Interim Results 2026 announcement

Derwent London PLC

06 August 2026

 

	6 August 2026
Derwent London plc ("Derwent London" / "the Group") UNAUDITED RESULTS FOR SIX MONTHS ENDED 30 JUNE 2026 Delivering our strategy

Paul Williams, Chief Executive of Derwent London, said:

"We have made strong progress against the strategic priorities set out at the start of the year. We have accelerated disposals, fully pre-let Network, committed to our next phase of accretive developments and launched a £50m share buyback programme. We remain focused on driving earnings growth over the coming years through disciplined capital allocation.

London's occupational market is robust, with the strongest demand focused on high quality buildings in well-connected locations. Against a supply constrained backdrop, rents continue to grow and the West End is outperforming. Since the start of the year, we have completed £30.4m of lettings and asset management transactions, with new open market lettings signed more than 5% above ERV, and have more space under offer.

Operationally, the business is performing well and we upgrade our EPRA earnings growth guidance for 2026. Leasing activity, rental growth and progress on capital allocation give us confidence in delivering our medium-term earnings growth and total accounting return objectives. I look forward to watching the business thrive over the coming years under my successor, Jonathan Murphy, and the rest of the leadership team."

Key financial highlights

	H1 2026	H1 2025	Change			Jun-26	Dec-25
Gross rental income	£106.9m	£109.1m	-2.0%		EPRA NTA per share1	3,157p	3,225p
Net rental income	£92.9m	£94.0m	-1.2%		Net debt	£1,378m	£1,425m2
EPRA EPS1	48.7p	52.2p	-6.7%		Net debt/EBITDA	8.6x	8.8x2
Dividend	26.0p	25.5p	2.0%		Interest cover	3.0x	3.1x
IFRS result before tax	£(17.9)m	£94.0m	-		EPRA LTV1	28.8%	29.4%
Total accounting return	-0.4%	3.0%	-		Cash and undrawn debt	£481m	£652m2

¹ Explanations of how EPRA figures are derived from IFRS are shown in note 25. ² Prior year figures represented.

Financial highlights

·      EPRA EPS of 48.7p, ahead of guidance

·      NTA down 2.1% to 3,157p; TAR of -0.4% after impact of:

o  £45.8m provision at Old Street Quarter EC1

o  6bp of outward yield movement

Operational performance

·      Leasing and asset management transactions: £30.4m YTD, split:

o  New lettings of £22.1m with open-market transactions +5.1% vs ERV

§ Databricks £14.1m pre-let at Network W1, which completed during Q2; 10.7% ungeared IRR

§ Further £5.3m of rent currently under offer

o  Renewals/regears: £8.3m, averaging 6.5% above previous rent

·      EPRA vacancy rate remains low at 4.4% at H1

Capital allocation

·      Disposals: £168.8m completed in first half, excluding lease regear at 50 Baker Street W1, and £110.5m contracted; average 3% discount to book value (before costs)

·      Four major West End projects on site (527,300 sq ft) with ungeared IRRs >10%; includes commitment to 50 Baker Street W1

·      £50m share buyback; £18.1m of shares repurchased (before costs) in H1 at average price of 1,833p

Outlook

·      2026 portfolio ERV guidance maintained at 4-7%; H1 2026: 2.6%

·      Targeting £400m of disposals in 2026 and £1bn over three years

·      2026 EPRA EPS guidance upgraded to '0% to -3%' (from '-3% to -5%')

o  2027 (5-10% versus 2025) and 2030 (25-30% versus 2025) guidance unchanged

·      Total accounting return outlook of 7-10% over the medium-term, assuming stable yields

Webcast

There will be a live webcast for investors and analysts at 09.30 BST today.

To access the webcast, please register at www.derwentlondon.com

A recording of the webcast will also be made available following the event on www.derwentlondon.com

For further information, please contact:

Derwent London Tel: [phone]	Paul Williams, Chief Executive Damian Wisniewski, Chief Financial Officer Robert Duncan, Head of Investor Relations
Brunswick Group Tel: [phone]	Nina Coad Peter Hesse

CHIEF EXECUTIVE STATEMENT

Delivering against our capital allocation priorities

At the start of the year, we set out our returns-focused capital allocation framework: to accelerate disposals, recycle capital into our highest-returning development and asset management opportunities, and consider share buybacks while maintaining a strong balance sheet. We have made good progress in the first half of 2026.

We have completed or exchanged on £279.3m of disposals this year, at 3% discount to book value, with a further c.£30m under offer and a number of other properties on the market. This is a significant step towards our target of around £400m for 2026 and c.£1bn over three years.

Two major projects at 25 Baker Street W1 and Network W1 completed over the last 12 months. Together, these generated an average 11.1% ungeared IRR, with strong rental performance more than offsetting the outward movement in market yields during delivery.

In H1, we committed to two major projects at 50 Baker Street W1 and Greencoat & Gordon SW1. Our on-site pipeline comprises four West End projects (527,300 sq ft) where we forecast double digit IRRs.

Reflecting the strength of our balance sheet and the progress on disposals, we launched a £50m share buyback programme in May. To date, we have repurchased £33.4m of shares (before costs) at an average price of 1,921p. Of this, £18.1m was in H1 at 1,833p, adding c.7p to NTA per share at 30 June.

Portfolio valuation

The investment market was upbeat at the start of the year. However, the conflict in the Middle East caused the market to slow. Whilst the pool of potential investors remains broad, demand has been impacted by the uncertainty around market interest rates and property yields.

Underlying capital values across our portfolio were broadly stable during H1 with rental growth partly offset by modest outward yield shift. ERV growth in the first half was 2.6%, the strongest six-month period since 2016, with the West End (3.2%) outperforming the City Borders (1.4%). The EPRA true equivalent yield rose by 6bp to 5.77% as at June but excluding Network, which completed in May, and the disposal of Horseferry House SW1, it increased by 15bp. As a result, our total property return of 1.6% compares to the MSCI Central London Office Quarterly Index return of 3.2%, where yields tightened.

Development valuations were up 10.3%, driven by a strong performance at Network W1 on completion and pre-letting of the offices substantially ahead of ERV. Other buildings valued at >£1,500 psf increased by 1.3%, while values declined by 5.3% for properties with a capital value of <£1,000 psf.

Old Street Quarter EC1

In 2022, we exchanged a conditional contract to acquire the freehold of Old Street Quarter EC1 for consideration of £239m, subject to the vendor providing vacant possession. Completion of the acquisition is currently expected in late-2027. The site has significant redevelopment potential and, alongside our strategic development partner Related Argent, we continue to progress planning for this unique centrally located 2.5-acre island site.

The current masterplan envisages a flexible, mixed-use, living-led campus-style redevelopment, which we consider to be the highest value use classes for this site. We are targeting a near doubling in floor area, with optionality to deliver in several phases. Ahead of submission of a planning application in early-2027, we have updated our probability-weighted assessment of the potential financial outcomes under a range of scenarios from full delivery to disposal with planning. Consequently, we have recognised a £45.8m provision in H1 which we will re-appraise at subsequent results up until the point of acquisition.

When we complete our purchase of the site, the property will be included within investment property at an externally appraised fair value, with any valuation adjustment recognised net of the current provision.

Strong leasing and asset management activity

The occupational market remains robust. While AI companies are particularly active, other sectors are also well-represented. Occupiers continue to prioritise good quality, well-located buildings with excellent amenity and strong transport connectivity. This plays to Derwent's strengths with our design-led approach and nearly 90% of our buildings within a 10-minute walk of an Elizabeth line or mainline station.

Since the start of the year, we have completed £30.4m of leasing and asset management transactions. This comprises £22.1m of new lettings, with open market transactions 5.1% above December 2025 ERV, as well as £8.3m of renewals/regears with an average uplift of 6.5% versus the previous rent.

New lettings of £21.4m in H1 represent our second highest first half leasing total on record. This includes the £14.1m pre-let to Databricks at Network W1, which was completed 5% ahead of December 2025 ERV and 22% above our 2021 underwriting level. 'Furnished + Flexible' leases totalled £4.7m or 22% of overall leasing.

EPRA vacancy increased slightly during H1 to 4.4% from 4.1% at December 2025, although this reduces to 3.5% excluding a vacant property which is currently under offer for disposal. In addition, a number of units were taken back during H1 which are currently being repositioned and 1 Page Street SW1, which was vacated at the end of 2025, is currently being marketed for sale. Looking to H2, we have already completed £1.8m of new lettings, including renewals/regears, and have £5.3m of rent currently under offer, including recently refurbished space at 1-2 Stephen Street W1 and 1 Oliver's Yard EC1.

Financial performance

EPRA EPS of 48.7p (H1 2025: 52.2p) came in slightly ahead of expectations, partly helped by cost reductions of £1.5m across the Group. The interim dividend has been increased by 2.0% to 26.0p (H1 2025: 25.5p). Net debt reduced to £1.38bn from £1.43bn and the Group's gearing ratios remain comfortable with net debt/EBITDA reducing to 8.6x (2025: 8.8x) and EPRA LTV to 28.8% (2025: 29.4%).

