and
understand individual career aspirations.
We have trained mental health first aiders, an employee
assistance programme and occupational health support in
place. We encourage proactive self-care and run a series of
‘lunch and learn’ sessions.
Attracting and developing talent / See page 78
Engaging with our employees
We have an open, collaborative and inclusive management
structure and engage regularly with our employees on a variety
of issues. We do this through a range of one and two-way
channels including appraisals, employee surveys, our intranet
site, Company presentations, awaydays and our wellbeing
programme.
An engagement section is included within the explanatory
booklet of the employee incentive plan, ESOP, which details our
remuneration strategy and principles. This section also provides
further information on the differences between the executive
and employee incentive arrangements.
Our employees are provided with the means to engage on a
range of matters. The Committee considers pay across the
Group, as well as any employee feedback, when making
decisions on executive remuneration.
Employee engagement / See pages 78 and 128
Relative importance of the Company’s spend on pay
In order to give shareholders an understanding of how total
expenditure on remuneration (for all employees) compares to
certain core financial dispersals of the Company, the table below
demonstrates the relative importance of the Company’s spend
on employee pay for the period 2024 to 2025.
£m
2025
2024
% change
Staff costs
1
28.3
29.7
(4.7)%
Distributions to
shareholders
2
90.9
89.8
1.2%
Net asset value
attributable to equity
shareholders
3
3,615
3,540
2.1%
1
Staff costs includes salaries, employer pension contributions, national insurance
contributions, benefits and share-based payment expenses relating to equity
settled schemes (see note 11 on page 237). Staff costs decreased by 4.7%
through 2025, due to a decrease in share-based payment expenses alongside a
slightly lower bonus accrual.
2
Distributions to shareholders during the financial year. For 2025, this includes the
payment of the 2024 final and 2025 interim dividends.
3
Net asset value attributable to equity shareholders was chosen as it is a key
determinant of the Group’s total accounting return and is used by management
to measure our progress. We base our total accounting return calculation on
EPRA net tangible assets (NTA).
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
194
Remuneration structure
We value and appreciate our employees and aim to provide market competitive remuneration and benefit packages in order to
continue to be seen as an employer of choice. The remuneration structure for our wider workforce is similar to that of our Executive
Directors
1
and contains both fixed and performance-based elements (see below).
Wider workforce
Executive Directors
Base salary
Average inflationary increase for
the wider workforce of 3.0% from
1 January 2026. The average actual
increase in base salaries for all
employees eligible for a pay rise
was 3.6%.
No base salary increase from
1 January 2026.
Benefits
2
All employees (including the
Executive Directors) receive:
private medical insurance;
dental care; and
the option of joining a
non-contractual healthcare
cash plan which offers an
affordable way to help with
everyday healthcare costs.
We also operate:
a Cycle to Work scheme;
an Electric Car Salary
Sacrifice Scheme which
allows any member of staff
to lease a new electric car
in a tax efficient way;
a season ticket loan; and
a workplace nursery
scheme.
A car allowance is payable to Executive
Directors, members of the Executive
Committee, Heads of Departments and
other senior managers. Other employees
may receive a car allowance depending on
the nature of their role.
Pension
2
Receive an employer pension contribution equal to 15% of salary per annum with the option to make additional
voluntary contributions (AVCs).
Life assurance
2
Employees who opt to participate in the pension scheme also receive:
a lump sum Death in Service insurance benefit of 4x their base annual salary; and
an additional Death in Service pension benefit of one-third of base salary paid to their nominated
dependant(s).
Annual bonus
All employees are enrolled into an annual discretionary bonus
scheme
Bonuses are paid via payroll in March
Bonuses are based on individual and Group performance
100% of our workforce below Board level (not subject to
probation) received an annual bonus in 2025
The Executive Directors’ discretionary
bonus is based on financial and strategic
(non-financial) performance targets
Executive Director bonuses in excess of
75% of salary are subject to deferral for
three years
Subject to malus and clawback
provisions and can be adjusted if payout
does not align with the wider stakeholder
experience
Long-term incentives
We operate a discretionary ESOP for employees below the
Board and Executive Committee
ESOP grants options which are exercisable after three years at a
pre-agreed option price
There is no performance conditions attached to the awards
except continued employment
In 2025, we granted 410,330 options to eligible employees (see
note 12 on page 238)
Subject to shareholder approval of the
Remuneration Policy, we will operate
performance share and restricted share
awards for the Executive Directors and
Executive Committee
Performance share awards require the
achievement of stretching performance
targets over a three-year performance
period
Restricted share awards are subject to
the satisfaction of underpins that
safeguard the financial stability of the
business and provide sufficient focus on
corporate governance and health and
safety responsibilities
Awards are subject to a two-year holding
period, shareholding guidelines, and
malus and clawback provisions
Sharesave Plan
To encourage Group-wide share ownership, the Company operates an HMRC tax efficient Sharesave Plan which is
open to all eligible employees including the Executive Directors. No grant under the Sharesave Plan was made during
2025. Further information on the Derwent London Sharesave Plan is on page 208.
1
Our Remuneration Policy for Executive Directors, subject to shareholder approval at the 2026 AGM, is on pages 178 to 187. Further information on the remuneration
received by Executive Directors during 2025 is on page 198.
2
All benefits are subject to the terms and conditions of the insurance policy in force.
195
Strategic report
Governance
Financial statements
Other information
Percentage change in remuneration
The table below shows the annual percentage change in the salary or fees, benefits and annual bonus, for each of the Directors
compared to that for an average employee, from 2021 to 2025. The Directors’ remuneration used to calculate the percentage change
is taken from the ‘single figure’ table on page 198.
Executive Directors
Non-Executive Directors
Former
Directors
Average
employee
1,2
Williams
P.
Wisniewski
D.
George
N.
Prideaux
E.
Breuer
M.
Gordon
H.
Bell
L.
Sharma
S.
6
Wilkinson
R.
7
McDougall
M.
7
Snowball
C.
8
2024 to 2025
Salary/fees
5,9
+4.7
+3.5
+3.5
+3.5
+3.5
+3.5
+3.5
+3.5
+7.9
+3.5
+3.5
+3.5
Benefits
3
+5.6
(14.8)
(14.7)
(20.3)
1.2
–
–
–
–
–
–
–
Bonus4
(8.5)
(6.3)
(6.3)
(6.3)
(6.3)
–
–
–
–
–
–
–
2023 to 20241
0
Salary/fees
+3.4
+4.0
+4.0
+4.0
+10.8
+12.0
+10.5
+8.4
+13.7
n/a
n/a
+8.8
Benefits
+5.1
(2.2)
+1.7
+5.0
+8.1
–
–
–
–
–
–
–
Bonus
+29.3
+105.8
+105.8
+105.8
+119.2
–
–
–
–
–
–
–
2022 to 20231
0
Salary/fees
+2.6
+7.8
+4.0
+4.0
+9.4
–
–
–
–
n/a
n/a
+3.0
Benefits
(1.5)
+7.1
+3.8
+3.6
+1.1
–
–
–
–
–
–
–
Bonus
(27.1)
(59.8)
(61.2)
(61.2)
(59.2)
–
–
–
–
–
–
–
2021 to 2022
10
Salary/fees
+1.4
+3.0
+3.0
+3.0
+9.8
–
+10.7
+16.2
+13.5
n/a
n/a
+15.7
Benefits
(9.9)
(7.0)
+1.0
+0.7
+20.0
–
–
–
–
–
–
–
Bonus
(24.5)
+177
+177
+177
+253
–
–
–
–
–
–
–
2020 to 2021
10
Salary/fees
+0.3
+2.0
+2.0
+2.0
n/a
n/a
+3.0
–
n/a
n/a
n/a
–
Benefits
(3.7)
(0.2)
(0.2)
(0.0)
n/a
–
–
–
–
–
–
–
Bonus
+22.5
(52.5)
(52.5)
(52.5)
n/a
–
–
–
–
–
–
–
Average employee calculation
1
The movement in the average annual salary is calculated based on the mean employee pay for employees of Derwent London plc on a full-time equivalent basis. The
average employee salary increase includes employees who were not eligible for a salary increase (i.e. new joiners and leavers, depending on the date of joining or leaving
the Group) and takes into account that new joiners may be recruited at a lower salary than those who had left.
2
The actual average increase in base salaries for all employees eligible for a pay rise (inclusive of promotions, career progression and market salary alignments) effective
from 1 January was 3.6% for 2026, 5.9% in 2025 and 6.2% in 2024.
Executive Director benefits and annual bonuses
3
There has been no change in the benefits received by the average employee or the Executive Directors, comprising private medical and life insurance. The reduction in
annual cost primarily arises from lower premiums for private medical insurance, following Derwent’s transition in 2025 from an age-based medical insurance plan to a
more cost-effective claims-based arrangement. Non-Executive Directors and the Chairman did not receive taxable benefits during the relevant years.
4
For further details on the annual bonus see pages 201 and 202.
5
The 3.5% increase was effective from 1 January 2025. Executive Directors did not receive a fee increase for 2026.
Non-Executive Director fees
6
Sanjeev Sharma’s percentage change in fee from 2024 to 2025 relates to his appointment as Remuneration Committee Chair, with effect from 10 May 2024.
7
Robert Wilkinson and Madeleine McDougall were appointed as Non-Executive Directors on 1 June 2024 and 1 November 2024, respectively. They received a 3.5% increase
in fees, in line with other Directors, from 1 January 2025.
8
Cilla Snowball stepped down from the Board on 16 May 2025. She received her normal fees, including a 3.5% increase effective 1 January 2025, until her leaving date.
There was no payment for loss of office in respect of Cilla Snowball’s departure.
9
The 3.5% increase was effective from 1 January 2025. Non-Executive Directors did not receive a fee increase for 2026.
Prior year comparisons
10
For information relating to previous financial years, refer to the corresponding page references in earlier annual Reports & Accounts::
2023-2024: see 2024 Report & Accounts, page 188
2022-2023: see 2023 Report & Accounts, page 186
2021-2022: see 2022 Report & Accounts, page 208
2020-2021: see 2021 Report & Accounts, page 189
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
196
Chief Executive pay ratio
As Derwent London has less than 250 employees, we are not required to disclose the CEO pay ratio. However, given our commitment
to high standards of transparency and corporate governance, the Committee considers it appropriate to disclose the CEO pay ratio
voluntarily. For the years ended 31 December 2018 to 31 December 2025, the Chief Executive’s total remuneration as a ratio against the
full-time equivalent remuneration of UK employees is detailed in the table below.
Employee remuneration
2
CEO pay
ratio
3
Base salary
Total
remuneration
Year ended 31 December 2025
1
25th percentile
£50,000
£69,137
22:1
50th percentile
£65,000
£92,319
16:1
75th percentile
£83,000
£121,768
12:1
Year ended 31 December 2024
25th percentile
£50,000
£69,522
22:1
50th percentile
£63,950
£89,208
17:1
75th percentile
£70,323
£126,873
12:1
Year ended 31 December 2023
25th percentile
£51,750
£63,380
18:1
50th percentile
£58,750
£80,512
14:1
75th percentile
£90,000
£127,822
9:1
Year ended 31 December 2022
25th percentile
£45,219
£60,909
25:1
50th percentile
£56,000
£81,266
19:1
75th percentile
£80,000
£124,481
12:1
Year ended 31 December 2021
25th percentile
£48,500
£67,908
19:1
50th percentile
£63,750
£90,289
14:1
75th percentile
£91,750
£143,168
9:1
Year ended 31 December 2020
25th percentile
£47,000
£62,499
35:1
50th percentile
£64,000
£86,463
26:1
75th percentile
£95,266
£137,452
16:1
Year ended 31 December 2019
25th percentile
£40,993
£63,211
40:1
50th percentile
£68,462
£89,274
28:1
75th percentile
£67,500
£153,828
17:1
Year ended 31 December 2018
25th percentile
£45,057
£58,237
38:1
50th percentile
£59,250
£76,842
29:1
75th percentile
£75,000
£148,867
15:1
1
The Chief Executive’s remuneration is calculated on the same basis as the single figure of remuneration table on page 198.
2
The workforce comparison is based on the payroll data for the period 1 January to 31 December for all employees (including the Chief Executive but excluding the
Non-Executive Directors) and includes salary, employer pension contributions, life assurance and the healthcare cash plan, annual bonuses earned in respect of the year
and one-off gains received through the exercise of options granted under the Employee Share Option Plan (see pages 195 and 238).
3
The CEO pay ratio has been rounded to the nearest whole number.
A substantial proportion of the CEO’s remuneration is performance-related and delivered in shares. The CEO pay ratio will therefore
depend significantly on the CEO’s annual bonus and performance share award outcomes and may fluctuate year-on-year. The CEO’s
total remuneration for 2025 was stable compared to 2024 and as a result the CEO pay ratio has also remained broadly unchanged.
For each year, the Company has calculated the ratio in line with the reporting regulations using ‘Method A’ (determine total full-time
equivalent remuneration for all UK employees for the relevant financial year as at 31 December; rank the data and identify employees
whose remuneration places them at the 25th, 50th and 75th percentile). This method was used due to being the most accurate way of
calculating the ratio. The Board has confirmed that the ratio is consistent with the Company’s wider policies on employee pay, reward
and progression.
197
Strategic report
Governance
Financial statements
Other information
Executive Directors’ remuneration in 2025
Total remuneration (audited)
The table below sets out the remuneration paid to each Director for the financial years ended 31 December 2025 and 31 December
2024 as a single figure. A full breakdown of fixed pay and pay for performance in 2025 can be found on pages 200 to 205.
Executive Directors
(£’000)
Fixed pay
Pay for performance
Salary
Taxable
benefits
Pension
and life
assurance
Subtotal
Bonus
Performance
LTIPs
1
Subtotal
Other items in
the nature of
remuneration2
Total
remuneration
Cash
Deferred
2025
Paul Williams
732
20
120
872
549
61
38
648
–
1,520
Damian
Wisniewski
565
21
92
678
423
47
30
500
–
1,178
Nigel George
565
19
93
677
423
47
30
500
–
1,177
Emily Prideaux
565
21
93
679
423
47
28
498
–
1,177
2024
Paul Williams
707
23
115
845
531
120
–
651
–
1,496
Damian
Wisniewski
546
24
89
659
409
93
–
502
1
1,162
Nigel George
546
24
90
660
409
93
–
502
–
1,162
Emily Prideaux
546
20
89
655
409
93
–
502
–
1,157
Non-Executive Directors
(£’000)
2025
2024
Fees
Taxable
benefits
Total
Fees
Taxable
benefits
Total
Mark Breuer
290
–
290
280
–
280
Helen Gordon
98
–
98
95
–
95
Lucinda Bell
93
–
93
90
–
90
Sanjeev Sharma
90
–
90
83
–
83
Robert Wilkinson
3
69
–
69
39
–
39
Madeleine McDougall
3
81
–
81
12
–
12
Former Directors
Cilla Snowball
4
34
–
34
87
–
87
1
Performance LTIPs for 2025 relate to the 2023 performance share awards for which the performance conditions related to the year ended 31 December 2025. The value is
based on an estimate of expected vesting of 3.6% and the average share price over the last three months of the financial year ended 31 December 2025 of £17.24. This
amount includes the value of additional shares awarded in respect of dividends equivalent.
2
Included in the column for ‘other items in the nature of remuneration’ is the grant under the Derwent London Sharesave Plan made on 19 September 2024. These have
been calculated based on the middle market share price on the date of grant being £24.76 minus the value of the awards at the option price which was £19.00. Further
information on the Derwent London Sharesave Plan is on page 208.
3
Robert Wilkinson and Madeleine McDougall were appointed to the Board on 1 June 2024 and 1 November 2024, respectively. The fees for 2024 shown in the table above
are the actual fees paid to them for the periods they were Non-Executive Directors.
4
Cilla Snowball stepped down from the Board on 16 May 2025. The fees for 2025 shown in the table above are the actual fees paid to Cilla Snowball for the period
1 January 2025 to 16 May 2025.
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
198
Payments to former Directors and for loss of office (audited)
Paul Williams will retire and step down from the Board when a successor has been appointed and is in place. He will remain a full-time
employee until 21 January 2027. The table below discloses the treatment of Paul Williams’ remuneration.
Element
Agreed treatment
Salary, benefits
and pension
Continue to receive salary, benefits and pension until 21 January 2027. There will be no payment for loss of
office.
Annual bonus
Bonus for the year ended 31 December 2025 will be paid in March 2026 based on performance against
targets and is detailed on pages 201 and 202. Any amounts in excess of 75% of salary will be deferred into
shares in accordance with the Remuneration Policy.
Eligible for a bonus for the period 1 January to 31 December 2026. Any amounts in excess of 75% of salary
will be deferred into shares in accordance with the Remuneration Policy.
Outstanding
deferred bonus
and performance
share awards
Treated as a good leaver in respect of his outstanding deferred bonus awards (which will vest at the
normal time) and his outstanding performance share awards (which will be capable of vesting at the
normal time subject to performance and any amounts that vest will be subject to a holding period which
ends on the second anniversary of the date that he steps down as CEO).
Will not be granted a long-term incentive award in 2026.
Post-employment
shareholding
guidelines
Paul Williams will be subject to the Group’s post-employment shareholding guidelines, which restrict the
number of shares he may sell within the two-year period following stepping down from the Board (see
page 182).
Nigel George will retire and step down from the Board on 31 March 2026. Nigel will remain a full-time employee until 11 August 2026 and
will then continue to support the business as a consultant working on a number of projects expected until March 2028. The table below
discloses the treatment of Nigel George’s remuneration.
Element
Agreed treatment
Salary, benefits
and pension
Continue to receive salary, benefits and pension until 11 August 2026. There will be no payment for loss
office.
Annual bonus
Bonus for the year ended 31 December 2025 will be paid in March 2026 based on performance against
targets and is detailed on pages 201 and 202. Any amounts in excess of 75% of salary will be deferred into
shares in accordance with the Remuneration Policy.
Eligible for a bonus for the period 1 January to 11 August 2026. Any amounts in excess of 75% of salary will
be deferred into shares in accordance with the Remuneration Policy.
Outstanding
deferred bonus
and performance
share awards
Treated as a good leaver in respect of his outstanding deferred bonus awards (which will vest at the
normal time) and his outstanding performance share awards (which will be capable of vesting at the
normal time subject to performance and any amounts that vest will be subject to a two-year holding
period).
Will not be granted a long-term incentive award in 2026.
Post-employment
shareholding
guidelines
Nigel George will be subject to the Group’s post-employment shareholding guidelines, which restrict the
number of shares he may sell within the two-year period following stepping down from the Board (see
page 182).
No payments were made to past Directors or in respect of loss of office during 2025.
199
Strategic report
Governance
Financial statements
Other information
Fixed pay
Base salaries and fees (audited)
Salaries for the Executive Directors were increased by 3.5% with effect from 1 January 2025. The average inflationary increase for the
wider workforce was 3.5%. The average actual increase in base salaries for all employees eligible for a pay rise (inclusive of
promotions, career progression and market salary alignments) effective from 1 January 2025 was 5.9%.
With effect from 1 January 2025, Mark Breuer’s inclusive Chairman fee was increased by 3.5% to £289,800, in line with the average
inflationary increases for the wider workforce. Additionally, with effect from 1 January 2025, the fees payable to the Non-Executive
Directors were increased by c.3.5%.
2025 base
salary/fee
2024 base
salary/fee
Executive Directors
Paul Williams
£732,000
£707,200
Damian Wisniewski
£564,600
£545,500
Nigel George
£564,600
£545,500
Emily Prideaux
£564,600
£545,500
Non-Executive Directors
Mark Breuer
£289,800
£280,000
Helen Gordon
£97,825
£94,500
Lucinda Bell
£92,650
£89,500
Sanjeev Sharma
1
£90,050
£83,438
Robert Wilkinson
2
£69,350
£39,282
Madeleine McDougall
2
£80,984
£12,033
Former Directors
Cilla Snowball
3
£33,861
£87,000
1
From 10 May 2024, Sanjeev Sharma succeeded Claudia Arney as Chair of the Remuneration Committee.
2
Robert Wilkinson and Madeleine McDougall were appointed to the Board on 1 June 2024 and 1 November 2024, respectively. The fees for 2024 shown in the table above
are the actual fees paid to them for the periods they were Non-Executive Directors.
3
Cilla Snowball stepped down from the Board on 16 May 2025. The fees for 2025 shown in the table above are the actual fees paid to Cilla Snowball for the period
1 January 2025 to 16 May 2025.
Benefits (audited)
Executive Directors are entitled to a car allowance, fuel allowance, private medical insurance and life assurance. Further details of the
taxable benefits paid in 2025 can be found in the table below.
Car
allowance
1
Private
medical
insurance
Total 2025
taxable
benefits
Executive Directors
Paul Williams
£16,000
£3,519
£19,519
Damian Wisniewski
£16,000
£4,716
£20,716
Nigel George
£16,000
£3,393
£19,393
Emily Prideaux
£16,000
£4,716
£20,716
1
Damian Wisniewski and Emily Prideaux participate in the Electric Car Salary Sacrifice Scheme and as such sacrifice a significant proportion of their car allowance in
return for leasing an electric car.
Pension and life assurance (audited)
All of the Executive Directors paid into the Group’s defined contribution scheme, being the Fidelity Master Trust pension scheme, with
the remainder of their entitlement paid as a cash supplement. No other Directors are accruing benefits under a defined benefit or
money purchase pension scheme.
Paid into
defined
contribution
scheme
Pension cash
supplement
Total pension
Life
assurance
1
Total 2025
pension
and life
assurance
Executive Directors
Paul Williams
£10,000
£99,800
£109,800
£10,104
£119,904
Damian Wisniewski
£10,000
£74,690
£84,690
£7,793
£92,483
Nigel George
£10,000
£74,690
£84,690
£8,742
£93,432
Emily Prideaux
£10,000
£74,690
£84,690
£8,399
£93,089
1
There was no change in the life assurance benefits received by the Executive Directors in 2025. The change in the annual cost is due to changes in premiums.
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
200
Pay for performance
Annual bonus (audited)
Determination of 2025 annual bonus outcome
The performance measures set for the year under review were a combination of financial-based metrics (worth 75% of the bonus
potential) and strategic targets (worth 25% of the bonus potential). The maximum bonus potential for Executive Directors is 150% of
salary. Based on actual 2025 performance, the annual bonus payout for Executive Directors is 83.3% of the maximum potential (2024:
61.3%; 2023: 31.0%). Further information is below and available on page 201.
The Committee considered the formulaic performance outcome alongside broader perspectives including: underlying business
performance and affordability; the experience of shareholders; and the experience of employees and other stakeholders. Points
specifically considered are set out in the Chair’s Annual statement on pages 172 to 175. The Committee determined that it was not
appropriate to apply discretion to adjust the formulaic outcome.
In accordance with our current Remuneration Policy, bonuses of up to 75% of base salary are paid as cash. Amounts in excess of 75%
are deferred into shares and released after three years, subject to continued employment. The total bonus for each Executive Director
based on performance is therefore:
Deferred bonus
Bonus payable
as % of salary
Cash bonus
payable
£’000
£’000
% of salary
Executive Directors
Paul Williams
83.3%
549
61
8.3%
Damian Wisniewski
83.3%
423
47
8.3%
Nigel George
83.3%
423
47
8.3%
Emily Prideaux
83.3%
423
47
8.3%
2025 Annual bonus outcome
Bonus payable for financial-based performance
35.6% out of 75%
Bonus payable for strategic target performance
19.9% out of 25%
Financial-based metrics
Performance measure
Weighting %
of bonus
Basis of calculation
Threshold
2
%
Maximum
3
%
Actual
%
Payable
%
Total accounting return
30.0
Total accounting
return versus other
major real estate
companies
1
3.6
8.6
5.0
13.2
Total property return
45.0
Versus the MSCI
Quarterly Central
London Office Total
Return Index
4.8
6.8
5.5
22.4
Total bonus payable for financial-based metrics
35.6
1
The major real estate companies contained in the comparator group for the 2025 annual bonus are: Big Yellow Group plc, The British Land Company plc, CLS Holdings
plc, Great Portland Estates plc, Hammerson plc, Helical plc, Landsec plc, LondonMetric Property plc, Segro plc, Shaftesbury Capital plc, Unite Group plc and Workspace
Group plc. The comparator group for the 2026 annual bonus will be consistent with that used in 2025, with the addition of Grainger plc.
2
For achieving the threshold performance target, i.e. at the median total return against our sector peers or MSCI Quarterly Central London Offices Total Return Index,
22.5% of the maximum bonus opportunity will become payable.
3
Total accounting return payout accrues on a straight-line basis between the threshold level for median performance and maximum payment for upper quartile
performance or better. For total property return, the payout accrues on a straight-line basis between the threshold level for Index performance and maximum payment
for Index +2%.
201
Strategic report
Governance
Financial statements
Other information
Strategic targets
Performance measure
Link to
strategic
objectives
1
Target range
2
Maximum
award
2025
achievement
Proportion
awarded for
2025
Void management
This is measured by the Group’s EPRA vacancy rate for the year
calculated as the average of each quarter-end figure.
1
2
10% to 2%
5%
3.7%
3.9%
Tenant retention
This is measured by the percentage of tenants that remain in their
space when their lease expires or the space is re-let during the
reporting period.
1
2
4
50% to 75%
5%
71.1%
4.2%
Staff satisfaction
Staff surveys are used to assess this measure. In assessing this
target the Committee will consider any variance in staff
satisfaction scores between genders
3
.
3
80% to 90%
4%
86.5%
2.6%
Accident rate
The Group’s RIDDOR Accident Frequency Rate (AFR) is calculated
based on significant (‘Direct’) RIDDOR injuries and incidents during
the year
4
, multiplied by 1,000,000 and divided by ‘total work
exposure hours’. This target is also conditional on each Executive
Director completing, during 2025, an annual health and safety
leadership tour
5
.
4
4.0 to 1.0
4%
0.44
4.0%
Portfolio development potential
This is measured by the percentage of the Group’s portfolio by area
where a potential development scheme has been identified,
including committed acquisitions
6
.
1
35% to 50%
7%
46.2%
5.2%
25%
19.9%
1
Success against our strategic objectives is measured using our KPIs (see pages 30 to 34) and rewarded through our incentive schemes and annual bonus. The references
above show the link between our strategic objectives and our annual bonus targets (further information on our strategic objectives is on pages 26 to 29).
2
Payout accrues on a straight-line basis, between threshold and maximum performance.
3
The variance between genders in response to employee surveys is taken into account by the Committee when determining the payout for staff satisfaction. In 2025, the
results showed a 0.4% variance between genders (for those employees who indicated their gender), with female satisfaction being at 91.9% and male satisfaction at
91.5%.
4
The RIDDOR reportable injuries that we capture in our AFR are all HSE-reportable accidents or incidents which result in a fatality or ‘specified injuries’ (such as fractures,
serious burns etc). In addition, we will include all injuries caused to members of the public, where we may have contributed to the causation and where they are taken
directly to hospital, and injuries to our employees which result in them being unable to return to work for seven consecutive days. Our key health and safety statistics are
available on page 81.
5
All Executive Directors completed health and safety leadership tours during 2025. There were no work-based fatalities during 2025 (see page 81).
6
The target range for portfolio development potential includes Old Street Quarter EC1.
Remuneration Committee report
continued
Annual report on remuneration
continued
In May 2025, Derwent London’s Executive
Directors, Health & Safety (H&S) team
and several Heads of Department joined
the Non-Executive Directors for a visit to
the Network W1 construction site, to
review progress. The group spent time on
site discussing the practical health and
safety challenges as the project
advances. Andy Turrell, Derwent London’s
H&S lead manager, outlined the site’s
health and safety performance to date
and spoke about the day-to-day risks
managed by our principal contractor, Kier,
during the complex construction
programme.
A further leadership visit took place in July
2025, when the Chief Executive and the
H&S Committee toured the major
refurbishment project at 1–2 Stephen
Street W1. Hosted by Contrakt, the main
contractor, and supported by Derwent
London’s senior H&S lead manager Phil
Styan and project manager John Turner,
the visit offered a detailed view of project
progress and the specific health and
safety risks associated with working
within an occupied environment. The site
walk enabled senior management to see
how these risks are being managed in real
time and to reinforce expectations around
safe working practices.
H&S leadership tours
Network
W1
Derwent London plc
Report and Accounts 2025
202
Outstanding deferred bonus awards
In accordance with our Remuneration Policy, annual bonuses earned in excess of 75% of salary are deferred into shares and released
after three years, subject to continued employment. The outstanding deferred bonus awards held by Directors are set out below:
At grant
During the year (number)
Date of
award
Market
price
at date of
grant
1
£
Original
grant
1 January
2025
Deferred
Released
31 December
2025
Market
price
at date of
release
£
Value
release
£’000
Release
date
Executive
Directors
Paul Williams
04/04/2023
23.70
6,570
6,570
–
–
6,570
–
–
04/04/2026
26/03/2025
18.29
6,570
–
6,570
–
6,570
–
–
26/03/2028
13,140
6,570
6,570
–
13,140
–
–
Damian Wisniewski
04/04/2023
23.70
5,256
5,256
–
–
5,256
–
–
04/04/2026
26/03/2025
18.29
5,067
–
5,067
–
5,067
–
–
26/03/2028
10,323
5,256
5,067
–
10,323
–
–
Nigel George
04/04/2023
23.70
5,256
5,256
–
–
5,256
–
–
04/04/2026
26/03/2025
18.29
5,067
–
5,067
–
5,067
–
–
26/03/2028
10,323
5,256
5,067
–
10,323
–
–
Emily Prideaux
04/04/2023
23.70
4,690
4,690
–
–
4,690
–
–
04/04/2026
26/03/2025
18.29
5,067
–
5,067
–
5,067
–
–
26/03/2028
9,757
4,690
5,067
–
9,757
–
–
Other
employees
04/04/2023
23.70
562
562
–
–
562
–
–
04/04/2026
26/03/2025
18.29
322
–
322
–
322
–
–
26/03/2028
884
562
322
–
884
–
–
Total
44,427
22,334
22,093
–
44,427
–
–
1
The share price on the dealing day immediately preceding the grant date.
Performance share awards (audited)
Vesting of performance share awards
The Group granted performance share awards on 14 March 2023. The grant was subject to performance measures over a three-year
performance period which ended on 31 December 2025. As shown in the table below, the awards granted in 2023 will vest on 14 March
2026 at 3.6% of maximum opportunity.
Performance measure
Weighting %
of award
Basis of calculation
1
Threshold
2
%
Maximum
3
%
Actual
Estimated
vesting
Total shareholder return
50
FTSE 350 Super Sector Real Estate
Index
10.5%
29.4%
(13.6)%
Nil
Total property return
40
MSCI Quarterly UK All Property
Total Return Index
3.5%
5.5%
0.62%
Nil
Embodied carbon
5
Weighted average embodied
carbon for all projects
600kg
CO
2
e/m
2
500kg
CO
2
e/m
2
537.2kg
CO
2
e/m
2
71.2%
Energy intensity
5
Average total electricity and gas
consumption
134
kWh/m
2
131
kWh/m
2
125
kWh/m
2
Nil
1
The constituents of the FTSE 350 Super Sector Real Estate Index (excluding agencies) as at the start of the performance period (i.e. 1 January 2023). The Company’s
annualised total property return is calculated on a compound annual growth basis over the three-year performance period. Embodied carbon intensity is the weighted
average embodied carbon performance for all projects over the three-year performance period. Energy intensity is assessed based on the average energy consumption
of the managed portfolio (gas and electricity) over the three-year performance period.
2
For achieving the threshold performance target 22.5% of the maximum award will vest.
3
For total shareholder return (which is calculated based on a three-month weekday average Return Index excluding UK public bank holidays ended on: (1) the day before
the performance period start date; and (2) the performance period end date), vesting accrues on a straight-line basis between the threshold level for median
performance and maximum level for upper quartile performance. For total property return, vesting accrues on a straight-line basis between the threshold level for Index
performance and maximum level for Index +2%. For embodied carbon intensity, vesting accrues on a straight-line basis between the threshold performance target of
600kgCO₂e/m2 and maximum performance target of 500kgCO₂e/m2. For energy intensity, vesting accrues on a straight-line basis between the threshold performance
target of 134kWh/m2 and maximum performance target of 131kWh/m2.
