UK's Derwent London pretax profit beats expectations

Overview

• UK real estate firm's gross rental income slightly missed analyst expectations

• Pretax profit for 2025 beat analyst expectations

• Company targets £1bn disposals over next three years for reinvestment

Outlook

• Derwent London expects 2026 portfolio ERV growth of 4% to 7%

• Near-term reduction in EPRA earnings expected, with growth in H2 2026 and into 2027

Result Drivers

• NEW LETTINGS - Derwent London signed £11.3m of new lettings in 2025, 9.9% above ERV, indicating strong demand for its office spaces

• ASSET MANAGEMENT - Record asset management activity in 2025 with £58.9m transactions, driven by strong rental growth and proactive engagement with occupiers

• DISPOSALS AND INVESTMENT - £216.1m of disposals in 2025, with £33m exchanged in early 2026 and £240m under offer, supported by improving investment market liquidity

Company press release: ID:nRSZ4457Ua

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 7 "strong buy" or "buy", 6 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the commercial reits peer group is "buy."

• Wall Street's median 12-month price target for Derwent London PLC is GBp2,025.00, about 10.7% above its February 25 closing price of GBp1,830.00

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 17 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)