NTA at 30 June 2026 was 3,157p, down 2.1% from 31 December 2025 (3,225p), giving a total accounting return for H1 of
-0.4%. In February, we guided to an annual total accounting return of 7-10% in the medium-term assuming stable yields. Adjusting for the outward yield shift and Old Street Quarter provision in the period, as well as the value accretion from shares repurchased, the total accounting return for the first half would have been approximately 3.7%.

Four major on-site projects delivering the next phase of growth

During H1, we committed to 50 Baker Street W1, a 236,000 sq ft office-led project, having completed the regear of our headlease with the freeholder, The Portman Estate. In addition, we commenced the comprehensive refurbishment of Greencoat & Gordon SW1. As a result, we are now on site at four West End schemes totalling 527,300 sq ft: two redevelopments at 50 Baker Street and Holden House W1, plus two major refurbishments at Greencoat & Gordon and Middlesex House W1. In addition, we have a further 16 smaller upgrade projects totalling c.60,000 sq ft underway across the portfolio, with combined ERV of c.£4.0m.

These projects are all located in close proximity to either the Elizabeth line or Victoria mainline station, in sub-markets with low competing supply and broad occupational demand. Each of them will offer our usual outstanding Derwent London design and attention to detail. Fixed price construction contracts have now been placed at all of these projects. We forecast ungeared IRRs of 10%+ with further strong rental growth anticipated during delivery, supported by the reversion which has already been proven at 25 Baker Street W1.

CEO succession

As previously announced, Jonathan Murphy joins as Chief Executive with effect from 1 September 2026. His skillset is highly complementary to the experience and deep London office knowledge of our existing Executive team.

I will retire as Chief Executive on 1 September 2026 and step down from the Board following nearly 40 years with the Group.

A positive outlook for earnings growth and total accounting returns

We continue to deliver against our operational and capital allocation objectives: to position the portfolio to capture the strongest rental growth and capital appreciation opportunities, while delivering earnings growth and attractive medium-term total accounting returns.

We expect to make further progress on disposals over the remainder of the year and into 2027, with several assets currently under offer or on the market.

The underlying drivers of long-term value creation remain in place, despite a small outward yield movement and the provision at Old Street Quarter in the first half: rental growth, portfolio quality, development returns, disciplined capital allocation and a strong balance sheet.

We continue to target a 7-10% pa total accounting return over the medium-term, assuming stable yields.

This is supported by a positive earnings outlook. We upgrade our 2026 EPRA EPS guidance to '0% to -3%' (from '-3% to -5%' previously), and maintain our guidance for 2027 (5-10% versus 2025) and 2030 (25-30% versus 2025).

Following portfolio ERV growth of 2.6% in H1, we reiterate our guidance of 4-7% for 2026. We expect the West End to continue to outperform, although we are seeing improving sentiment across all submarkets.

VALUATION

Investment market overview

The London office investment market was upbeat at the start of the year, with the strong sentiment seen towards the end of 2025 carrying into 2026. However, the upward movement in market interest rates triggered by the conflict in the Middle East and consequent impact on return requirements and risk appetite caused the market to slowdown as vendors withdrew assets from sale and investors paused mandates. Transaction volumes of £3.1bn in H1 2026 were 15% lower than H1 2025, with an average lot size of £54m. The West End was the most liquid sub-market in H1, comprising the majority of deals over £100m.

The amount of equity targeting London, however, remains substantial at £25bn according to CBRE. Investor demand is focused on well-located Value-Add and Core-Plus opportunities, supported by the strength of the rental growth outlook and London's safe haven status.

Despite macroeconomic headwinds, pricing for prime property remained stable, buoyed by the highest rental growth seen for more than 10 years. Conversely, valuations for more secondary assets have reduced further. According to CBRE, prime yields in the West End were stable at 4.0% compared to the City at 5.5%.

Derwent London portfolio performance

The underlying portfolio valuation (including developments) was impacted by wider market trends and showed a deficit for the half year of £5.3m which, after accounting adjustments of £15.3m, produced an overall deficit of £20.6m. Our EPRA rental values were up 2.6% in H1 2026, the strongest six-month growth since 2016, in line with our guidance for 2026 of 4-7%. This was broadly offset by a 6bp increase in the equivalent yield (or 15bp on an underlying basis prior to the inclusion of Network W1 within the EPRA portfolio following completion in May 2026 and sale of Horseferry House SW1), which rose to 5.77% on an EPRA basis.

The EPRA initial yield moved in 10bp to 3.9% (December 2025: 4.0%) which, after allowing for the expiry of rent frees and contractual uplifts, rises to 5.2% on a 'topped-up' basis (December 2025: 5.1%).

The valuation of our central London properties, which represent 98% of the portfolio, was unchanged. Within this, the West End (75%) was up 0.9%, while the City Borders (23%), which has been a more challenging market, was down by 2.6%. The balance of the portfolio, our Scottish holdings, saw a modest 0.2% decline. 

During H1 2026, we had five projects on site: Network W1, 50 Baker Street W1, Holden House W1, Greencoat & Gordon SW1 and Middlesex House W1. Valued at £651.1m, they represent 13% of the portfolio and after adjusting for capital expenditure, the valuation uplift was 10.3%. The majority of this uplift came from Network, following completion in May with all the office and majority of the retail pre-let at rents 5% ahead of December 2025 ERV.

Portfolio valuation performance

	Valuation Jun 2026 £m	Valuation movement1 H1 2026 %	True equivalent yield2 Jun 2026 %	Yield shift2 H1 2026 bp	ERV growth2 H1 2026 %
West End	3,701.4	0.9	5.45	3	3.2
City Borders	1,153.1	(2.6)	6.51	17	1.4
Central London	4,854.5	0.0	5.75	6	2.6
Provincial	115.8	(0.2)	7.02	5	1.7
Portfolio	4,970.3	0.0	5.77	6	2.6
Developments3	651.1	10.3	-	-	-
Investment portfolio (ex-developments)	4,319.2	(1.3)	-	-	-

¹ Underlying - properties held throughout the year. ² On EPRA basis. ³ Five on-site developments during H1 2026: Network W1 (completed May 2026), 50 Baker Street W1, Holden House W1, Greencoat & Gordon SW1 and Middlesex House W1.

Excluding developments, the underlying property valuation decreased by 1.3%. Higher quality assets valued in excess of £1,500 psf performed best with valuations up 1.3%, with strong rental growth partly offset by modest yield expansion. By contrast, assets valued sub-£1,000 psf saw capital value falls of 5.3%. These typically will be part of our disposal plans or offer future repositioning potential.

Performance by category

Capital value banding (£ psf)	Weighting by value (%)	Capital value change (%)
≥£1,500	33	1.3
£1,000 - £1,499	25	0.2
≤£1,000	29	(5.3)
Sub-total	87	(1.3)
Recently completed/on-site projects	13	10.3
Portfolio	100	0.0

The MSCI Central London Office Quarterly Index saw capital value growth of 1.3% during H1 and valuations declined by 0.3% on the wider UK All Property Index.

Our total property return, which does not include the provision at Old Street Quarter EC1, was 1.6% in H1. This compares to 3.2% for the MSCI Central London Office Quarterly Index and 2.1% for UK All Property.

Portfolio reversion

Our annualised cash rent roll as of 30 June 2026 was £189.2m, with £60.9m of contracted uplifts, primarily from rent-free expiries and fixed uplifts. Under IFRS, these contracted uplifts are straight-lined in the income statement. Our annualised accounting rent roll was £208.8m. The components of our reversionary potential are shown in the following table.

	Accounting rent basis (£m)	Headline rent basis (£m)
June 2026 rent	208.8	189.2
Contracted uplifts	-	60.9
Major projects1	44.9	56.1
Vacant - refurb	11.3	14.1
Vacant - available (EPRA)	10.8	13.5
Reviews & expiries	16.3	18.5
ERV	292.1	352.3
Reversionary potential	83.3 (+40%)	102.2 (+41%)

¹ Comprises 50 Baker Street W1, Holden House W1, Greencoat & Gordon SW1 and Middlesex House W1.

DISPOSALS AND ACQUISITIONS

Since the start of 2026, we have completed the sale of £168.8m of properties and exchanged contracts on a further £110.5m, with a blended 5.0% initial yield and an average discount of 3% compared to December 2025 book value. In addition, we have a further c.£30m under offer and a number of other properties on the market. This is in line with our c.£400m disposals target for 2026 and £1bn over three years.

There were no acquisitions during H1.

Principal disposals in H1 2026

	Area sq ft	Total before costs £m	Net yield %	Net rental income £m pa
Completed
Horseferry House SW1	164,900	129.31	6.0	8.1
80-85 Tottenham Court Road W1	28,300	32.6	1.72	0.62
3 private flats at 25 Baker Street W1	2,500	6.9	-	-
Contracts exchanged
90 Whitfield Street W1	103,500	110.5	5.0	5.9
Total	299,200	279.3	5.0	14.6

¹ Headline consideration £131.8m before rental top-ups. ² Office element sold with vacant possession; £0.6m rental income on retail.

The table above excludes the property transactions related to the headlease regear at 50 Baker Street W1 which completed during H1. Further details of these transactions can be found in the Finance Review.