203
Strategic report
Governance
Financial statements
Other information
Vesting of performance share awards
continued
The Committee determined that it was not appropriate to apply discretion to adjust the formulaic outcome. Therefore, the vesting for
each executive will be:
Executive Director
Number of
awards
granted
Number of
shares
vesting
based on
performance
(3.6%)
Dividend
equivalents
(number of
shares)1
Total number
of shares
vesting
Total
estimate
value of
award on
vesting (£)
Paul Williams, CEO
55,921
1,990
238
2,228
38,411
Damian Wisniewski, CFO
43,133
1,535
183
1,718
29,618
Nigel George
43,133
1,535
183
1,718
29,618
Emily Prideaux
40,501
1,441
172
1,613
27,808
1
In accordance with the PSP rules, the Remuneration Committee has discretion to allow participants to receive the benefit of any dividends paid on vesting shares
between the grant date and the vesting date in the form of additional vesting shares.
The value of the vesting awards is based on the average share price over the last three months of the financial year ended
31 December 2025, being £17.24. The estimated value of the vesting awards has been included within the ‘single figure’ total
remuneration table on page 198. The Company’s share price was £24.32 at the point of grant. The Remuneration Committee did not
consider that it was necessary to exercise discretion in respect of share price fluctuations since grant.
Holding period
In accordance with the PSP rules, vested awards are subject to a two-year holding period whereby at least the after-tax number of
vested shares must be retained by the executive for a minimum of two years from the point of vesting. The 2020, 2021 and 2022 grants
have been removed from the table below as they each lapsed in full.
Grant
Grant date
Performance period
Vesting date
Holding period
Holding period ceases
2023 Grant
14 March 2023
1 January 2023 to
31 December 2025
14 March 2026
Two years
14 March 2028
2024 Grant
11 March 2024
1 January 2024 to
31 December 2026
11 March 2027
Two years
11 March 2029
2025 Grant
4 March 2025
1 January 2025 to
31 December 2027
4 March 2028
Two years
4 March 2030
Grant of performance share awards
On 4 March 2025, the Committee made an award to Executive Directors on the following basis:
Executive Directors
Number of
shares
awarded
Face value of
award
£
Paul Williams
80,750
1,463,998
Damian Wisniewski
62,283
1,129,191
Nigel George
62,283
1,129,191
Emily Prideaux
62,283
1,129,191
Awards were granted as nil-cost options and equivalent to 200% of base salary, with 22.5% of the award vesting at threshold
performance. The share price used to determine the level of the awards was the closing share price on the day immediately preceding
the grant date of £18.13. The performance period will run over three financial years ending on 31 December 2027 and, dependent upon
the achievement of the performance conditions, the awards will vest on 4 March 2028 and will be subject to a two-year holding period
as outlined in the table above.
The Committee has discretion to reduce the extent of vesting in the event that it considers that performance against either measure
is inconsistent with underlying financial performance and/or the experience of key stakeholders. At least the after-tax number of
vested shares must be retained for a minimum holding period of two years. To the extent that awards vest, the Committee has
discretion to allow the Executive Directors to receive the benefit of any dividends paid over the vesting period in the form of additional
vesting shares.
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
204
Grant of performance share awards
continued
The balance of performance metrics reflects Derwent London’s continued focus on delivering above average long-term returns to
shareholders, together with our commitment to sustainability and ambition to be a net zero carbon business by 2030. The
performance conditions for the 2025 awards are:
Measure
Basis of calculation
Weighting
Threshold
1
Maximum
Total shareholder return
Position of the Company’s total
shareholder return against the total
shareholder return of the ranked
members of the FTSE 350 Super Sector
Real Estate Index (excluding agencies)
assessed over the three-year
performance period ending 31 December
2027
50%
Median
Upper quartile and
above
Total property return
The Company’s annualised total
property return calculated on a
compound annual growth basis relative
to the MSCI Quarterly UK All Property
Total Return Index assessed over the
three-year performance period ending 31
December 2027
40%
At Index
Index +2%
Embodied carbon
intensity
Weighted average embodied carbon for
all projects during the three-year
performance period ending 31 December
2027
5%
600 kgCO
2
e/m
2
500 kgCO
2
e/m
2
Energy intensity
Average energy intensity for 2025, 2026
and 2027 assessed based on the
electricity and gas consumption across
the managed portfolio
5%
121 kWh/m
2
118 kWh/m
2
1
For achieving the threshold performance target, 22.5% of the maximum award will vest.
205
Strategic report
Governance
Financial statements
Other information
Outstanding performance share awards
The outstanding performance share awards held by Directors and employees are set out in the table below:
At grant
During the year (number)
Date of
award
Market
price at
date of
grant
1
£
1 January
2025
Granted
2
Vested
Lapsed
4
31 December
2025
3
Market
price at
date of
vesting
£
Value
vested
(inclusive
of dividend
equivalents)
£’000
Earliest
vesting date
Executive
Directors
Paul
Williams
09/03/2022
29.36
42,942
–
–
(42,942)
–
–
–
09/03/2025
14/03/2023
24.32
55,921
–
–
–
55,921
–
–
14/03/2026
11/03/2024
21.00
67,352
–
–
–
67,352
–
–
11/03/2027
04/03/2025
18.13
–
80,750
–
–
80,750
–
–
06/03/2028
166,215
80,750
–
(42,942)
204,023
–
–
Damian
Wisniewski
5
09/03/2022
29.36
34,352
–
–
(34,352)
–
–
–
09/03/2025
14/03/2023
24.32
43,133
–
–
–
43,133
–
–
14/03/2026
11/03/2024
21.00
51,952
–
–
–
51,952
–
–
11/03/2027
04/03/2025
18.13
–
62,283
–
–
62,283
–
–
06/03/2028
129,437
62,283
–
(34,352)
157,368
–
–
Nigel
George
09/03/2022
29.36
34,352
–
–
(34,352)
–
–
–
09/03/2025
14/03/2023
24.32
43,133
–
–
–
43,133
–
–
14/03/2026
11/03/2024
21.00
51,952
–
–
–
51,952
–
–
11/03/2027
04/03/2025
18.13
–
62,283
–
–
62,283
–
–
06/03/2028
129,437
62,283
–
(34,352)
157,368
–
–
Emily
Prideaux
09/03/2022
29.36
30,653
–
–
(30,653)
–
–
–
09/03/2025
14/03/2023
24.32
40,501
–
–
–
40,501
–
–
14/03/2026
11/03/2024
21.00
51,952
–
–
–
51,952
–
–
11/03/2027
04/03/2025
18.13
–
62,283
–
–
62,283
–
–
06/03/2028
123,106
62,283
–
(30,653)
154,736
–
–
Other
employees
09/03/2022
29.36
61,199
–
–
(61,199)
–
–
–
09/03/2025
14/03/2023
24.32
116,698
–
–
–
116,698
–
–
14/03/2026
11/03/2024
21.00
148,989
–
–
–
148,989
–
–
11/03/2027
04/03/2025
18.13
–
188,924
–
–
188,924
–
–
06/03/2028
326,886
188,924
–
(61,199)
454,611
–
–
Total
875,081
456,523
–
(203,498) 1,128,106
–
–
1
The share price on the dealing day immediately preceding the grant date.
2
The performance share awards granted on 4 March 2025 will vest on 4 March 2028. The performance targets attached to these awards are detailed on pages 204 and
205.
3
The performance share awards granted on 11 March 2024 will vest on 11 March 2027. The performance targets attached to these awards are detailed on page 195 of the
2024 Directors’ remuneration report.
4
The performance share awards granted on 14 March 2023 will vest at 3.6% on 14 March 2026. Further details are on page 203. The weighted average exercise price of
awards that lapsed in 2025 was £nil (2024: £nil).
5
Damian Wisniewski has a vested but unexercised 2019 performance share award of 5,253 shares (see pages 209 and 213).
31 December
2025
31 December
2024
31 December
2023
Weighted average exercise price of performance share awards
–
–
–
Weighted average remaining contracted life of performance share awards
1.19 years
1.19 years
1.20 years
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
206
Pay for performance comparison
The graph below shows the value on 31 December 2025 of £100 invested in Derwent London on 31 December 2015, compared to that of
£100 invested in the FTSE 350 Super Sector Real Estate Index. The other points plotted are the values at intervening financial year ends.
This index has been chosen by the Committee as it is considered the most appropriate benchmark against which to assess the relative
performance of the Company for this purpose.
Remuneration of the Chief Executive
The table below shows the remuneration earned by the Chief Executive over the past 10 years.
Financial year ended
31/12/2016
31/12/2017
31/12/2018
31/12/2019
1,2
31/12/2020
31/12/2021
31/12/2022
31/12/2023
31/12/2024
31/12/2025
Chief Executive
John
Burns
John
Burns
John
Burns
John
Burns
Paul
Williams
Paul
Williams
Paul
Williams
Paul
Williams
Paul
Williams
Paul
Williams
Paul
Williams
Total remuneration
(single figure)
(£’000)
1,403
1,681
2,219
1,399
2,100
2,214
1,238
1,549
1,133
1,496
1,520
Annual bonus (%
of maximum)
23.3
53.6
68.5
97.0
97.0
66.3
30.9
83.1
31.0
61.3
55.5
Long-term variable
pay (% of
maximum)
24.9
26.5
46.0
65.75
65.75
81.6
18.1
0.0
0.0
0.0
3.56
1
Paul Williams’ 2019 total remuneration is in respect of his tenure as Chief Executive from 17 May 2019. His salary, bonus and performance share awards were subject to a pro
rata time reduction.
2
The annual bonus (% of maximum) and long-term variable pay (% of maximum) for John Burns in 2019 is based on remuneration in the role of the Chief Executive.
Dec 25
Dec 24
Dec 23
Dec 22
Dec 21
Dec 20
Dec 19
Dec 18
Dec 17
Dec 16
Dec 15
50
75
100
125
Derwent London
FTSE United Kingdom 350 Super Sector Real Estate Index
Source: LSEG Datastream
Note: The total shareholder return chart data is based on the 30-day average over the period 2 December to 31 December for each year.
Total shareholder return
207
Strategic report
Governance
Financial statements
Other information
Sharesave Plan (audited)
Grant of Sharesave options
To encourage Group-wide share ownership, the Company has operated an HMRC tax efficient Sharesave Plan since the 2018 AGM. No
grant was made during 2025.
Outstanding Sharesave options
The outstanding Sharesave options held by Directors and employees are set out in the table below:
At grant
During the year (number)
Date of
award
Option
price
£
1 January
2025
Granted
Exercised
Lapsed
31
December
2025
Maturity
date
Market
price
at date of
exercise
£
Value of
award at
exercise
£’000
Executive Directors
Paul Williams
21/09/2022
19.61
458
–
–
–
458
01/12/2025
–
–
21/09/2023
14.87
623
–
–
–
623
01/11/2026
–
–
1,081
–
–
–
1,081
–
–
Damian
Wisniewski
21/09/2022
19.61
458
–
–
–
458
01/12/2025
–
–
21/09/2023
14.87
311
–
–
–
311
01/11/2026
–
–
19/09/2024
19.00
244
–
–
–
244
01/11/2027
–
–
1,013
–
–
–
1,013
–
–
Nigel
George
21/09/2022
19.61
458
–
–
–
458
01/12/2025
–
–
21/09/2023
14.87
623
–
–
–
623
01/11/2026
–
–
1,081
–
–
–
1,081
–
–
Emily
Prideaux
21/09/2022
19.61
458
–
–
–
458
01/11/2025
–
–
21/09/2023
14.87
623
–
–
–
623
01/11/2026
–
–
1,081
–
–
–
1,081
–
–
Other
employees
21/09/2022
19.61
21,244
–
–
(4,672)
16,572
01/12/2025
–
–
21/09/2023
14.87
40,515
–
–
(2,516)
37,999
01/11/2026
–
–
19/09/2024
19.00
13,851
–
–
(3,389)
10,462
01/11/2027
–
–
75,610
–
–
(10,577)
65,033
Total
79,866
–
–
(10,577)
69,289
–
–
1
On 1 December 2025, the options granted on 21 September 2022 became capable of exercise at a price of £19.61 per share.
Remuneration Committee report
continued
Annual report on remuneration
continued
Derwent London plc
Report and Accounts 2025
208
Directors’ interests in shares (audited)
Details of the Directors’ (and their connected persons) interests in shares are provided in the table below.
Number at 31 December 2025
Number at 31 December 2024
Beneficially
held
Deferred
shares
Conditional
shares
5
Share
options
6
Total
Beneficially
held
Deferred
shares
Conditional
shares
Share
options
Total
Executive
Directors
Paul Williams
1
95,757
13,140
204,023
1,081
314,001
92,921
6,570
166,215
1,081
266,787
Damian
Wisniewski
2
71,931
10,323
157,368
6,266
245,888
69,095
5,256
129,437
6,266
210,054
Nigel George
3
105,732
10,323
157,368
1,081
274,504
100,046
5,256
129,437
1,081
235,820
Emily Prideaux
6,081
9,757
154,736
1,501
172,075
6,081
4,690
123,106
4,001
137,878
Total
279,501
43,543
673,495
9,929 1,006,468
268,143
21,772
548,195
12,429
850,539
Non-Executive
Directors
Mark Breuer
7,000
–
–
–
7,000
7,000
–
–
–
7,000
Helen Gordon
4
1,051
–
–
–
1,051
1,009
–
–
–
1,009
Lucinda Bell
1,000
–
–
–
1,000
1,000
–
–
–
1,000
Sanjeev Sharma
1,261
–
–
–
1,261
1,261
–
–
–
1,261
Robert Wilkinson
1,500
–
–
–
1,500
1,500
–
–
–
1,500
Madeleine
McDougall
–
–
–
–
–
–
–
–
–
–
Former
Directors
Cilla Snowball
–
–
–
–
–
–
–
–
–
–
Total
11,812
–
–
–
11,812
11,770
–
–
–
11,770
There have been no other changes to the above interests between 31 December 2025 and 25 February 2026.
1
On 6 March 2025, Paul Williams purchased 2,836 shares at an average share price of £17.63.
2
On 7 March 2025, Damian Wisniewski purchased 2,836 shares at an average share price of £17.49.
3
On 6 March 2025, Nigel George purchased 5,686 shares at an average share price of £17.59.
4
During 2025, Helen Gordon reinvested her dividend to purchase an additional 42 shares.
5
Conditional shares are those which are subject to performance conditions. For further information on the Performance Share Plan see pages 203 to 206.
6
Share options principally relate to the Sharesave Plan (see page 208) and are unvested, except for:
Damian Wisniewski: Damian’s share options also include his vested but unexercised performance share 2019 award (5,253 shares); and
Emily Prideaux: Emily has 420 outstanding Employee Share Option Plan (ESOP) awards as at 31 December 2025 which were granted in respect of her role prior to being
appointed an Executive Director. During 2025, 2,500 ESOP awards (granted in 2015) lapsed.
Managing shareholder dilution
The table below sets out the available dilution capacity for the Company’s employee share plans based on the limits set out in the rules
of those plans that relate to issuing new shares.
2025
2024
Total issued share capital as at 31 December
112.3m
112.3m
Employee share plan limits (in any consecutive 10-year period):
Current dilution for all share plans
3.0%
2.7%
Headroom relative to 10% limit
7.0%
7.3%
5% for executive plans – current dilution for discretionary (executive) plans
1.4%
1.3%
Headroom relative to 5% limit
3.6%
3.7%
209
Strategic report
Governance
Financial statements
Other information
Directors’ report
The Directors present their Report & Accounts
and audited financial statements for the year
ended 31 December 2025.
This Report & Accounts contains certain forward-looking
statements. By their nature, any statements about the future
outlook involve risk and uncertainty because they relate to events
and depend on circumstances that may or may not occur in the
future. Actual results, performance or outcomes may differ
materially from any results, performance or outcomes expressed
or implied by such forward-looking statements.
Each forward-looking statement speaks only as of the date of
that particular statement. No representation or warranty is given
in relation to any forward-looking statements made by Derwent
London, including as to their completeness or accuracy. Nothing
in this Report & Accounts should be construed as a profit
forecast.
Both the Strategic report and the Directors’ report have been
drawn up and presented in accordance with and in reliance upon
applicable English company law, and the liabilities of the
Directors in connection with that report shall be subject to the
limitations and restrictions provided by such law.
Corporate governance arrangements
During the year ended 31 December 2025 , we have applied the
principles and complied with the provisions of good governance
contained in the UK Corporate Governance Code 2024 (the
Code). Further details on how we have applied the Code can be
found in the Governance section on pages 112 to 209. The Code
can be found in the standards, codes & policy section of the
Financial Reporting Council’s website:
www.frc.org.uk
Amendment of Articles of Association
Unless expressly specified to the contrary in the Company’s
Articles of Association (the Articles), the Articles may be
amended by a special resolution of the Company’s shareholders.
Company status and branches
the holding company of the Derwent London group of
companies, which includes no branches. Derwent London plc is
listed in the commercial companies’ category of the London
Stock Exchange Main Market. Derwent London plc is a public
(company number 01819699).
Key stakeholders
The long-term success of the Group is dependent on its
relationships with its key stakeholders. On pages 128 and 129, we
outline the ways in which we have engaged with our key
stakeholders to understand their material concerns and factor
them into our decision making.
David Lawler
Company Secretary
The Directors’ report for the financial year ended
31 December 2025 is set out on pages 210 to 214. Additional
information, which is incorporated into this Directors’ report
by reference, including information required in accordance
with the Companies Act 2006 and UK Listing Rule 6.6.1, can
be located on the following pages:
Pages
Future business developments
1 to 111
Stakeholder engagement
128 and 129
Diversity and inclusion
79 and 170
Charitable donations
77
Going concern & viability
62 to 65
The Section 172(1) Statement
130
Monitoring purpose, values and culture
126
Training
135 and 163
Review of the 2025 Report & Accounts
146
Internal financial control
149
Risk management and internal controls
104 to 111
Rewarding our employees
194
Total remuneration in 2025
198
Long-term incentive schemes
203 to 206
Interest capitalised
243
Financial instruments
252
Financial risk management
256
Credit, market and liquidity risks
256 and 257
Related party disclosures
263
Derwent London plc
Report and Accounts 2025
210
Substantial shareholders
The table below shows the holdings in the Company’s issued share capital which had been notified to the Company pursuant to the
Financial Conduct Authority’s Disclosure Guidance and Transparency Rules. The information below was correct at the date of
notification. It should be noted that these holdings may have changed since the Company was notified. However, notification of any
change is not required until the next notifiable threshold is crossed.
31 December 2025
25 February 2026
Direct/
indirect
Number of
shares (m)
%
Direct/
indirect
Number of
shares (m)
%
Norges Bank
Direct
6.6
5.9
Direct
6.6
5.9
BlackRock Investment Management (UK) Ltd
Indirect
6.0
5.4
Indirect
6.0
5.4
First Eagle Investment Management LLC
Direct
5.7
5.1
Direct
5.7
5.1
Resolution Capital Limited
Direct
5.6
5.0
Direct
5.6
5.0
APG Asset Management N.V.
Direct
5.6
5.0
Direct
5.5
4.9
Ameriprise Financial Inc (Columbia Threadneedle)
Indirect
4.9
4.8
Indirect
4.9
4.8
Lady Jane Rayne
Direct
3.6
3.6
Direct
3.6
3.6
Canada Pension Plan Investment Board
Direct
3.3
3.0
Direct
3.3
3.0
Fidelity International Limited
1
–
–
–
Indirect
5.8
5.1
1
Notification of TR-1 received 6 February 2026.
Employees
The Board recognises the importance of attracting, developing
and retaining the right people. In accordance with best practice,
we have employment policies in place which provide equal
opportunities for all employees, irrespective of sex, race, colour,
disability, sexual orientation, gender identity, religious beliefs or
marital status.
Following Dame Cilla Snowball’s retirement from the Board on
16 May 2025, Madeleine McDougall became the designated
director responsible for gathering the views of the workforce.
Further information on the Board’s methods for engaging with
the workforce is on page 129.
Greenhouse gas emissions
In line with our commitment to transparent and best practice
reporting, we have included our Streamlined Energy and Carbon
Reporting (SECR) disclosures on pages 74 and 75, which includes
our annual GHG (greenhouse gas) emissions footprint and an
intensity ratio appropriate for our business, which fulfil the
requirements of the Companies Act 2006 (Strategic and
Directors’ report) Regulations 2013. For further analysis and detail
on our GHG emissions, please see our latest Responsibility
Report, which can be found at:
www.derwentlondon.com/
responsibility/publications
Directors
The Directors of the Company are set out on pages 118 and 119,
all of which were in office during the year under review, except
for Dame Cilla Snowball who served on the Board for the period
1 January 2025 to 16 May 2025.
On 22 January 2026, Paul Williams announced his intention to
step down as Chief Executive and Director. He will continue in his
role until a successor is appointed and has transitioned into the
position during 2026.
During the year, Nigel George announced that he will step down
as a Director on 31 March 2026. Nigel’s current responsibilities will
be allocated to the other Executive Directors and therefore it is
not the Board’s current intention to appoint a replacement.
The Board is required to consist of no fewer than two Directors
and not more than 15. Shareholders may vary the minimum and/
or maximum number of Directors by passing an ordinary
resolution.
Copies of the Executive Directors’ service contracts are available
to shareholders for inspection at the Company’s registered office
and at the Annual General Meeting (AGM). Details of the
Directors’ remuneration and service contracts and their interests
in the shares of the Company are set out on pages 172, 186 and
209. A summary of the key elements of the Directors’ service
contracts is available in the Remuneration Policy report on pages
178 and 187.
Directors’ indemnity
The Company maintains appropriate Directors’ and Officers’
liability insurance cover in respect of any potential legal action
brought against its Directors. The Company has also indemnified
each Director to the extent permitted by law against any liability
incurred in relation to acts or omissions arising in the ordinary
course of their duties. The indemnity arrangements were in force
throughout the year (and at the date of approval of the financial
statements) and are qualifying indemnity provisions under the
Companies Act 2006.
Powers of the Directors
Subject to the Company’s Articles of Association, the Companies
Act 2006 and any directions given by special resolution, the
business of the Company is managed by the Board, which may
exercise all the powers of the Company, whether relating to the
management of the business of the Company or not. In
particular, the Board may exercise all the powers of the Company
to borrow money, to guarantee, to indemnify, to mortgage or
charge any of its undertakings, property, assets (present and
future) and uncalled capital and to issue debentures and other
securities and to give security for any debt, liability or obligation
of the Company or of any third party.
Directors’ training and development
Details of the training that has been provided to the Executive
and Non-Executive Directors during the year can be found on
pages 135, 155, 159 and 163.
211
Strategic report
Governance
Financial statements
Other information
Appointment and replacement of Directors
Directors may be appointed by ordinary resolution of the
shareholders, or by the Board. Appointment of a Director from
outside the Group is on the recommendation of the Nominations
Committee, whilst internal promotion is a matter decided by the
Board unless it is considered appropriate for a recommendation
to be requested from the Nominations Committee.
Notwithstanding provisions in the Company’s Articles of
Association, the Board has agreed, in accordance with the Code
and in line with previous years, that all of the Directors wishing to
continue will retire and, being eligible, offer themselves for
re-election by the shareholders at the 2026 AGM.
Significant agreements
There are no agreements between the Company and its
Directors or employees providing for compensation for loss of
office or employment that occurs because of a takeover bid,
except that, under the rules of the Group’s share-based
remuneration schemes some awards may vest following a
change of control.
Some of the Group’s banking and financial arrangements are
terminable upon a change of control of the Company. As a REIT,
a tax charge may be levied on the Company if it makes a
distribution to another company which is beneficially entitled to
10% or more of the shares or dividends in the Company or
controls 10% or more of the voting rights in the Company (a
substantial shareholder), unless the Company has taken
reasonable steps to avoid such a distribution being made.
The Company’s Articles of Association give the Directors power
to take such steps, including the power to:
identify a substantial shareholder;
withhold the payment of dividends to a substantial
shareholder; and
require the disposal of shares forming part of a substantial
shareholding.
There is no person with whom the Group has a contractual or
other arrangement that is essential to the business of the
Company.
Annual General Meeting (AGM)
At the 2025 AGM, we were delighted to receive in excess of 90%
votes in favour of all resolutions. In total, 85% of our shareholders
(issued capital) voted.
The 42nd AGM of Derwent London plc will be held in DL/78 at 78
Charlotte Street, London W1T 4QS on 15 May 2026 at 9.30am.
The Notice of Meeting together with explanatory notes is
contained in the circular to shareholders that accompanies the
Report & Accounts.
Voting
Shareholders will be entitled to vote at a general meeting
whether on a show of hands or a poll, as provided in the
Companies Act 2006. Voting at the 2026 AGM will be via poll.
Where a proxy is given discretion as to how to vote on a show of
hands, this will be treated as an instruction by the relevant
shareholder to vote in the way in which the proxy decides to
exercise that discretion. This is subject to any special rights or
restrictions as to voting which are given to any shares or upon
which any shares may be held at the relevant time and to the
Articles of Association.
If more than one joint holder votes (including voting by proxy),
the only vote which will count is the vote of the person whose
name is listed first on the register for the share.
In the event we receive 20% or more votes against a
recommended resolution at a general meeting, we would
announce the actions we intend to take to engage with our
shareholders to understand the result in accordance with the
Code. We would follow this announcement with a further update
within six months of the meeting, with an overview of our
shareholders’ views on the resolutions and the remedial actions
we have taken. All announcements made via RNS are available
to shareholders on our website.
To date, the Board has not been required to follow these
procedures due to the high level of support received from
shareholders.
Restrictions on voting
Unless the Directors decide otherwise, a shareholder cannot
attend or vote shares at any general meeting of the Company or
upon a poll or exercise any other right conferred by membership
in relation to general meetings or polls if they have not paid all
amounts relating to those shares which are due at the time of
the meeting.
This also applies if they have been served with a restriction notice
(as defined in the Articles of Association) after failure to provide
the Company with information concerning interests in those
shares required to be provided under the Companies Act 2006.
The Company is not aware of any agreements between
shareholders that may result in restrictions on voting rights.
Capital structure
As at 25 February 2026, the Company’s issued share capital
comprised a single class of 5p ordinary shares (ISIN:
GB0002652740) and equalled an amount of £5,614,546.45
divided into 112,290,929 ordinary shares.
The market price of the 5p ordinary shares at 31 December 2025
was £17.39 (2024: £19.59). During the year, they traded in a range
between £16.00 and £21.06 (2024: £18.74 and £25.28). Details of
the ordinary share capital and shares issued during the year can
be found in note 29 to the financial statements.
Directors’ report
continued
Derwent London plc
Report and Accounts 2025
212
Derwent London shares held by the Group
As at 31 December 2025, the Group holds 55,093 Derwent London shares in order to deliver vesting awards under the Performance
Share Plan (PSP) to participants, allot dividend equivalents as additional vesting shares and deliver deferred bonus shares when the
deferral periods expire. Movements on the holding of these shares are detailed below.
1 January
2025
Acquired
Allotted
Disposal
31 December
2025
Deferred bonus
1
22,334
22,093
–
–
44,427
Performance Share Plan
2
10,666
–
–
–
10,666
Total
33,000
22,093
–
–
55,093
Price (£)
18.29
Percentage of issued share capital
0%
1
The shares held as at 31 December 2025 include 22,334 and 22,093 deferred bonus shares purchased on 4 April 2023 and 26 March 2025, respectively (see page 203).
2
Includes Damian Wisniewski’s vested but unexercised PSP 2019 award (5,253 shares). The remaining balance of 5,413 shares will be used to satisfy future PSP vestings.
Rights and restrictions attaching to shares
Subject to the Articles of Association, the Companies Act 2006
and other shareholders’ rights, shares in the Company may be
issued with such rights and restrictions as the shareholders may
by ordinary resolution decide, or if there is no such resolution, as
the Board may decide provided it does not conflict with any
resolution passed by the shareholders. These rights and
restrictions will apply to the relevant shares as if they were set
out in the Articles of Association. Subject to the Articles of
Association, the Companies Act 2006 and other shareholders’
rights, unissued shares are at the disposal of the Board.
Variation of rights
The rights attached to any class of shares can be amended if
approved, either by 75% of shareholders holding the issued
shares in that class by amount, or by special resolution passed at
a separate meeting of the holders of the relevant class of shares.
Every member and every duly appointed proxy present at a
general meeting or class meeting has, upon a show of hands,
one vote and every member present in person or by proxy has,
upon a poll, one vote for every share held by him or her. No
person holds securities in the Company carrying special rights
with regard to control of the Company.
Restrictions on transfer of securities in the Company
There are no specific restrictions on the transfer of securities in
the Company, which is governed by its Articles of Association
and prevailing legislation. The Company is not aware of any
agreements between shareholders that may result in restrictions
on the transfer of securities.
Directors’ interests in shares / See page 209
Managing shareholder dilution / See page 209
Results and dividends
The financial statements set out the results of the Group for the
financial year ended 31 December 2025 and are shown on pages
226 to 284. The Directors recommend a final dividend of 56.0p
per ordinary share for the year ended 31 December 2025. When
taken together with the interim dividend of 25.5p per ordinary
share paid in October 2025, this results in a total dividend for the
year of 81.5p (2024: 80.50p) per ordinary share. Subject to
approval by shareholders of the recommended final dividend, the
dividend to shareholders for 2025 will total £91.5m. If approved,
the Company will pay the final dividend on 29 May 2026 to
shareholders on the register of members at 24 April 2026.
PID and non-PID dividends
As a REIT, Derwent London must distribute at least 90% of the
Group’s income profits from its tax-exempt property rental
business by way of a dividend, which is known as a property
income distribution (PID). These distributions can be subject to
withholding tax at 20%. Dividends from profits of the Group’s
taxable residual business are non-PID and will be taxed as an
ordinary dividend.
Dividend payments
Derwent London plc is committed to
reducing its impact on the environment.
From October 2025, dividend payments are
no longer made by cheque. Receiving
dividends by direct payment rather than
cheque is more efficient, secure and better
for the environment. Further information is
contained on our dividend tax vouchers.
213
Strategic report
Governance
Financial statements
Other information
Disapplication of pre-emption rights
At the 2026 AGM, the Company will seek approval from its
shareholders to disapply pre-emption rights in accordance with
the Pre-Emption Group’s 2022 Statement of Principles.
Special resolutions 17 and 18 will seek authority to:
disapply pre-emption rights on up to a nominal amount of
£561,455 (representing 10% of our issued share capital), with a
further disapplication for up to 2 per cent to be used only for
the purposes of a follow-on offer; and
disapply pre-emption rights for an additional 10 per cent for
transactions which the Board determines to be either an
acquisition or a specified capital investment as defined by the
Statement of Principles, with a further disapplication for up to
2 per cent to be used only for the purposes of a follow-on
offer.
The Company confirms its intention to comply with the ‘letter
and spirit’ of the Pre-Emption Group’s Statement of Principles in
respect of the use of the annual disapplication of pre-emption
rights.
Powers in relation to the Company issuing or buying
back its own shares
At the 2025 AGM, shareholders authorised the Company to allot
relevant securities:
(i) up to a nominal amount of £1,871,328; and
(ii) up to a nominal amount of £3,743,218, after deducting from
such limit any relevant securities allotted under (i), in
connection with an offer by way of a rights issue.
This authority is renewable annually. An ordinary resolution will
be proposed at the 2026 AGM to grant a similar authority to
allot:
(i) up to a nominal amount of £1,871,328 (being one-third of the
issued share capital of the Company); and
(ii) up to a nominal amount of £3,743,218, after deducting from
such limit any relevant securities allotted under (i), in
connection with an offer by way of a pre-emptive offer,
including an offer by way of a rights issue or open offer (being
two-thirds of the issued share capital).
A further special resolution will be proposed to renew the
Directors’ authority to repurchase the Company’s ordinary shares
in the market. The authority will be limited to a maximum of
11,229,093 ordinary shares and the resolution sets the minimum
and maximum prices which may be paid. The Directors will only
purchase the Company’s shares in the market if they believe it is
in the best interests of shareholders generally.
Fixed assets
The Group’s portfolio was professionally revalued at 31 December
2025, resulting in a surplus of £67.5m, before accounting
adjustments of £10.8m. The portfolio is included in the Group
balance sheet at a carrying value of £4,915.0m. Further details
are given in note 15 of the financial statements.
Post balance sheet events
Please refer to note 35 of the financial statements for details of
post balance sheet events.
Political donations
There were no political donations during 2025 (2024: nil).
