Derwent London (DLN) H1 2026 earnings summary

Executive summary

• Achieved strong operational performance with £30.4 million in leasing and asset management transactions YTD, with new leases signed over 5% above ERV and a low EPRA vacancy rate of 4.4%.

• Four major West End development projects totaling 500,000 sq ft underway, targeting ungeared IRRs above 10%, with Network W1 completed and pre-let at around 11% IRR.

• Upgraded 2026 earnings guidance after H1 results exceeded expectations; reaffirmed guidance through 2030 with confidence in delivering 25%-30% EPRA earnings growth by 2030.

• Completed or contracted £280 million of disposals within 3% of book value, progressing toward a £400 million 2026 target and £1 billion over three years.

• Launched a £50 million share buyback, over halfway complete, with £18.1 million repurchased in H1 and further buybacks under consideration.

Financial highlights

• EPRA NTA per share at 3,157p as of 30 June, down 2.1% due to a revaluation deficit and a £45.8 million provision for Old Street Quarter.

• EPRA earnings for H1 were £54.6 million or 48.7p per share, slightly ahead of guidance but down 6.7% year-over-year.

• Gross rental income for H1 2026 was £106.9 million, down 2.0% year-over-year; net rental income was £92.9 million, down 1.2%.

• Interim dividend per share increased 2% to 26.0p and remains well covered by EPRA earnings.

• Total accounting return for H1 was -0.4%, impacted by yield shift, share buyback, and Old Street Quarter provision.

Outlook and guidance

• Upgraded 2026 EPRA EPS guidance to '0% to -3%' from '-3% to -5%', a 2%-3% improvement; 2027 and 2030 guidance reaffirmed at 5-10% and 25-30% growth, respectively.

• Reiterated ERV growth guidance of 4-7% for 2026, following 2.6% growth in H1.

• Targeting £400 million of disposals in 2026 and £1 billion over three years.

• Medium-term total accounting return outlook of 7-10% per annum, assuming stable yields.