LEASING & ASSET MANAGEMENT

Occupational market overview

London's occupational market remains strong, with demand continuing to outpace supply. Take-up during H1 in the West End increased 18%, compared to H1 2025, to 2.0m sq ft which is c.14% above the 10-year average. Overall take-up across London reduced 11% to 4.9m sq ft from 5.5m sq ft in H1 2025, driven by the City, which was down 26% to 1.8m sq ft. The tech, media and telecoms sector was most active, comprising 24% of take-up across London, followed closely by banking & finance (24%), business services (18%) and professional (12%). The outlook for H2 is positive, with space under offer increasing by 10% in H1 to 4.0m sq ft, which is 15% above the 10-year average, and active demand rising by 21% to 11.9m sq ft, the second highest level on record.

Vacancy across London continued to fall, reducing from 7.3% in December to 6.5% at June, with new space remaining broadly constant at just over one-third of space available. Vacancy fell in both the West End (-69bp to 5.1%) and City (-133bp to 7.6%). Space under development for completion by 2029 increased by 2.1m sq ft during H1 to 13.2m sq ft, of which 4.4m sq ft (33%) is pre-let or under offer. The increase in space under development was driven by the commencement of several refurbishments.

Take-up by AI-linked companies reached c.0.7m sq ft during H1, including our pre-let to Databricks at Network W1, and is close to double the full-year total for 2025. There is a further c.0.6m sq ft of named demand still to be satisfied. London is the clear European leader in AI, supported by its deep talent base, mature capital markets and funding environment, and strong innovation ecosystem. CBRE estimates further AI-led office take-up in London of up to 2.5m sq ft by 2033. On an indirect basis, the broader workforce implications of AI remain an important medium-term consideration.

Derwent London operational performance

Against the backdrop of an increasingly supply-constrained London office market, we have delivered another strong leasing performance, with £30.4m of new rent agreed since the start of the year. This is split £22.1m of lettings and £8.3m of renewals/regears. In addition, there is a further £5.3m of rent currently under offer.

Key activity:

·      Network W1: Pre-let of the offices to Databricks (£14.1m) on a 15-year term with a break at year 10, at 5% above December 2025 ERV and 22% above our underwriting ERV - this is our largest leasing transaction by rent on record.

·      1-2 Stephen Street W1: Following completion of a comprehensive upgrade of the second floor, Navan (£1.9m) leased the space on a 'Furnished + Flexible' basis at an 11% premium to the December 2025 ERV.

·      The White Chapel Building E1: GDS (£1.4m) extended its lease by four years to 2030 at a 3% premium to its previous rent.

·      White Collar Factory EC1: Compare the Market (£1.1m) extended its lease by 10 years to 2037, with a break in 2032, with an 8% uplift compared to the previous rent.

Leasing activity

New lettings of £22.1m have completed since the start of the year, with open-market lettings agreed 5.1% above the December 2025 ERV. The average WAULT (to break) of 7.6 years is ahead of the portfolio's 6.8 year 'topped-up' WAULT. The West End comprises 88% of leasing activity, principally due to the Databricks pre-let at Network W1 which accounts for almost two-thirds of total activity.

Our 'Furnished + Flexible' (F+F) space, which comprises 8.4% of the office portfolio, remains in demand. During H1, new leases of £4.7m completed, or c.22% of total. We anticipate F+F increasing to around 15% of our portfolio through the conversion of smaller units. Adjusting for the shorter F+F leases, the WAULT (to break) of our HQ lettings increases to 9.1 years.

Leasing activity in 2026 to date

	Let			Performance vs Dec 2025 ERV (%)
	Area '000 sq ft	Income £m pa	WAULT1 Years	Open-market	Overall2
H1 2026	244.2	21.4	7.7	5.1	0.0
H2 to date	9.6	0.7	4.5	5.0	5.0
2026 to date	253.8	22.1	7.6	5.1	0.2

¹ Weighted average unexpired lease term (to break). ² Includes short-term lettings at properties earmarked for redevelopment

Principal lettings in 2026 to date

Property	Tenant	Area '000 sq ft	Rent £ psf	Total annual rent £m	Lease term Years	Lease break Year	Rent free equivalent Months
Network W1	Databricks	136.3	103	14.1	15	10	35
1-2 Stephen Street W1	Navan UK1	20.8	91	1.9	3	-	1.2
25 Savile Row W1	Esselco	6.2	144	0.9	10	5	12, plus 10 if no break
The Featherstone Building EC1	Modulr Finance1	9.7	85	0.8	5	3	2.5, plus 2 if no break
Charlotte Building W1	Overbury	6.8	93	0.6	10	5	11, plus 10 if no break
Tea Building E1	Katkin1	7.9	48	0.4	2.7	-	12
Network W1 (retail)	Bolia	3.7	84	0.3	15	6 & 10	14

¹ Space leased on a 'Furnished + Flexible' basis

Asset management activity

We continue to proactively manage our lease expiry profile and have focused on early engagement with occupiers ahead of breaks/expiries to extend income and secure rental uplifts. Consequently, lease renewals dominated asset management activity in H1, comprising 35 of the 39 transactions and £6.2m of the £7.4m of new rent agreed. Excluding two short-term deals, renewals were completed 6.5% above the previous rent and 3.4% above December 2025 ERV. As noted above, the key transactions were at The White Chapel Building E1 and White Collar Factory EC1.

Alongside Sage's decision to vacate at 1 Oliver's Yard EC1 and UCL at 88-94 Tottenham Court Road W1, this resulted in a lower retention/re-let rate on breaks/expiries (excluding space taken back for projects and disposals) of 41% during H1. Overall, asset management transactions in H1 delivered a 5.9% uplift versus the previous rent and beat ERV by 1.2%.

The portfolio WAULT (to break) is 6.0 years (December 2025: 6.0 years), rising to 6.8 years (December 2025: 7.0 years) on a 'topped-up' basis.

Asset management in 2026 to date

	Number	Area '000 sq ft	Previous rent £m pa	New rent1 £m pa	Uplift %	New rent vs Dec 2025 ERV %
Rent reviews	1	4.6	0.2	0.3	9.1	9.1
Lease renewals	35	145.0	5.9	6.2	6.3	0.8
Lease regears	3	16.1	0.9	0.9	2.3	1.5
H1 total	39	165.7	7.0	7.4	5.9	1.2
H2 to date	5	44.7	1.2	1.4	12.2	3.9
2026 to date	44	210.4	8.2	8.8	6.9	1.6

¹ Headline rent, shown prior to lease incentives

Portfolio vacancy

The EPRA vacancy rate increased marginally during H1 to 4.4% from 4.1% at December 2025, with a headline ERV of £13.5m. We are under offer to sell a vacant property which would reduce vacancy to 3.5%. In addition, there is £9.4m of vacancy at buildings either contracted for sale (90 Whitfield Street W1) or being marketed for sale (1 Page Street SW1 which Burberry vacated in December 2025).

DEVELOPMENTS & REFURBISHMENTS

Over the last 12 months, we completed two major development projects at 25 Baker Street W1 (298,000 sq ft) and Network W1 (141,200 sq ft). In each case, the office space was fully pre-let at rents substantially ahead of our appraisal ERV and construction costs were within budget, supporting a blended IRR of 11.1% despite the outward yield movement experienced during delivery.

We also made good progress on our phased refurbishments at 1-2 Stephen Street W1 and 1 Oliver's Yard EC1. At 1-2 Stephen Street, the second floor has been leased to Navan on a 'Furnished + Flexible' basis at an 11% premium to the December 2025 ERV and floors 7 and 9 are under offer. At 1 Oliver's Yard, over 50% of the refurbished space has been leased or is under offer at rents ahead of ERV.

We are now on-site at four major West End projects totalling 527,300 sq ft, with a combined appraised ERV of £60.3m, which we forecast will deliver 10%+ ungeared IRRs. Each project is well-located close to either the Elizabeth line or Victoria mainline station, offering best-in-class, future-proofed space with substantial amenity provision. Against the backdrop of a highly supply constrained market, we are delivering great buildings in locations where occupiers want to be. This gives us a high degree of confidence that we will achieve rents substantially in excess of our appraisals. In addition, we have visibility on construction costs having signed fixed price contracts for each project.

Major on-site regeneration schemes

	Total	50 Baker Street W1	Holden House W1	Greencoat & Gordon SW1	Middlesex House W1
Type of scheme		Development	Development	Major refurb	Major refurb
Commencement		H1 2026	H2 2025	H1 2026	H1 2026
Completion		H2 2029	H2 2028	H2 2027	H1 2027
Office (sq ft)	474,800	204,000	113,000	107,800	50,000
Residential (sq ft)	14,000	14,000	-	-	-
Retail (sq ft)	38,500	18,000	20,500	-	-
Total area (sq ft)	527,300	236,000	133,500	107,800	50,000
Est. future capex1 (£m)	417	231	128	43	15
Total cost2 (£m)	872	412	251	135	74
Appraised ERV (c.£ psf)		130	120	90	95
Appraised ERV (£m pa)	60.3	29.2	16.4	10.05	4.7
Embodied carbon intensity (kgCO2e/sqm) - estimate3		c.550	c.560	c.280	c.260
BREEAM rating (target)		Outstanding4	Outstanding	Excellent	n/a
NABERS rating (target)		5 Star or above4	5 Star or above	n/a	n/a
Green finance		To be elected	To be elected	To be elected	n/a

¹ As at 30 June 2026. ² Comprising book value at commencement, capex, fees and capitalised interest, voids and other costs. ³ Embodied carbon intensity estimate as at stage 4; excludes demolition. ⁴ On main commercial building.  ⁵ ERV of 131,400 sq ft building, includes tenanted 23,600 sq ft. 