Audit exemption
For the year ending 31 December 2025, a number of the Group’s
wholly owned subsidiaries are entitled to exemption from audit,
under section 479A of the Companies Act 2006. We have
identified in the table on pages 282 and 283 which subsidiaries
intend to utilise the audit exemption. As the ultimate parent of
these companies, Derwent London plc has unanimously agreed to
the adoption of the exemptions and to the granting of a
guarantee in accordance with section 479C of the Companies Act
2006.
Auditor
PricewaterhouseCoopers LLP (PwC) were reappointed in 2024
following a competitive tender process during 2023. PwC has
expressed its willingness to continue in office as the Group’s
external Auditor and, accordingly, resolutions to appoint and
authorise the Audit Committee, for and on behalf of the
Directors, to determine its remuneration will be proposed at the
AGM. These are resolutions 14 and 15 as set out in the Notice of
Meeting.
The Directors who held office at the date of approval of this
Directors’ report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company’s
external Auditor is unaware and that each Director has taken all
the steps that they ought to have taken as a Director to make
themselves aware of any relevant audit information and ensure
that the Auditor is aware of such information.
The Strategic report and Directors’ report have been approved by
the Board of Directors and signed by order of the Board by:
David Lawler
Company Secretary
25 February 2026
Directors’ report
continued
Derwent London plc
Report and Accounts 2025
214
Statement of Directors’ responsibilities
The Directors are responsible for preparing the
Report & Accounts 2025 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.
Directors’ confirmations
The Directors consider that the annual Report & Accounts, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s and
Company’s position and performance, business model and
strategy. Each of the Directors, whose names and functions are
listed on pages 118 and 119 confirm that, to the best of their
knowledge:
Horseferry House
SW1
the Group financial statements, which have been prepared in
accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Group;
the Company financial statements, which have been prepared
in accordance with United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair view of the assets,
liabilities and financial position of the Company; and
the Strategic report includes a fair review of the development
and performance of the business and the position of the
Group and Company, together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Paul Williams
Damian Wisniewski
Chief Executive
Chief Financial Officer
25 February 2026
215
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
216
Greencoat
& Gorden House
SW1
217
218
Independent auditors’ report
226 Consolidated income statement
227
Consolidated statement of
comprehensive income
228 Consolidated balance sheet
229
Consolidated statement of
changes in equity
230
Consolidated cash flow statement
231
Notes to the consolidated
financial statements
276 Company balance sheet
277
Company statement of
changes in equity
278
Notes to the Company
financial statements
Other information
284 Ten-year summary
285 EPRA summary
288 Principal properties
290 List of definitions
294 Shareholder information
295 Awards and recognition
Financial statements
Financial statements
Other information
Strategic report
Governance
Derwent London plc
Report and Accounts 2025
218
Independent auditors’ report
to the members of Derwent London plc
Report on the audit of the financial statements
Opinion
In our opinion:
Derwent London plc’s group financial statements and company financial statements (the “financial statements”) give a true and
fair view of the state of the group’s and of the company’s affairs as at 31 December 2025 and of the group’s profit and the group’s
cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards
as applied in accordance with the provisions of the Companies Act 2006;
the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable
law); and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Report and Accounts 2025 (the “Annual Report”), which comprise:
the consolidated balance sheet as at 31 December 2025;
the company balance sheet as at 31 December 2025;
the consolidated income statement for the year then ended;
the consolidated statement of comprehensive income for the year then ended;
the consolidated cash flow statement for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the company statement of changes in equity for the year then ended; and
the notes to the financial statements, comprising material accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
Other than those disclosed in note 9 to the consolidated financial statements, we have provided no non-audit services to the
company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the geographic structure of the group, the accounting processes and controls, and the
industry in which the group operates.
The group’s properties are spread across a number of statutory entities, with the group financial statements being a consolidation
of these entities and the company. All work was carried out by the group audit team.
Key audit matters
Valuation of investment properties (group)
Valuation of investments in and loans to subsidiaries (company)
219
Key audit matter
How our audit addressed the key audit matter
Valuation of investment properties (group)
Refer to the Audit Committee report (Significant financial judgements, key
assumptions and estimates), note 3 (Significant judgements, key
assumptions and estimates) and note 15 (Property portfolio) to the
consolidated financial statements.
The group’s property portfolio totals £4,915.0 million (2024: £4,860.5 million)
and is comprised of investment property, owner-occupied and trading
property.
The group’s property portfolio principally consists of offices and commercial
space within central London. The remainder of the portfolio represents a
retail park, farming woodland and strategic residential development land in
Scotland.
Valuations are carried out by third party valuers (the ‘Valuers’) in
accordance with the current edition of the Royal Institution of Chartered
Surveyors (‘RICS’) Valuation – Global Standards, International Accounting
Standard 40 (Investment Property) and International Financial Reporting
Standard 13 (Fair Value Measurement).
There are significant judgements and estimates to be made in relation to
the valuation of the group’s property portfolio. Where available, the
valuations take into account evidence of market transactions for properties
and locations comparable to those of the group. The property portfolio
mainly features office accommodation and includes:
Investment properties: These are existing properties that are currently
let. They are valued using the income capitalisation method.
Development properties: These are properties currently under
construction or identified for future development. They have a
different risk and investment profile to the standing investments.
These are valued using the residual appraisal method (i.e. by
estimating the fair value of the completed project using the income
capitalisation method less estimated costs to completion and a risk
premium).
Trading properties: These are properties being developed for sale and
are held at the lower of cost and net realisable value.
Owner-occupied property: Property occupied by the group is presented
as part of Property, plant and equipment. It is stated at its revalued
amount, which is determined in the same manner as investment
properties.
Given the inherent subjectivity involved in the valuation of the property
portfolio, and therefore the need for deep market knowledge when
determining the most appropriate assumptions and the technicalities
of valuation methodology, we engaged our internal valuation experts
to assist us in our audit of this matter.
Assessing group’s external Valuers’ expertise and
objectivity
The Valuers used by the group are Knight Frank. They are a well-known
firm, with sufficient experience of the group’s market. We assessed the
competence and capabilities of the Valuers and verified their
qualifications by discussing the scope of their work and reviewing the
terms of their engagements for unusual terms or fee arrangements.
Based on this work, we are satisfied that the Valuers remain objective
and competent and that the scope of their work was appropriate.
Testing the valuations assumptions and capital
movement
We obtained details of each property held by the group and set an
expected range for yield and capital value movement, determined by
reference to published benchmarks and using our experience and
knowledge of the market. We obtained and read the Valuers’ valuation
reports covering all of the group’s investment properties and confirmed
that the valuation approach was in accordance with RICS standards.
We held meetings with management and the Valuers, at which the
valuations and the key assumptions therein were discussed. We focused
on the largest properties, development properties, and any outliers
(where the year-on-year capital value or yield were out of line with our
range of assumptions developed using externally published market
data for the relevant sector). For these properties, we obtained the
additional evidence used in arriving at the final valuations and
assessing the appropriateness of the assumptions as applied.
Furthermore, we challenged the Valuers as to the extent to which
recent market transactions and expected rental values which they
made use of in deriving their valuations took into account the impact
of climate change and related ESG considerations. Specifically, we
challenged the Valuers on their consideration of any Energy
Performance Certificate related costs identified by management and
how that was reflected within the underlying property valuations.
Materiality
Overall group materiality: £52.9 million (2024: £52.1 million) based on 1% of Total assets.
Overall company materiality: £47.6 million (2024: £45.7 million) based on 1% of Total assets.
Performance materiality: £39.6 million (2024: £39.1 million) (group) and £35.7 million (2024: £34.3 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results
of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Taxation, which was a key audit matter last year, is no longer included because of the limited history of findings, with respect to the
group’s compliance with the UK REIT regime. Otherwise, the key audit matters below are consistent with last year.
Strategic report
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Financial statements
Other information
Derwent London plc
Report and Accounts 2025
220
Key audit matter
How our audit addressed the key audit matter
Valuation of investment properties (group)
continued
The most significant estimates affecting the valuation included yields and
estimated rental value (“ERV”) growth (as described in note 15 of the
consolidated financial statements). For development projects, other
assumptions included costs to completion and risk premium assumptions
are also factored into the valuation.
The existence of significant estimation uncertainty, coupled with the fact
that only a small percentage difference in individual property valuations
when aggregated could result in material misstatement, is why we have
given specific audit focus and attention to this area.
Information and standing data
We tested the data inputs underpinning the investment property
valuation for a sample of properties, including rental income,
acquisitions and capital expenditure, by agreeing the inputs to the
underlying property records held by the group to assess the reliability,
completeness and accuracy of the underlying data used by the Valuers.
The underlying property records were assessed for reliability by
obtaining signed and approved lease contracts or sale/purchase
contracts and by inspecting approved third party invoices and tracing
back to bank statements on a sample basis.
For development properties, we agreed the costs to date included
within development appraisals to quantity surveyor reports and
capitalised expenditure was tested on a sample basis to invoices. We
agreed the total forecasted cost of upgrading buildings to Energy
Performance Certificate B to a third party report commissioned by the
group.
We also challenged the valuer on the profit on cost assumptions used
as this reflects the risk premium of the development property.
We have no matters to report in respect of this work.
Valuation of investments in and loans to subsidiaries
(company)
Refer to notes vi (Investments) and vii (Receivables) to the company
financial statements.
The company has investments in subsidiaries of £2,621.4 million (2024:
£2,578.3 million) and loans to subsidiaries of £2,093.3 million (2024: £1,920.4
million) as at 31 December 2025. This is following the recognition of an
impairment of £7.7 million and a reversal of impairment of £40.8 million
(2024: impairment of £27.5 million and reversal of impairment of £28.0
million)) on investments in subsidiaries and an expected credit loss
impairment of £nil (2024: £nil) recognised on loans to subsidiaries in the
year.
The company’s accounting policy for investments and loans is to hold them
at cost less any impairment. Impairment of the loans is calculated in
accordance with International Financial Reporting Standard 9 (Financial
Instruments). Investments in subsidiaries are assessed for impairment in
line with International Accounting Standard 36 (Impairment of Assets).
Given the inherent judgement and complexity in assessing both the
carrying value of a subsidiary company and the expected credit loss of
intercompany receivables, this was identified as a key audit matter.
We obtained management’s impairment assessment for the
recoverability of investments in and loans to subsidiaries as at 31
December 2025.
We assessed the accounting policy for investments and loans to
subsidiaries to ensure they were compliant with FRS 101 “Reduced
Disclosure Framework”. We verified that the methodology used by
management in arriving at the carrying value of each subsidiary, and
the expected credit loss for intercompany receivables, was compliant
with FRS 101.
We identified the key judgement within the requirement for impairment
of both the investments and loans to subsidiaries to be the underlying
valuation of investment property held by the subsidiaries. For details of
our procedures over investment property valuations please refer to the
group key audit matter above.
We have no matters to report in respect of this work.
Independent auditors’ report
continued
to the members of Derwent London plc
221
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry
in which they operate.
The group’s properties are spread across a number of statutory entities, with the group financial statements being a consolidation of
these entities and the company. All work was carried out by the group audit team.
The impact of climate risk on our audit
In planning our audit, we made enquiries with management to understand the extent of the potential impact of climate change risk
on the financial statements. Our evaluation of this conclusion included challenging key judgements and estimates in areas where we
considered that there was greatest potential for climate change impact. We particularly considered how climate change risks would
impact the assumptions made in the valuation of investment properties as explained in our key audit matter above. We also
considered the consistency of the disclosures in relation to climate change made within the Annual Report, the financial statements
and the knowledge obtained from our audit. We assessed the consideration of the cost of delivering the group’s climate change and
sustainability strategy within the going concern and viability forecasts.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group
Financial statements – company
Overall
materiality
£52.9 million (2024: £52.1 million).
£47.6 million (2024: £45.7 million).
How we
determined it
1% of Total assets
1% of Total assets
Rationale for
benchmark
applied
The primary measurement attribute of
the group is the carrying value of
property investments. On this basis, we
set an overall group materiality level
based on total assets.
The primary measurement attribute of the company is the
carrying value of investments in subsidiaries. On this basis, we
set an overall company materiality level based on total assets.
For purposes of the group audit, we capped the overall
materiality for the company to be 90% of the group overall
materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £39.6 million (2024:
£39.1 million) for the group financial statements and £35.7 million (2024: £34.3 million) for the company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was
appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £2.6 million
(group audit) (2024: £2.6 million) and £2.4 million (company audit) (2024: £2.3 million) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
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Other information
Derwent London plc
Report and Accounts 2025
222
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of
accounting included:
Agreed the underlying cash flow projections to Board approved forecast and assess how this forecast is compiled;
Considered management’s forecasting accuracy by comparing how the forecast made in the prior period compares to the actual
performance in the year;
Tested the integrity of the underlying formulas and calculations within the going concern and cash flow models;
Understood and assessed the appropriateness of the key assumptions used in the base case and in the severe but plausible
downside scenarios, including assessing whether we considered the downside sensitivities to be appropriately severe;
Performed sample testing over the data and information of the properties used in the forecast made by management to the
supporting documents to gain comfort over the accuracy of the data and information;
Assessed the consideration of the cost of delivering the group’s climate change and sustainability strategy within the underlying
going concern and viability forecasts;
Evaluated whether the directors’ conclusion, that sufficient liquidity and covenant headroom existed to continue trading
operationally throughout the going concern period under the base and severe but plausible scenarios, is appropriate; and
Reviewed the disclosures provided relating to the going concern basis of preparation and found that these provided an explanation
of the directors’ assessment that was consistent with the evidence we obtained.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the
company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Independent auditors’ report
continued
to the members of Derwent London plc
223
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
report for the year ended 31 December 2025 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors’ report.
Directors’ remuneration
In our opinion, the part of the Remuneration Committee report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s ability
to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and
why the period is appropriate; and
The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the financial statements and our knowledge and understanding of the group and company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s and company’s position, performance, business model
and strategy;
The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing
Rules for review by the auditors.
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
224
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are
also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to compliance with the Real Estate Investment Trust (REIT) status Part 12 of the Corporation Tax Act 2010 and the
UK regulatory principles, such as those governed by the Listings Rules, and we considered the extent to which non-compliance might
have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were
related to posting inappropriate journal entries to increase revenue, and management bias in accounting estimates and judgemental
areas of the financial statements such as the valuation of investment properties. Audit procedures performed by the engagement
team included:
Discussions with management, including the Company Secretary, as well as those charged with governance, over their
consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Understanding and evaluating management’s controls designed to prevent and detect irregularities;
Reviewing the reports made by internal audit;
Assessment of matters reported through the group’s whistleblowing helpline and the results of management’s investigation of
such matters where relevant;
Review of REIT tax compliance with the involvement of our tax specialists in the audit;
Procedures relating to the valuation of investment properties described in the related key audit matter above;
Reviewing relevant meeting minutes, including those of the Board of Directors, Risk Committee and the Audit Committee; and
Identifying and testing journal entries, in particular any journal entries posted with unexpected account combinations and post
close entries.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website
at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our auditors’ report.
Independent auditors’ report
continued
to the members of Derwent London plc
225
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from
branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the company financial statements and the part of the Remuneration Committee report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the company for the financial year ended 31 December 2014. Our uninterrupted engagement covers twelve
financial years.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial
statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R and filed on the
National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over whether the
structured digital format annual financial report has been prepared in accordance with those requirements.
Allan McGrath (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
25 February 2026
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
226
Consolidated income statement
for the year ended 31 December 2025
Note
2025
£m
2024
£m
Gross property and other income
5
Net property and other income
5
Administrative expenses
(39.1 )
(41.1 )
Revaluation surplus/(deficit)
15
(2.7 )
(Loss)/profit on disposal
6
(2.2 )
Profit from operations
Finance income
7
Finance costs
7
(50.5 )
(39.9 )
Movement in fair value of derivative financial instruments
(0.6 )
(2.3 )
Share of results of joint ventures
8
Profit before tax
9
Tax charge
14
(0.4 )
(0.1 )
Profit for the year
Basic earnings per share
37
Diluted earnings per share
37
The notes on pages 231 to 275 form part of these financial statements.
227
Consolidated statement
of comprehensive income
for the year ended 31 December 2025
Note
2025
£m
2024
£m
Profit for the year
Actuarial losses on defined benefit pension scheme
13
(0.4 )
Revaluation surplus of owner-occupied property
15
Deferred tax charge on revaluation
28
(1.1 )
(0.6 )
Other comprehensive income that will not be reclassified to profit or loss
Total comprehensive income relating to the year
The notes on pages 231 to 275 form part of these financial statements.
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
228
Note
2025
£m
2024
£m
Non-current assets
Investment property
15
Property, plant and equipment
16
Pension scheme surplus
13
Other receivables
19
Current assets
Trading property
15
Trading stock
17
Trade and other receivables
20
Derivative financial instruments
24
Corporation tax asset
Cash and cash equivalents
32
Non-current assets held for sale
21
Total assets
Current liabilities
Borrowings
24
Leasehold liabilities
24
Trade and other payables
22
Provisions
23
Non-current liabilities
Borrowings
24
Leasehold liabilities
24
Provisions
23
Deferred tax
28
Total liabilities
Total net assets
Equity
Share capital
29
Share premium
30
Other reserves
30
Retained earnings
30
Total equity
Paul Williams
Damian Wisniewski
Chief Executive
Chief Financial Officer
The notes on pages 231 to 275 form part of these financial statements.
Consolidated balance sheet
as at 31 December 2025
229
Share
capital
£m
Share
premium
£m
Other
reserves
1
£m
Retained
earnings
£m
Total
equity
£m
At 1 January 2025
Profit for the year
Other comprehensive income
Share-based payments
Dividends paid
(90.9 )
(90.9 )
At 31 December 2025
At 1 January 2024
Profit for the year
Other comprehensive income/(expense)
(0.4 )
Share-based payments
Dividends paid
(89.8 )
(89.8 )
At 31 December 2024
1
See note 30.
Consolidated statement of changes in equity
for the year ended 31 December 2025
Strategic report
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Financial statements
Other information
Derwent London plc
Report and Accounts 2025
230
Note
2025
£m
2024
£m
Operating activities
Cash generated from operations
27
Interest received
Interest and other finance costs paid
(45.5 )
(38.3 )
Tax paid in respect of operating activities
(0.3 )
Net cash from operating activities
Investing activities
Acquisition of properties
(13.7 )
(47.0 )
Capital expenditure
1
(149.1 )
(139.9 )
Disposal of investment properties
Purchase of property, plant and equipment
(10.0 )
(1.6 )
Indirect taxes (paid)/received in respect of investing activities
(3.0 )
Net cash used in investing activities
(96.7 )
(101.9 )
Financing activities
Proceeds of bond issue
Net movement in revolving bank loans
26
(110.5 )
Drawdown of term bank loans
26
Payment of arrangement fees
(3.9 )
(0.7 )
Repayment of other loan
(20.0 )
Repayment of secured loan
(83.0 )
Repayment of unsecured convertible bond
(175.0 )
Settlement of derivative
(1.2 )
Dividends paid
31
(90.8 )
(89.6 )
Net cash (used in)/from financing activities
(71.0 )
Increase/(decrease) in cash and cash equivalents in the year
(1.6 )
Cash and cash equivalents at the beginning of the year
32
Cash and cash equivalents at the end of the year
32
1
Finance costs of £14.1 m (2024: £11.2 m) are included in capital expenditure (see note 7).
The notes on pages 231 to 275 form part of these financial statements.
Consolidated cash flow statement
for the year ended 31 December 2025
Strategic report
Governance
Financial statements
Other information
231
Notes to the consolidated financial statements
for the year ended 31 December 2025
“applicable framework”), and have been prepared in accordance with the requirements of the Companies Act 2006 as applicable to
modified by the revaluation of investment properties, the revaluation of property, plant and equipment, assets held for sale, pension
scheme, and financial assets and liabilities held at fair value through profit and loss.
These financial statements have been presented in Pounds Sterling, which is the functional currency of the Group, to the nearest
million.
The financial statements of Derwent London plc (the “Company”) have been prepared under FRS 101 and can be found on pages 276
to 283.
As with most other UK property companies and real estate investment trusts (‘REITs’), the Group presents many of its financial
measures in accordance with the guidance criteria issued by the European Public Real Estate Association (‘EPRA’). These measures,
which provide consistency across the sector, are all derived from the IFRS figures in note 37.
The Board continues to adopt the going concern basis in preparing these consolidated financial statements. In considering this
requirement, the Directors have taken into account the following:
The Group’s latest rolling forecast for the next two years, in particular the cash flows, borrowings and undrawn facilities, including
the ‘severe but plausible’ downside case.
The headroom under the Group’s financial covenants.
The risks included on the Group’s risk register that could impact on the Group’s liquidity and solvency over the 12 months from the
date of signing of these consolidated financial statements.
The risks on the Group’s risk register that could be a threat to the Group’s business model and capital adequacy.
The Directors have considered the relatively long-term and predictable nature of the income receivable under the tenant leases, the
Group’s year-end loan-to-value ratio for 2025 of 29.4%, the interest cover ratio of 306%, the £627m total of undrawn facilities and cash
and the fact that the average maturity of borrowings was 4.2 years at 31 December 2025. In the latter part of the year, the gradual
easing of cost inflation and interest rates has been considered. The likely impact of climate change has been incorporated into the
Group’s forecasts which have also taken account of a programme of EPC upgrades across the portfolio. Based on the year end
position, rental income would need to decline by 53% and property values would need to fall by 51% before breaching its financial
covenants.
In February 2026, £55m of US private placement notes were repaid upon maturity. These notes, together with the £175m 6.5% secured
bonds maturing in March 2026, are classified as current liabilities as at 31 December 2025. This has resulted in the Group being in a net
current liabilities position. However, the Group has significant liquidity to fund its ongoing operations and, as noted above, has access
to £627m of available undrawn facilities and cash as at 31 December 2025. Additionally, in January 2026, the Group’s £82.5m
unsecured term loan, originally due to mature in February 2027, was extended by one year to February 2028. This provides the Directors
with a reasonable expectation that the Group will be able to meet these current liabilities as they fall due.
Having due regard to these matters and after making appropriate enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing of these
Derwent London plc
Report and Accounts 2025
232
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
The principal accounting policies are described in note 40 and are consistent with those applied in the Group’s financial statements for
the year to 31 December 2024, as amended to reflect the adoption of new standards, amendments and interpretations which became
effective in the year as shown below.
New standards adopted during the year
The following standards, amendments and interpretations were effective for the first time for the Group’s current accounting period
and had no material impact on the financial statements.
IAS 21 (amended) – Lack of Exchangeability.
Standards in issue but not yet effective
The following standards, amendments and interpretations were in issue at the date of approval of these financial statements but were
not yet effective for the current accounting period and have not been adopted early. Based on the Group’s current circumstances the
Directors do not anticipate that their adoption in future periods will have a material impact on the financial statements of the Group.
IFRS 7 and IFRS 9 (amended) – Classification and Measurement of Financial Instruments;
IFRS 7 and IFRS 9 (amended) – Contracts referencing Nature-dependent Electricity;
IFRS 19 – Subsidiaries without Public Accountability: Disclosures.
IFRS 18 – Presentation and Disclosure in Financial Statements was in issue at the date of approval of these financial statements but
not yet effective for the current reporting period and has not been adopted early. This standard will impact the presentation of
individual line items within the Group’s consolidated financial statements, including related disclosures. The standard will be applied
for reporting periods beginning on or after 1 January 2027 and will also apply to comparative information. The Directors are currently
The preparation of financial statements in accordance with the applicable framework requires the use of certain significant
accounting estimates and judgements. It also requires management to exercise judgement in the process of applying the Group’s
accounting policies. The Group’s significant accounting policies are stated in note 40. Not all of these accounting policies require
management to make difficult, subjective or complex judgements or estimates. Estimates and judgements are continually evaluated
and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. Although these estimates are based on management’s best knowledge of the amount, event or actions,
actual results may differ from those estimates. The following is intended to provide an understanding of the policies that
management consider critical because of the level of complexity, judgement or estimation involved in their application and their
impact on these consolidated financial statements.
Significant judgement
Compliance with the REIT taxation regime
As a REIT, the Group benefits from tax advantages. Income and chargeable gains on the qualifying property rental business are
exempt from corporation tax. Income that does not qualify as property income within the REIT rules is subject to corporation tax in
the normal way. There are a number of tests that are applied annually, and in relation to forecasts, to ensure the Group remains well
within the limits allowed within those tests. The Group met all the criteria in 2025 in each case, thereby ensuring its REIT status is
maintained. The Directors intend that the Group should continue as a REIT for the foreseeable future.
Property portfolio valuation
The Group uses the valuation carried out by external valuers as the fair value of its property portfolio. The valuation considers a range
of assumptions including future rental income, investment yields, anticipated outgoings and maintenance costs, future development
expenditure and appropriate discount rates. The external valuers also make reference to market evidence of transaction prices for
similar properties and take into account the impact of climate change and related environmental, social and governance
Strategic report
Governance
Financial statements
Other information
233
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal financial reports about components
of the Group that are regularly reviewed by the chief operating decision makers (which in the Group’s case are the four Executive
Directors who are assisted by the other 13 members of the Executive Committee) in order to allocate resources to the segments and to
assess their performance.
The internal financial reports received by the Group’s Executive Committee contain financial information at a Group level as a whole
and there are no reconciling items between the results contained in these reports and the amounts reported in the financial
statements. These internal financial reports include IFRS figures but also report non-IFRS figures for the EPRA earnings and net asset
value. Reconciliations of each of these figures to their statutory equivalents are detailed in note 37. Additionally, information is
provided to the Executive Committee showing gross property income and property valuation by individual property. Therefore, for the
purposes of IFRS 8, each individual property is considered to be a separate operating segment in that its performance is monitored
individually.
The Group’s property portfolio includes investment property, owner-occupied property and trading property and comprised 96% office
buildings
1
by value at 31 December 2025 (2024: 95%). The Directors consider that these individual properties have similar economic
characteristics and therefore have been aggregated into a single reportable segment. The remaining 4% (2024: 5%) represented a
mixture of retail, residential and light industrial properties, as well as land, each of which is de minimis in its own right and below the
quantitative threshold in aggregate. Therefore, in the view of the Directors, there is one reportable segment under the provisions of
IFRS 8.
All of the Group’s properties are based in the UK. No geographical grouping is contained in any of the internal financial reports
provided to the Group’s Executive Committee and, therefore, no geographical segmental analysis is required by IFRS 8. However,
geographical analysis is included in the tables below to provide users with additional information regarding the areas contained in the
Strategic report. The majority of the Group’s properties are located in London (West End central, West End borders/other and City
borders), with the remainder in Scotland (Provincial).
1
Some office buildings have an ancillary element such as retail or residential.
Gross property income
| 2025 |
2024 |
|||||
Office |
Office |
|||||
buildings |
Other |
Total |
buildings |
Other |
Total |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
West End central |
130.2 |
2.1 |
132.3 |
126.9 |
2.2 |
129.1 |
West End borders/other |
14.6 |
– |
14.6 |
17.0 |
– |
17.0 |
City borders |
66.5 |
0.8 |
67.3 |
66.3 |
0.7 |
67.0 |
Provincial |
– |
4.4 |
4.4 |
– |
4.5 |
4.5 |
Gross property income (excl. joint venture) |
211.3 |
7.3 |
218.6 |
210.2 |
7.4 |
217.6 |
Share of joint venture gross property income 1 |
– |
– |
– |
1.9 |
– |
1.9 |
211.3 |
7.3 |
218.6 |
212.1 |
7.4 |
219.5 |
|
1
See note 8 for further details.
A reconciliation of gross property income to gross property and other income is given in note 5.
Derwent London plc
Report and Accounts 2025
234
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
4 Segmental information
continued
Property portfolio
| 2025 |
2024 |
|||||
Office |
Office |
|||||
buildings |
Other |
Total |
buildings |
Other |
Total |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Carrying value |
||||||
West End central |
3,298.3 |
81.6 |
3,379.9 |
3,172.5 |
164.3 |
3,336.8 |
West End borders/other |
262.9 |
– |
262.9 |
288.8 |
– |
288.8 |
City borders |
1,153.0 |
6.2 |
1,159.2 |
1,136.5 |
6.1 |
1,142.6 |
Provincial |
– |
113.0 |
113.0 |
– |
92.3 |
92.3 |
4,714.2 |
200.8 |
4,915.0 |
4,597.8 |
262.7 |
4,860.5 |
|
Fair value |
||||||
West End central |
3,445.3 |
82.5 |
3,527.8 |
3,307.7 |
165.4 |
3,473.1 |
West End borders/other |
273.2 |
– |
273.2 |
301.7 |
– |
301.7 |
City borders |
1,172.5 |
6.2 |
1,178.7 |
1,167.3 |
6.1 |
1,173.4 |
Provincial |
– |
114.2 |
114.2 |
– |
92.9 |
92.9 |
4,891.0 |
202.9 |
5,093.9 |
4,776.7 |
264.4 |
5,041.1 |
|
2025 |
2024 |
|
£m |
£m |
|
Gross rental income |
218.3 |
214.8 |
Surrender premiums received |
0.3 |
2.7 |
Other property income |
– |
0.1 |
Gross property income |
218.6 |
217.6 |
Trading property sales proceeds 1 |
118.1 |
3.7 |
Trading stock sales proceeds 1 |
17.8 |
– |
Service charge income 1 |
46.9 |
50.5 |
Other income 1 |
4.9 |
5.1 |
Gross property and other income |
406.3 |
276.9 |
Gross rental income |
218.3 |
214.8 |
Movement in impairment of receivables |
(0.5) |
(0.2) |
Movement in impairment of prepayments |
(1.4) |
(0.2) |
Service charge income 1 |
46.9 |
50.5 |
Service charge expenses |
(53.5) |
(57.1) |
(6.6) |
(6.6) |
|
Property costs |
(19.8) |
(18.2) |
Net rental income |
190.0 |
189.6 |
Trading property sales proceeds 1 |
118.1 |
3.7 |
Trading property cost of sales |
(113.9) |
(3.7) |
Profit on trading property disposals |
4.2 |
– |
Trading stock sales proceeds 1 |
17.8 |
– |
Trading stock cost of sales |
(17.8) |
– |
Result on trading stock disposals |
– |
– |
Other property income |
– |
0.1 |
Other income 1 |
4.9 |
5.1 |
Net surrender premiums received |
0.3 |
2.7 |
Dilapidation receipts |
0.2 |
0.8 |
Net property and other income |
199.6 |
198.3 |
1
In line with IFRS 15 Revenue from Contracts with Customers, the Group recognised a total of £187.7m (2024: £59.3m) of other income, trading property sales proceeds,
trading stock sales proceeds and service charge income within Gross property and other income.
Strategic report
Governance
Financial statements
Other information
235
Gross rental income includes £3.7m (2024: £6.3m) relating to rents recognised in advance of cash receipts. It also includes £0.5m
(2024: £0.4m) received in relation to DL/Lounges. Other income includes £0.6m (2024: £0.5m) received from customer services.
non-recoverable service charge costs associated with vacant units during periods of refurbishment.
In 2025, the Group disposed of all its trading stock which was sold under development agreements to the freeholder upon completion.
Trading property sales proceeds relates to the sale of 24 residential apartments for £115.8m and the affordable residential units for
£2.3m.
In October 2024, the Group acquired the remaining 50% interest of the Derwent Lazari Baker Street Limited Partnership. From that
2025 |
2024 |
|
£m |
£m |
|
Investment property |
||
Gross disposal proceeds |
80.2 |
87.5 |
Costs of disposal |
(1.6) |
(0.7) |
Net disposal proceeds |
78.6 |
86.8 |
Carrying value |
(76.9) |
(79.3) |
Adjustment for lease costs and rents recognised in advance |
(3.9) |
(5.4) |
(Loss)/profit on disposal of investment property |
(2.2) |
2.1 |
Artwork |
||
Gross disposal proceeds |
– |
– |
Costs of disposal |
– |
(0.2) |
Net disposal proceeds |
– |
(0.2) |
Carrying value |
– |
– |
Loss on disposal of artwork |
– |
(0.2) |
(Loss)/profit on disposal of investment property and artwork |
(2.2) |
1.9 |
Included within gross disposal proceeds for 2025 is £26.0m relating to the disposal of the Group’s freehold interest in 4&10 Pentonville
Derwent London plc
Report and Accounts 2025
236
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
2025 |
2024 |
|
£m |
£m |
|
Finance income |
||
Net interest received on defined benefit pension scheme asset |
0.1 |
0.1 |
Bank interest receivable |
2.0 |
0.2 |
Finance income |
2.1 |
0.3 |
Finance costs |
||
Bank loans |
(15.0) |
(6.1) |
Non-utilisation fees |
(2.3) |
(1.9) |
Unsecured convertible bonds |
(1.8) |
(4.0) |
Unsecured green bonds |
(6.7) |
(6.7) |
Unsecured bonds |
(7.6) |
– |
Secured bonds |
(11.4) |
(11.4) |
Unsecured private placement notes |
(15.6) |
(15.6) |
Secured loan |
– |
(2.7) |
Amortisation of issue and arrangement costs |
(2.8) |
(2.6) |
Amortisation of the fair value of the secured bonds |
1.7 |
1.6 |
Obligations under headleases |
(1.7) |
(1.3) |
Settlement of derivative financial instrument |
(1.2) |
– |
Other |
(0.2) |
(0.4) |
Gross finance costs |
(64.6) |
(51.1) |
Less: interest capitalised |
14.1 |
11.2 |
Finance costs |
(50.5) |
(39.9) |
Finance costs of £14.1m (2024: £11.2m) have been capitalised on development projects including trading stock and trading properties,
in accordance with IAS 23 Borrowing Costs, using the Group’s average cost of borrowings during each quarter. Total finance costs paid
to 31 December 2025 were £59.6m (2024: £49.5m) of which £14.1m (2024: £11.2m) out of a total of £149.1m (2024: £139.9m) was included
in capital expenditure on the property portfolio in the Group cash flow statement under investing activities.
