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
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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