Developments

·      50 Baker Street W1 (236,000 sq ft) - located opposite our very successful 25 Baker Street W1 and close to the Bond Street Elizabeth line station in a sub-market with positive occupational dynamics, we committed to this exciting project during H1 2026 and have signed the main construction contract, on a fixed price basis, within budget. Early demolition works are progressing in line with expectations and scheme completion is anticipated in H2 2029. Working closely with our design and construction teams, we are aiming to re-use c.2,000m³ of concrete in the new building, which will be the largest project of this type in the UK.  We forecast an ungeared IRR of c.12% and are confident that the strength of the rental outlook will generate additional performance.

·      Holden House W1 (133,500 sq ft) - demolition at this retained façade redevelopment is progressing to programme and we have now signed a fixed price construction contract within budget. Through innovative re-use of existing and/or recycled materials, we expect to achieve an embodied carbon intensity of c.560 kgCO₂e/sqm. Completion is expected in H2 2028. We forecast an ungeared IRR of c.10%. Supported by its location opposite the Dean Street Elizabeth line station in a sub-market where supply is highly constrained, we anticipate significant rental growth from the current level.

Major refurbishments

·      Greencoat & Gordon SW1 (107,800 sq ft) - the refurbishment of this former Victorian warehouse is making good progress. With limited supply of thoughtfully repositioned heritage space in Victoria, and following our successes at the adjacent Francis House and 6-8 Greencoat Place refurbishments, we anticipate strong occupier demand for a range of HQ and Fitted space, supported by its proximity to Victoria mainline station. Completion is targeted for H2 2027.

·      Middlesex House W1 (50,000 sq ft) - this 1930s warehouse-style office is currently being refurbished to deliver much-needed fitted units which are in high demand in the Fitzrovia sub-market. With a relatively short delivery window, completion is expected in H1 2027 and we are encouraged by the strength of early occupier interest.

Other projects

In addition to our on-site projects, we have a further pipeline comprising a range of different projects. This includes:

·      Old Street Quarter EC1 (750,000+ sq ft): ahead of completion of the acquisition of this 2.5-acre island site in late-2027 for £239m, we are making good progress, alongside our strategic development partner Related Argent, prior to submission of the planning application in early-2027.  As our expectations for how this living-led development is delivered evolve, we have recognised a provision of £45.8m as at H1 2026 reflecting an updated probability-weighted scenario analysis. See 'Finance Review' for further details.

·      20 Farringdon Road EC1 (167,000 sq ft): vacant possession of this prime refurbishment opportunity adjacent to the Farringdon Elizabeth line station is expected during H1 2027. As well as upgrading the office space, the project includes an upgraded street entrance, repositioning of the reception, terrace improvements and amenity enhancements.

·      230 Blackfriars Road SE1 (200,000+ sq ft): longer-dated regeneration opportunity which could commence from 2030, involving a significant uplift from the existing 60,000 sq ft. We are currently exploring several options to maximise the value from this site which benefits from very strong public transport connectivity.

Lochfauld solar park

Lochfauld solar park is a c.85-acre, 18.4 MW solar development forming part of the Group's Scottish portfolio. Once operational, the park is expected to generate in excess of 40% of the London managed portfolio's electricity requirements. The project is forecast to deliver an attractive yield on cost of 9%+. The development delivers both a compelling financial return and long term strategic value as part of the Group's sustainability and decarbonisation objectives.

The majority of the construction and installation phases have now been completed. The principal remaining activities include the final high voltage grid connections alongside testing and commissioning. Power-on and grid supply connection is expected in H2 2026.

SUSTAINABILITY

Energy intensity

Energy intensity was unchanged at 67 kWh/sqm in H1 2026 (H1 2025: 67 kWh/sqm). Total energy consumption rose 2% to 25.9m kWh (H1 2025: 25.4m kWh), with gas 3% lower and electricity 4% higher. This is due to both ongoing decarbonisation activity across the portfolio, switching the energy mix away from gas towards electricity, and the inclusion of 25 Baker Street W1 following project completion in H2 2025 (excluded from energy intensity in line with our reporting policy), offset by the commencement of our current on-site projects.

Scottish solar park approaching completion

See 'Developments & Refurbishments' section for detailed update.

Circular economy

Alongside our portfolio refurbishment approach, our two new-build on-site projects are demonstrating circularity in action, with a focus on concrete, glass, raised access floors, finishes and other components. At Holden House W1, c.65% of the materials used within the temporary façade retention works are re-used materials, saving c.250 tCO₂e. In addition, the stone and slate from the existing building have been dismantled and are currently being stored prior to re-use in the new building.

At 50 Baker Street W1, our design and construction teams are working together to make the re-use of 2,000m³ of concrete a reality. Of this, 1,150m³ will be recovered using the pioneering 'Piecewise Reuse of Existing Concrete Structures' (PRECS) engineering technique, the first time PRECS has been progressed at this scale in the UK. The remaining 850m³ will be re-used on site as Crushed Concrete Aggregate (CCA).

Accelerating Concrete Decarbonisation Group (ACDG)

At the end of 2025, Derwent London formalised the ACDG, a group of 35 developers, structural engineers and contractors collaborating to lower the barriers to adoption of innovative low carbon concrete mixes on live schemes. Following a formal tender, the prototype contract was awarded to Kilnbridge and the testing contract to LoveConcrete. Three concrete prototypes have now been built and testing is underway, with initial findings shared with ACDG members.

Through the ACDG, Derwent London continues to demonstrate leadership in tackling embodied carbon within construction, promoting industry-wide collaboration, testing and knowledge sharing to help unlock wider adoption of low carbon concrete across the industry.

EPCs

86% of our portfolio is rated EPC A or B (including on-site projects), a substantial increase from 72% at December 2025 as the result of commencement of projects at 50 Baker Street W1, Greencoat & Gordon SW1 and Middlesex House W1 during the period. With a clear programme of upgrade works phased over the coming years, we are well-placed to ensure compliance with the recently published Minimum Energy Efficiency Standards (MEES) legislation, which requires a minimum EPC B by 2031.

FINANCE REVIEW

EPRA NTA and total accounting return (TAR)

Derwent London has made good operational progress in the first half of 2026; the major letting of Network W1 in May 2026 saw a substantial increase in rent roll and property disposals enabled us to launch a £50m share buyback programme in May. 

EPRA net tangible asset value as at 30 June 2026 was £3.52bn, equivalent to 3,157p per share.  This is a small decline from 3,187p in June 2025 and 3,225p in December 2025 after we recognised a £45.8m provision in relation to the Old Street Quarter EC1 site that we are due to acquire in late 2027, explained in more detail below.  It also reflects 6bp of outward yield shift on the portfolio valuation in the first half of 2026, partly influenced by rises in medium and long-term UK interest rates.  Development profits have come through strongly, however, and rental values continue to grow consistently across most of the portfolio.

The Group's total accounting return (TAR) for the first half was -0.4% (H1 2025: 3.0%) after adding back the 56p per share final dividend.  Though there may be further amounts recognised at Old Street Quarter prior to acquisition, we retain a positive medium-term TAR outlook backed by increasing rents, growing earnings and future development uplifts, and assuming flat yields.  Moreover, our EPRA earnings outlook for 2026 has improved.

Property income and costs

Gross property and other income increased to £146.5m in H1 2026 from £141.0m in the first half of 2025 due largely to an increase in service charge income and £6.9m (H1 2025: £2.4m) of trading proceeds from further apartment sales at 100 George Street W1.  Gross rental income was £106.9m, slightly lower than the £109.1m in H1 2025 after taking account of disposals and new projects starting on site.  Rent from the letting to Databricks at Network W1 commenced in late May, adding £1.3m in the period and we will see a full six months of rent there in the second half. 

Property costs and irrecoverable service charges were £13.5m, down from £14.5m in the first half of 2025, and taking underlying net property and other income to £95.2m (H1 2025: £96.6m).

EPRA like-for-like gross rental income, which excludes the effect of acquisitions, disposals and developments, increased 1.0% compared to H1 2025 and like-for-like net rental income was up 2.7% compared with H1 2025. 

Rent and service charge receipts have again been strong with impairment charges in relation to rents receivable of only £0.1m (H1 2025: £0.1m). 

Old Street Quarter EC1

At this site that we expect to acquire in late 2027, we have recognised a further £0.4m (H1 2025: £0.5m) impairment charge relating to prepaid planning costs as we work together with Related Argent to refine our planning application. As noted in previous reports, at the point of acquisition, the site will be externally appraised on a residual value basis and, assuming current market conditions prevail, that valuation is likely to be significantly below the agreed price of £239m plus costs.  In advance of that, we have been regularly reviewing our contractual obligations under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.  At 31 December 2025, we concluded that no adjustment was required.  In the last few months, our plans for the site have become clearer but there are a range of possible delivery outcomes being considered such as partial site sales following planning.  These options have been appraised with expected probabilities attached.  Inputs include expected costs, end values and discount rates and have given rise to a provision of £45.8m which has been recognised in these results to 30 June 2026.  This analysis will be carried out regularly and, at the point of acquisition when the fair value of the site is included within the financial statements, any provision booked to date will be reversed.