Prior to the issue of the £250m unsecured bonds in June 2025 (see note 24 for more information) the Group entered into derivative
contracts to hedge against movements in UK government bond yields during the period between launch and pricing of the bond. As
hedge accounting was not applied, the resulting loss on settlement of the derivative financial instrument of £1.2m has been
2025 |
2024 |
|
£m |
£m |
|
Net property income |
– |
1.9 |
Administrative expenses |
– |
(0.1) |
Revaluation surplus |
– |
7.3 |
Share of result of underlying joint ventures |
– |
9.1 |
Impairment of additional deferred consideration (see note 18) |
– |
(7.6) |
Group share of results of joint ventures |
– |
1.5 |
In October 2024, the Group acquired the remaining 50% interest of the Derwent Lazari Baker Street Limited Partnership. From this
Strategic report
Governance
Financial statements
Other information
237
2025 | 2024 | |
£m | £m | |
This is arrived at after charging: | ||
Depreciation | 0.8 | 1.0 |
Rent payable under headleases | 1.9 | 1.5 |
Auditor’s remuneration | ||
Audit – Group | 0.6 | 0.6 |
Audit – subsidiaries | – | 0.1 |
Non-audit fees | 0.3 | 0.2 |
In 2025, audit fees for the Group were £600,940 (2024: £572,650) and for the subsidiaries £43,220 (2024: £101,325). Non-audit fees in
2025 included the review of the interim results £76,986 (2024: £74,025), green finance assurance £40,000 (2024: £40,000), sustainability
assurance £93,200 (2024: £nil), audit related assurance services £70,000 (2024: £71,000) and other non-audit services £1,350 (2024:
2025 | 2024 | |
£m | £m | |
Remuneration for management services | 4.7 | 4.6 |
Post-employment benefits | 0.4 | 0.4 |
5.1 | 5.0 | |
National insurance contributions | 0.8 | 0.7 |
5.9 | 5.7 |
An amount of £0.8m (2024: £1.2m) attributable to the Directors is included within share-based payments expense of £2.0m (2024:
£3.1m) relating to equity-settled schemes in note 11. This is in accordance with IFRS 2 Share-based Payment.
Details of the Directors’ remuneration awards under the long-term incentive plan and options held by the Directors under the Group
share option schemes are given on pages 203 to 209 of the report of the Remuneration Committee. The only key management
2025 | 2024 | |
£m | £m | |
Staff costs, including those of Directors: | ||
Wages and salaries | 19.6 | 20.2 |
Social security costs | 3.6 | 3.4 |
Other pension costs | 3.1 | 3.0 |
Share-based payments expense relating to equity-settled schemes | 2.0 | 3.1 |
28.3 | 29.7 |
Employee related costs of £2.7m (2024: £2.5m) are capitalised within interest capitalisation and staff costs in note 15 and another
£2.7m (2024: £2.7m) is included within service charge expense.
The monthly average number of employees in the Group during the year, excluding Directors, was 193 (2024: 185). Of the Group’s
Derwent London plc
Report and Accounts 2025
238
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
Details of the options held by Directors under the Performance Share Plan (PSP) are given in the report of the Remuneration
Committee on page 206.
Equity-settled option scheme
The Employee Share Option Plan (‘ESOP’) is designed to incentivise and retain eligible employees. The ESOP is separate to the PSP
disclosed in the report of the Remuneration Committee. The Directors are not entitled to any awards under the ESOP.
Adjusted |
|||||||
Exercise |
exercise |
Movement in options |
|||||
price |
price 1 |
Outstanding at |
Outstanding at |
||||
Year of grant |
£ |
£ |
1 January |
Granted |
Exercised |
Lapsed |
31 December |
For the year to 31 December 2025 |
|||||||
2015 |
34.65 |
33.23 |
24,541 |
– |
– |
(24,541) |
– |
2016 |
31.20 |
29.93 |
26,196 |
– |
– |
(3,342) |
22,854 |
2017 |
28.93 |
27.75 |
54,063 |
– |
– |
(9,557) |
44,506 |
2018 |
30.29 |
29.57 |
72,787 |
– |
– |
(14,575) |
58,212 |
2019 |
32.43 |
32.43 |
92,075 |
– |
– |
(19,132) |
72,943 |
2020 |
30.02 |
30.02 |
120,547 |
– |
– |
(17,772) |
102,775 |
2021 |
33.28 |
33.28 |
151,275 |
– |
– |
(22,223) |
129,052 |
2022 |
31.10 |
31.10 |
201,290 |
– |
– |
(25,890) |
175,400 |
2023 |
22.86 |
22.86 |
276,017 |
– |
– |
(28,017) |
248,000 |
2024 |
21.00 |
21.00 |
341,095 |
– |
– |
(32,902) |
308,193 |
2025 |
17.83 |
17.83 |
– |
410,330 |
– |
(32,630) |
377,700 |
1,359,886 |
410,330 |
– |
(230,581) |
1,539,635 |
|||
For the year to 31 December 2024 |
|||||||
2014 |
27.39 |
26.27 |
11,474 |
– |
– |
(11,474) |
– |
2015 |
34.65 |
33.23 |
26,625 |
– |
– |
(2,084) |
24,541 |
2016 |
31.20 |
29.93 |
29,041 |
– |
– |
(2,845) |
26,196 |
2017 |
28.93 |
27.75 |
57,668 |
– |
– |
(3,605) |
54,063 |
2018 |
30.29 |
29.57 |
78,531 |
– |
– |
(5,744) |
72,787 |
2019 |
32.43 |
32.43 |
100,515 |
– |
– |
(8,440) |
92,075 |
2020 |
30.02 |
30.02 |
136,186 |
– |
– |
(15,639) |
120,547 |
2021 |
33.28 |
33.28 |
165,629 |
– |
– |
(14,354) |
151,275 |
2022 |
31.10 |
31.10 |
223,000 |
– |
– |
(21,710) |
201,290 |
2023 |
22.86 |
22.86 |
324,850 |
– |
– |
(48,833) |
276,017 |
2024 |
21.00 |
21.00 |
– |
380,200 |
– |
(39,105) |
341,095 |
1,153,519 |
380,200 |
– |
(173,833) |
1,359,886 |
|||
31 December |
31 December |
1 January |
|
2025 |
2024 |
2024 |
|
Number of shares: |
|||
Exercisable |
605,742 |
541,484 |
440,040 |
Non-exercisable |
933,893 |
818,402 |
713,479 |
Weighted average exercise price of share options: |
|||
Exercisable |
£31.14 |
£31.24 |
£30.33 |
Non-exercisable |
£20.21 |
£24.11 |
£27.86 |
Weighted average remaining contracted life of share options: |
|||
Exercisable |
4.33 years |
4.35 years |
4.53 years |
Non-exercisable |
8.36 years |
8.40 years |
8.47 years |
Weighted average exercise price of share options that lapsed: |
|||
Exercisable |
£31.49 |
£30.35 |
£30.31 |
Non-exercisable |
£20.45 |
£23.83 |
£30.58 |
1
In 2018, following the payment of the special dividend of 75 pence per share, the Remuneration Committee exercised their discretion and adjusted the number of
outstanding unapproved ‘B’ options and their option price, to ensure participants were not disadvantaged by the payment to shareholders of the special dividend.
Strategic report
Governance
Financial statements
Other information
239
The weighted average share price at which options were exercised during 2025 was £nil (2024: £nil).
The weighted average fair value of options granted during 2025 was £4.42 (2024: £5.61).
The following information is relevant in the determination of the fair value of the options granted during 2025 and 2024 under the
equity-settled employee share plan operated by the Group.
2025 |
2024 |
|
Option pricing model used |
Binomial lattice |
Binomial lattice |
Risk free interest rate |
4.1% |
4.1% |
Volatility |
30.0% |
31.0% |
Dividend yield |
4.5% |
3.4% |
For both the 2025 and 2024 grants, additional assumptions have been made that there is no employee turnover and 50% of
employees exercise early when the share options are 20% in the money and 50% of employees exercise early when the share options
are 100% in the money.
The volatility assumption, measured as the standard deviation of expected share price returns, is based on a statistical analysis of
daily prices over the last four years.
Save As You Earn scheme
The Save As You Earn (‘SAYE’) plan is designed to allow employees (including Directors) to purchase shares in the Company in a tax
efficient manner. The SAYE plan is an HMRC approved scheme. Employees can participate on an annual basis and save up to £250 per
The Group operates both a defined contribution scheme and a defined benefit scheme. The latter was acquired as part of the
acquisition of London Merchant Securities plc in 2007 and is closed to new members. All new employees are entitled to join the defined
contribution scheme. The assets of the pension schemes are held separately from those of Group companies.
Defined contribution plan
The total expense relating to this plan in the current year was £2.6m (2024: £2.3m).
The Group sponsors the scheme which is a funded defined benefit arrangement. This is a separate trustee-administered fund holding
the pension scheme assets to meet long-term pension liabilities for past employees. The Scheme closed to future benefit accrual on
31 July 2019. The level of retirement benefit is principally based on basic salary at the last scheme anniversary of employment prior to
leaving active service and increases at 5% pa in deferment.
The trustees of the scheme are required to act in the best interest of the scheme’s beneficiaries. The appointment of the trustees is
determined by the scheme’s trust documentation. It is policy that one third of all trustees should be nominated by the members.
A full actuarial valuation was carried out as at 31 October 2022 in accordance with the scheme funding requirements of the Pensions
Act 2004 and the funding of the scheme is agreed between the Group and the trustees in line with those requirements. The funding
valuation requires the surplus/deficit to be calculated using prudent actuarial assumptions, as opposed to best estimate assumptions
required for pensions accounting purposes.
The 2022 actuarial valuation showed a deficit of £2.8m. The Group agreed with the trustees that it will aim to eliminate the deficit
over a period of 3 years and 2 months from 31 October 2022 by three payments of £1.4m payable by 31 December 2022, 31 December
2023 and the final contribution by 31 December 2026. In addition, the Group has agreed with the trustees that the Group will meet
expenses of running the scheme and levies to the Pension Protection Fund separately. The estimated amount of total employer
contributions expected to be paid to the scheme during the year to 31 December 2026 is £1.4m (31 December 2025 actual: £nil).
For the purposes of IAS 19 the actuarial valuation as at 31 October 2022, which was carried out by a qualified independent actuary,
has been updated on an approximate basis to 31 December 2025.
Derwent London plc
Report and Accounts 2025
240
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
13 Pension costs
continued
Amounts included in the balance sheet
2025 | 2024 | |
£m | £m | |
Fair value of plan assets | 34.7 | 35.2 |
Present value of defined benefit obligation | (32.9) | (33.4) |
Net asset | 1.8 | 1.8 |
The present value of the scheme liabilities is measured by discounting the best estimate of future cash flows to be paid out by the
scheme. The value calculated in this way is reflected in the net asset in the balance sheet as shown above.
All actuarial gains and losses are recognised in the year in which they occur in the Group Statement of Comprehensive income.
Reconciliation of the impact of the asset ceiling
We have considered the application of IFRIC 14 and deemed it to have no material effect on the IAS 19 figures.
Reconciliation of the opening and closing present value of the defined benefit obligation
2025 | 2024 | |
£m | £m | |
At 1 January | 33.4 | 37.6 |
Interest cost | 1.7 | 1.6 |
Actuarial losses/(gains) due to changes in financial assumptions | 0.5 | (3.3) |
Benefits paid, death in service premiums and expenses | (2.7) | (2.5) |
At 31 December | 32.9 | 33.4 |
There have been no scheme amendments, curtailments or settlements in the year.
Reconciliation of opening and closing values of the fair value of plan assets
2025 | 2024 | |
£m | £m | |
At 1 January | 35.2 | 39.6 |
Interest income | 1.8 | 1.7 |
Gain/(loss) on plan assets (excluding amounts included in interest income) | 0.4 | (3.7) |
Benefits paid, death in service premiums and expenses | (2.7) | (2.5) |
Other | – | 0.1 |
At 31 December | 34.7 | 35.2 |
The actual return on the plan assets including interest income over the year was a gain of £2.2m (2024: loss of £2.0m).
Defined benefit income recognised in the income statement
2025 | 2024 | |
£m | £m | |
Net interest income | (0.1) | (0.1) |
Defined benefit income recognised in the income statement | (0.1) | (0.1) |
Amounts recognised in other comprehensive income
2025 | 2024 | |
£m | £m | |
Gain/(loss) on plan assets (excluding amounts recognised in net interest cost) | 0.4 | (3.7) |
(Loss)/gain from changes in the financial assumptions underlying the present value | ||
of the defined benefit obligation | (0.4) | 3.3 |
Total loss recognised in other comprehensive income | – | (0.4) |
Strategic report
Governance
Financial statements
Other information
241
Fair value of plan assets
2025 |
2024 |
|
£m |
£m |
|
LDI |
12.1 |
12.0 |
Other |
(0.1) |
0.1 |
Insured assets |
22.7 |
23.1 |
Total assets |
34.7 |
35.2 |
The scheme’s assets are held exclusively within instruments that are valued with inputs other than quoted prices in active markets,
but which are observable, with the exception of the holdings in insurance policies and the trustee’s bank account. The insured assets
have been set equal to the value of the insured liabilities but before allowance has been made for the impact of equalising benefits for
the different effects of Guaranteed Minimum Pensions for males and females.
The scheme does not invest directly in property occupied by the Group or in financial securities issued by the Group.
It is the policy of the trustees and the Group to review the investment strategy at the time of each funding valuation. The trustees’
investment objectives and the processes undertaken to measure and manage the risks inherent in the plan investment strategy are
illustrated by the asset allocation at 31 December 2025.
Significant actuarial assumptions
2025 |
2024 |
|
% |
% |
|
Discount rate |
5.4 |
5.4 |
Inflation (RPI) |
n/a |
n/a |
Salary increases |
n/a |
n/a |
The mortality assumptions adopted at 31 December 2025 are 85% of the standard tables S3NXA_L, year of birth, no age rating for
males and females, projected using CMI 2024 converging to 1.25% p.a. These imply the following life expectancies:
Life expectancy at age 65
Years |
|
Male retiring in 2025 |
24.8 |
Female retiring in 2025 |
26.4 |
Male retiring in 2045 |
26.0 |
Female retiring in 2045 |
27.7 |
Analysis of the sensitivity to the principal assumptions of the present value of the defined benefit obligation
Change in assumption |
Change in liabilities |
|
Discount rate |
Decrease of 0.25% p.a |
Increase by 2.0% |
Rate of mortality |
Increase in life expectancy of one year |
Increase by 5.0% |
The sensitivities shown above are approximate. Each sensitivity considers one change in isolation. The average duration of the defined
benefit obligation at the year ended 31 December 2025 is 10 years (2024: 11 years) for the scheme as a whole or 18 years (2024: 18
years) when only considering non-insured members.
The scheme typically exposes the Group to actuarial risks such as investment risk, interest rate risk, salary growth risk, mortality risk
and longevity risk. A decrease in corporate bond yields or an increase in life expectancy would result in an increase to the scheme’s
liabilities. This would detrimentally impact the balance sheet position and may give rise to increased charges in the income statement.
This effect would be partially offset by an increase in the value of the scheme’s LDI and gilt holdings.
Derwent London plc
Report and Accounts 2025
242
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
2025 |
2024 |
|
£m |
£m |
|
Corporation tax |
||
UK corporation tax and income tax in respect of results for the year |
– |
– |
Corporation tax charge |
– |
– |
Deferred tax |
||
Origination and reversal of temporary differences |
0.4 |
0.1 |
Deferred tax charge |
0.4 |
0.1 |
Tax charge |
0.4 |
0.1 |
A deferred tax charge of £0.4m has passed through the Group income statement (2024: charge of £0.1m). More information regarding
deferred tax can be found in note 28.
The main rate of corporation tax for 2025 was 25.0% (2024: 25.0%). The difference between the main rate and the tax charge for the
Group are explained below:
2025 |
2024 |
|
£m |
£m |
|
Profit before tax |
161.5 |
116.0 |
Expected tax charge based on the standard rate of corporation tax in the UK of 25.0% (2024: 25.0%) |
40.4 |
29.0 |
Difference between tax and accounting profit on disposals |
1.3 |
(2.1) |
REIT exempt income |
(19.4) |
(23.7) |
Revaluation (surplus)/deficit attributable to REIT properties |
(13.7) |
1.2 |
Expenses and fair value adjustments not allowable for tax purposes |
1.9 |
3.6 |
Capital allowances |
(10.5) |
(8.2) |
Other differences |
0.4 |
0.3 |
Tax charge |
0.4 |
0.1 |
Strategic report
Governance
Financial statements
Other information
243
Total |
Owner- |
Assets |
Total |
||||
investment |
occupied |
held for |
Trading |
property |
|||
Freehold |
Leasehold |
property |
property |
sale |
property |
portfolio |
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Carrying value |
|||||||
At 1 January 2025 |
3,209.7 |
1,460.4 |
4,670.1 |
49.0 |
25.7 |
115.7 |
4,860.5 |
Acquisitions |
0.2 |
5.8 |
6.0 |
– |
– |
– |
6.0 |
Capital expenditure |
92.9 |
38.5 |
131.4 |
– |
– |
24.7 |
156.1 |
Interest capitalisation and staff costs |
7.4 |
6.8 |
14.2 |
– |
– |
2.3 |
16.5 |
Additions |
100.5 |
51.1 |
151.6 |
– |
– |
27.0 |
178.6 |
Disposals |
(51.2) |
– |
(51.2) |
– |
(25.7) |
(109.8) |
(186.7) |
Revaluation |
57.3 |
(5.1) |
52.2 |
4.5 |
– |
– |
56.7 |
Movement in grossing up |
|||||||
of headlease liabilities |
– |
5.9 |
5.9 |
– |
– |
– |
5.9 |
At 31 December 2025 |
3,316.3 |
1,512.3 |
4,828.6 |
53.5 |
– |
32.9 |
4,915.0 |
At 1 January 2024 |
3,280.5 |
1,270.9 |
4,551.4 |
46.1 |
– |
60.0 |
4,657.5 |
Acquisitions |
– |
47.0 |
47.0 |
– |
– |
– |
47.0 |
Capital expenditure |
82.0 |
42.8 |
124.8 |
– |
– |
57.3 |
182.1 |
Interest capitalisation and staff costs |
3.4 |
7.5 |
10.9 |
– |
– |
2.0 |
12.9 |
Additions |
85.4 |
97.3 |
182.7 |
– |
– |
59.3 |
242.0 |
Disposals |
(78.7) |
(0.6) |
(79.3) |
– |
– |
(3.6) |
(82.9) |
Transfer from joint venture |
– |
44.4 |
44.4 |
– |
– |
– |
44.4 |
Transfers |
(25.7) |
– |
(25.7) |
– |
25.7 |
– |
– |
Revaluation |
(51.8) |
49.1 |
(2.7) |
2.9 |
– |
– |
0.2 |
Movement in grossing up |
|||||||
of headlease liabilities |
– |
(0.7) |
(0.7) |
– |
– |
– |
(0.7) |
At 31 December 2024 |
3,209.7 |
1,460.4 |
4,670.1 |
49.0 |
25.7 |
115.7 |
4,860.5 |
Adjustments from fair value |
|||||||
to carrying value |
|||||||
At 31 December 2025 |
|||||||
Fair value |
3,472.0 |
1,535.1 |
5,007.1 |
53.5 |
– |
33.3 |
5,093.9 |
Revaluation of trading property |
– |
– |
– |
– |
– |
(0.4) |
(0.4) |
Lease incentives and costs |
|||||||
included in receivables |
(155.7) |
(61.8) |
(217.5) |
– |
– |
– |
(217.5) |
Grossing up of headlease liabilities |
– |
39.0 |
39.0 |
– |
– |
– |
39.0 |
Carrying value |
3,316.3 |
1,512.3 |
4,828.6 |
53.5 |
– |
32.9 |
4,915.0 |
At 31 December 2024 |
|||||||
Fair value |
3,374.1 |
1,475.7 |
4,849.8 |
49.0 |
26.0 |
116.3 |
5,041.1 |
Selling costs relating |
|||||||
to assets held for sale |
– |
– |
– |
– |
(0.3) |
– |
(0.3) |
Revaluation of trading property |
– |
– |
– |
– |
– |
(0.6) |
(0.6) |
Lease incentives and costs |
|||||||
included in receivables |
(164.4) |
(48.4) |
(212.8) |
– |
– |
– |
(212.8) |
Grossing up of headlease liabilities |
– |
33.1 |
33.1 |
– |
– |
– |
33.1 |
Carrying value |
3,209.7 |
1,460.4 |
4,670.1 |
49.0 |
25.7 |
115.7 |
4,860.5 |
The property portfolio is subject to semi-annual external valuations and was revalued at 31 December 2025 by external valuers on the
basis of fair value in accordance with The RICS Valuation – Professional Standards, which takes account of the properties’ highest and
best use. When considering the highest and best use of a property, the external valuers will consider its existing and potential uses
which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the external valuers
will consider the costs and the likelihood of achieving and implementing this change in arriving at the property valuation. There were
no such instances during either 2025 or 2024.
Derwent London plc
Report and Accounts 2025
244
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
15 Property portfolio
continued
The external valuations for the portfolio at 31 December 2025 were carried out by Knight Frank LLP.
Knight Frank valued the portfolio at £5,093.9m (2024: £5,041.1m). Of the properties revalued, £53.5m (2024: £49.0m) relating to
owner-occupied property was included within property, plant and equipment and £33.3m (2024: £116.3m) was in relation to trading
property.
The total fees, including the fee for this assignment, earned by Knight Frank (or other companies forming part of the same group of
companies within the UK) from the Group is less than 5.0% of their total UK revenues.
Staff and associated costs directly attributable to the management of major schemes are capitalised, based on the proportion of
time spent on each relevant scheme.
In October 2024, the Group acquired the remaining 50% interest of the Derwent Lazari Baker Street Partnership (the ‘joint venture’)
from Lazari Investments Limited (‘Lazari’). Following the acquisition, the Group’s 50% interest in the joint venture was consolidated
Net zero carbon and EPC compliance
The Group published its pathway to net zero carbon in July 2020 and has set 2030 as its target date to achieve this. £88.9m (year to
31 December 2024: £123.9m) of eligible ‘green’ capital expenditure, in accordance with the Group’s Green Finance Framework, was
incurred in the year to 31 December 2025 on the major developments at 80 Charlotte Street W1, 1 Soho Place W1, The Featherstone
Building EC1, 25 Baker Street W1 and Network W1. In addition, the Group continues to hold carbon credits to support certain externally
validated green projects to offset embodied carbon.
To quantify one of the impacts of climate change on the valuation, an independent third-party assessment was carried out in 2021 to
estimate the cost of EPC upgrades across the portfolio. Following a review of the latest scope changes in building regulation,
subsequent inflation, disposals, and work carried out to date, the estimated amount was £73.7m at the end of 2025. Of this amount, a
specific deduction of £31m was included in the 31 December 2025 external valuation. In addition, further amounts have been allowed
for in the expected costs of future refurbishment projects. Any committed capital expenditure has been included in note 33.
Reconciliation of revaluation surplus/(deficit)
2025 |
2024 |
|
£m |
£m |
|
Total revaluation surplus/(deficit) |
67.5 |
(1.8) |
Less: |
||
Lease incentives and costs |
(8.7) |
(7.2) |
Assets held for sale selling costs |
– |
(0.3) |
Trading property revaluation adjustment |
(2.0) |
9.1 |
Other |
(0.1) |
0.4 |
IFRS revaluation surplus |
56.7 |
0.2 |
Reported in the: |
||
Revaluation surplus/(deficit) |
52.2 |
(2.7) |
Group income statement |
52.2 |
(2.7) |
Group statement of comprehensive income |
4.5 |
2.9 |
56.7 |
0.2 |
Strategic report
Governance
Financial statements
Other information
245
Valuation process
The valuation reports produced by the external valuers are based on information provided by the Group such as current rents, terms
and conditions of lease agreements, service charges and capital expenditure. This information is derived from the Group’s financial
and property management systems and is subject to the Group’s overall control environment. In addition, the valuation reports are
based on assumptions and valuation models used by the external valuers. The assumptions are typically market related, such as yields
and discount rates, and are based on their professional judgement and market observation and take into account the impact of
climate change and related environmental, social and governance considerations. Each property is considered a separate asset class
based on the unique nature, characteristics and risks of the property.
Members of the Group’s investments team, who report to the Executive Director responsible for the valuation process, verify all major
inputs to the external valuation reports, assess the individual property valuation changes from the prior year valuation report and
hold discussions with the external valuers. When this process is complete, the valuation report is recommended to the Audit
Committee, which considers it as part of its overall responsibilities.
Valuation techniques
The fair value of the property portfolio has been determined using an income capitalisation technique, whereby contracted and
market rental values are capitalised with a market capitalisation rate. The resulting valuations are cross-checked against the
equivalent yields and the fair market values per square foot derived from comparable recent market transactions on arm’s length
terms.
For properties under construction, the fair value is calculated by estimating the fair value of the completed property using the income
capitalisation technique less estimated costs to completion and a risk premium.
These techniques are consistent with the principles in IFRS 13 Fair Value Measurement and use significant unobservable inputs such
that the fair value measurement of each property within the portfolio has been classified as Level 3 in the fair value hierarchy.
There were no transfers between levels in the fair value hierarchy during either 2025 or 2024.
Gains and losses recorded in profit or loss for recurring fair value measurements categorised within Level 3 of the fair value hierarchy
amount to a gain of £52.2m (2024: loss of £2.7m) and are presented in the Group income statement in the line item ‘revaluation
surplus/(deficit)’. The revaluation surplus for the owner-occupied property of £4.5m (2024: surplus of £2.9m) was included within the
Group statement of comprehensive income.
All gains and losses recorded in profit or loss in 2025 and 2024 for recurring fair value measurements categorised within Level 3 of the
fair value hierarchy are attributable to changes in unrealised gains or losses relating to investment property held at 31 December 2025
and 31 December 2024, respectively.
Derwent London plc
Report and Accounts 2025
246
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
15 Property portfolio
continued
Quantitative information about fair value measurement using unobservable inputs (Level 3)
West End | Provincial | |||||
At 31 December 2025 | West End central | borders/other | City borders | commercial | Provincial land | Total |
Income | Income | Income | Income | Income | ||
Valuation technique | capitalisation | capitalisation | capitalisation | capitalisation | capitalisation | |
Fair value (£m) | 3,527.8 | 273.2 | 1,178.7 | 74.5 | 39.7 | 5,093.9 |
Area ('000 sq ft) | 2,966 | 377 | 1,564 | 351 | – | 5,258 |
Range of unobservable inputs 1 : | ||||||
Gross ERV (per sq ft pa) | ||||||
Minimum | £35 | £25 | £22 | £nil | n/a 2 | |
Maximum | £123 | £59 | £75 | £16 | n/a 2 | |
Weighted average | £76 | £51 | £58 | £16 | n/a 2 | |
Net initial yield | ||||||
Minimum | 2.3% | 2.0% | 3.8% | 2.9% | 0.0% | |
Maximum | 9.4% | 7.0% | 7.3% | 2.9% | 2.4% | |
Weighted average | 2.9% | 6.2% | 5.2% | 2.9% | 2.4% | |
Reversionary yield | ||||||
Minimum | 3.2% | 4.4% | 3.3% | 6.9% | 0.0% | |
Maximum | 9.6% | 6.9% | 8.7% | 6.9% | 2.4% | |
Weighted average | 5.5% | 6.6% | 7.0% | 6.9% | 2.4% | |
True equivalent yield | ||||||
(EPRA basis) | ||||||
Minimum | 3.2% | 4.2% | 5.2% | 7.0% | 0.0% | |
Maximum | 7.6% | 7.3% | 7.6% | 7.0% | 0.0% | |
Weighted average | 5.3% | 6.9% | 6.3% | 7.0% | 0.0% | |
At 31 December 2024 | ||||||
Income | Income | Income | Income | Income | ||
Valuation technique | capitalisation | capitalisation | capitalisation | capitalisation | capitalisation | |
Fair value (£m) | 3,473.1 | 301.7 | 1,173.4 | 53.9 | 39.0 | 5,041.1 |
Area ('000 sq ft) | 3,040 | 429 | 1,562 | 325 | – | 5,356 |
Range of unobservable inputs 1 : | ||||||
Gross ERV (per sq ft pa) | ||||||
Minimum | £32 | £24 | £38 | £nil | n/a 2 | |
Maximum | £118 | £59 | £75 | £15 | n/a 2 | |
Weighted average | £69 | £52 | £57 | £15 | n/a 2 | |
Net initial yield | ||||||
Minimum | 3.1% | 2.5% | 3.3% | 7.0% | 0.0% | |
Maximum | 9.9% | 6.8% | 6.9% | 7.0% | 1.4% | |
Weighted average | 3.1% | 5.6% | 5.2% | 7.0% | 1.4% | |
Reversionary yield | ||||||
Minimum | 3.2% | 4.8% | 3.3% | 6.9% | 0.0% | |
Maximum | 9.7% | 11.4% | 8.3% | 6.9% | 1.4% | |
Weighted average | 5.4% | 6.9% | 6.9% | 6.9% | 1.4% | |
True equivalent yield | ||||||
(EPRA basis) | ||||||
Minimum | 3.2% | 4.4% | 5.3% | 7.2% | 0.0% | |
Maximum | 6.6% | 7.1% | 6.9% | 7.2% | 0.0% | |
Weighted average | 5.3% | 6.8% | 6.3% | 7.2% | 0.0% |
1
Costs to complete are not deemed a significant unobservable input by virtue of the high percentage that is already fixed.
2
There is no calculation of gross ERV per sq ft pa. The land totals 5,500 acres.
Strategic report
Governance
Financial statements
Other information
247
Sensitivity of measurement to variations in the significant unobservable inputs
The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy of the
Group’s property portfolio, together with the impact of significant movements in these inputs on the fair value measurement, are
shown below:
Impact on fair value measurement |
Impact on fair value measurement |
|
Unobservable input |
of significant increase in input |
of significant decrease in input |
Gross ERV |
Increase |
Decrease |
Net initial yield |
Decrease |
Increase |
Reversionary yield |
Decrease |
Increase |
True equivalent yield |
Decrease |
Increase |
There are inter-relationships between these inputs as they are partially determined by market conditions. An increase in the
reversionary yield may accompany an increase in gross ERV and would mitigate its impact on the fair value measurement.
A sensitivity analysis was performed to ascertain the impact on the fair value of a 25 basis point shift in true equivalent yield and a
£2.50 per sq ft shift in ERV on the property valuations. The Group believes this captures the range of variations in these key valuation
assumptions. The results are shown in the tables below:
West End |
|||||
West End |
borders/ |
City |
Provincial |
||
central |
other |
borders |
commercial |
Total |
|
£m |
£m |
£m |
£m |
£m |
|
At 31 December 2025 |
|||||
True equivalent yield |
|||||
+25bp |
(125.8) |
(9.6) |
(44.8) |
(2.6) |
(181.2) |
- 25bp |
138.2 |
10.3 |
48.5 |
2.8 |
197.8 |
ERV |
|||||
+£2.50 psf |
116.8 |
13.4 |
51.2 |
10.5 |
197.2 |
- £2.50 psf |
(116.8) |
(13.4) |
(51.2) |
(10.5) |
(197.2) |
At 31 December 2024 1 |
|||||
True equivalent yield |
|||||
+25bp |
(127.1) |
(10.7) |
(44.6) |
(1.8) |
(182.6) |
- 25bp |
139.7 |
11.5 |
48.2 |
1.9 |
199.3 |
ERV |
|||||
+£2.50 psf |
102.9 |
14.4 |
51.6 |
8.9 |
179.2 |
- £2.50 psf |
(102.9) |
(14.4) |
(51.6) |
(8.9) |
(179.2) |
1
These amounts have been re-presented from percentages to pound sterling (£).
