Derwent London delivers 'another strong leasing performance'

(Sharecast News) - Property investor Derwent London said on Thursday that it had delivered "another strong leasing performance" in FY24, with rental growth driving total returns. Derwent London said gross rental income had grown 0.9% in FY24 to £214.8m, helping the group swing from FY23's pre-tax loss of £475.9m to a pre-tax profit of £116.0m.

Earnings per share were up 4.4% at 106.5p each and the FTSE 250-listed group's FY dividend increased 1.3% year-on-year to 80.5p per share.

Derwent also said estimated rental values had grown 4.3%, while the value of its total property portfolio had increased from £4.65bn to £4.86bn.

Chief executive Paul Williams said: "We have delivered another strong leasing performance, with £18.9m of new rent signed over 12% above ERV. Alongside pre-letting the remaining office space at 25 Baker Street W1, our activity was well distributed across the portfolio. Growth in rental values doubled to 4.3%, the highest level since 2016, and valuations recovered in the second half as yields stabilised, delivering a positive total return of 3.2%.

"Investment volumes are forecast to recover over the coming year, and we expect portfolio ERV growth of 3% to 6% in 2025 which will further drive the group's reversionary profile. Together with development profits from our c.2m sq ft pipeline, this gives us confidence in our total return outlook."

As of 0945 GMT, Derwent shares were down 1.60% at 1,904.0p.

Reporting by Iain Gilbert at Sharecast.com