Other income statement items

Administrative expenses increased slightly to £17.8m from £17.5m for the first half of 2025 but, on an EPRA basis where non-recurring costs associated with our new accounting system and certain staff termination costs are deducted, costs fell slightly to £16.9m from £17.4m in H1 2025.  We continue to focus on cost efficiency and, in 2026 to date, we have achieved staff savings of £1.4m on an annualised basis with more expected in the second half.

Our EPRA cost ratios in the first half were 26.4% (H1 2025: 25.8%, FY 2025: 27.3%) including direct vacancy costs and 20.9% (H1 2025: 19.4%, FY 2025: 22.4%) excluding direct vacancy costs. 

After accounting adjustments, the revaluation movement on investment properties recognised in the income statement was a deficit of £19.0m after surpluses of £38.2m in H1 2025 and £52.2m for the whole of 2025.  Rental growth and development profits buoyed the valuation but we saw some modest outward yield shift in the period partly due to shortening leases or vacancy in a few of our buildings such as 1 Page Street SW1.  The owner-occupied office at 25 Savile Row W1 showed a £1.6m revaluation deficit (H1 2025: £4.5m gain) in the statement of comprehensive income.  

Proceeds from the sale of investment properties totalled £263.8m but this includes £101.9m relating to the surrender of the old leases at Baker Street; the freeholder immediately granted a new headlease at 50 Baker Street which is included in investment property 'additions' (note 9) at a similar amount.  The other disposals related mainly to Horseferry House SW1 and 80-85 Tottenham Court Road W1, both of which completed in June 2026.  A further property disposal at 90 Whitfield Street W1 is due to complete in late August 2026 and is therefore held as a non-current asset held for sale at 30 June 2026 at its net carrying value of £106.7m.

Finance costs net of finance income increased marginally to £24.2m in the first half (H1 2025: £22.6m) due to the impact of higher average borrowing rates and a reduction in capitalised interest to £6.1m from £8.4m in H1 2025.

After the revaluation deficit and the onerous contract provision at Old Street Quarter, the IFRS result was a loss before tax for the half year of £17.9m compared to a profit of £94.0m in H1 2025.

EPRA earnings per share, which exclude fair value movements and the onerous contract provision, were 48.7p in H1 2026, down from 52.2p in H1 2025.  This is a slightly better result than we guided in February 2026. 

Capital allocation and project expenditure

Capital expenditure in the property portfolio in the first half totalled £53.7m (H1 2025: £80.6m) including £7.4m (H1 2025: £9.6m) of capitalised interest and staff costs.  The four substantial projects on site are currently either in the demolition or site preparation stages and we expect capex in the second half to accelerate to about £85m. As noted earlier, the leasehold acquisition of £105.2m related to the new headlease granted to us at 50 Baker Street and was essentially matched by a leasehold disposal of £101.9m being the surrender of the old leases that we held previously.

A further £2.7m was incurred at the solar park being constructed at Lochfauld in Scotland where completion remains on schedule for the second half of 2026.  There was also £3.0m of prepaid development expenditure at the Old Street Quarter site.

The £50m share buyback programme commenced in May 2026 and, by 30 June 2026, we had acquired 989,203 shares of 5p each at an average price of 1,833p for total consideration of £18.1m before costs.  We estimate that this had a positive 7p per share impact on EPRA NTA as at 30 June 2026.

Refinancing activity in 2026 to date 

Current period refinancing comprised the repayment of certain fixed rate debt that had reached maturity, replaced by either new or extended bank facilities.  We are seeing strong support from our banks who are currently able to offer more attractive overall pricing than can be achieved in the capital markets through bonds or private placements. As a result of this refinancing, our weighted average interest rate has fallen from 4.1% as at 31 December 2025 to 3.9% at 30 June 2026.  The weighted average rate over the six months to 30 June 2026 was 3.9% (H1 2025: 3.6%).

The fixed rate debt repaid at maturity comprised £55m of private placement notes in February 2026 and the longstanding £175m London Merchant Securities secured 6.5% bonds redeemed in March.  These were our last secured debt instrument so that 100% of the Group's debt is now unsecured.

Since the start of 2026, we have completed the following changes to our bank loans: i) extended the £82.5m HSBC term loan by a year in January 2026 taking its maturity to February 2028, ii) arranged a new 5-year £100m unsecured revolving credit facility (RCF) with Handelsbanken plc in July incorporating two one-year extension options plus a £50m accordion option, subject to consent, and iii) exercised our option to extend the maturity of our main £450m revolving credit facility to July 2030. 

Net debt summary

Our debt metrics and covenants remain very comfortable.

As a result of the property disposals which completed in June, Group net debt fell back to £1.38bn as at 30 June 2026 from £1.43bn at the 2025 year-end and from £1.52bn in June 2025.  This brought the EPRA loan-to-value ratio to 28.8% at 30 June 2026, down slightly from 29.4% at 31 December 2025.  Net debt to EBITDA also fell from 8.8 times at 31 December 2025 to 8.6 times as at 30 June 2026.  The anticipated completion of the sale of 90 Whitfield Street W1 in late August for c.£107m after costs will further reduce net debt. The Group's interest cover ratio remains strong at 3.0 times for the six months to 30 June 2026.

We retain substantial headroom under our facilities, with £481m in cash and undrawn facilities as at 30 June 2026.  This amount will increase with completion of the sale of 90 Whitfield Street and the availability of the new £100m RCF which was arranged after the period end in July.

The weighted average term of our debt was 4.3 years as at 30 June 2026 and there are no facilities to repay or refinance until November 2027 when the £100m Wells Fargo RCF becomes due.

Cash generated from operations reduced to £58.4m in the half year to 30 June 2026 (H1 2025: £73.6m) due largely to higher voids across the portfolio.  These came from space under redevelopment or refurbishment as well as additional vacancy, the latter mainly at 1 Page Street SW1. In addition, 25 Baker Street W1 is currently subject to rent-free and half-rent periods.  The net cash from operating activities was also impacted by a full year's interest paid in June 2026 on the 5.25% unsecured bonds; these were arranged in June 2025 and interest is paid annually in arrears.

Qualifying expenditure under our Green Finance Framework

The qualifying expenditure as at 30 June 2026 for each Eligible Green Project (EGP) is summarised below:

		Subsequent spend
Project	Look-back spend £m	Q4 2019  - FY 2025 £m	H1 2026 spend £m	H1 2026 disposals £m	Cumulative spend £m
80 Charlotte Street W1	185.6	52.6	-	-	238.2
1 Soho Place W1	57.5	167.1	-	-	224.6
The Featherstone Building EC1	29.1	69.2	-	-	98.3
25 Baker Street W1	26.5	179.4	0.8	(4.7)	202.0
Network W1	23.8	89.5	2.1	-	115.4
	322.5	557.8	2.9	(4.7)	878.5

80 Charlotte Street, 1 Soho Place and The Featherstone Building were completed in prior years and are fully operational. 25 Baker Street reached practical completion in August 2025, whilst Network was completed earlier this year.

Further projects are expected to be added to the list of EGPs later in the year including Holden House W1, 50 Baker Steet W1 and the Lochfauld solar park.

Qualifying capital expenditure incurred in H1 2026 totalled £2.9m. Following the disposal of three private residential units at 25 Baker Street, to which £4.7m of expenditure had been allocated, cumulative qualifying expenditure on EGPs amounted to £878.5m.

As at 30 June 2026, drawn borrowings from Green Financing Transactions comprised solely the £350m Green Bonds issued in 2021.

Dividend

The interim dividend has been increased again by 2.0% to 26.0p per share from 25.5p in 2025 and remains comfortably covered by EPRA earnings.  It will be paid as a PID on 9 October 2026 to shareholders on the register as at 4 September 2026.  The Board has, as usual, considered our other stakeholder obligations when setting this dividend.

RISK MANAGEMENT AND INTERNAL CONTROLS

We have identified certain principal risks and uncertainties that could prevent or adversely affect the Group from achieving its strategic objectives. We have assessed how these risks could best be mitigated, where possible, through a combination of internal controls, risk management and the purchase of insurance cover.

The London property market has generally been stable during H1 2026 with strong occupational demand for well-located, high quality buildings. However, the Group's valuation remains sensitive to factors which impact London's growth with geopolitical uncertainty, inflationary pressures, and elevated interest rates and gilt yields influencing market sentiment.

The risk of refinancing is a principal risk identified by the Group and continues to be well managed with both a new £100m unsecured revolving credit facility arranged in July and a one-year extension of the Group's £450m unsecured revolving credit facility also signed in July 2026. The Group's focus on disposals during 2026 also supports the Group's capital structure.

The principal risks and uncertainties facing the Group in 2026 are set out on the following pages with the potential impact and the mitigating actions and controls in place. These risks are reviewed and updated on a regular basis and were last formally assessed by the Board on 4 August 2026. The Group's approach to the management and mitigation of these risks is included in the 2025 Report & Accounts. The Board has confirmed that its risk appetite and key risk indicators remain appropriate.

Strategic risks

The Group's business model and/or strategy does not create the anticipated shareholder value or fails to meet investors' and other stakeholders' expectations.