Historical cost
2025 |
2024 |
|
£m |
£m |
|
Investment property |
3,856.1 |
3,746.4 |
Owner-occupied property |
19.6 |
19.6 |
Assets held for sale |
– |
28.8 |
Trading property |
42.9 |
132.9 |
Total property portfolio |
3,918.6 |
3,927.7 |
Derwent London plc
Report and Accounts 2025
248
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
Owner- | ||||
occupied | Solar | |||
property | park | Other | Total | |
£m | £m | £m | £m | |
At 1 January 2025 | 49.0 | – | 3.0 | 52.0 |
Additions | – | 9.7 | 0.2 | 9.9 |
Depreciation | – | – | (0.8) | (0.8) |
Transfers | – | 2.5 | – | 2.5 |
Revaluation | 4.5 | – | – | 4.5 |
At 31 December 2025 | 53.5 | 12.2 | 2.4 | 68.1 |
At 1 January 2024 | 46.1 | – | 3.8 | 49.9 |
Additions | – | – | 0.3 | 0.3 |
Depreciation | – | – | (1.0) | (1.0) |
Revaluation | 2.9 | – | (0.1) | 2.8 |
At 31 December 2024 | 49.0 | – | 3.0 | 52.0 |
Net book value | ||||
Cost or valuation | 53.5 | 12.2 | 9.6 | 75.3 |
Accumulated depreciation | – | – | (7.2) | (7.2) |
At 31 December 2025 | 53.5 | 12.2 | 2.4 | 68.1 |
Net book value | ||||
Cost or valuation | 49.0 | – | 9.4 | 58.4 |
Accumulated depreciation | – | – | (6.4) | (6.4) |
At 31 December 2024 | 49.0 | – | 3.0 | 52.0 |
Of the total £12.2m of costs, £2.5m was transferred in the period from prepayments as the costs now meet the criteria for recognition
within Property, plant and equipment (see note 20). Planning consent for this project was received in June 2023 with completion
anticipated in 2026.
Artwork £0.7m (2024: £0.7m) is included within ‘Other’ and is periodically valued by Bonhams on the basis of fair value using their
extensive market knowledge. The latest valuation was carried out in December 2024. In accordance with IFRS 13 Fair Value
2025 | 2024 | |
£m | £m | |
Trading stock | 17.8 | 17.5 |
Disposals (see note 5) | (17.8) | – |
Trading stock | – | 17.5 |
Trading stock related to capitalised development expenditure incurred which was due to be transferred under development
agreements to the freeholder upon completion. This was included in trading stock, as opposed to trading property, as the Group did
not have an ownership interest in the property.
Strategic report
Governance
Financial statements
Other information
249
and Primister Limited.
In October 2024, the Group acquired the remaining 50% interest of the Derwent Lazari Baker Street Partnership from Lazari
Investments Limited, which was accounted for as an asset acquisition. This resulted in full ownership of the assets and liabilities of the
partnership.
2025 |
2024 |
|
£m |
£m |
|
At 1 January |
– |
35.8 |
Deferred consideration and fees on initial formation of joint venture |
– |
7.6 |
Revaluation surplus |
– |
7.3 |
Other profit from operations |
– |
1.8 |
Transfer to investment property (see note 15) |
– |
(44.4) |
Transfer to assets and liabilities |
– |
(0.5) |
Impairment of additional deferred consideration |
– |
(7.6) |
At 31 December |
– |
– |
The Group’s share of its investments in joint ventures is represented by the following amounts in the underlying joint venture entities.
2025 |
2024 |
|||
Joint |
Joint |
|||
ventures |
Group share |
ventures |
Group share |
|
£m |
£m |
£m |
£m |
|
Net property income |
– |
– |
3.8 |
1.9 |
Administrative expenses |
– |
– |
(0.3) |
(0.1) |
Revaluation surplus |
– |
– |
14.6 |
7.3 |
Share of results of underlying joint ventures |
– |
– |
18.1 |
9.1 |
Impairment of additional deferred consideration |
– |
(7.6) |
||
Group share of results of joint ventures |
– |
1.5 |
||
2025 |
2024 |
|
£m |
£m |
|
Rents recognised in advance |
176.9 |
173.6 |
Initial direct letting costs |
14.3 |
14.4 |
Prepayments |
12.0 |
13.0 |
Other receivables |
203.2 |
201.0 |
Other receivables includes £176.9m (2024: £173.6m) after impairments relating to rents recognised in advance as a result of spreading
tenant lease incentives over the expected terms of their respective leases. This includes rent-free and reduced rent periods, capital
contributions in lieu of rent-free periods and contracted rent uplifts. In addition, £14.3m (2024: £14.4m) relates to the spreading effect
of the initial direct costs of letting over the same term. Together with £26.3m (2024: £24.8m), which was included as accrued income
within trade and other receivables (see note 20), these amounts totalled £217.5m at 31 December 2025 (2024: £212.8m).
Prepayments represent £12.0m (2024: £13.0m) of costs incurred in relation to Old Street Quarter EC1. This was after a £2.2m (2024:
£0.8m) impairment in accordance with IAS 36 Impairment of Assets. In May 2022, the Group entered into a conditional contract to
acquire the freehold of Old Street Quarter island site. The site is being sold by Moorfields Eye Hospital NHS Foundation Trust and UCL,
together the Oriel joint initiative (“Oriel”). Completion is subject to delivery by Oriel of a new hospital and subsequent vacant
possession of the site, which is anticipated no earlier than late 2027. At that point, the site and the prepaid design and planning costs
Derwent London plc
Report and Accounts 2025
250
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
19 Other receivables (non-current)
continued
The total movement in tenant lease incentives is shown below:
2025 | 2024 | |
£m | £m | |
At 1 January | 195.6 | 194.1 |
Amounts taken to income statement | 3.7 | 6.3 |
Capital incentives granted | 5.6 | – |
Movement in lease incentive impairment | (0.1) | 0.3 |
Disposal of investment properties | (4.2) | (4.9) |
Write off to bad debt | (0.4) | (0.2) |
200.2 | 195.6 | |
Amounts included in trade and other receivables (see note 20) | (23.3) | (22.0) |
At 31 December | 176.9 | 173.6 |
2025 | 2024 | |
£m | £m | |
Trade receivables | 4.4 | 13.3 |
Other receivables | 1.0 | 3.2 |
Prepayments 1 | 13.8 | 15.4 |
Accrued income | ||
Rents recognised in advance | 23.3 | 22.0 |
Initial direct letting costs | 3.0 | 2.8 |
Other | 1.2 | 1.1 |
46.7 | 57.8 |
1
In 2025, £2.5m in relation to the Group’s solar park on its Scottish land, was transferred to ‘Solar park’ within Property, plant and equipment (see note 16).
2025 | 2024 | |
£m | £m | |
Trade receivables are split as follows: | ||
less than three months due | 4.2 | 12.9 |
between three and six months due | 0.2 | 0.2 |
between six and twelve months due | – | 0.2 |
4.4 | 13.3 |
Trade receivables are stated net of impairment.
The Group has £4.1m (2024: £4.6m) of provision for bad debts as shown below. £1.7m (2024: £2.4m) is included in trade receivables,
£0.4m (2024: £0.4m) in accrued income and £2.0m (2024: £1.8m) in prepayments and accrued income within other receivables
(non-current) (note 19).
2025 | 2024 | |
£m | £m | |
Provision for bad debts | ||
At 1 January | 4.6 | 4.6 |
Trade receivables provision | 0.1 | 0.7 |
Lease incentive provision | 0.4 | (0.4) |
Service charge provision | 0.1 | (0.2) |
Released | (1.1) | (0.1) |
At 31 December | 4.1 | 4.6 |
The provision for bad debts is split as follows: | ||
less than three months due | 0.5 | 0.9 |
between three and six months due | 0.2 | 0.5 |
between six and twelve months due | 0.5 | 0.5 |
over twelve months due | 2.9 | 2.7 |
4.1 | 4.6 |
Strategic report
Governance
Financial statements
Other information
251
2025 |
2024 |
|
£m |
£m |
|
Transferred from investment properties (see note 15) |
– |
25.7 |
– |
25.7 |
In January 2025, the Group completed the disposal of its freehold interest in 4 & 10 Pentonville N1, disclosed as a non-current asset
2025 |
2024 |
|
£m |
£m |
|
Trade payables |
8.0 |
0.6 |
Other payables |
1.0 |
3.6 |
Other taxes |
1.2 |
7.3 |
Accruals |
56.2 |
57.2 |
Deferred income |
47.0 |
50.0 |
Tenant rent deposits |
29.3 |
27.9 |
Service charge balances |
25.3 |
28.1 |
168.0 |
174.7 |
2025 |
2024 |
|
£m |
£m |
|
At 1 January |
0.6 |
0.4 |
Provided in the income statement |
(0.1) |
0.2 |
At 31 December |
0.5 |
0.6 |
Due within one year |
0.1 |
0.2 |
Due after one year |
0.4 |
0.4 |
0.5 |
0.6 |
The provisions in the Group relate to national insurance that is payable on gains made by employees on the exercise of share options
granted to them. The eventual liability to national insurance is dependent on:
the market price of the Company’s shares at the date of exercise;
the number of equity share options that are exercised; and
Derwent London plc
Report and Accounts 2025
252
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
2025 |
2024 |
|
£m |
£m |
|
Current liabilities |
||
Other loans |
– |
20.0 |
6.5% secured bonds |
176.6 |
– |
2.68% unsecured private placement notes |
55.0 |
– |
1.5% unsecured convertible bonds |
– |
174.1 |
231.6 |
194.1 |
|
Non-current liabilities |
||
6.5% secured bonds |
– |
178.1 |
1.875% unsecured green bonds |
347.6 |
347.2 |
5.25% unsecured bonds |
247.5 |
– |
2.68% unsecured private placement notes |
– |
54.9 |
3.46% unsecured private placement notes |
29.9 |
29.9 |
4.41% unsecured private placement notes |
24.9 |
24.9 |
2.87% unsecured private placement notes |
92.8 |
92.8 |
2.97% unsecured private placement notes |
49.9 |
49.9 |
3.57% unsecured private placement notes |
74.8 |
74.8 |
3.09% unsecured private placement notes |
51.8 |
51.8 |
4.68% unsecured private placement notes |
74.6 |
74.6 |
Unsecured bank loans |
261.2 |
290.5 |
1,255.0 |
1,269.4 |
|
Borrowings |
1,486.6 |
1,463.5 |
Leasehold liabilities – current |
0.5 |
0.4 |
Leasehold liabilities – non-current |
40.5 |
34.2 |
Derivative financial instruments – current |
– |
(0.6) |
Gross debt |
1,527.6 |
1,497.5 |
Reconciliation to net debt: |
||
Gross debt |
1,527.6 |
1,497.5 |
Derivative financial instruments |
– |
0.6 |
Cash at bank excluding restricted cash (see note 32) |
(77.2) |
(15.4) |
Net debt |
1,450.4 |
1,482.7 |
1.5% unsecured convertible bonds 2025
In June 2025, the Group’s 1.5% unsecured convertible bonds matured and were repaid, without any conversion to equity.
6.5% secured bonds 2026
As a result of the acquisition of London Merchant Securities plc in 2007, the secured bonds 2026 were included at fair value less
unamortised issue costs. This difference between fair value at acquisition and principal value is being amortised through the income
statement. The fair value at 31 December 2025 was determined by the ask-price of £100.40 per £100 (2024: £100.99 per £100),
representing Level 1 fair value measurement. The carrying value at 31 December 2025 was £176.6m (2024: £178.1m).
1.875% unsecured green bonds 2031
In November 2021, the Group issued £350m of green bonds on a 10-year term maturing in 2031. The unsecured instrument pays a
coupon of 1.875% and the effective interest rate is 1.934%. This represents an issue discount of £1.8m. The unsecured green bonds 2031
are accounted for at amortised cost. The fair value at 31 December 2025 was determined by the ask-price of £85.23 per £100 (2024:
£80.36 per £100), representing Level 1 fair value measurement. The carrying value at 31 December 2025 was £347.6m (2024: £347.2m).
The £350m green bonds are used to fund qualifying ‘green’ expenditure in accordance with the Group’s Green Finance Framework.
Strategic report
Governance
Financial statements
Other information
253
5.25% unsecured bonds 2032
In June 2025, the Group issued £250m of unsecured bonds on a 7-year term maturing in 2032. The unsecured instrument pays a
coupon of 5.25% and the effective interest rate is 5.338%. This represents an issue discount of £1.3m. The unsecured bonds were
initially recognised at fair value, net of the unamortised discount and issue costs of £0.8m, and are subsequently measured at
amortised cost. The fair value at 31 December 2025 was determined by the ask-price of £102.08 per £100, representing Level 1 fair value
measurement. The carrying value at 31 December 2025 was £247.5m.
2.68% unsecured private placement notes 2026, 2.87% unsecured private placement notes 2029, 2.97%
unsecured private placement notes 2031 and 3.09% unsecured private placement notes 2034
In October 2018, the Group arranged unsecured private placement notes, comprising £55m for 7 years, £93m for 10 years, £50m for 12
years and £52m for 15 years. The funds were drawn on 31 January 2019. The fair values were determined by discounting the contractual
cash flows by the replacement rate. The replacement rate is the sum of the current underlying Gilt rate plus the market implied
margin. These represent Level 2 fair value measurement. The carrying values at 31 December 2025 were £55.0m (2024: £54.9m),
£92.8m (2024: £92.8m), £49.9m (2024: £49.9m) and £51.8m (2024: £51.8m), respectively.
3.46% unsecured private placement notes 2028 and 3.57% unsecured private placement notes 2031
In February 2016, the Group arranged unsecured private placement notes, comprising £30m for 12 years and £75m for 15 years. The
funds were drawn on 4 May 2016. The fair values were determined by discounting the contractual cash flows by the replacement rate.
The replacement rate is the sum of the current underlying Gilt rate plus the market implied margin. These represent Level 2 fair value
measurement. The carrying values at 31 December 2025 were £29.9m (2024: £29.9m) and £74.8m (2024: £74.8m), respectively.
4.41% unsecured private placement notes 2029 and 4.68% unsecured private placement notes 2034
In November 2013, the Group arranged unsecured private placement notes, comprising £25m for 15 years and £75m for 20 years. The
funds were drawn on 8 January 2014. The fair values were determined by discounting the contractual cash flows by the replacement
rate. The replacement rate is the sum of the current underlying Gilt rate plus the market implied margin. These represent Level 2 fair
value measurement. The carrying values at 31 December 2025 were £24.9m (2024: £24.9m) and £74.6m (2024: £74.6m), respectively.
Unsecured bank loans
In June 2024, the Group signed an agreement for an unsecured term loan facility of £100m. The loan is for a three-year term and has
two one-year extension options. In June 2025, the Group exercised the first extension option.
In December 2024, the Group signed an agreement for an unsecured facility of £115m, consisting of an £82.5m term loan and £32.5m
revolving credit facility (RCF). The facility is for an initial two-year term and has two one-year extension options. In December 2025,
the Group exercised the first extension option. The £32.5m RCF was cancelled in July 2025.
In February 2025, the Group signed an agreement for an unsecured facility of £115m, consisting of an £82.5m term loan and £32.5m
revolving credit facility (RCF). The facility is for an initial two-year term and has a one-year extension option. The £32.5m RCF was
cancelled in July 2025.
In July 2025, the Group amended and extended its principal £450m unsecured RCF, which was due to expire in October 2026. The
facility, signed with the Group’s core relationship banks, is structured as an initial four-year term with two one-year extension options.
The facility is due to expire in July 2029.
Unsecured bank borrowings are accounted for at amortised cost. At 31 December 2025, there was £nil (2024: £110.5m) drawn on the
RCFs, £265.0m (2024: £182.5m) drawn on term loans and the combined unamortised arrangement fees were £3.8m (2024: £2.5m),
resulting in the carrying value being £261.2m (2024: £290.5m).
As all main corporate facilities were refinanced or amended recently, the fair values of the Group’s bank loans are deemed to be
approximately the same as their carrying amount, after adjusting for the unamortised arrangement fees, and represent Level 2 fair
value measurement.
Derwent London plc
Report and Accounts 2025
254
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
24 Net debt and derivative financial instruments
continued
Undrawn committed bank facilities – maturity profile
< 1 year | 1 to 2 years | 2 to 3 years | 3 to 4 years | 4 to 5 years | > 5 years | Total | |
£m | £m | £m | £m | £m | £m | £m | |
At 31 December 2025 | – | 100.0 | – | 450.0 | – | – | 550.0 |
At 31 December 2024 | – | 395.5 | 76.5 | – | – | – | 472.0 |
Other loans
At 31 December 2024, other loans consisted of a £20m interest-free loan from a third party providing development consultancy
services on the residential element of the 25 Baker Street W1 development. This was fully repaid in 2025. The agreement provides for a
profit share on completion of the sales which, under IFRS 9 Financial Instruments, has been deemed to have a carrying value of £nil at
31 December 2025 (2024: £nil). The carrying value of the loan at 31 December 2025 was £nil (2024: £20.0m).
Derivative financial instruments
At 31 December 2024, the derivative financial instruments consisted of interest rate swaps. The fair values of the Group’s outstanding
interest rate swaps were estimated using the mid-point of the yield curves prevailing on the reporting date and represented the net
present value of the differences between the contracted rate and the valuation rate when applied to the projected balances for the
period from the reporting date to the contracted expiry dates. These represented Level 2 fair value measurement. These were fully
settled in the year.
During 2025, the Group entered into derivative contracts to hedge against movements in UK government bond yields in relation to the
issuance of the £250m unsecured bonds in June 2025. These were fully settled on pricing of the bond.
| Group | |||
Weighted average | |||
Principal | interest rate | Average life | |
£m | % | Years | |
At 31 December 2025 | |||
Interest rate swaps | – | – | – |
At 31 December 2024 | |||
Interest rate swaps | 75.0 | 1.36 | 0.3 |
Secured and unsecured debt
2025 | 2024 | |
£m | £m | |
Secured | ||
6.5% secured bonds | 176.6 | 178.1 |
176.6 | 178.1 | |
Unsecured | ||
5.25% unsecured bonds | 247.5 | – |
1.5% unsecured convertible bonds | – | 174.1 |
1.875% unsecured green bonds | 347.6 | 347.2 |
Unsecured private placement notes | 453.7 | 453.6 |
Unsecured bank loans | 261.2 | 290.5 |
Other loans | – | 20.0 |
1,310.0 | 1,285.4 | |
Borrowings | 1,486.6 | 1,463.5 |
As at 31 December 2025, the Group’s secured bonds 2026 were secured by a floating charge over a number of the Group’s subsidiary
companies which contained £339.9m (2024: £376.3m) of the Group’s properties.
Fixed interest rate and hedged debt
At 31 December 2025, the Group’s fixed rate debt included the unsecured bonds, the unsecured green bonds, the secured bonds and
the unsecured private placement notes. At 31 December 2024, the Group’s fixed rate and hedged debt included the unsecured
convertible bonds, the unsecured green bonds, the secured bonds, the unsecured private placement notes and other loans.
Strategic report
Governance
Financial statements
Other information
255
Interest rate exposure
After taking into account the various interest rate hedging instruments entered into by the Group, the interest rate exposure of the
Group’s borrowings were:
Weighted | Weighted | |||||
average | average | |||||
Floating rate | Hedged | Fixed rate | Borrowings | interest rate 1 | life | |
£m | £m | £m | £m | % | Years | |
At 31 December 2025 | ||||||
5.25% unsecured bonds | – | – | 247.5 | 247.5 | 5.25 | 6.4 |
6.5% secured bonds | – | – | 176.6 | 176.6 | 6.50 | 0.2 |
1.875% unsecured green bonds | – | – | 347.6 | 347.6 | 1.88 | 5.9 |
Unsecured private placement notes | – | – | 453.7 | 453.7 | 3.42 | 4.6 |
Unsecured bank loans | 261.2 | – | – | 261.2 | 5.17 | 1.9 |
261.2 | – | 1,225.4 | 1,486.6 | 4.06 | 4.2 | |
At 31 December 2024 | ||||||
1.5% unsecured convertible bonds | – | – | 174.1 | 174.1 | 2.30 | 0.4 |
6.5% secured bonds | – | – | 178.1 | 178.1 | 6.50 | 1.2 |
1.875% unsecured green bonds | – | – | 347.2 | 347.2 | 1.88 | 6.9 |
Unsecured private placement notes | – | – | 453.6 | 453.6 | 3.42 | 5.6 |
Unsecured bank loans | 216.1 | 74.4 | – | 290.5 | 4.81 | 2.2 |
Other loans 2 | – | – | 20.0 | 20.0 | – | – |
216.1 | 74.4 | 1,173.0 | 1,463.5 | 3.53 | 4.0 |
1
The weighted average interest rates are based on the nominal amounts of the debt facilities.
2
Other loans shown above are interest free and have no fixed repayment date. For further detail, see Other loans section above.
Contractual undiscounted cash outflows
IFRS 7 Financial Instruments: Disclosure, requires disclosure of the maturity of the Group’s remaining contractual financial liabilities.
The tables below show the contractual undiscounted cash outflows arising from the Group’s gross debt.
< 1 year | 1 to 2 years | 2 to 3 years | 3 to 4 years | 4 to 5 years | > 5 years | Total | |
£m | £m | £m | £m | £m | £m | £m | |
At 31 December 2025 | |||||||
5.25% unsecured bonds | – | – | – | – | – | 250.0 | 250.0 |
6.5% secured bonds | 175.0 | – | – | – | – | – | 175.0 |
1.875% unsecured green bonds | – | – | – | – | – | 350.0 | 350.0 |
Unsecured private placement notes | 55.0 | – | 30.0 | 118.0 | – | 252.0 | 455.0 |
Unsecured bank loans | – | 165.0 | 100.0 | – | – | – | 265.0 |
Total on maturity | 230.0 | 165.0 | 130.0 | 118.0 | – | 852.0 | 1,495.0 |
Leasehold liabilities | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | 254.0 | 264.0 |
Interest on borrowings | 48.6 | 42.7 | 35.5 | 29.2 | 29.0 | 40.9 | 225.9 |
Gross loan commitments | 280.6 | 209.7 | 167.5 | 149.2 | 31.0 | 1,146.9 | 1,984.9 |
At 31 December 2024 | |||||||
1.5% unsecured convertible bonds | 175.0 | – | – | – | – | – | 175.0 |
6.5% secured bonds | – | 175.0 | – | – | – | – | 175.0 |
1.875% unsecured green bonds | – | – | – | – | – | 350.0 | 350.0 |
Unsecured private placement notes | – | 55.0 | – | 30.0 | 118.0 | 252.0 | 455.0 |
Unsecured bank loans | – | 169.5 | 123.5 | – | – | – | 293.0 |
Other loans | 20.0 | – | – | – | – | – | 20.0 |
Total on maturity | 195.0 | 399.5 | 123.5 | 30.0 | 118.0 | 602.0 | 1,468.0 |
Leasehold liabilities | 1.7 | 1.8 | 1.8 | 1.8 | 1.6 | 208.6 | 217.3 |
Interest on borrowings | 50.7 | 37.4 | 24.1 | 20.0 | 16.1 | 15.8 | 164.1 |
Effect of interest rate swaps | (0.8) | – | – | – | – | – | (0.8) |
Gross loan commitments | 246.6 | 438.7 | 149.4 | 51.8 | 135.7 | 826.4 | 1,848.6 |
Derwent London plc
Report and Accounts 2025
256
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
24 Net debt and derivative financial instruments
continued
Reconciliation to borrowings:
| Adjustments |
||||||
Effect of |
||||||
Gross loan |
Interest on |
interest |
Leasehold |
Non-cash |
||
commitments |
gross debt |
rate swaps |
liabilities |
amortisation |
Borrowings |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
At 31 December 2025 |
||||||
Maturing in: |
||||||
< 1 year |
280.6 |
(48.6) |
– |
(2.0) |
1.6 |
231.6 |
1 to 2 years |
209.7 |
(42.7) |
– |
(2.0) |
(0.8) |
164.2 |
2 to 3 years |
167.5 |
(35.5) |
– |
(2.0) |
(0.5) |
129.5 |
3 to 4 years |
149.2 |
(29.2) |
– |
(2.0) |
(3.0) |
115.0 |
4 to 5 years |
31.0 |
(29.0) |
– |
(2.0) |
– |
– |
> 5 years |
1,146.9 |
(40.9) |
– |
(254.0) |
(5.7) |
846.3 |
1,984.9 |
(225.9) |
– |
(264.0) |
(8.4) |
1,486.6 |
|
At 31 December 2024 |
||||||
Maturing in: |
||||||
< 1 year |
246.6 |
(50.7) |
0.8 |
(1.7) |
– |
195.0 |
1 to 2 years |
438.7 |
(37.4) |
– |
(1.8) |
(1.8) |
397.7 |
2 to 3 years |
149.4 |
(24.1) |
– |
(1.8) |
(1.9) |
121.6 |
3 to 4 years |
51.8 |
(20.0) |
– |
(1.8) |
3.0 |
33.0 |
4 to 5 years |
135.7 |
(16.1) |
– |
(1.6) |
(0.3) |
117.7 |
> 5 years |
826.4 |
(15.8) |
– |
(208.6) |
(3.5) |
598.5 |
1,848.6 |
(164.1) |
0.8 |
(217.3) |
(4.5) |
1,463.5 |
|
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, with additional disclosures required under IFRS 7 provided on
pages 100 to 111.
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 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
Strategic report
Governance
Financial statements
Other information
257
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
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
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 on pages 290 to 293 and are derived in note 39 to the financial statements.
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
Derwent London plc
Report and Accounts 2025
258
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
Categories of financial assets and liabilities
Fair value |
Financial |
Financial |
Total |
|
through profit |
assets held at |
liabilities held at |
carrying |
|
and loss |
amortised cost |
amortised cost |
value |
|
£m |
£m |
£m |
£m |
|
Financial assets |
||||
Cash and cash equivalents |
– |
131.7 |
– |
131.7 |
Other assets – current |
– |
6.6 |
– |
6.6 |
– |
138.3 |
– |
138.3 |
|
Financial liabilities |
||||
5.25% unsecured bonds |
– |
– |
(247.5) |
(247.5) |
6.5% secured bonds |
– |
– |
(176.6) |
(176.6) |
1.875% unsecured green bonds |
– |
– |
(347.6) |
(347.6) |
Unsecured private placement notes |
– |
– |
(453.7) |
(453.7) |
Bank borrowings due after one year |
– |
– |
(261.2) |
(261.2) |
Leasehold liabilities |
– |
– |
(41.0) |
(41.0) |
Other liabilities – current |
– |
– |
(119.8) |
(119.8) |
– |
– |
(1,647.4) |
(1,647.4) |
|
At 31 December 2025 |
– |
138.3 |
(1,647.4) |
(1,509.1) |
Financial assets |
||||
Cash and cash equivalents |
– |
71.4 |
– |
71.4 |
Other assets – current |
– |
17.6 |
– |
17.6 |
– |
89.0 |
– |
89.0 |
|
Financial liabilities |
||||
1.5% unsecured convertible bonds |
– |
– |
(174.1) |
(174.1) |
6.5% secured bonds |
– |
– |
(178.1) |
(178.1) |
1.875% unsecured green bonds |
– |
– |
(347.2) |
(347.2) |
Unsecured private placement notes |
– |
– |
(453.6) |
(453.6) |
Bank borrowings due after one year |
– |
– |
(290.5) |
(290.5) |
Other loans |
– |
– |
(20.0) |
(20.0) |
Leasehold liabilities |
– |
– |
(34.6) |
(34.6) |
Derivative financial instruments |
0.6 |
– |
– |
0.6 |
Other liabilities – current |
– |
– |
(117.4) |
(117.4) |
0.6 |
– |
(1,615.5) |
(1,614.9) |
|
At 31 December 2024 |
0.6 |
89.0 |
(1,615.5) |
(1,525.9) |
Reconciliation of net financial assets and liabilities to gross debt:
2025 |
2024 |
|
£m |
£m |
|
Net financial assets and liabilities |
(1,509.1) |
(1,525.9) |
Other assets – current |
(6.6) |
(17.6) |
Other liabilities – current |
119.8 |
117.4 |
Cash and cash equivalents |
(131.7) |
(71.4) |
Gross debt |
(1,527.6) |
(1,497.5) |
Strategic report
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Financial statements
Other information
259
The table below shows the fair values, where applicable, of borrowings and derivative financial instruments held by the Group,
together with a reconciliation to net financial assets and liabilities. Details of inputs and valuation methods used to derive the fair
values are shown in note 24.
Group |
|||
Carrying value |
Fair value |
Fair value |
|
£m |
£m |
hierarchy |
|
At 31 December 2025 |
|||
5.25% unsecured bonds |
(247.5) |
(255.2) |
Level 1 |
6.5% secured bonds |
(176.6) |
(175.7) |
Level 1 |
1.875% unsecured green bonds |
(347.6) |
(298.3) |
Level 1 |
Unsecured private placement notes |
(453.7) |
(404.2) |
Level 2 |
Bank borrowings due after one year |
(261.2) |
(265.0) |
Level 2 |
(1,486.6) |
(1,398.4) |
||
Amounts not fair valued: |
|||
Cash and cash equivalents |
131.7 |
||
Other assets – current |
6.6 |
||
Leasehold liabilities |
(41.0) |
||
Other liabilities – current |
(119.8) |
||
Net financial assets and liabilities |
(1,509.1) |
||
At 31 December 2024 |
|||
1.5% unsecured convertible bonds |
(174.1) |
(171.6) |
Level 1 |
6.5% secured bonds |
(178.1) |
(176.7) |
Level 1 |
1.875% unsecured green bonds |
(347.2) |
(281.2) |
Level 1 |
Unsecured private placement notes |
(453.6) |
(391.3) |
Level 2 |
Bank borrowings due after one year |
(290.5) |
(293.0) |
Level 2 |
Other loans |
(20.0) |
(20.0) |
Level 2 |
Derivative financial instruments |
0.6 |
0.6 |
Level 2 |
(1,462.9) |
(1,333.2) |
||
Amounts not fair valued: |
|||
Cash and cash equivalents |
71.4 |
||
Other assets – current |
17.6 |
||
Leasehold liabilities |
(34.6) |
||
Other liabilities – current |
(117.4) |
||
Net financial assets and liabilities |
(1,525.9) |
||
The fair values of the following financial assets and liabilities are the same as their carrying values:
Cash and cash equivalents.
Trade receivables, other receivables and accrued income included within trade and other receivables.
Trade payables, other payables and accruals included within trade and other payables.
Leasehold liabilities.
Derwent London plc
Report and Accounts 2025
260
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
Net debt reconciliation
The table below shows net debt movement during the year as a result of cash flows and other non-cash movements.
| Non-cash changes |
|||||||||
Impact of |
|||||||||
issue and |
Transfer from |
||||||||
Cash |
arrangement |
Fair value |
Unwind of |
non-current to |
|||||
2024 |
flows |
costs |
Other |
adjustments |
Additions |
discount |
current |
2025 |
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Current liabilities |
|||||||||
Borrowings |
194.1 |
(195.0) |
0.1 |
(0.1) |
– |
– |
0.9 |
231.6 |
231.6 |
Leasehold liabilities |
0.4 |
– |
– |
– |
– |
0.1 |
– |
– |
0.5 |
Non-current liabilities |
|||||||||
Borrowings |
1,269.4 |
214.8 |
2.7 |
0.3 |
(0.6) |
– |
– |
(231.6) |
1,255.0 |
Leasehold liabilities |
34.2 |
– |
– |
– |
- |
6.6 |
(0.3) |
– |
40.5 |
Total liabilities from |
|||||||||
financing activities |
1,498.1 |
19.8 |
2.8 |
0.2 |
(0.6) |
6.7 |
0.6 |
– |
1,527.6 |
Cash at bank 1 |
(15.4) |
(61.8) |
– |
– |
– |
– |
– |
– |
(77.2) |
Net debt |
1,482.7 |
(42.0) |
2.8 |
0.2 |
(0.6) |
6.7 |
0.6 |
– |
1,450.4 |
1
27 Cash generated from operations
The table below shows the reconciliation of cash generated from operations.
