Derwent London plc (DLN), the largest London office-focused REIT with a £5.0 billion central London portfolio, has published its third quarter business update for 2026, reporting strong leasing and capital recycling progress. The group has secured £39.8m of leasing and asset management year to date, with open-market lettings running 6.1% above December 2025 estimated rental values. EPRA vacancy fell to 3.4% at the end of Q3, down from 4.4% at the half-year, while £290m of disposals have been completed or exchanged, with a further £135m under offer.

Key Points

  • Derwent London plc (DLN) — largest London office-focused REIT, £5.0bn central London portfolio
  • £39.8m of leasing and asset management secured year to date, with EPRA vacancy reduced to 3.4% at Q3 2026
  • £290m of disposals completed or exchanged; £50m share buyback completed at an average price of 1,959p, adding approximately 30p to NTA per share
  • Investors should watch the analyst and investor update scheduled for 30 November 2026 at 25 Baker Street W1, where medium-term business priorities will be outlined

Derwent London's EPRA Vacancy Falls to 3.4% as Open-Market Lettings Beat December 2025 ERV by 6.1%

The group signed £11.2m of new rent since the start of the second half, bringing the full year-to-date total to £39.8m, comprising £28.6m of new leases and £11.2m of renewals and regears. Renewals were agreed at rents 5.2% above previous levels. Notable lettings include space at 1-2 Stephen Street W1, let to Grayling at £92.50 per square foot and to Econic UK at £125 per square foot, and at One Oliver's Yard EC1, where NewFlex and Beauty Seen took a combined 26,100 square feet following completion of a recent refurbishment. A further £1.7m of rent remains under offer.

Four Major West End Developments Totalling 527,300 sq ft Target Ungeared IRRs of 10% to 15%

Derwent London has development contracts in place across all four committed West End projects, targeting ungeared internal rates of return of between 10% and 15%. The largest scheme, 50 Baker Street W1 at 236,000 square feet, features the UK's largest planned Piecewise Re-use of Existing Concrete Structure project and is anticipated to complete in H2 2029. Holden House W1 is expected in H2 2028, while Greencoat & Gordon SW1 and Middlesex House W1 are targeted for completion in H2 2027 and H1 2027 respectively. The company cited demand continuing to outpace supply across its principal sub-markets.

£290m of Disposals and £50m Buyback Strengthen Derwent London's Balance Sheet Position

Net debt reduced during Q3 to £1.34bn from £1.38bn at the half-year. EPRA LTV stood at 28.2%, based on the H1 2026 portfolio valuation. Cash and undrawn facilities totalled £620m at the end of Q3, up from £481m at H1. The group agreed a new £100m unsecured revolving credit facility with Handelsbanken during the period and extended its main £450m revolving credit facility to July 2030. The weighted average interest rate on drawn debt was 3.8% as at 30 September 2026, with weighted average maturity broadly stable at 4.2 years.

Chief Executive Jonathan Murphy Flags Near-Term Yield Uncertainty Ahead of 30 November Strategy Update

In his first update since joining Derwent London, Chief Executive Jonathan Murphy highlighted that the near-term outlook for property yields remains uncertain, reinforcing the group's focus on factors within its control, including rental reversion capture and capital discipline. Murphy stated that 2026 is on track to be one of the company's best years on record for leasing activity. The group is targeting approximately £400m of disposals in 2026 and intends to recycle capital into development, asset management, potential acquisitions, and further buybacks. A fuller strategic update for analysts and investors is scheduled for 30 November 2026.