Risk, effect and progression	Controls and mitigation
1.     Market impact on Group's strategy The Group's reliance on the successful execution of its strategy and maintaining its ability to respond appropriately to internal and external factors including changing work practices, occupational demand, economic and property cycles.	·      The Board maintains a formal schedule of matters which are reserved solely for its approval. These matters include decisions relating to the Group's strategy, capital structure, financing, capital allocation, major property acquisition or disposal, the Group's risk appetite and the authorisation of capital expenditure above certain limits. ·      An annual strategic review (including the five-year forecast) and budget is prepared for Board approval alongside two-year rolling forecasts which are prepared during the year. ·      The Credit Committee's terms of reference were updated during 2025 focusing on assessing and monitoring the financial strength of potential and existing occupiers. The Group's diverse and high quality occupier base provides resilience against occupier default. ·      The Board has an ongoing strategy to extend income through lease renewals and regears. The Group seeks to de-risk developments through the use of fixed price contracts prior to the commencement of works on site and appointing contractors appropriate to the project's scale and complexity as well as by often securing pre-lets. ·      We develop properties in central, well-connected locations where there is good potential for future occupier demand, such as along the Elizabeth line. ·      A regular review of the portfolio and identification of opportunities to dispose of non-core assets which are not anticipated to produce required returns. ·      Maintain sufficient headroom against all key financial ratios and covenants, with a particular focus on interest cover and net debt/EBITDA.

Financial risks

The main financial risk is that the Group becomes unable to meet its financial obligations. The probability of this occurring is low due to our significant covenant headroom, modest leverage and strong credit metrics. Financial risks can arise from movements in the financial markets in which we operate and inefficient management of capital resources.

Risk, effect and progression	Controls and mitigation
2. Refinancing risks The Group is unable to raise finance in a cost-effective manner that optimises the capital structure of the Group.	·      Continue to review market conditions for long-term fixed rate debt and engage with existing and potential debt providers. ·      Early and frequent engagement with existing and potential lenders to maintain long-term relationships. ·      Preparation of five-year cash flow and annual budgets support the Group in raising finance in advance of requirements. ·      The Group's financial position is reviewed at Executive Committee and Board meetings with an update on leverage metrics and capital markets from the CFO. ·      Annual review with a credit rating agency with whom we maintain a frequent dialogue. ·      Regular updates with our advisers to understand debt market trends. This includes looking at new forms of debt, considering whether security should be offered and the appropriate terms. ·      Recycling of capital is a key assumption in our annual budget and is updated in each rolling forecast.

3. Income decline
The Group's income declines due to external factors, many of which are outside of its control, including: ·   geopolitical and macroeconomic factors; ·   recession; ·   occupier default or failure; ·   demand for office space; ·   the 'grey' market in office space (i.e. occupier controlled vacant space); and ·   upward only rent reviews likely to be banned by 2027/2028 for new leases.	·      The Credit Committee, chaired by the CEO or CFO, conducts detailed reviews of all prospective occupiers and monitors the financial strength of our existing occupiers. ·      The Group maintains a diverse range of occupiers. We focus on letting our buildings to large and established businesses (headquarter spaces) where the risk of default is lower, compared with SMEs. ·      A 'tenants on watch' register is maintained and regularly reviewed by the Executive Directors and the Board. ·      The Leasing team monitors the vacancy rate closely with a specific focus on upcoming vacancies. ·      Ongoing dialogue is maintained with occupiers to understand their concerns, requirements and future plans. ·      Active in-house rent collection, with regular reports to the Executive Directors on day 1, 7, 14 and 21 of each rent collection cycle. ·      The Group's robust interest cover ratio and moderate net debt/EBITDA reduces the likelihood that a fall in rental income has a significant impact. ·      Rent deposits or guarantees are obtained where considered appropriate.
4. Fall in property values
The economic and geopolitical environment could have an adverse impact on property values and heighten the risk of a fall in property values.	·      The Group's unsecured financing makes management of our financial covenants straightforward. ·      The Group's moderate loan-to-value ratio reduces the likelihood that falls in property values will have a significant impact. ·      The impact of valuation yield changes on the Group's financial covenants and performance is monitored regularly and subject to sensitivity analysis to ensure that adequate headroom is preserved. ·      The impact of valuation yield changes and rent levels are considered when potential projects are appraised. ·      The Group produces a budget, five-year strategic review and three rolling forecasts each year which contain detailed sensitivity analyses, including the effect of changes to valuation yields.

Operational risks

The Group suffers either a financial loss or adverse consequences due to processes being inadequate or not operating correctly, human factors or other external events.

Risk, effect and progression	Controls and mitigation
5. Reduced development returns Returns from the Group's developments and refurbishments may be adversely impacted due to: ·   Conflict in the Middle East ·   Increased construction costs ·   Skilled labour shortages ·   Movement in valuation yields ·   Contractor or subcontractor default ·   Delays on delivery due to poor contractor performance ·   Building Safety Regulator sign-off where applicable ·   Unexpected 'on-site' issues ·   Adverse letting conditions ·   Planning requirements and delays	·   Monitoring of market conditions through reports from consultants and experts. ·   We use known 'Tier 1' contractors on our major projects with whom we have established working relationships and regularly work with tried and tested subcontractors. ·   Prior to construction beginning on site, we conduct thorough site investigations and surveys to reduce the risk of unidentified issues, including investigating the building's history and adjacent buildings/sites. ·   Engagement with the Building Safety Regulator to mitigate time required for Building Control approval. ·   Adequately appraise investments, through: (a) benchmarking development costs; (b) following a procurement process that is designed to minimise uncertainty around costs and includes the use of highly regarded quantity surveyors; and (c) value engineering opportunities. ·   We collaborate with the supply chain through the main contractor and engage in pre-construction service agreements (PCSAs) as well as against an agreed target, cost and programme. ·   Contractors are paid promptly and are encouraged to pay subcontractors promptly. Payments to contractors are in place to incentivise the achievement of project timescales, with damages agreed in the event of delay/cost overruns. ·   Regular on-site supervision by a dedicated Project Manager who monitors contractor performance and identifies problems at an early stage, thereby enabling remedial action to be taken. ·   Post-completion reviews are carried out for all major developments to ensure that improvements to the Group's procedures are identified and implemented.

6. Cyber attack on our IT systems The Group may be subject to a cyber attack that results in it being unable to use its information systems and/or losing data.	·   Our IT systems are protected by anti-virus software, 24/7/365 threat hunting, security incident detection and response, security anomaly detection and firewalls that are frequently updated. ·   The Group's Business Continuity Plan and cyber security incident response procedures are regularly reviewed and tested. ·   Security measures are regularly reviewed by the DIT team and cyber insurance is in place to support the strategy in mitigating the financial impact of cyber attacks. ·   Independent internal and external penetration/vulnerability tests and audits are regularly conducted to assess the effectiveness of the Group's security and the Cyber Essentials Plus Certification has been obtained. ·   Multi-Factor Authentication is in place for all users with access to our systems. ·   The Group's data is regularly backed up and securely replicated off site. ·   A gap analysis of the Cyber Governance Code of Practice was performed and enhancements were made to the Group's security posture with additional controls implemented as required. ·   Regular staff awareness and training programmes.
7. Cyber attack on our buildings The portfolio is exposed to potential cyber threats targeting building IT infrastructure, Operational Technology systems, and Internet of Things devices. Such incidents could adversely affect occupiers and result in significant operational disruption.	·   Our IT systems are protected by advanced endpoint protection software, 24/7/365 threat hunting, security incident detection and response, security anomaly detection, vulnerability management, firewalls and infrastructure that is regularly updated. ·   Frequent staff awareness and training programmes. Building Managers are included in cyber security awareness training and phishing simulations. ·   Cyber security incident response procedures are regularly reviewed and tested. ·   Physical segregation between the building's core IT infrastructure and occupiers' corporate IT networks as well as between buildings across the portfolio. ·   Multi-Factor Authentication, network segmentation and security standardisation. ·   Unlimited support by our Managed Detection and Response team is provided in the event of a malware incident. ·   Independent security penetration testing on both internal and externally facing systems. ·   A gap analysis of the Cyber Governance Code of Practice was performed and enhancements were made to the Group's security posture with additional controls implemented as required. ·   Cyber insurance is in place to support the strategy in responding to the risk of cyber attacks.