2025 |
2024 |
|
£m |
£m |
|
Profit from operations |
210.5 |
156.4 |
Adjustment for non-cash items: |
||
Revaluation (surplus)/deficit |
(52.2) |
2.7 |
Depreciation |
0.8 |
1.0 |
Lease incentive/cost spreading |
(4.3) |
(6.8) |
Share-based payments |
2.0 |
3.1 |
Ground rent adjustment |
0.5 |
0.7 |
Adjustment for other items: |
||
Loss/(profit) on disposal |
2.2 |
(1.9) |
Profit on disposal of trading property and trading stock |
(4.2) |
– |
Changes in working capital: |
||
Decrease/(increase) in receivables balance |
7.3 |
(8.8) |
Increase in payables balance |
5.4 |
9.5 |
Decrease/(increase) in trading property and trading stock |
104.5 |
(53.3) |
Cash generated from operations |
272.5 |
102.6 |
Cash generated from operations included £115.8m (2024: £3.6m) cash inflows from disposal of trading properties and £17.8m cash
inflows (2024: £nil) in relation to disposals of trading stock. It also included £12.1m (2024: £43.0m) cash outflows in relation to
Strategic report
Governance
Financial statements
Other information
261
Revaluation |
Other |
Total |
|
£m |
£m |
£m |
|
At 1 January 2025 |
3.5 |
(2.7) |
0.8 |
Charged to the income statement |
(0.1) |
0.5 |
0.4 |
Charged to other comprehensive income |
1.1 |
– |
1.1 |
At 31 December 2025 |
4.5 |
(2.2) |
2.3 |
At 1 January 2024 |
2.8 |
(2.7) |
0.1 |
Charged to the income statement |
0.1 |
– |
0.1 |
Charged to other comprehensive income |
0.6 |
– |
0.6 |
At 31 December 2024 |
3.5 |
(2.7) |
0.8 |
Deferred tax on the balance sheet revaluation is calculated on the basis of the chargeable gains that would crystallise on the sale of
the property portfolio at each balance sheet date. The calculation takes account of any available indexation on the historical cost of
the properties. Due to the Group’s REIT status, deferred tax is only provided at each balance sheet date on properties outside the REIT
regime.
Deferred tax assets have been recognised in respect of all tax losses and other temporary differences where the Directors believe it is
The movement in the number of 5p ordinary shares in issue is shown in the table below:
Number of shares in issue fully paid |
2025 |
2024 |
At 1 January and 31 December |
112,290,929 |
112,290,929 |
The number of outstanding share options and other share awards granted are disclosed in the report of the Remuneration Committee
The following describes the nature and purpose of each reserve within shareholders’ equity:
Reserve |
Description and purpose |
|
Share premium |
Amount subscribed for share capital in excess of nominal value less directly attributable issue costs. |
|
Other |
Merger |
Premium on the issue of shares as equity consideration for the acquisition of London Merchant |
reserves: |
Securities plc (LMS). |
|
Revaluation |
Revaluation of the owner-occupied property and the associated deferred tax. |
|
Other |
Equity portion of the convertible bonds for the Group and intercompany loans for the Company. |
|
Fair value of equity instruments granted but not yet exercised under share-based payments. |
||
Retained earnings |
Cumulative net gains and losses recognised in the Group income statement together with other |
|
items such as dividends. |
2025 |
2024 |
|
Other reserves |
£m |
£m |
Merger reserve |
910.5 |
910.5 |
Revaluation reserve |
18.8 |
15.4 |
Equity portion of the convertible bonds |
7.5 |
7.5 |
Fair value of equity instruments under share-based payments |
10.5 |
9.8 |
947.3 |
943.2 |
Derwent London plc
Report and Accounts 2025
262
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
| Dividend per share |
||||||
PID |
Non-PID |
Total |
2025 |
2024 |
||
Payment date |
p |
p |
p |
£m |
£m |
|
Current year |
||||||
2025 final dividend 1 |
29 May 2026 |
40.00 |
16.00 |
– |
– |
|
2025 interim dividend |
10 October 2025 |
25.50 |
– |
25.50 |
28.6 |
– |
65.50 |
16.00 |
81.50 |
28.6 |
– |
||
Prior year |
||||||
2024 final dividend |
30 May 2025 |
45.50 |
10.00 |
62.3 |
– |
|
2024 interim dividend |
11 October 2024 |
25.00 |
– |
25.00 |
– |
28.1 |
70.50 |
10.00 |
80.50 |
62.3 |
28.1 |
||
2023 final dividend |
31 May 2024 |
39.00 |
16.00 |
– |
61.7 |
|
Dividends as reported in the Group |
||||||
statement of changes in equity |
90.9 |
89.8 |
||||
2025 interim dividend withholding tax |
14 January 2026 |
(4.0) |
– |
|||
2024 interim dividend withholding tax |
14 January 2025 |
3.9 |
(3.9) |
|||
2023 interim dividend withholding tax |
12 January 2024 |
– |
3.7 |
|||
Dividends paid as reported in the |
||||||
Consolidated cash flow statement |
90.8 |
89.6 |
||||
1
2025 |
2024 |
|
£m |
£m |
|
Cash at bank |
77.2 |
15.4 |
Cash held in restricted accounts |
||
Tenant rent deposits |
29.3 |
27.9 |
Service charge balances |
25.2 |
28.1 |
131.7 |
71.4 |
Contracts for capital expenditure entered into by the Group at 31 December 2025 and not provided for in the accounts relating to the
construction, development or enhancement of the Group’s investment properties amounted to £85.5m (2024: £101.0m), whilst that
relating to the Group’s trading properties amounted to £7.6m (2024: £29.3m). At 31 December 2025 and 31 December 2024, there were
no material contractual obligations for the purchase, repair or maintenance of investment or trading properties.
In May 2022, the Group entered into a conditional contract to acquire the freehold of Old Street Quarter island site. The site is being
sold by Moorfields Eye Hospital NHS Foundation Trust and UCL, together the Oriel joint initiative (“Oriel”). Consideration for the site
has been agreed as £239m before costs. Completion is subject to delivery by Oriel of a new hospital and subsequent vacant possession
of the site, which is anticipated no earlier than late 2027. In addition to the note 19 disclosure of the impairment assessment under IAS
36 Impairment of Assets for costs incurred to date, the conditional contract has also been assessed under IAS 37 Provisions,
Contingent Liabilities and Contingent Assets, and it has been determined that no adjustments are required to the year end financial
Strategic report
Governance
Financial statements
Other information
263
2025 |
2024 |
|
£m |
£m |
|
Operating lease receipts |
||
Minimum lease receipts under non-cancellable operating leases to be received: |
||
not later than one year |
198.3 |
207.8 |
later than one year and not later than five years |
668.4 |
634.9 |
later than five years |
760.5 |
698.1 |
1,627.2 |
1,540.8 |
2025 |
2024 |
|
£m |
£m |
|
Headlease obligations |
||
Minimum lease payments under headleases that fall due: |
||
not later than one year |
2.0 |
1.7 |
later than one year and not later than five years |
8.0 |
7.0 |
later than five years |
254.0 |
208.6 |
264.0 |
217.3 |
|
Future contingent rent payable on headleases |
0.2 |
– |
Future finance charges on headleases |
(223.2) |
(182.7) |
Present value of headlease liabilities |
41.0 |
34.6 |
Present value of minimum headlease obligations: |
||
not later than one year |
0.5 |
0.4 |
later than one year and not later than five years |
1.9 |
1.9 |
later than five years |
38.6 |
32.3 |
41.0 |
34.6 |
The Group has approximately 640 leases granted to its tenants. These vary depending on the individual tenant and the respective
property and demise but typically are let for a term of five to 20 years, at a market rent with provisions to review to market rent every
five years. Standard lease provisions include service charge payments and recovery of other direct costs. The weighted average lease
length of the leases commencing during 2025 was 7.4 years (2024: 5.4 years). Of these leases, on a weighted average basis, 62% (2024:
In January 2026, the Group exercised its option to extend the £82.5m unsecured term loan, originally set to mature in February 2027,
by one year to February 2028.
In February 2026, £55m of US private placement notes were repaid upon maturity.
Details of Directors’ remuneration are given in the report of the Remuneration Committee on pages 172 to 209 and note 10. Details of
transactions with joint ventures are shown in note 18. A full list of subsidiaries and joint ventures is given in note xiii of the Company
financial statements.
There have been no related party transactions for the year ended 31 December 2025 that have materially affected the financial
Derwent London plc
Report and Accounts 2025
264
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
Unaudited unless stated otherwise.
As with most other UK property companies and REITs, the Group presents many of its financial measures in accordance with the
guidance criteria issued by the EPRA. These measures, which provide consistency across the sector, are all derived from the IFRS
figures. A summary of our EPRA performance measures is set out in the table below.
Summary table of EPRA performance measures
2025 |
2024 |
|||
Pence |
Pence |
|||
per share |
per share |
|||
p |
p |
|||
EPRA earnings (audited) |
£110.4m |
98.36 |
£119.5m |
106.45 |
EPRA Net Tangible Assets (audited) |
£3,619.8m |
3,225 |
£3,545.0m |
3,149 |
EPRA Net Disposal Value (audited) |
£3,706.2m |
3,302 |
£3,671.4m |
3,261 |
EPRA Net Reinstatement Value (audited) |
£3,968.4m |
3,535 |
£3,889.5m |
3,455 |
EPRA Cost Ratio (including direct vacancy costs) |
27.3% |
27.0% |
||
EPRA Cost Ratio (excluding direct vacancy costs) |
22.4% |
21.7% |
||
EPRA Net Initial Yield |
4.0% |
4.3% |
||
EPRA 'topped-up' Net Initial Yield |
5.1% |
5.2% |
||
EPRA Vacancy Rate |
4.1% |
3.1% |
||
The definition of these measures can be found on pages 290 and 291.
Number of shares
Earnings per share |
Net asset value per share |
|||
Weighted average |
At 31 December |
|||
2025 |
2024 |
2025 |
2024 |
|
Audited |
Audited |
Audited |
Audited |
|
‘000 |
‘000 |
‘000 |
‘000 |
|
For use in basic measures |
112,241 |
112,258 |
112,236 |
112,258 |
Dilutive effect of share-based payments |
13 |
342 |
12 |
323 |
For use in diluted measures |
112,254 |
112,600 |
112,248 |
112,581 |
For the year ended 31 December 2024, the Group did not recognise the dilutive impact of the conversion of the £175m unsecured
convertible bonds 2025 (‘1.5% convertible bonds 2025’) on its earnings per share (EPS) or net asset value (NAV) per share metrics as,
based on the share price at the end of that year, the bonds were not expected to convert. In 2025, the £175m unsecured convertible
bonds 2025 (‘1.5% convertible bonds 2025’) were repaid in full with no share conversion, resulting in no dilutive impact on the Group’s
earnings per share (EPS) or net asset value (NAV) per share metrics.
The following tables set out reconciliations between the IFRS and EPRA earnings for the year and earnings per share. The adjustments
made between the figures are as follows:
A – Disposal of investment and trading property (including the Group’s share in joint ventures), and associated tax.
B – Revaluation movement on investment property, in joint ventures and other interests and associated deferred tax.
C – Fair value movement and termination income relating to derivative financial instruments.
D – Non-operating and exceptional items.
Strategic report
Governance
Financial statements
Other information
265
Earnings and earnings per share (audited)
| Adjustments |
||||||
EPRA |
||||||
IFRS |
A |
B |
C |
D |
basis |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Year ended 31 December 2025 |
||||||
Net property and other income |
199.6 |
(4.2) |
1.4 |
– |
– |
196.8 |
Total administrative expenses |
(39.1) |
– |
– |
– |
0.4 |
(38.7) |
Revaluation surplus |
52.2 |
– |
(52.2) |
– |
– |
– |
Loss on disposal |
(2.2) |
2.2 |
– |
– |
– |
– |
Net finance costs |
(48.4) |
– |
– |
1.2 |
– |
(47.2) |
Movement in fair value |
||||||
of derivative financial instruments |
(0.6) |
– |
– |
0.6 |
– |
– |
Profit before tax |
161.5 |
(2.0) |
(50.8) |
1.8 |
0.4 |
110.9 |
Tax charge |
(0.4) |
– |
(0.1) |
– |
– |
(0.5) |
Profit for the year |
161.1 |
(2.0) |
(50.9) |
1.8 |
0.4 |
110.4 |
Earnings attributable to equity shareholders |
161.1 |
(2.0) |
(50.9) |
1.8 |
0.4 |
110.4 |
Earnings per share |
143.53p |
98.36p |
||||
Diluted earnings per share |
143.51p |
98.35p |
||||
In addition to EPRA earnings per share, an adjusted earnings per share is presented below to add back the profit from the disposal of
the trading properties (see note 5), following the sale of the residential apartments at 100 George Street W1, which are excluded from
EPRA earnings.
£m |
|
Earnings attributable to equity shareholders |
110.4 |
Profits from the disposal of trading properties |
4.2 |
Adjusted earnings attributable to equity shareholders |
114.6 |
Adjusted earnings per share |
102.10p |
During the year, the Group commenced an IT transformation project to implement a new finance system. In accordance with EPRA
Best Practices Recommendations (September 2024), the associated costs have been excluded from EPRA earnings per share.
| Adjustments |
||||||
EPRA |
||||||
IFRS |
A |
B |
C |
D |
basis |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Year ended 31 December 2024 |
||||||
Net property and other income |
198.3 |
– |
0.2 |
– |
– |
198.5 |
Total administrative expenses |
(41.1) |
– |
– |
– |
– |
(41.1) |
Revaluation deficit |
(2.7) |
– |
2.7 |
– |
– |
– |
Profit on disposal |
1.9 |
(1.9) |
– |
– |
– |
– |
Net finance costs |
(39.6) |
– |
– |
– |
– |
(39.6) |
Movement in fair value |
||||||
of derivative financial instruments |
(2.3) |
– |
– |
2.3 |
– |
– |
Share of results of joint ventures |
1.5 |
– |
0.3 |
– |
– |
– |
Profit before tax |
116.0 |
(1.9) |
3.2 |
2.3 |
– |
119.6 |
Tax charge |
(0.1) |
– |
– |
– |
– |
(0.1) |
Profit for the year |
115.9 |
(1.9) |
3.2 |
2.3 |
– |
119.5 |
Earnings attributable to equity shareholders |
115.9 |
(1.9) |
3.2 |
2.3 |
– |
119.5 |
Earnings per share |
103.24p |
106.45p |
||||
Diluted earnings per share |
102.93p |
106.13p |
||||
Derwent London plc
Report and Accounts 2025
266
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
37 EPRA performance measures and core recommendations
continued
EPRA Net Asset Value metrics (audited)
2025 | 2024 | |
£m | £m | |
Net assets attributable to equity shareholders | 3,615.3 | 3,539.8 |
Adjustment for: | ||
Revaluation of trading properties | 0.4 | 0.6 |
Deferred tax on revaluation surplus 1 | 2.3 | 1.8 |
Fair value of derivative financial instruments | – | (0.6) |
Fair value adjustment to secured bonds | 1.8 | 3.4 |
EPRA Net Tangible Assets | 3,619.8 | 3,545.0 |
Per share measure – diluted | 3,225p | 3,149p |
Net assets attributable to equity shareholders | 3,615.3 | 3,539.8 |
Adjustment for: | ||
Revaluation of trading properties | 0.4 | 0.6 |
Fair value adjustment to secured bonds | 1.8 | 3.4 |
Mark-to-market of fixed rate debt | 96.6 | 133.6 |
Unamortised issue and arrangement costs | (7.9) | (6.0) |
EPRA Net Disposal Value | 3,706.2 | 3,671.4 |
Per share measure – diluted | 3,302p | 3,261p |
Net assets attributable to equity shareholders | 3,615.3 | 3,539.8 |
Adjustment for: | ||
Revaluation of trading properties | 0.4 | 0.6 |
Deferred tax on revaluation surplus | 4.5 | 3.5 |
Fair value of derivative financial instruments | – | (0.6) |
Fair value adjustment to secured bonds | 1.8 | 3.4 |
Purchasers' costs 2 | 346.4 | 342.8 |
EPRA Net Reinstatement Value | 3,968.4 | 3,889.5 |
Per share measure – diluted | 3,535p | 3,455p |
1
Only 50% of the deferred tax on the revaluation surplus is excluded.
2
Includes Stamp Duty Land Tax. Total costs assumed to be 6.8% of the portfolio’s fair value.
Strategic report
Governance
Financial statements
Other information
267
Cost ratio
2025 | 2024 | |
£m | £m | |
Administrative expenses | 39.1 | 41.1 |
Write-off/impairment of receivables | 0.5 | 0.2 |
Other property costs | 17.9 | 16.7 |
Dilapidation receipts | (0.2) | (0.8) |
Net service charge costs | 6.6 | 5.3 |
Management fees received less estimated profit element | (4.9) | (5.1) |
Share of joint ventures' expenses | – | 0.3 |
EPRA costs (including direct vacancy costs) (A) | 59.0 | 57.7 |
Direct vacancy costs | (10.5) | (11.3) |
EPRA costs (excluding direct vacancy costs) (B) | 48.5 | 46.4 |
Gross rental income | 218.3 | 214.8 |
Ground rent | (1.9) | (1.5) |
Service charge components of rental income | – | (1.3) |
Share of joint ventures' rental income less ground rent | – | 2.0 |
Adjusted gross rental income (C) | 216.4 | 214.0 |
EPRA cost ratio (including direct vacancy costs) (A/C) | 27.3% | 27.0% |
EPRA cost ratio (excluding direct vacancy costs) (B/C) | 22.4% | 21.7% |
In addition to the two EPRA cost ratios, the Group has calculated an additional cost ratio based on its property portfolio fair value to
recognise the ‘total return’ nature of the Group’s activities.
2025 | 2024 | |
£m | £m | |
Property portfolio at fair value (D) | 5,093.9 | 5,041.1 |
Portfolio cost ratio (A/D) | 1.2% | 1.1% |
Net Initial Yield and ‘topped-up’ Net Initial Yield
2025 | 2024 | |
£m | £m | |
Property portfolio | 5,093.9 | 5,041.1 |
Less non-EPRA properties 1 | (781.6) | (696.0) |
Completed property portfolio | 4,312.3 | 4,345.1 |
Allowance for: | ||
Estimated purchasers’ costs | 293.2 | 295.5 |
EPRA property portfolio valuation (A) | 4,605.5 | 4,640.6 |
Annualised contracted rental income, net of ground rents2 | 194.8 | 204.3 |
Less non-EPRA properties 1 | (5.4) | (0.7) |
Add outstanding rent reviews | – | 0.7 |
Less estimate of non-recoverable expenses | (6.1) | (5.6) |
(11.5) | (5.6) | |
Current income net of non-recoverable expenses (B) | 183.3 | 198.7 |
Contractual rental increases across the portfolio | 53.5 | 42.2 |
Contractual rental increases across the EPRA portfolio | 53.5 | 42.2 |
‘Topped-up’ net annualised rent (C) | 236.8 | 240.9 |
EPRA net initial yield (B/A) | 4.0% | 4.3% |
EPRA ‘topped-up’ net initial yield (C/A) | 5.1% | 5.2% |
1
In accordance with EPRA best practice guidelines, deductions are made for development properties, land and long-dated reversions.
2
The 2024 figure has been re-presented with no change to the EPRA net initial yield.
Derwent London plc
Report and Accounts 2025
268
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
37 EPRA performance measures and core recommendations
continued
Vacancy rate
2025 |
2024 |
|
£m |
£m |
|
Annualised estimated rental value of vacant premises |
11.3 |
8.4 |
Portfolio estimated rental value |
339.5 |
324.3 |
Less non-EPRA properties 1 |
(62.4) |
(49.7) |
277.1 |
274.6 |
|
EPRA vacancy rate |
4.1% |
3.1% |
1
In accordance with EPRA best practice guidelines, deductions are made for development properties, land and long-dated reversions.
Like-for-like rental growth
Like-for-like |
|||
portfolio |
Other |
Total |
|
£m |
£m |
£m |
|
2025 |
|||
Gross rental income |
188.4 |
31.2 |
219.6 |
Other property expenditure |
(19.5) |
(6.9) |
(26.4) |
Write-off/impairment of receivables |
– |
(0.5) |
(0.5) |
Impairment included in prepayments (see note 19) |
– |
(1.4) |
(1.4) |
Net rental income |
168.9 |
22.4 |
191.3 |
Other |
5.2 |
4.4 |
9.6 |
Net property and other income |
174.1 |
26.8 |
200.9 |
2024 |
|||
Gross rental income |
183.9 |
29.6 |
213.5 |
Other property expenditure |
(16.9) |
(6.6) |
(23.5) |
Write-off/impairment of receivables |
(0.4) |
0.2 |
(0.2) |
Impairment included in prepayments (see note 19) |
– |
(0.2) |
(0.2) |
Net rental income |
166.6 |
23.0 |
189.6 |
Other |
5.4 |
3.3 |
8.7 |
Net property and other income |
172.0 |
26.3 |
198.3 |
Change based on: |
|||
Gross rental income |
2.4% |
2.9% |
|
Net rental income |
1.4% |
0.9% |
|
Net property and other income |
1.2% |
1.3% |
Property-related capital expenditure
| 2025 |
2024 |
|||||
Group |
Joint |
Group |
Joint |
|||
(excl. Joint |
ventures |
Total |
(excl. Joint |
ventures |
Total |
|
ventures) |
(50% share) |
Group |
ventures) |
(50% share) |
Group |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Acquisitions |
6.0 |
– |
6.0 |
47.0 |
– |
47.0 |
Development |
129.8 |
– |
129.8 |
136.2 |
3.3 |
139.5 |
Investment properties |
||||||
Incremental lettable space |
0.3 |
– |
0.3 |
2.5 |
– |
2.5 |
No incremental lettable space |
26.4 |
– |
26.4 |
45.3 |
– |
45.3 |
Tenant incentives |
2.3 |
– |
2.3 |
0.3 |
– |
0.3 |
Capitalised interest |
13.8 |
– |
13.8 |
10.7 |
– |
10.7 |
Total capital expenditure |
178.6 |
– |
178.6 |
242.0 |
3.3 |
245.3 |
Conversion from accrual to cash basis |
2.5 |
– |
2.5 |
(12.1) |
– |
(12.1) |
Total capital expenditure on a cash basis |
181.1 |
– |
181.1 |
229.9 |
3.3 |
233.2 |
Strategic report
Governance
Financial statements
Other information
269
2025 | 2024 | |
P | P | |
EPRA Net Tangible Assets on a diluted basis | ||
At end of year | 3,225 | 3,149 |
At start of year | (3,149) | (3,129) |
Increase | 76 | 20 |
Dividend per share | 81 | 80 |
Increase including dividend | 157 | 100 |
Total accounting return | 5.0% | 3.2% |
NAV gearing
2025 | 2024 | |
£m | £m | |
Net debt | 1,450.4 | 1,482.7 |
Net assets | 3,615.3 | 3,539.8 |
NAV gearing | 40.1% | 41.9% |
Loan-to-value ratio
2025 | 2024 | |
£m | £m | |
Group loan-to-value ratio | ||
Net debt | 1,450.4 | 1,482.7 |
Fair value adjustment of secured bonds | (1.8) | (3.4) |
Unamortised discount on unsecured bonds | 2.3 | 1.3 |
Unamortised issue and arrangement costs | 7.9 | 6.0 |
Leasehold liabilities | (41.0) | (34.6) |
Drawn debt net of cash (A) | 1,417.8 | 1,452.0 |
Fair value of property portfolio (B) | 5,093.9 | 5,041.1 |
Loan-to-value ratio (A/B) | 27.8% | 28.8% |
EPRA loan-to-value ratio | ||
Drawn debt net of cash (A) | 1,417.8 | 1,452.0 |
Debt with equity characteristics | – | (20.0) |
Adjustment for hybrid debt instruments | – | 0.6 |
Net payables adjustment | 81.2 | 72.7 |
Adjusted debt (C) | 1,499.0 | 1,505.3 |
Fair value of property portfolio (B) | 5,093.9 | 5,041.1 |
EPRA loan-to-value ratio (C/B) | 29.4% | 29.9% |
Derwent London plc
Report and Accounts 2025
270
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
39 Gearing and interest cover
continued
Net interest cover ratio
2025 |
2024 |
|
£m |
£m |
|
Group net interest cover ratio |
||
Net property and other income |
199.6 |
198.3 |
Adjustments for: |
||
Other income |
(4.9) |
(5.1) |
Other property income |
(0.1) |
|
Surrender premiums received |
(0.3) |
(2.7) |
Profit on disposal of trading properties |
(4.2) |
– |
Adjusted net property income |
190.2 |
190.4 |
Finance income |
(2.1) |
(0.3) |
Finance costs |
50.5 |
39.9 |
48.4 |
39.6 |
|
Adjustments for: |
||
Finance income |
2.1 |
0.3 |
Other finance costs |
(1.4) |
(0.4) |
Amortisation of fair value adjustment to secured bonds |
1.7 |
1.6 |
Amortisation of issue and arrangement costs |
(2.8) |
(2.6) |
Finance costs capitalised |
14.1 |
11.2 |
Net interest payable |
62.1 |
49.7 |
Group net interest cover ratio |
306% |
383% |
Proportionally consolidated net interest cover ratio |
||
Adjusted net property income |
190.2 |
190.4 |
Share of joint ventures’ net property income |
– |
1.9 |
Adjusted net property income including share of joint ventures |
190.2 |
192.3 |
Net interest payable |
62.1 |
49.7 |
Proportionally consolidated net interest cover ratio |
306% |
387% |
Net debt to EBITDA
2025 |
2024 |
|
£m |
£m |
|
Net debt (A) |
1,450.4 |
1,482.7 |
Profit for the year |
161.1 |
115.9 |
Add back: tax charge |
0.4 |
0.1 |
Profit before tax |
161.5 |
116.0 |
Add back: net finance charges |
48.4 |
39.6 |
Add back: movement in fair value of derivative financial instruments |
0.6 |
2.3 |
210.5 |
157.9 |
|
Add back: loss/(profit) on disposal |
2.2 |
(1.9) |
Add back: revaluation (surplus)/deficit |
(52.2) |
2.7 |
Add back: share of joint venture revaluation movement/impairment (note 8) |
– |
0.3 |
Add back: depreciation |
0.8 |
1.0 |
Add back: IT transformation project costs |
0.4 |
– |
EBITDA (B) |
161.7 |
160.0 |
Net debt to EBITDA (A/B) |
9.0 |
9.3 |
Strategic report
Governance
Financial statements
Other information
271
The Group financial statements incorporate the financial statements of Derwent London plc and all of its subsidiaries, together with
the Group’s share of the results of its joint ventures.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are no
longer consolidated from the date that control ceases.
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement. Interests in
joint ventures are accounted for using the equity method of accounting as permitted by IFRS 11 Joint Arrangements, and following the
procedures for this method set out in IAS 28 Investments in Associates and Joint Ventures. The equity method requires the Group’s
share of the joint venture’s post-tax profit or loss for the year to be presented separately in the income statement and the Group’s
share of the joint venture’s net assets to be presented separately in the balance sheet.
Intra-group balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the
consolidated financial statements. Unrealised gains arising from transactions with joint ventures are eliminated to the extent of the
Group’s interest in the joint venture concerned. Unrealised losses are eliminated in the same way, but only to the extent that there is
Gross property income arises from two main sources:
(i)
Rental income
– This arises from operating leases granted to tenants. An operating lease is a lease other than a finance lease. A
finance lease is one whereby substantially all the risks and rewards of ownership are passed to the lessee.
Rental income is recognised in the Group income statement on a straight-line basis over the term of the lease in accordance with
IFRS 16 Leases. This includes the effect of lease incentives given to tenants, which are normally in the form of rent-free or half rent
periods or capital contributions in lieu of rent-free periods, and the effect of contracted rent uplifts and payments received from
tenants on the grant of leases. Where the total consideration due under a lease is modified, the revised total amount due under
the lease is recognised on a straight-line basis over the remaining term of the lease. Where rent demanded is forgiven for periods
that have passed, these amounts are assessed under IFRS 9 and written off. Where rent is forgiven for future periods, this is
considered a lease modification and spread on a straight-line basis over the remaining lease term in accordance with IFRS 16.
For income from property leased out under a finance lease, a lease receivable asset is recognised in the balance sheet at an
amount equal to the net investment in the lease, as defined in IFRS 16 Leases. Minimum lease payments receivable, again defined
in IFRS 16, are apportioned between finance income and the reduction of the outstanding lease receivable so as to produce a
constant periodic rate of return on the remaining net investment in the lease. Contingent rents, being the difference between the
rent currently receivable and the minimum lease payments when the net investment in the lease was originally calculated, are
recognised in property income in the years in which they are receivable.
(ii)
Surrender premiums
– Payments received from tenants to surrender their lease obligations are recognised immediately in the
Group income statement. In circumstances where surrender payments received relate to specific periods, they are deferred and
recognised in those periods.
Other income consists of commissions, fees charged to tenants for the management of certain Group properties, administration
services provided to joint ventures and customer services. Other income is recognised in the Group income statement in accordance
Service charges
Service charge income relates to expenditure that is directly recoverable from tenants, excluding management fees which are
included in ‘other income’. Service charge income is recognised as revenue in the period to which it relates as required by IFRS 15
Derwent London plc
Report and Accounts 2025
272
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
40 Material accounting policies
continued
Lease payments
– For leasehold investment properties held, a right of use asset is recognised at commencement date of the lease
within the investment property carrying value. The initial cost includes the lease liabilities recognised, initial direct costs incurred
and any lease payments made at commencement adjusted for any lease incentives received. In addition, a corresponding lease
liability is also included on the balance sheet. Minimum lease payments are apportioned between the finance charge and the
(ii)
Dilapidations
– Dilapidation monies received from tenants in respect of their lease obligations are recognised immediately in the
Group income statement, unless they relate to future capital expenditure. In the latter case, where the costs are considered to be
recoverable they are capitalised as part of the carrying value of the property.
(iii)
Reverse surrender premiums
– Payments made to tenants to surrender their lease obligations are charged directly to the Group
income statement unless the payment is to enable the probable redevelopment of a property. In the latter case, where the costs
are considered to be recoverable, they are capitalised as part of the carrying value of the property.
(iv)
Other property expenditure
– Vacant property costs and other property costs are expensed in the year to which they relate,
with the exception of the initial direct costs incurred in negotiating and arranging leases which are, in accordance with IFRS 16
Leases, added to the carrying value of the relevant property and recognised as an expense over the lease term on the same basis
Equity-settled
– The Company operates a long-term incentive plan and share option scheme. The fair value of the conditional
awards of shares granted under the long-term incentive plan and the options granted under the share option scheme are
determined at the date of grant. This fair value is then expensed on a straight-line basis over the vesting period, based on an
estimate of the number of shares that will eventually vest. At each reporting date, the non-market based performance criteria of
the long-term incentive plan are reconsidered and the expense is revised as necessary. In respect of the share option scheme, the
(ii) Pensions
(a)
Defined contribution plans
– Obligations for contributions to defined contribution pension plans are recognised as an
expense in the Group income statement in the period to which they relate.
(b)
Defined benefit plans
– The Group’s net obligation in respect of defined benefit post-employment plans, including pension
plans, is calculated separately for each plan by estimating the amount of future benefit that employees have earned in
return for their service in the current and prior periods. That benefit is discounted to determine its present value, and the fair
value of any plan assets is deducted. The discount rate is the yield at the balance sheet date on AA credit rated bonds that
have maturity dates approximating the terms of the Group’s obligations. The calculation is performed by a qualified actuary
using the projected unit credit method. Any actuarial gain or loss in the period is recognised in full in the Group statement of
Business combinations are accounted for under the acquisition method. Any excess of the purchase price of business combinations
over the fair value of the assets, liabilities and contingent liabilities acquired and resulting deferred tax thereon is recognised as
goodwill. Any discount is credited to the Group income statement in the period of acquisition. Goodwill is recognised as an asset and
reviewed for impairment. Any impairment is recognised immediately in the Group income statement and is not subsequently reversed.
(i)
Valuation
– Investment properties are those that are held either to earn rental income or for capital appreciation or both,
including those that are undergoing redevelopment. Investment properties are measured initially at cost, including related
transaction costs. After initial recognition, they are carried in the Group balance sheet at fair value adjusted for the carrying value
of leasehold interests and lease incentive and letting cost receivables. Fair value is the price that would be received to sell an
investment property in an orderly transaction between market participants at the measurement date. The valuation is
undertaken by independent valuers who hold recognised and relevant professional qualifications and have recent experience in
the locations and categories of properties being valued.
Strategic report
Governance
Financial statements
Other information
273
Surpluses or deficits resulting from changes in the fair value of investment property are reported in the Group income statement
in the year in which they arise.
The Group leases out investment properties under operating leases with rents generally payable monthly or quarterly. The Group
is exposed to changes in the residual value of properties at the end of current lease agreements, and mitigates this risk by actively
managing its tenant mix in order to maximise the weighted average lease term, minimise vacancies across the portfolio and
maximise exposure to tenants with strong financial characteristics. The Group also grants lease incentives to encourage high
quality tenants to remain in properties for longer lease terms.
Capital expenditure
– Capital expenditure, being costs directly attributable to the redevelopment or refurbishment of an
investment property, up to the point of it being completed for its intended use, are capitalised in the carrying value of that
property. In addition, in accordance with IAS 23 Borrowing Costs, finance costs that are directly attributable to such expenditure
are capitalised using the Group’s average cost of borrowings during each quarter.
Certain internal staff and associated costs directly attributable to the major development and refurbishment schemes are also
capitalised based on the proportion of time spent on the relevant scheme. These costs are capitalised from the date the Group
(iii)
Disposal
– Properties are treated as disposed when the Group transfers the significant risks and rewards of ownership to the
buyer. Generally this would occur on completion of contract. On disposal, any gain or loss is calculated as the difference between
the net disposal proceeds and the carrying value at the last year end plus subsequent capitalised expenditure during the year.
Where the net disposal proceeds have yet to be finalised at the balance sheet date, the proceeds recognised reflect the Directors’
best estimate of the amounts expected to be received. Any contingent consideration is recognised at fair value at the balance
sheet date. The fair value is calculated using future discounted cash flows based on expected outcomes with estimated
probabilities taking account of the risk and uncertainty of each input.
(iv)
Development
– When the Group begins to redevelop an existing investment property for continued use as an investment
property or acquires a property with the subsequent intention of developing as an investment property, the property is classified
as an investment property and is accounted for as such. When the Group begins to redevelop an existing investment property
with a view to sale, the property is transferred to trading properties and held as a current asset. The property is remeasured to fair
value as at the date of transfer with any gain or loss being taken to the income statement. The remeasured amount becomes the
Trading property relates to property being developed for sale. Trading stock relates to development expenditure which is due to be
disposed of to third parties under development agreements. In accordance with IAS 2 Inventories, trading property and trading stock
are held at the lower of cost and net realisable value. Proceeds from sale are recognised in the Group’s income statement when title
Prepayment (non-current)
Acquisition and capital expenditure costs incurred in advance of ownership of a property are initially included as a prepayment in the
Group’s balance sheet and measured at cost. This asset is then tested for impairment under IAS 36 Impairment of Assets. On
completion of the purchase, the asset will be transferred to either investment property or trading property as appropriate.
(i)
Owner-occupied property
– Owner-occupied property is stated at its revalued amount, which is determined in the same
manner as investment property. It is depreciated over its remaining useful life (40 years) with the depreciation included in
administrative expenses. On revaluation, any accumulated depreciation is eliminated against the gross carrying amount of the
property concerned, and the net amount restated to the revalued amount. Subsequent depreciation charges are adjusted based
on the revalued amount for each property. Any difference between the depreciation charge on the revalued amount and that
which would have been charged under historic cost is transferred, net of any related deferred tax, between the revaluation
reserve and retained earnings as the property is utilised. Surpluses or deficits resulting from changes in the fair value are reported
in the Group statement of comprehensive income. The land element of the property is not depreciated.
(ii)
Solar park
– The Solar park is carried at cost, including directly attributable construction and development expenditure. As the
asset is not yet ready for use, no depreciation is charged.
(iii)
Other
– Plant and equipment is depreciated at a rate of between 10% and 25% per annum which is calculated to write off the
cost, less estimated residual value of the individual assets, over their expected useful lives. Artwork is stated at revalued amounts
Derwent London plc
Report and Accounts 2025
274
Notes to the consolidated financial statements
continued
for the year ended 31 December 2025
40 Material accounting policies
continued
Investments in joint ventures, being those entities over whose activities the Group has joint control, as established by contractual
agreement, are included in the Group’s balance sheet at cost together with the Group’s share of post-acquisition reserves, on a net
equity basis. Investments in subsidiaries and joint ventures are included in the Company’s balance sheet at the lower of cost and
Non-current assets are classified as held for sale if their carrying value will be recovered through a sale transaction rather than
through continuing use. This condition is regarded as met if the sale is highly probable, the asset is available for immediate sale in its
present condition, being actively marketed and management is committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of classification.
In accordance with IFRS 5, non-current assets, including related liabilities, classified as held for sale are measured at the lower of
Cash and cash equivalents
– Cash at bank comprises cash in hand and on-demand deposits. Cash at bank comprises short-
term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
are recognised as restricted cash.
Cash collected on behalf of tenants to fund service charges of properties in the portfolio meet the definition of ‘cash and cash
Trade receivables
– Trade receivables are recognised and carried at the original transaction value. This balance is subject to
In accordance with IFRS 16, rental income is recognised in the Group income statement on a straight-line basis over the term of the
lease. This includes the effect of lease incentives given to tenants (in the form of rent-free periods, half rent periods or capital
contributions in lieu of rent-free periods) and any contracted rental uplifts granted at lease inception. The result is included within
Bank loans and fixed rate loans
– Bank loans and fixed rate loans are included as financial liabilities on the balance sheets at
amortised cost. Interest payable is expensed as a finance cost in the year to which it relates.
Where there has been a change to the terms of a debt agreement, such as the applicable interest rate or benchmark rate, this is
assessed under IFRS 9 using quantitative and qualitative assessments to determine if the debt modification is considered
substantial enough to be deemed an extinguishment. It is common for loan facilities agreements to include extension options
which extend the loan maturity out by one year. When these options are exercised as per the agreement, with no changes to
(ii)
Non-convertible bonds
– These are included as a financial liability on the balance sheet net of the unamortised discount and
costs on issue. The difference between this carrying value and the redemption value is recognised in the Group income statement
over the life of the bond on an effective interest basis. Interest payable to bond holders is expensed in the year to which it relates.
(iii)
Convertible bonds
– The fair value of the liability component of a convertible bond is determined using the market interest rate
for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on
conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and
included in shareholders’ equity, net of income tax effects and is not subsequently re-measured. Issue costs are apportioned
between the liability and the equity components of the convertible bonds based on their carrying amounts at the date of issue.
The portion relating to the equity component is charged directly against equity. The issue costs apportioned to the liability are
amortised over the life of the bond. The issue costs apportioned to equity are not amortised.
Strategic report
Governance
Financial statements
Other information
275
Finance lease liabilities
– Finance lease liabilities arise for those investment properties held under a leasehold interest and
accounted for as investment property. The liability is initially calculated as the present value of the minimum lease payments,
reducing in subsequent years by the apportionment of payments to the lessor, as described above under the heading for lease
Interest rate derivatives
– The Group uses derivative financial instruments to manage the interest rate risk associated with the
financing of the Group’s business. No trading in financial instruments is undertaken.
At each reporting date, these interest rate derivatives are measured at fair value, being the estimated amount that the Group
would receive or pay to terminate the agreement at the balance sheet date, taking into account current interest rates and the
current credit rating of the counterparties. The gain or loss at each fair value remeasurement is recognised in the Group income
Trade payables
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the tax computations, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can
be utilised. In respect of the deferred tax on the revaluation surplus, this is calculated on the basis of the chargeable gains that would
crystallise on the sale of the investment portfolio as at the reporting date. The calculation takes account of available indexation on
the historical cost of the properties.
Deferred tax is calculated at the tax rates that are expected to apply in the period, based on Acts substantially enacted at the year
end, when the liability is settled or the asset is realised. Deferred tax is included in profit or loss for the period, except when it relates to
Transactions in the cash flow statement under operating, investing and financing activities have been prepared net of value added
Derwent London plc
Report and Accounts 2025
276
as at 31 December 2025
Registered No. 1819699
2025 |
2024 |
||
Note |
£m |
£m |
|
Non-current assets |
|||
Property, plant and equipment |
15.2 |
17.1 |
|
Investments |
vi |
2,621.4 |
2,578.3 |
Receivables: amounts falling due after more than one year |
vii |
2,093.3 |
1,920.4 |
Deferred tax |
x |
0.7 |
0.8 |
Pension scheme surplus |
v |
1.8 |
1.8 |
4,732.4 |
4,518.4 |
||
Current assets |
|||
Receivables: amounts falling due within one year |
vii |
29.8 |
33.4 |
Derivative financial instruments |
ix |
– |
0.6 |
Corporation tax asset |
0.6 |
0.3 |
|
Cash and cash equivalents |
84.5 |
20.7 |
|
114.9 |
55.0 |
||
Total assets |
4,847.3 |
4,573.4 |
|
Current liabilities |
|||
Borrowings |
ix |
55.0 |
174.1 |
Leasehold liabilities |
ix |
1.4 |
1.3 |
Payables: amounts falling due within one year |
viii |
1,756.1 |
1,615.5 |
Provisions |
0.1 |
0.2 |
|
1,812.6 |
1,791.1 |
||
Non-current liabilities |
|||
Borrowings |
ix |
1,255.0 |
1,091.3 |
Leasehold liabilities |
ix |
17.5 |
19.0 |
Provisions |
0.4 |
0.4 |
|
1,272.9 |
1,110.7 |
||
Total liabilities |
3,085.5 |
2,901.8 |
|
Total net assets |
1,761.8 |
1,671.6 |
|
Equity |
|||
Share capital |
xi |
5.6 |
5.6 |
Share premium |
196.6 |
196.6 |
|
Other reserves |
928.5 |
927.8 |
|
Retained earnings |
631.1 |
541.6 |
|
Total equity |
1,761.8 |
1,671.6 |
The financial statements were approved by the Board of Directors and authorised for issue on 25 February 2026.
Paul Williams
Damian Wisniewski
Chief Executive
Chief Financial Officer
The notes on pages 278 to 283 form part of these financial statements.
Strategic report
Governance
Financial statements
Other information
277
Share | Share | Other | Retained | Total | |
capital | premium | reserves | earnings | equity | |
£m | £m | £m | £m | £m | |
At 1 January 2025 | 5.6 | 196.6 | 927.8 | 541.6 | 1,671.6 |
Profit for the year | – | – | – | 179.2 | 179.2 |
Share-based payments | – | – | 0.7 | 1.2 | 1.9 |
Dividends paid | – | – | – | (90.9) | (90.9) |
At 31 December 2025 | 5.6 | 196.6 | 928.5 | 631.1 | 1,761.8 |
At 1 January 2024 | 5.6 | 196.6 | 926.2 | 304.1 | 1,432.5 |
Profit for the year | – | – | – | 326.3 | 326.3 |
Other comprehensive expense | – | – | – | (0.4) | (0.4) |
Share-based payments | – | – | 1.6 | 1.4 | 3.0 |
Dividends paid | – | – | – | (89.8) | (89.8) |
At 31 December 2024 | 5.6 | 196.6 | 927.8 | 541.6 | 1,671.6 |
Company statement of changes in equity
for the year ended 31 December 2025
Derwent London plc
Report and Accounts 2025
278
Notes to the company financial statements
for the year ended 31 December 2025
i Basis of preparation
Derwent London plc is a public limited company, limited by shares, incorporated, domiciled and registered in England in the United
Kingdom under the Companies Act. The address of the registered office is given on the back cover.
Consolidated financial statements are on pages 226 to 230.
The Company has prepared its financial statements in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure
Framework’ (FRS 101). The financial statements have been prepared on a going concern basis under the historical cost convention,
except for the revaluation of derivatives which are measured at fair value. The Company has applied the recognition, measurement,
and presentation requirements of UK-adopted International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
As permitted by FRS 101, the exemptions that have been applied in preparation of these financial statements are as follows:
A cash flow statement and related notes have not been presented in line with IAS 7 Statement of Cash Flows.
Disclosures in respect of new standards and interpretations that have been issued but which are not yet effective have not been
provided, in line with paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
Disclosures in respect of transactions with wholly-owned subsidiaries have not been made in line with IAS 24 Related Party
Disclosures.
Disclosures required by paragraphs 91 to 99 of IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial
Instruments: Disclosures have not been made.
Paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based payment (details of the number and weighted average exercise prices of
share options, and how the fair value of goods or services received was determined), have not been presented.
Disclosures under paragraphs 17 and 18A of IAS 24 Related Party Disclosures to disclose key management personnel compensation
have not been presented.
The requirements of paragraphs 10(f); 40A to 40D; and 134 to 136 of IAS 1 Presentation of Financial Statements are no longer
required.
Going concern
The Company balance sheet shows a net current liability position of £1,697.7m, primarily as a result of amounts owed to subsidiaries of
£1,733.4m being classified as current liabilities. The subsidiaries are all under common control in the Group, and the balances are not
due to external counterparties. Although they are repayable on demand, there is no intention or expectation for them to be called or
repaid within the next 12 months. The net current liability position also results from the £55m of debt facilities that reach maturity
within the next 12 months. As at 31 December 2025, the Company had access to £627m of available undrawn facilities and cash to
meet current liabilities as they fall due. Additionally, in January 2026, the Company’s £82.5m unsecured term loan, originally due to
mature in February 2027, was extended by one year to February 2028. This provides the Directors with a reasonable expectation that
the Company will be able to meet these current liabilities as they fall due.
Having due regard to these matters and after making appropriate enquiries, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing of
these financial statements and, therefore, the Directors continue to adopt the going concern basis in their preparation.
ii Accounting policies
The principal accounting policies are described in the Group’s note 40 and are consistent with those applied in the Company’s financial
statements for the year ended 31 December 2024, as amended to reflect the adoption of new standards, amendments and
interpretations which became effective in the year as shown below.
New standards adopted during the year
The following standards, amendments and interpretations were effective for the first time for the Company’s current accounting
period. They did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect
the current or future periods.
IAS 21 (amended) – Lack of Exchangeability.
Strategic report
Governance
Financial statements
Other information
279
iii Profit for the year attributable to members of Derwent London plc
Company retained earnings includes a profit of £179.2m (2024: £326.3m) for the year. The Company has taken advantage of the
exemption allowed under section 408 of the Companies Act 2006 and has not presented its own income statement in these financial
statements. The employees of the Company include the Directors and the Company Secretary. Full disclosure of the Directors’
remuneration can be found on pages 172 to 209.
iv Employees
Employee costs for the year include wages and salaries of £19.6m (2024: £20.5m), social security costs of £3.2m (2024: £3.1m), pension
costs of £2.8m (2024: £2.7m) and share-based payment expenses relating to equity-settled schemes of £2.0m (2024: £3.1m). Details of
the Executive Directors’ remuneration are disclosed in the Directors’ remuneration report on pages 172 to 209.
The monthly average number of employees in the Company during the year, excluding Directors, was 154 (2024: 146).
v Pension
The Company operates both a defined contribution scheme and a defined benefit scheme and details are set out in note 13 of the
consolidated financial statements.
vi Investments
Subsidiaries | |
£m | |
At 1 January 2024 | 2,189.8 |
Additions | 390.0 |
Repayment of capital | (2.0) |
Reversal of impairment 1 | 28.0 |
Impairment 1 | (27.5) |
At 31 December 2024 | 2,578.3 |
Additions | 10.1 |
Disposals | (0.1) |
Reversal of impairment | 40.8 |
Impairment | (7.7) |
At 31 December 2025 | 2,621.4 |
1
The numbers have been re-presented to be consistent with the current year presentation. This had no impact on the total for 31 December 2024.
At 31 December 2025, the carrying values of the investment in wholly owned subsidiaries were reviewed in accordance with IAS 36
Impairment of Assets on both a ‘value in use’ and ‘fair value less costs to sell’ basis. The Company’s accounting policy is to carry
investments in subsidiary undertakings at the lower of cost and recoverable amount and recognise any impairment, or reversal
thereof, in the income statement. As a result, the Company recognised a net impairment reversal of £33.1m (2024: net impairment
reversal of £0.5m). This was due to property revaluation surpluses charged to the income statement in a number of the property
investment subsidiaries held directly or indirectly by the Company. Investment properties are held by the property investment
subsidiaries with any surpluses or deficits on revaluation being reported in the income statement of those subsidiaries. The Group uses
the valuation carried out by external valuers as the fair value of its property portfolio. See note 3 of the consolidated financial
statements for further details.
Derwent London plc
Report and Accounts 2025
280
Notes to the company financial statements
continued
for the year ended 31 December 2025
vii Receivables
2025 | 2024 | |
£m | £m | |
Amounts falling due within one year: | ||
Other receivables | 1.0 | 3.7 |
Prepayments | 5.6 | 4.1 |
Accrued income | ||
Other | 23.2 | 25.6 |
29.8 | 33.4 |
2025 | 2024 | |
£m | £m | |
Amounts falling due after more than one year: | ||
Amounts owed by subsidiaries | 2,093.3 | 1,920.4 |
2,093.3 | 1,920.4 |
Amounts owed by subsidiaries in the Company are unsecured, have no fixed date of repayment and are repayable on demand,
however, there is no intention or expectation for them to be paid within the next 12 months. Interest is charged at a rate dependent
on the Group’s overall debt funding cost for the year. For the year ended 31 December 2025, interest was charged at 4.44% (2024:
3.90%). These balances have been considered as part of the full expected credit loss assessment under IFRS 9 and no impairments
were determined to be required (2024: £nil).
viii Payables
2025 | 2024 | |
£m | £m | |
Amounts falling due within one year: | ||
Amounts owed to subsidiaries | 1,733.4 | 1,593.3 |
Taxation and social security | 0.6 | 0.5 |
Trade payables | 0.7 | – |
Other payables | 0.3 | 0.9 |
Accruals | 21.0 | 20.7 |
Deferred income | 0.1 | 0.1 |
1,756.1 | 1,615.5 |
Amounts owed to subsidiaries in the Company are unsecured, have no fixed date of repayment and are repayable on demand, however,
there is no intention or expectation for them to be paid within the next 12 months. Interest is charged at a rate dependent on the
Group’s overall debt funding cost for the year. For the year ended 31 December 2025, interest was charged at 4.44% (2024: 3.90%).
Strategic report
Governance
Financial statements
Other information
281
ix Net debt
2025 | 2024 | |
£m | £m | |
5.25% unsecured bonds | 247.5 | – |
1.875% unsecured green bonds | 347.6 | 347.2 |
Unsecured private placement notes | 453.7 | 453.6 |
Unsecured bank loans | 261.2 | 290.5 |
Intercompany loan | – | 174.1 |
1,310.0 | 1,265.4 | |
Borrowings | 1,310.0 | 1,265.4 |
Leasehold liabilities – current | 1.4 | 1.3 |
Leasehold liabilities – non-current | 17.5 | 19.0 |
Derivative financial instruments – current | – | (0.6) |
Derivative financial instruments – non-current | – | – |
Gross debt | 1,328.9 | 1,285.1 |
Reconciliation to net debt: | ||
Gross debt | 1,328.9 | 1,285.1 |
Derivative financial instruments | – | 0.6 |
Cash at bank excluding restricted cash | (76.3) | (12.9) |
Net debt | 1,252.6 | 1,272.8 |
Reconciliation to borrowings:
| Adjustments | ||||||
Effect of | ||||||
Gross loan | Interest on | interest | Leasehold | Non-cash | ||
commitments | gross debt | rate swaps | liabilities | amortisation | Borrowings | |
£m | £m | £m | £m | £m | £m | |
At 31 December 2025 | ||||||
Maturing in: | ||||||
< 1 year | 103.4 | (46.3) | – | (2.1) | – | 55.0 |
1 to 2 years | 209.8 | (42.7) | – | (2.1) | (0.8) | 164.2 |
2 to 3 years | 167.6 | (35.5) | – | (2.1) | (0.5) | 129.5 |
3 to 4 years | 149.3 | (29.2) | – | (2.1) | (3.0) | 115.0 |
4 to 5 years | 31.1 | (29.0) | – | (2.1) | – | – |
> 5 years | 905.5 | (40.9) | – | (12.6) | (5.7) | 846.3 |
1,566.7 | (223.6) | – | (23.1) | (10.0) | 1,310.0 | |
At 31 December 2024 | ||||||
Maturing in: | ||||||
< 1 year | 215.6 | (39.3) | 0.8 | (2.1) | – | 175.0 |
1 to 2 years | 261.7 | (35.1) | – | (2.1) | (1.8) | 222.7 |
2 to 3 years | 149.7 | (24.1) | – | (2.1) | (1.9) | 121.6 |
3 to 4 years | 52.1 | (20.0) | – | (2.1) | (0.1) | 29.9 |
4 to 5 years | 136.2 | (16.1) | – | (2.1) | (0.3) | 117.7 |
> 5 years | 632.5 | (15.8) | – | (14.7) | (3.5) | 598.5 |
1,447.8 | (150.4) | 0.8 | (25.2) | (7.6) | 1,265.4 | |
Derwent London plc
Report and Accounts 2025
282
Notes to the company financial statements
continued
for the year ended 31 December 2025
x Deferred tax
Other | Total | |
£m | £m | |
At 1 January 2025 | 0.8 | 0.8 |
Charged to the income statement | (0.1) | (0.1) |
At 31 December 2025 | 0.7 | 0.7 |
At 1 January 2024 | 2.6 | 2.6 |
Charged to the income statement | (1.8) | (1.8) |
At 31 December 2024 | 0.8 | 0.8 |
Deferred tax assets have been recognised in respect of short term timing differences where the Directors believe it is probable that
these assets will be recovered. The deferred tax asset at the balance sheet date primarily relates to temporary differences arising from
the Company’s share based payment schemes and the IFRS 16 transitional adjustment recognised on adoption of the leasing standard.
xi Share capital
The movement in the number of 5p ordinary shares in issue is shown in the table below:
Number of shares in issue fully paid | 2025 | 2024 |
At 1 January and 31 December | 112,290,929 | 112,290,929 |
xii Post balance sheet events
In January 2026, the Company exercised its option to extend the £82.5m unsecured term loan, originally set to mature in February
2027, by one year to February 2028.
In February 2026, £55m of US private placement notes were repaid upon maturity.
xiii List of subsidiaries and joint ventures
A full list of subsidiaries and joint ventures as at 31 December 2025 is set out below.
Audit exemption taken for subsidiaries
Certain UK subsidiaries are exempt from the requirement of the Companies Act 2006 relating to the audit of individual accounts by
virtue of Section 479A of the Act. These subsidiaries are identified in the table below (superscript/footnote 2):
Company number | Ownership 3 | Principal activity | |
Subsidiaries | |||
Asta Commercial Limited 2 | 09644973 | 100% | Property investment |
BBR Property Limited 1 | 08486476 | 100% | Dormant |
Caledonian Properties Limited 2 | 00669924 | 100% | Property investment |
Caledonian Property Estates Limited 2 | 07412270 | 100% | Property investment |
Caledonian Property Investments Limited 2 | 00669923 | 100% | Property investment |
Carlton Construction & Development Company Limited | 00538216 | 100% | Dormant |
Central London Commercial Estates Limited 2 | 00656914 | 100% | Property investment |
Charlotte Apartments Limited 2 | 09642563 | 100% | Property investment |
80 Charlotte Street Limited 1, 2 | 10579271 | 100% | Property investment |
Derwent Asset Management Limited 1, 2 | 07325387 | 100% | Property management |
Derwent Central Cross Limited 1, 2 | 07320070 | 100% | Property investment |
Derwent Henry Wood Limited 1, 2 | 07412653 | 100% | Property investment |
Derwent London 50 Baker Street Limited | 13644777 | 100% | Property investment |
Derwent London Angel Building Limited 2 | 13247175 | 100% | Property investment |
Derwent London AD Limited 1 | 13227143 | 100% | Dormant |
Derwent London Asta Limited 2 | 09643005 | 100% | Property trading |
Derwent London Baker Street Limited | 00806862 | 100% | Property investment |
Derwent London BH Limited 1, 2 | 13136439 | 100% | Property investment |
Derwent London Blackfriars Limited 1, 2 | 13655681 | 100% | Property investment |
Derwent London Brixton Limited 1, 2 | 12405614 | 100% | Property investment |
Derwent London BSP Limited 2 | 13635308 | 100% | Property investment |
Strategic report
Governance
Financial statements
Other information
283
Derwent London Development Services Limited 1 |
09850541 |
100% |
Development services |
Derwent London Euston Road Limited 1, 2 |
13136412 |
100% |
Property investment |
Derwent London Farringdon Limited 1, 2 |
09310500 |
100% |
Property investment |
Derwent London Featherstone Limited 1, 2 |
11296132 |
100% |
Property investment |
Derwent London Gallery Limited 1, 2 |
12752908 |
100% |
Property investment |
Derwent London George Street Limited 1 |
13034088 |
100% |
Property trading |
Derwent London Green Energy Limited 1, 2 |
12824452 |
100% |
Energy production |
Derwent London Greencoat Limited 1, 2 |
16250221 |
100% |
Property investment |
Derwent London Holden House Limited 1 |
11325906 |
100% |
Property investment |
Derwent London Holford Works Limited 1, 2 |
13302967 |
100% |
Property investment |
Derwent London Horseferry Limited 1, 2 |
13136399 |
100% |
Property investment |
Derwent London KSW Limited 1, 2 |
08802313 |
100% |
Property investment |
Derwent London Member Services Limited 1, 2 |
14958936 |
100% |
Events & catering services |
Derwent London No.5 Limited 1, 2 |
13906854 |
100% |
Property investment |
Derwent London No.7 Limited 1, 2 |
16230405 |
100% |
Property investment |
Derwent London Network Limited 1 |
14009618 |
100% |
Property investment |
Derwent London Oliver's Yard Limited 1, 2 |
10775826 |
100% |
Property investment |
Derwent London Page Street (Nominee) Limited |
07540717 |
100% |
Dormant |
Derwent London Page Street Limited 1, 2 |
07540699 |
100% |
Property investment |
Derwent London Savile Row Limited 1, 2 |
12902975 |
100% |
Property investment |
Derwent London White Chapel Limited 1, 2 |
13136446 |
100% |
Property investment |
Derwent London White Collar Limited 1, 2 |
13136415 |
100% |
Property investment |
Derwent London Whitfield Street Limited 1, 2 |
10775868 |
100% |
Property investment |
Derwent Valley Central Limited 1 |
00205226 |
100% |
Property investment |
Derwent Valley Employee Trust Limited 1, 2 |
04177132 |
100% |
Employee trust |
Derwent Valley Finance Limited 2 |
05622597 |
100% |
Investment holding |
Derwent Valley Limited |
00445037 |
100% |
Holding company |
Derwent Valley London Limited 1 |
00229333 |
100% |
Property investment |
Derwent Valley Property Developments Limited 1 |
02148266 |
100% |
Property investment |
Derwent Valley Property Investments Limited 1, 2 |
01885847 |
100% |
Property investment |
Derwent Valley Property Trading Limited 1, 2 |
03087749 |
100% |
Property trading |
Derwent Valley Railway Company 1 |
100% |
Dormant |
|
Derwent Valley West End Limited 1, 2 |
02035801 |
100% |
Property investment |
Kensington Commercial Property Investments Limited 2 |
00590078 |
100% |
Property investment |
LMS (City Road) Limited 2 |
05642456 |
100% |
Property investment |
LMS Finance Limited 2 |
05622669 |
100% |
Investment holding |
LMS Offices Limited 2 |
05308784 |
100% |
Property investment |
London Merchant Securities Limited 1, 2 |
00007064 |
100% |
Holding company |
Old Street Quarter Limited 1, 2 |
16827608 |
100% |
Property investment |
The New River Company Limited 2 |
00085094 |
100% |
Property investment |
Urbanfirst Limited 2 |
02213216 |
100% |
Investment holding |
West London & Suburban Property Investments Limited 2 |
00538148 |
100% |
Property investment |
Joint ventures |
|||
Dorrington Derwent Holdings Limited |
02355611 |
50% |
Holding company |
Dorrington Derwent Investments Limited |
02359387 |
50% |
Investment company |
Primister Limited4 |
02068292 |
50% |
Property investment |
1
Indicates subsidiary undertakings held directly.
2
Exempt from the requirement of the Companies Act 2006 relating to the audit of individual accounts by virtue of Section 479A of the Act.
3
All holdings are of ordinary shares.
4
Unaudited.
The Company controls 50% of the voting rights of its joint ventures, which are accounted for and disclosed in accordance with IFRS 11
Joint Arrangements.
All of the entities above are incorporated and domiciled in England and Wales. In addition, all the entities are registered at 25 Savile
Row, London, W1S 2ER, with the exception of:
Dorrington Derwent Holdings Limited and Dorrington Derwent Investments Limited, which are registered at 16 Hans Road,
London, SW3 1RT;
Derwent London plc
Report and Accounts 2025
284
2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Income statement | ||||||||||
Gross property income | 218.6 | 217.6 | 212.9 | 208.4 | 200.9 | 205.2 | 192.7 | 196.0 | 172.2 | 156.0 |
Net property income | ||||||||||
and other income | 199.6 | 198.3 | 190.5 | 194.6 | 187.2 | 183.5 | 182.6 | 185.9 | 164.8 | 149.2 |
(Loss)/profit on disposal of | ||||||||||
properties and investments | (2.2) | 1.9 | 1.2 | 25.6 | 10.4 | 1.7 | 13.8 | 5.2 | 50.3 | 7.5 |
Profit/(loss) before tax | 161.5 | 116.0 | (475.9) | (279.5) | 252.5 | (83.0) | 280.6 | 221.6 | 314.8 | 54.5 |
Earnings and dividend per share | ||||||||||
EPRA earnings | 110.4 | 119.5 | 114.5 | 119.7 | 121.7 | 109.6 | 115.1 | 126.1 | 105.0 | 85.7 |
EPRA earnings per share (p) | 98.36 | 106.45 | 101.97 | 106.62 | 108.53 | 97.93 | 103.09 | 113.07 | 94.23 | 76.99 |
Dividend paid (p) | 81.00 | 80.00 | 79.00 | 77.50 | 75.45 | 73.45 | 67.75 | 136.50 | 107.83 | 44.66 |
Interim/final dividend for the year (p) | 81.50 | 80.50 | 79.50 | 78.50 | 76.50 | 74.45 | 72.45 | 65.85 | 59.73 | 52.36 |
Special dividend paid (p) | – | – | – | – | – | – | – | – | 75.00 | 52.00 |
Net asset value | ||||||||||
Net assets | 3,615.3 | 3,539.8 | 3,508.8 | 4,075.5 | 4,441.8 | 4,315.1 | 4,476.9 | 4,263.4 | 4,193.2 | 3,999.4 |
Net asset value per share (p) | ||||||||||
– undiluted | 3,221 | 3,153 | 3,125 | 3,629 | 3,959 | 3,808 | 3,956 | 3,767 | 3,703 | 3,530 |
EPRA NTA per share (p) – diluted | 3,225 | 3,149 | 3,129 | 3,632 | 3,959 | 3,812 | 3,957 | 3,775 | 3,714 | 3,550 |
EPRA NDV per share (p) – diluted | 3,302 | 3,261 | 3,243 | 3,768 | 3,884 | 3,682 | 3,847 | 3,696 | 3,617 | 3,450 |
EPRA NRV per share (p) – diluted | 3,535 | 3,455 | 3,423 | 3,956 | 4,301 | 4,138 | 4,290 | 4,092 | 4,011 | 3,852 |
Total accounting return (%) | 5.0 | 3.2 | (11.7) | (6.3) | 5.8 | (1.8) | 6.6 | 5.3 | 7.7 | 1.7 |
Property portfolio | ||||||||||
Property portfolio at fair value 1 | 5,093.9 | 5,041.1 | 4,844.7 | 5,321.8 | 5,646.3 | 5,355.5 | 5,475.2 | 5,190.7 | 4,850.3 | 4,942.7 |
Revaluation surplus/(deficit) | 56.7 | 0.2 | (585.4) | (421.4) | 134.8 | (194.3) | 154.6 | 84.1 | 149.7 | (42.6) |
Cash flow statement | ||||||||||
Net cash from operating activities | 228.0 | 64.6 | 97.0 | 111.4 | 125.7 | 115.9 | 97.1 | 115.2 | 83.5 | 77.7 |
Net cash (used in)/from | ||||||||||
investing activities | (96.7) | (101.9) | (98.0) | (51.7) | (182.6) | (92.5) | (44.3) | (209.1) | 284.0 | (9.5) |
Net cash (used in)/from | ||||||||||
financing activities | (71.0) | 35.7 | (2.6) | (88.6) | 74.7 | (27.2) | (16.6) | 25.2 | (298.2) | (57.0) |
Gearing and debt | ||||||||||
Net debt | 1,450.4 | 1,482.7 | 1,356.8 | 1,257.2 | 1,251.5 | 1,049.1 | 981.6 | 956.9 | 657.9 | 904.8 |
NAV gearing (%) | 40.1 | 41.9 | 38.7 | 30.8 | 28.2 | 24.3 | 21.9 | 22.4 | 15.7 | 22.6 |
Loan-to-value ratio (%)2 | 29.4 | 29.9 | 27.9 | 23.9 | 22.3 | 18.4 | 16.9 | 17.2 | 13.2 | 17.7 |
Net interest cover ratio (%) | 306 | 387 | 414 | 423 | 464 | 446 | 462 | 491 | 454 | 370 |
1
Excludes share of joint ventures.
2
Presented on an EPRA basis since 2021.
A list of definitions is provided on pages 290 to 293.
Ten-year summary
(unaudited)
285
EPRA Performance Measures
EPRA measure
Definition
2025
2024
EPRA Earnings
Earnings from operational activities
£110.4m
£119.5m
EPRA undiluted earnings per share
EPRA earnings divided by the weighted average number
of ordinary shares in issue during the financial year
98.36p
106.45p
EPRA Net Tangible Assets (NTA)
Assumes that entities buy and sell assets, thereby
crystallising certain levels of unavoidable deferred tax
£3,619.8m
£3,545.0m
EPRA diluted NTA per share
EPRA NTA divided by the number of ordinary shares in issue
at the financial year end adjusted to include the effects of
potential dilutive shares issuable under the Group’s share
option schemes and the convertible bonds
3,225p
3,149p
EPRA Net Disposal Value (NDV)
Represent the shareholders’ value under a disposal scenario,
where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability,
net of any resulting tax
£3,706.2m
£3,671.4m
EPRA diluted NDV per share
EPRA NDV divided by the number of ordinary shares in issue
at the financial year end adjusted to include the effects of
potential dilutive shares issuable under the Group’s share
option schemes and the convertible bonds
3,302p
3,261p
EPRA Net Reinstatement Value
(NRV)
NAV adjusted to reflect the value required to rebuild the
entity and assuming that entities never sell assets. Assets
and liabilities, such as fair value movements on financial
derivatives are not expected to crystallise in normal
circumstances and deferred taxes on property valuation
surpluses are excluded
£3,968.4m
£3,889.5m
EPRA diluted NRV per share
EPRA NRV divided by the number of ordinary shares in issue
at the financial year end adjusted to include the effects of
potential dilutive shares issuable under the Group’s share
option schemes and the convertible bonds
3,535p
3,455p
EPRA cost ratio
(including direct vacancy costs)
Administrative & operating costs (including costs of direct
vacancy) divided by gross rental income
27.3%
27.0%
EPRA net initial yield
Annualised rental income based on the cash rents passing at
the balance sheet date, less non-recoverable property
operating expenses, divided by the market value of the EPRA
property portfolio, increased by estimated purchasers’ costs
4.0%
4.3%
EPRA ‘topped-up’ net initial yield
This measure incorporates an adjustment to the EPRA NIY in
respect of the expiration of rent free periods (or other
unexpired lease incentives such as discounted rent periods
and stepped rents)
5.1%
5.2%
EPRA vacancy rate
Estimated rental value (ERV) of immediately available space
divided by the ERV of the EPRA portfolio
4.1%
3.1%
EPRA loan-to-value ratio
Debt divided by the property value. Debt is equal to drawn
facilities less cash, adjusted with equity characteristics,
adding back the equity portion of hybrid debt instruments
and including net payables if applicable. Property value is
equal to the fair value of the property portfolio including net
receivables if applicable
29.4%
29.9%
EPRA summary
(unaudited)
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
286
EPRA Sustainability Performance Measures
Environmental Sustainability Performance Measures
EPRA measure
Definition
2025
2024
Landlord Grid electricity
consumption
Electricity use across our managed portfolio (landlord/
common areas) – annual kWh
12,923,059
12,759,561
1
Onsite renewable electricity
consumption
Electricity use across our managed portfolio (onsite
renewables) – annual kWh
99,602
86,136
DL Occupied Grid electricity
consumption
Electricity use across our managed portfolio (landlord
occupied areas) – annual kWh
297,756
304,790
1
Tenant Grid electricity consumption
Electricity use across our total managed portfolio (tenant
occupied areas) – annual kWh
25,324,570
25,713,301
Total electricity consumption
Electricity use across our total managed portfolio
38,644,986
38,863,483
Like-for-like landlord grid electricity
consumption
Energy use across our like-for-like portfolio (landlord/common
areas) – annual kWh
12,624,571
12,503,107
1
Like for Like Onsite renewable
electricity consumption
Electricity use across our like for like portfolio (onsite
renewables) – annual kWh
99,602
86,136
Like for Like DL Occupied grid
electricity consumption
Electricity use across our like for like portfolio (landlord
occupied areas) – annual kWh
297,756
304,790
1
Like for Like Tenant grid electricity
consumption
Electricity use across our like for like portfolio (tenant
occupied areas) – annual kWh
24,309,067
24,792,896
1
Total like for like electricity
consumption
Electricity use across our like for like portfolio
36,933,638
37,296,004
1
Total fuel consumption
Fuel use (gas, oil, biomass) across our managed portfolio
(landlord/common areas) – annual kWh
10,099,638
12,981,252
Like-for-like total fuel consumption
Fuel use (gas, oil, biomass) use across our like-for-like
portfolio (landlord/common areas) – annual kWh
9,900,093
12,618,394
1
Building energy intensity
Energy use across our total managed portfolio (landlord/
common areas) – kWh per m
2
60
66
Building energy intensity
Energy use across our total managed portfolio (landlord &
tenants) – kWh per m
2
125
137
Total direct greenhouse gas (GHG)
emissions
Total managed portfolio emissions (landlord influenced
portfolio emissions); a total of gas Scope 1 emissions – annual
metric tonnes CO
2
e
2,126
2,736
Total indirect greenhouse gas (GHG)
emissions
Total managed portfolio emissions (landlord influenced
portfolio emissions); Scope 2 energy-use – annual metric
tonnes CO
2
e
2,340
2,705
Like-for-like total direct greenhouse
gas (GHG) emissions
Like-for-like emissions (landlord influenced portfolio
emissions, building related only); Scope 1 energy-use – annual
metric tonnes CO
2
e
2,089
2,670
1
Like-for-like total indirect
greenhouse gas (GHG) emissions
Like-for-like emissions (landlord influenced portfolio
emissions, building related only); Scope 2 energy-use – annual
metric tonnes CO
2
e
2,217
2,571
1
Greenhouse gas (GHG) intensity
from building energy consumption
Intensity (Scopes 1 & 2) per m
2
– kgCO
2
e/m
2
/year
11
14
1
Greenhouse gas (GHG) intensity
from building energy consumption
Intensity (Scopes 1 & 2) per m
2
/£m fair market value
877
1,079
1
Greenhouse gas (GHG) intensity
from building energy consumption
Intensity (Scopes 1 & 2) per m
2
/£m turnover
23
25
Total water consumption (water
withdrawn from municipal supplies)
Water use across our total managed portfolio (excluding
retail consumption) – annual m
3
188,649
193,029
1
Like-for-like total water consumption
(water withdrawn from municipal
supplies)
Water use across our like-for-like portfolio (excluding retail
consumption) – annual m
3
181,946
180,037
1
Building water intensity
Water use across our total managed portfolio (excluding
retail consumption) – m
3
/m
2
/year
0.47
0.47
Total weight of waste by disposal
route
Waste generated across our total managed portfolio –
annual metric tonnes and proportion by disposal route
2,481
2,463
Like-for-like total weight of waste by
disposal route
Waste generated across our like-for-like portfolio – annual
metric tonnes and proportion by disposal route
2,367
2,4061
EPRA summary
continued
(unaudited)
287
Social Performance Measures
Diversity-Emp
Employee gender diversity
(% of employees)
Percentage of male and female employees in the
organisation’s governance bodies (committee or boards
responsible for the strategic guidance of the organisation)
2025 Report & Accounts page 171
Diversity-Pay
Gender pay ratio
Ratio of the basic salary and/or remuneration of men to
women. As we have less than 250 employees we are not
obliged by the Equality Act 2010 (Gender Pay Gap
Information) Regulations 2017 to disclose our gender pay
gap information
As we have fewer than 250 employees,
we are not obliged by The Equality Act
2010 (Gender Pay Gap Information)
Regulations 2017 to disclose our gender
pay information
Emp-Turnover
Employee turnover and
retention (total number and
rate)
Total number and rate of new employee hires and
employee turnover during the reporting period
2025 Report & Accounts page 78
H&S-Emp
Employee H&S (injury rate,
absentee rate and no. of
work-related fatalities)
Occupational health and safety performance with
relation to direct employees
2025 Report & Accounts page 81
H&S-Asset
Asset H&S assessments (%
of assets)
Proportion of assets controlled for which health and
safety impacts have been reviewed or assessed for
compliance or improvement
2025 Report & Accounts pages 80 to 81
H&S-Comp
Asset H&S compliance (no.
of incidents)
Any incidents of non-compliance with regulations and/or
voluntary standards concerning the health and safety
impacts of assets assessed during the reporting period
2025 Report & Accounts page 81
Comty-Eng
Community engagement,
impact assessments and
development programmes
Percentage of assets under operational control that have
implemented local community engagement, impact
assessments and/or development programmes
2025 Report & Accounts pages 76 to 77
Governance Performance Measures
Gov-Board
Composition of the highest
governance body (total no.)
Number of executive board members, number of
independent/non-executive board members, average
tenure of the governance body and number of
independent/non-executive board members with
competencies relating to environmental and social topics
2025 Report & Accounts pages 118, 138
to 141
Gov-Selec
Process for nominating and
selecting the highest
governance body
Nomination and selection process for the highest
governance body and its members, and the criteria used
to guide the nomination and selection process
2025 Report & Accounts pages 138 to
141
Gov-Col
Process for managing
conflicts of interest
Process for the highest governance body to ensure
conflicts of interest are avoided and managed
2025 Report & Accounts pages 124 and
134
1
2024 figures have been restated. Please refer to the Environment Basis of Reporting in the 2025 Responsibility Report for further details.
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
288
Value
banding
£m
Offices (O),
Retail/
restaurant (R),
Residential (Re),
Industrial (I),
Leisure (L)
Freehold (F),
Leasehold (L)
BREEAM
Rating
Approximate
net area
sq ft
West End (75%)
80 Charlotte Street W1
300+ O/R/Re
F
Excellent
336,500
Angel Building, 407 St. John Street EC1
200–300 O/R
F
Excellent
268,300
1-2 Stephen Street & Tottenham Court Walk W1
200–300
O/R/L
F
Very Good
267,100
Brunel Building, 2 Canalside Walk W2
300+
O/R
F
Excellent, Outstanding
243,400
25 Baker Street W1
300+
O/R/Re
L
Outstanding, Excellent
229,000
1 Soho Place W1
300+
O/R
L
Very Good, Outstanding
225,900
250 Euston Road NW1
100–200 O
F
165,900
Horseferry House, Horseferry Road SW1
100–200 O
F
162,700
Network, 10 Howland Street W1
200–300 O/R
F
Outstanding*
141,200
Greencoat and Gordon House, Francis Street SW1
50–100 O
F
Excellent**
138,300
Holden House, 54-68 Oxford Street W1
50–100 O/R
F
Outstanding**
133,500
1 Page Street SW1
50–100 O
F
Excellent
127,800
50 Baker Street W1
100–200 O/R
L
Outstanding**
122,000
90 Whitfield Street W1
100–200 O/R/Re
F
103,500
Henry Wood House, 3-7 Langham Place W1
50–100 O/R/L
L
79,800
Middlesex House, 34-42 Cleveland Street W1
50–100 O
F
65,400
Blue Star House, 234-244 Stockwell Road SW9
25–50 O/R
F
53,400
Charlotte Building, 17 Gresse Street W1
25–50 O
L
47,200
88-94 Tottenham Court Road W1
25–50 O/R
F
45,900
3-10 Rathbone Place W1
25–50 O/R/Re/L
L/F
45,400
80-85 Tottenham Court Road W1
25–50 O/R
F
44,500
25 Savile Row W1
100–200
O/R
F
Very Good
43,000
Holford Works, Cruikshank Street WC1
0–25 O/I
F
42,500
60 Whitfield Street W1
50–100 O
F
37,300
6-8 Greencoat Place SW1
25–50 O
F
32,400
43 and 45-51 Whitfield Street W1
25–50 O
F
29,000
171-174 Tottenham Court Road W1
0–25 O/R
F
15,800
401 St. John Street EC1
0–25 O
F
12,300
1-5 Maple Place W1
0–25 O
F
11,400
76-78 Charlotte Street W1
0–25 O
F
11,300
19-23 Fitzroy Street W1
0–25 O
F
8,100
50 Oxford Street W1
1
0–25 O/R
F
6,100
Principal properties
(unaudited)
289
Value
banding
£m
Offices (O),
Retail/
restaurant (R),
Residential (Re),
Industrial (I),
Leisure (L)
Freehold (F),
Leasehold (L)
BREEAM
Rating
Approximate
net area
sq ft
City: Borders (23%)
White Collar Factory, Old Street Yard EC1
200–300
O/R/Re
F
Outstanding, Excellent,
Very Good
294,400
The White Chapel Building E1
100–200 O/L
F
271,300
Tea Building, 56 Shoreditch High Street E1
100–200 O/R/L
F
269,500
1 Oliver’s Yard EC1
100–200 O/R
F
182,300
20 Farringdon Road EC1
100–200 O/R/L
L
167,000
The Featherstone Building, 66 City Road EC1
100–200 O/R
F
Outstanding
124,000
88 Rosebery Avenue EC1
50–100 O
F
98,500
Morelands, 5-27 Old Street EC1
50–100 O/R
L
87,400
230 Blackfriars Road SE1
25–50 O
L
59,800
Provincial (2%)
Strathkelvin Retail Park, Bishopbriggs, Glasgow
50–100 R/L
F
351,800
Land, Bishopbriggs, Glasgow
25–50
–
F
5,500 acres
1
Includes 36-38 and 42-44 Hanway Street W1.
*
On-track for Post Completion target.
**
Design stage target
( )
Percentages weighted by valuation.
Strategic report
Governance
Financial statements
Other information
Derwent London plc
Report and Accounts 2025
290
Estimated rental value (ERV)
This is the external valuers’ opinion as to the open market rent
which, on the date of valuation, could reasonably be expected to
be obtained on a new letting or rent review of a property.
European Public Real Estate Association (EPRA)
A not-for-profit association with a membership of Europe’s
leading property companies, investors and consultants which
strives to establish best practices in accounting, reporting and
corporate governance and to provide high-quality information to
investors. EPRA’s Best Practices Recommendations includes
guidelines for the calculation of the following performance
measures which the Group has adopted.
EPRA earnings per share
Earnings from operational activities.
EPRA Loan-To-Value (LTV)
Debt divided by the property value. Debt is equal to drawn
facilities less cash, adjusted with equity characteristics, adding
back the equity portion of hybrid debt instruments and including
net payables if applicable. Property value is equal to the fair
value of the property portfolio including net receivables if
applicable.
EPRA Net Reinstatement Value (NRV) per share
NAV adjusted to reflect the value required to rebuild the entity
and assuming that entities never sell assets. Assets and liabilities,
such as fair value movements on financial derivatives are not
expected to crystallise in normal circumstances and deferred
taxes on property valuation surpluses are excluded.
EPRA Net Tangible Assets (NTA) per share
Assumes that entities buy and sell assets, thereby crystallising
certain levels of unavoidable deferred tax.
EPRA Net Disposal Value (NDV) per share
Represent the shareholders’ value under a disposal scenario,
where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability, net
of any resulting tax.
EPRA capital expenditure
The total expenditure incurred on the acquisition, enhancement,
and development of investment properties. This can include
amounts spent on any investment properties under construction
or related development projects, as well as the amounts spent
on the completed (operational) investment property portfolio.
Capitalised finance costs included in the financial statements are
also presented within this total. The costs are presented on both
an accrual and a cash basis, for both the Group and the
proportionate share of joint ventures.
EPRA Cost Ratio (including direct vacancy costs)
EPRA costs as a percentage of gross rental income less ground
rent (including share of joint venture gross rental income less
ground rent). EPRA costs include administrative expenses, other
property costs, net service charge costs and the share of joint
ventures’ overheads and operating expenses (net of any service
charge costs), adjusted for service charge costs recovered
through rents and management fees.
Better Buildings Partnership (BBP)
The BBP is a collaboration of the UK’s leading commercial
property owners who are working together to improve the
sustainability of existing commercial building stock.
Building Research Establishment Environmental
Assessment Method (BREEAM)
An environmental impact assessment method for non-domestic
buildings. Performance is measured across a series of ratings –
Good, Very Good, Excellent and Outstanding.
Capital return
The annual valuation movement arising on the Group’s portfolio
expressed as a percentage return on the valuation at the
beginning of the year adjusted for acquisitions and capital
expenditure.
Carbon emissions Scopes 1, 2 and 3
Scope 1 – direct emissions;
Scope 2 – indirect emissions; and
Scope 3 – other indirect emissions.
CDP
The CDP is an organisation which works with shareholders and
listed companies to facilitate the disclosure and reporting of
climate change data and information.
Company Voluntary Arrangement (CVA)
An insolvency procedure allowing a company with debt problems
or that is insolvent to reach a voluntary agreement with its
creditors to repay its debt over a fixed period.
Department for Environment, Food and Rural Affairs
(DEFRA)
The government department responsible for environmental
protection, food production and standards, agriculture, fisheries
and rural communities in the United Kingdom.
Diluted figures
Reported results adjusted to include the effects of potential
dilutive shares issuable under the Group’s share option schemes
and the convertible bonds.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
Earnings/earnings per share (EPS)
Earnings represent the profit or loss for the year attributable to
equity shareholders and are divided by the weighted average
number of ordinary shares in issue during the financial year to
arrive at earnings per share.
Energy Performance Certificate (EPC)
An EPC is an asset rating detailing how energy efficient a building
is, rated by carbon dioxide emission on a scale of A-G, where an
A rating is the most energy efficient. They are legally required for
any building that is to be put on the market for sale or rent.
List of definitions
(unaudited)
291
EPRA Cost Ratio (excluding direct vacancy costs)
Calculated as above, but with an adjustment to exclude direct
vacancy costs.
EPRA Net Initial Yield (NIY)
Annualised rental income based on the cash rents passing at the
balance sheet date, less non-recoverable property operating
expenses, divided by the market value of the EPRA property
portfolio, increased by estimated purchasers’ costs.
EPRA ‘topped-up’ Net Initial Yield
This measure incorporates an adjustment to the EPRA NIY in
respect of the expiration of rent-free periods (or other unexpired
lease incentives such as discounted rent periods and stepped
rents).
EPRA vacancy rate
Estimated rental value (ERV) of immediately available space
divided by the ERV of the EPRA portfolio.
In addition, the Group has adopted the following
recommendation for investment property reporting.
Like-for-like rental income growth
The growth in rental income on properties owned throughout the
current and previous year under review. This growth rate includes
revenue recognition and lease accounting adjustments but
excludes properties held for development in either year and
properties acquired or disposed of in either year.
Fair value adjustment
An accounting adjustment to change the book value of an asset
or liability to its market value.
Global Real Estate Sustainability Benchmark (GRESB)
The Global Real Estate Sustainability Benchmark is an initiative
set up to assess the environmental and social performance of
public and private real estate investments and allow investors to
understand their performance.
Ground rent
The rent payable by the Group for its leasehold properties. Under
IFRS, a liability is recognised using the discounted payments due.
Fixed lease payments made are allocated between the interest
payable and the reduction in the outstanding liability. Any
variable payments are recognised in the income statement in the
period to which it relates.
Headroom
This is the amount left to draw under the Group’s loan facilities
(i.e. the total loan facilities less amounts already drawn).
Interest rate swap
A financial instrument where two parties agree to exchange an
interest rate obligation for a predetermined amount of time.
These are generally used by the Group to convert floating rate
debt to fixed rates.
ISS-Oekom
ISS-Oekom is an ESG rating service that provides corporate and
country ESG research and ratings that enables its clients to
identify material social and environmental risks and
opportunities.
Key Performance Indicators (KPIs)
Activities and behaviours, aligned to both business objectives
and individual goals, against which the performance of the
Group is annually assessed. Performance measured against them
is referenced in the Annual Report.
Leadership in Energy and Environmental Design (LEED)
LEED is a US-based environmental impact assessment method
for buildings. Performance is measured across a series of ratings
– Certified, Silver, Gold and Platinum.
Lease incentives
Any incentive offered to occupiers to enter into a lease. Typically
the incentive will be an initial rent-free or half rent period,
stepped rents, or a cash contribution to fit-out or similar costs.
Loan-to-value ratio (LTV)
Drawn debt net of cash divided by the fair value of the property
portfolio. Drawn debt is equal to drawn facilities less unrestricted
cash and the unamortised equity element of the convertible
bonds.
Mark-to-market
The difference between the book value of an asset or liability and
its market value.
MSCI Inc. (MSCI)
MSCI Inc. is a company that produces independent benchmarks
of property returns. The Group measures its performance against
both the Central London Offices Index and the UK All Property
Index.
National Australian Built Environment Rating System
(NABERS)
This is a building performance rating system which provides an
energy performance benchmark using a simple star rating
system on a 1 to 6 scale. This helps property owners understand
and communicate a building’s performance versus other similar
buildings to occupiers. Ratings are validated on an annual basis.
NAV gearing
Net debt divided by net assets.
Net assets per share or net asset value (NAV)
Equity shareholders’ funds divided by the number of ordinary
shares in issue at the balance sheet date.
Net debt
Borrowings plus bank overdraft less unrestricted cash and cash
equivalents.
Net debt to EBITDA
Net debt to EBITDA is the ratio of gross debt less unrestricted
cash to earnings before interest, tax, depreciation and
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Derwent London plc
Report and Accounts 2025
292
List of definitions
continued
(unaudited)
amortisation (EBITDA).
Net effective rent
Net effective rent is the actual rental income a landlord receives
after adjusting for all concessions, incentives, and rental uplifts
over the term of the lease, spread over the full lease term. It
reflects the true economic value of a lease.
Net interest cover ratio
Net property income, excluding all non-core items divided by
interest payable on borrowings and non-utilisation fees.
Property income distribution (PID)
Dividends from profits of the Group’s tax-exempt property rental
business under the REIT regulations.
Non-PID
Dividends from profits of the Group’s taxable residual business.
Real Estate Investment Trust (REIT)
The UK Real Estate Investment Trust (‘REIT’) regime was
launched on 1 January 2007. On 1 July 2007, Derwent London plc
elected to convert to REIT status.
The REIT legislation was introduced to provide a structure which
closely mirrors the tax outcomes of direct ownership in property
and removes tax inequalities between different real estate
investors. It provides a liquid and publicly available vehicle which
opens the property market to a wide range of investors.
A REIT is exempt from corporation tax on qualifying income and
gains of its property rental business providing various conditions
are met. It remains subject to corporation tax on non-exempt
income and gains e.g. interest income, trading activity and
development fees.
REITs must distribute at least 90% of the Group’s income profits
from its tax exempt property rental business, by way of dividend,
known as a property income distribution (PID). These
distributions can be subject to withholding tax at 20%.
If the Group distributes profits from the non-tax exempt
business, the distribution will be taxed as an ordinary dividend in
the hands of the investors (non-PID).
Rent reviews
Rent reviews take place at intervals agreed in the lease (typically
every five years) and their purpose is usually to adjust the rent to
the current market level at the review date. For upwards only
rent reviews, the rent will either remain at the same level or
increase (if market rents are higher) at the review date.
Renewable Energy Guarantees of Origin (REGO)
The REGO scheme administered by Ofgem provides transparency
to consumers about the proportion of electricity that suppliers
source/provide from renewable generation.
Reporting of Injuries, Diseases and Dangerous
Occurrences Regulations (RIDDORs)
The regulations place a legal duty on employers to report
work-related deaths, major injuries or over-three-day injuries,
work related diseases and dangerous occurrences (near miss
accidents) to the Health and Safety Executive.
Reversion
The reversion is the amount by which ERV is higher than the rent
roll of a property or portfolio. The reversion is derived from
contractual rental increases, rent reviews, lease renewals and the
letting of space that is vacant and available to occupy or under
development or refurbishment.
Science Based Target initiative (SBTi)
The Science Based Targets initiative (SBTi) is a collaboration
between CDP, the United Nations Global Compact, World
Resources Institute (WRI) and the World Wide Fund for Nature
(WWF). The SBTi defines and promotes best practice in science-
based target setting and independently assesses and approves
companies’ targets. Science-based targets provide companies
with a clearly defined pathway to future-proof growth by
specifying how much and how quickly they need to reduce their
greenhouse gas emissions.
Scrip dividend
Derwent London plc sometimes offers its shareholders the
opportunity to receive dividends in the form of shares instead of
cash. This is known as a scrip dividend.
Streamlined energy and carbon reporting (SECR)
The SECR regulations were introduced in April 2019 and require
companies incorporated in the UK to undertake enhanced
disclosures of their energy and carbon emissions in their financial
reporting.
Task Force on Climate-related Financial Disclosures
(TCFD)
Set up by the Financial Stability Board (FSB) in response to the
G20 Finance Ministers and Central Bank Governors request for
greater levels of decision-useful, climate-related information; the
TCFD was asked to develop climate-related disclosures that could
promote more informed investment, credit (or lending), and
insurance underwriting decisions. In turn, this would enable
stakeholders to understand better the concentrations of
carbon-related assets in the financial sector and the financial
system’s exposures to climate-related risks.
‘Topped-up’ rent
Annualised rents generated by the portfolio plus rent contracted
from expiry of rent-free periods and uplifts agreed at the balance
sheet date.
293
Total property return (TPR)
Total property return is a performance measure calculated by the
MSCI and defined in the MSCI Global Methodology Standards for
Real Estate Investment as “the percentage value change plus net
income accrual, relative to the capital employed.”
Total accounting return (TAR)
The movement in EPRA Net Tangible Assets per share on a
diluted basis between the beginning and the end of each
financial year plus the dividend per share paid during the year
expressed as a percentage of the EPRA Net Tangible Assets per
share on a diluted basis at the beginning of the year.
Total shareholder return (TSR)
The growth in the ordinary share price as quoted on the London
Stock Exchange plus dividends per share received for the year,
expressed as a percentage of the share price at the beginning of
the year.
Transmission and distribution (T&D)
The emissions associated with the transmission and distribution
losses in the grid from the transportation of electricity from its
generation source.
Underlying portfolio
Properties that have been held for the whole of the year (i.e.
excluding any acquisitions or disposals made during the year).
Underlying valuation increase/decrease
The valuation increase/decrease on the underlying portfolio.
Yields
Net initial yield
Annualised rental income based on the cash rents passing at the
balance sheet date, less non-recoverable property operating
expenses, divided by the market value of the property, increased
by estimated purchasers’ costs.
Reversionary yield
The anticipated yield to which the net initial yield will rise once
the rent reaches the estimated rental values.
True equivalent yield
The constant capitalisation rate which, if applied to all cash flows
from the portfolio, including current rent, reversions to valuers’
estimated rental value and such items as voids and expenditures,
equates to the valuation having taken into account notional
purchasers’ costs. Rent is assumed to be received quarterly in
advance.
Yield shift
A movement in the yield of a property asset, or like-for-like
portfolio, over a given year. Yield compression is a commonly-
used term for a reduction in yields.
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Other information
Derwent London plc
Report and Accounts 2025
294
Shareholder information
Shareholder enquiries
Our Registrar
Enquiries relating to shareholders, such as queries concerning
notification of change of address, dividend payments and lost
share certificates, should be made to the Company’s registrar,
Equiniti (EQ).
The Company has a share account, management and dealing
facility for all shareholders via Equiniti Limited. This offers
shareholders secure access to their account details held on the
share register, to amend address information and payment
instructions directly, as well as providing a simple and convenient
way of buying and selling the Company’s ordinary shares.
For internet services visit:
www.shareview.co.uk
The Shareview Dealing service is also available by telephone on
+44 (0) 3456 037 037 between 8.00am and 4.30pm, Monday to
Friday (excluding public holidays in England and Wales).
Company information
As at 25 February 2026, the Company’s issued share capital
consisted of 112,290,929 ordinary shares of 5 pence each with
voting rights (ISIN: GB0002652740).
Derwent London plc is listed in the commercial companies’
category of the London Stock Exchange Main Market. Derwent
London plc is a public limited company, registered and domiciled
in England and Wales (company number 01819699).
Shareholder security
Unsolicited calls and correspondence targeting shareholders
are on the rise. Shareholders should verify any unsolicited
communication with the Financial Conduct Authority
(FCA) using the FCA’s Warning List and website:
www.fca.org.
uk/consumers
. We advise shareholders to remain cautious
before sharing personal information or transferring funds and to
report suspicious activity to the FCA.
2026 financial and dividend calendar
Our forthcoming financial and dividend calendar for 2026 is
provided in the tables below. These dates are provisional and
subject to change. For up to date information, refer to the
financial calendar on our corporate website at:
www.derwentlondon.com/investors/calendar
Financial calendar
Final results announced
26 February
Q1 Business update
12 May
Annual General Meeting
15 May
Interim results announced
6 August
Q3 Business update
5 November
Dividend calendar
2025 Final dividend
2026 Interim dividend
Ex-dividend date
23 April
3 September
Record date
24 April
4 September
Dividend paid
29 May
9 October
Dividend payments
Derwent London plc is committed to reducing its impact on the
environment. From October 2025, dividend payments are no
longer made by cheque. Receiving dividends by direct payment
rather than cheque is quicker, more secure and better for the
environment. Further information is contained on our dividend
tax vouchers.
Annual General Meeting (AGM)
The AGM of Derwent London plc will be held in DL/78 at 78
Charlotte Street, London W1T 4QS on 15 May 2026 at 9.30am.
The Notice of Meeting together with explanatory notes is
contained in the circular to shareholders that accompanies the
Report & Accounts.
Useful contact information:
Equiniti (EQ)
Aspect House
Lancing Business Park
Lancing
West Sussex
BN99 6DA
United Kingdom
Equiniti general shareholder helpline:
Calling from the UK:
0371 384 2192
Calling from overseas:
+44 (0) 371 384 2192
Lines are open 8.30am to 5.30pm, Monday to Friday
(excluding public holidays in England and Wales)
Derwent London plc
David Lawler
Company Secretary
Telephone:
+44 (0)20 7659 3000
Email:
company.secretary@derwentlondon.com
Robert Duncan
Head of Investor Relations & Strategic Planning
Telephone:
+44 (0)20 7659 3000
Email:
ir@derwentlondon.com
295
Derwent London won numerous awards for its achievements and buildings
in 2025, a sample of which are shown below.
EPRA BPR
Gold Award 2025
RoSPA
Gold Award 2025
Greenstar status
‘A’ rated public disclosure (100/100),
Development 5 Star (98/100),
Standing Investments 4 Star (86/100)
CDP 2025
Climate Change: A-rating
EPRA Sustainability BPR
Gold Award 2025
ISS Oekom
Prime status C+
Corporate
Sustainability
Awards and recognition
Chartered Governance Awards
Audit Disclosure of the Year
Real Estate insider Awards
Most Innovative Office-Focused REIT
London 2025
Teenage Cancer Trust’s
Altogether Unstoppable Awards
Special Recognition Winner
European Brand Awards
Strongest Brand UK -
Developers Office 2025
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Other information
CBP035135
Derwent London plc
Report and Accounts 2025
296
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Derwent London plc
Registered office:
T: +44 (0)20 7659 3000
www.derwentlondon.com
Registered No: 1819699