8. Our resilience to climate change The Group fails to respond appropriately, and sufficiently, to climate-related risks or fails to benefit from the potential opportunities.	·   Our SBTi (Science Based Targets initiative) targets are aligned to a 1.5°C climate scenario in line with our net zero carbon ambition. ·   We are progressing the construction of an 18.4 MW solar park at Lochfauld (Scotland), with energisation anticipated in 2026. ·   The Executive Directors receive regular updates and presentations at both the Executive Committee and Sustainability Committee meetings on environmental and sustainability performance and management matters, as well as progress against our pathway to becoming net zero carbon by 2030. ·   Industry leadership through both the Circular Economy initiative and Accelerating Concrete-Decarbonisation Group. ·   Periodic multi-scenario climate risk assessments (physical and transition risks), supported by third party experts, to identify risks and agree mitigation plans. ·   Clear disclosure in Group results, Annual Report and Responsibility Data Report of key data and performance points which are internally reviewed and subject to external assurance.
9. Health and safety (H&S) A major incident occurs at a development scheme, a managed property or at head office which leads to significant injuries, harm, or fatal consequences.	·   Periodic review of relevant health, safety and fire management policies and arrangements. ·   Ensure the Group has a competent and qualified (CMIOSH) H&S resource, whose performance is monitored and reviewed by the H&S and Risk Committees, and line-managed by the Chief Executive. ·   Check the H&S competence of our main contractors and service partners through verification by the H&S team prior to their appointment, based on risk profile of the project and/or delivery. ·   Ensure our principal designers and principal contractors submit suitable design stage reviews, pre-construction information, construction phase plans, site management plans (logistics, security, fire etc.) before works commence. ·   The H&S team, with the support of external advisers and audits, ensures our Construction (Design and Management) (CDM) client duties are executed at all project stages and are monitored on a monthly basis (on construction sites). ·   The Board, Risk Committee and Executive Directors receive frequent updates and presentations on key H&S matters, including 'Significant Incidents', legislation updates, and H&S performance trends across the development and managed portfolio. ·   The H&S team work closely with HR on employee health and safety proactive measures (such as the Heath & Wellbeing Strategy and Plan) and reactive measures (such as workplace adjustments, returning to work for new/expectant mothers and workplace assessments).
10. Non-compliance with law and regulations The Group breaches legislation that forms the regulatory framework within which the Group operates.	·   The Board and Risk Committee receive regular reports identifying upcoming legislative/regulatory changes. External advice is taken on any new legislation, if required. ·   Managing our properties to ensure they are compliant with the proposed Minimum Energy Efficiency Standards (MEES) legislation for Energy Performance Certificates (EPCs). ·   Ongoing staff training and awareness programmes. ·   Group policies and procedures dealing with all key legislation are available on the Group's intranet. ·   Quarterly review of our anti-bribery and corruption procedures by the Risk Committee. ·   A Group whistleblowing system ('Speak-up') for staff is maintained to report wrongdoing anonymously. ·   A review of our procedures against the Home Office's guide in response to the offence of 'failure to prevent fraud'.
11. Digital transformation risk
Transformation programmes and system implementations may fail to deliver expected business benefits, operational efficiencies and control improvements due to weaknesses in programme governance, stakeholder engagement, resourcing, change management, solution design, implementation or adoption.	·   Project scope, objectives, success criteria and expected benefits are clearly defined, approved and communicated to stakeholders. ·   Detailed business cases, budgets and resource plans are prepared and approved before project commencement, including appropriate contingency for delivery risks and delays. ·   Project risks, issues, budget utilisation, contingency levels and key milestones are regularly monitored and reported to the Steering Committee and Principal Committees, with updates to the Executive Committee and Board/as required. ·   Appropriate governance, executive sponsorship and project management resources are assigned to significant change initiatives, with projects required to follow established governance and delivery processes. ·   Business readiness, stakeholder communication, training and change management activities are performed throughout the project lifecycle to support successful implementation, adoption and benefits realisation.

12. Financial instruments - risk management

The Group is exposed to a range of financial risks through its activities, in particular credit risk, market risk and liquidity risk. These risks arise naturally from the Group's use of financial instruments in managing a large, London‑focused property portfolio, and the Group's framework for identifying, assessing and managing such risks remains well established. Further quantitative information in respect of these risks is presented throughout these financial statements.

While the overall risk profile has not changed materially from the prior year, the environment in which the Group operates continues to evolve. The Group's approach therefore reflects both prevailing market conditions and its long‑term strategic priorities. 

Financial instrument risk arises mainly from the Group's use of trade receivables, accrued income relating to lease incentives, cash deposits, trade and other payables, floating rate bank facilities, private placement notes and unsecured bonds. The Board is responsible for setting the overarching risk management objectives, with day‑to‑day monitoring and implementation delegated to the executive management team. The objective continues to be the conservative management of risk while maintaining the flexibility required to pursue value‑accretive development and investment opportunities.

Credit risk

Credit risk principally arises from amounts owed by tenants, reflecting the Group's position as a major central London landlord. It is the Group's policy to assess the creditworthiness of prospective tenants before entering into lease contracts. The Board's Credit Committee assesses each new tenant, drawing on financial statements, external ratings where available and, in some cases, forecast information and bank or trade references. Where appropriate, the Group may seek a rent deposit or guarantee. Existing tenant exposure is reviewed periodically, with additional focus on sectors experiencing structural pressures or where creditworthiness may be more variable. The Group has historically experienced low levels of tenant default, reflecting the strength of its tenant base and the effectiveness of its credit assessment and monitoring processes.

While the Group operates predominantly in central London and is therefore exposed to some geographical concentration risk, this is mitigated by the broad range of tenants across multiple industry sectors. In accordance with IFRS 9, trade receivables are assessed using an expected credit loss model, while lease incentive receivables are reviewed under IAS 36.

Credit risk arising from cash balances is controlled by depositing funds only with institutions that meet minimum investment‑grade criteria and by keeping maturities short. Across all financial assets, the carrying amounts recognised in the balance sheet represent the maximum exposure to credit risk.

Market risk

Market risk principally reflects the Group's exposure to movements in interest rates, given its mix of fixed and floating‑rate funding. The Group regularly monitors its interest rate exposure and performs sensitivity analysis to assess the potential effect of reasonably possible shifts in interest rates on profit and net assets.

It is the Group's policy to maintain a significant proportion of expected borrowings at fixed rates, typically in the range of 60% to 85%, achieved through a combination of fixed‑rate debt and floating‑to‑fixed interest rate swaps. At 30 June 2026, 71% of the Group's debt was fixed (31 December 2025: 82%), in line with policy.

From time to time, when preparing for a public bond issuance, the Group may also make use of gilt locks to effectively hedge movements in the underlying gilt yield between launch and pricing, thereby providing certainty over the coupon payable on the forthcoming issuance. This forms part of the Group's broader interest rate risk management strategy and complements the use of interest rate swaps and fixed‑rate funding.

All variable‑rate borrowings continued to be denominated in Sterling. When raising new long‑term funding, the Group generally prefers fixed‑rate structures to support cashflow predictability and capital planning.

Liquidity risk

Liquidity risk arises from the need to meet the Group's financial obligations as they fall due, including interest payments, scheduled loan repayments and working capital requirements of the business.

The Group manages liquidity risk by maintaining appropriate headroom on its committed revolving bank facilities and by spreading debt maturity dates across a range of lenders. Cash flows and projected loan balances are monitored regularly by the executive management team as part of the Group's forecasting process, with forward‑looking assessments covering a range of scenarios, including downside cases.

The Group also supports liquidity stability by fixing interest rates (and therefore cash flows) on a substantial portion of long-term borrowings. At the balance sheet date, the Group's projections indicated that it held sufficient liquidity to meet its obligations under all reasonably foreseeable scenarios.

Capital management

The Group's capital structure comprises equity and net debt. Consistent with the strategy applied in recent years, the principal objectives of capital management are to ensure the Group remains financially robust and efficient, while being able to continue as a going concern.

Capital is monitored using key measures such as NAV gearing, loan-to-value ratio, interest cover and net debt/EBITDA, all of which are defined within the list of definitions at the end of this announcement and are derived in note 26.

The Group also maintains significant uncharged property, reflecting its predominantly unsecured financing structure. At 30 June 2026, there was £5.0bn (31 December 2025: £4.8bn) of uncharged property. This provides flexibility to raise some future secured finance if required and supports a diversified approach to funding. Adjustments to the capital structure are considered in the context of market conditions, financial covenants and the Group's future development and acquisition plans. Potential actions include varying dividend levels (within REIT rules), returning capital to shareholders, issuing or redeeming debt or disposing of assets to reduce gearing.

Statement of Directors' responsibilities

The Directors' confirm that, to the best of their knowledge, these condensed interim financial statements have been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

·      An indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      Material related-party transactions in the first six months of the financial year and any material changes in the related-party transactions described in the last Annual Report.

The Directors are listed in the Derwent London plc Annual Report of 31 December 2025 and a list of the current Directors is maintained on the Derwent London plc website: www.derwentlondon.com. The maintenance and integrity of the Derwent London website is the responsibility of the Directors.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board

Paul M. Williams                                                                                                    Damian M.A. Wisniewski

Chief Executive                                                                                                       Chief Financial Officer

5 August 2026

GROUP CONDENSED INCOME STATEMENT

		Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
			Unaudited		Unaudited		Audited
	Note		£m		£m		£m
Gross property and other income	5		146.5		141.0		406.3
Net property and other income	5		95.2		96.6		199.6
Onerous contract provision	5		(45.8)		-		-
Administrative expenses			(17.8)		(17.5)		(39.1)
Revaluation (deficit)/surplus	9		(19.0)		38.2		52.2
Loss on disposal	6		(6.3)		(0.1)		(2.2)
Profit from operations			6.3		117.2		210.5
Finance income	7		0.4		0.2		2.1
Finance costs	7		(24.6)		(22.8)		(50.5)
Movement in fair value of derivative financial instruments			-		(0.6)		(0.6)
(Loss)/profit before tax			(17.9)		94.0		161.5
Tax (charge)/credit	8		(0.7)		0.5		(0.4)
(Loss)/profit for the period			(18.6)		94.5		161.1
Basic earnings per share	25		(16.59p)		84.18p		143.53p
Diluted earnings per share	25		(16.59p)		83.92p		143.51p

GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME

	Half year to 30.06.2026			Half year to 30.06.2025		Year to 31.12.2025
			Unaudited		Unaudited		Audited
	Note		£m		£m		£m
(Loss)/profit for the period			(18.6)		94.5		161.1
Revaluation (deficit)/surplus of owner-occupied property	9		(1.6)		4.5		4.5
Deferred tax credit/(charge) on revaluation	18		0.4		(1.1)		(1.1)
Other comprehensive (expense)/income that will not be
reclassified to profit or loss			(1.2)		3.4		3.4
Total comprehensive (expense)/income relating to the period			(19.8)		97.9		164.5

GROUP CONDENSED BALANCE SHEET

		30.06.2026		30.06.2025		31.12.2025
			Unaudited		Unaudited		Audited
	Note		£m		£m		£m
Non-current assets
Investment property	9		4,632.0		4,791.4		4,828.6
Property, plant and equipment	10		69.1		61.8		68.1
Pension scheme surplus			1.9		1.8		1.8
Other receivables	11		192.5		199.3		203.2
			4,895.5		5,054.3		5,101.7
Current assets
Trading property	9		26.2		116.6		32.9
Trading stock			-		10.7		-
Trade and other receivables	12		54.5		58.0		46.7
Corporation tax asset			0.7		0.7		0.7
Cash and cash equivalents	22		110.9		91.7		131.7
			192.3		277.7		212.0
Non-current assets held for sale	13		106.7		-		-
Total assets			5,194.5		5,332.0		5,313.7
Current liabilities
Borrowings	15		-		252.4		231.6
Leasehold liabilities	15		0.5		0.4		0.5
Trade and other payables	14		171.6		169.0		168.0
Provisions	17		0.2		0.2		0.1
			172.3		422.0		400.2
Non-current liabilities
Borrowings	15		1,405.7		1,298.6		1,255.0
Leasehold liabilities	15		52.5		34.0		40.5
Provisions	17		46.1		0.2		0.4
Deferred tax	18		2.6		1.4		2.3
			1,506.9		1,334.2		1,298.2
Total liabilities			1,679.2		1,756.2		1,698.4
Total net assets			3,515.3		3,575.8		3,615.3
Equity
Share capital			5.6		5.6		5.6
Share premium			196.6		196.6		196.6
Other reserves			937.3		945.7		947.3
Retained earnings			2,375.8		2,427.9		2,465.8
Total equity			3,515.3		3,575.8		3,615.3

GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY

		Attributable to equity shareholders
		Share	Share		Other		Retained		Total
		capital	premium		reserves		earnings		equity
		£m		£m		£m		£m		£m
At 1 January 2026		5.6		196.6		947.3		2,465.8		3,615.3
Loss for the period		-		-		-		(18.6)		(18.6)
Other comprehensive expense		-		-		(1.2)		-		(1.2)
Share-based payments		-		-		(1.3)		2.2		0.9
Transfer of reserves	21	-		-		(7.5)		7.5		-
Dividends paid	19	-		-		-		(62.9)		(62.9)
Share buyback	20	-		-		-		(18.2)		(18.2)
At 30 June 2026 (unaudited)		5.6		196.6		937.3		2,375.8		3,515.3
At 1 January 2025		5.6		196.6		943.2		2,394.4		3,539.8
Profit for the period		-		-		-		94.5		94.5
Other comprehensive income		-		-		3.4		-		3.4
Share-based payments		-		-		(0.9)		1.3		0.4
Dividends paid	19	-		-		-		(62.3)		(62.3)
At 30 June 2025 (unaudited)		5.6		196.6		945.7		2,427.9		3,575.8
At 1 January 2025		5.6		196.6		943.2		2,394.4		3,539.8
Profit for the year		-		-		-		161.1		161.1
Other comprehensive income		-		-		3.4		-		3.4
Share-based payments		-		-		0.7		1.2		1.9
Dividends paid	19	-		-		-		(90.9)		(90.9)
At 31 December 2025 (audited)		5.6		196.6		947.3		2,465.8		3,615.3

GROUP CONDENSED CASH FLOW STATEMENT

		Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
			Unaudited		Unaudited		Audited
	Note		£m		£m		£m
Operating activities
Cash generated from operations	16		58.4		73.6		272.5
Interest received			1.1		0.2		1.3
Interest and other finance costs paid			(25.1)		(14.9)		(45.5)
Tax paid in respect of operating activities			-		(0.1)		(0.3)
Net cash from operating activities			34.4		58.8		228.0
Investing activities
Acquisition of properties			-		(13.7)		(13.7)
Capital expenditure1			(51.7)		(72.9)		(149.1)
Disposal of investment properties			160.8		25.6		79.1
Purchase of property, plant and equipment			(2.3)		(3.2)		(10.0)
Indirect taxes paid in respect of investing activities			(2.4)		(0.2)		(3.0)
Net cash from/(used in) investing activities			104.4		(64.4)		(96.7)
Financing activities
Proceeds of bond issue			-		247.9		247.9
Net movement in revolving bank loans			149.5		(68.5)		(110.5)
Drawdown of term bank loans			-		82.5		82.5
Payment of arrangement fees			(0.4)		(0.7)		(3.9)
Repayment of other loan			-		-		(20.0)
Repayment of secured bond			(175.0)		-		-
Repayment of unsecured convertible bond			-		(175.0)		(175.0)
Repayment of private placement notes			(55.0)		-		-
Settlement of derivative			-		(1.2)		(1.2)
Dividends paid	19		(61.3)		(59.1)		(90.8)
Share buyback			(17.4)		-		-
Net cash (used in)/from financing activities			(159.6)		25.9		(71.0)
(Decrease)/increase in cash and cash equivalents in the period			(20.8)		20.3		60.3
Cash and cash equivalents at the beginning of the period			131.7		71.4		71.4
Cash and cash equivalents at the end of the period	22		110.9		91.7		131.7

¹ Finance costs of £6.1m (half year to 30 June 2025: £8.4m; year to 31 December 2025: £14.1m) have been included in capital expenditure (see note 7).

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation

The financial information for the half year to 30 June 2026 and the half year to 30 June 2025 was not subject to an audit but has been subject to a review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board.

The comparative financial information presented herein for the year to 31 December 2025 does not constitute the Group's statutory accounts, but is derived from those accounts. The Group's statutory accounts for the year to 31 December 2025 have been delivered to the Registrar of Companies. The Auditors' report on those accounts was unmodified, did not draw attention to any matters by way of an emphasis of matter and did not contain any statement under Section 498 of the Companies Act 2006.

The financial information in these condensed consolidated interim financial statements is that of the holding company and all of its subsidiaries (the 'Group'). The Group's condensed consolidated interim financial statements have been prepared in accordance with UK-adopted IAS 34 and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority and should be read in conjunction with the Annual Report and Accounts for the year to 31 December 2025, which have been prepared in accordance with UK-adopted International Accounting Standards, (the "applicable framework"), and have been prepared in accordance with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. All financial statements referred to in this report have been prepared under the historical cost convention as modified by the revaluation of investment properties, the revaluation of property, plant and equipment, assets held for sale, pension scheme, and financial assets and liabilities held at fair value through profit and loss.

As with most other UK property companies and real estate investment trusts ('REITs'), the Group presents many of its financial measures in accordance with the guidance criteria issued by the European Public Real Estate Association ('EPRA').  These measures, which provide consistency across the sector, are all derived from the IFRS figures in note 25.

Going concern

Under Provision 30 of the UK Corporate Governance Code 2024, the Board needs to report whether the business is a going concern. In considering this requirement, the Directors have taken into account the following:

·    The Group's latest rolling forecast for the period to 31 December 2027, in particular the cash flows, borrowings and undrawn facilities, including the 'severe but plausible' downside case.

·      The headroom under the Group's financial covenants.

·    The risks included on the Group's risk register that could impact on the Group's liquidity and solvency over the 12 months following approval of these interim financial statements.

·      The risks on the Group's risk register that could be a threat to the Group's business model and capital adequacy. 

The Directors have considered the relatively long-term and predictable nature of the income receivable under the tenant leases, the Group's EPRA loan-to-value ratio of 28.8%, the interest cover ratio of 300%, the £481m total of undrawn facilities and unrestricted cash and the fact that the average maturity of borrowings was 4.3 years at 30 June 2026.

Following the period end, the Group also entered into a new £100m unsecured revolving credit facility with Handelsbanken plc, a new lender to the Group. In addition, the Group exercised the first one-year extension option on its principal £450m unsecured revolving credit facility in July 2026, extending its maturity to July 2030. Please refer to note 23 for further detail. Together, these transactions further strengthen the Group's funding position and provide the Directors with a reasonable expectation that the Group will be able to meet its liabilities as they fall due.

The impacts of the current economic situation, interest rates and cost inflation on the business and its occupiers has been considered. The likely impact of climate change has been incorporated into the Group's forecasts which have also taken account of a programme of EPC upgrades across the portfolio. Based on the Group's position at half year, rental income would need to decline by 52% and property values would need to fall by 52% before breaching its financial covenants.

The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial review. In addition, the Group's risks and risk management processes can be found within the risk management and internal controls.

Having due regard to these matters and after making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing of these condensed consolidated interim financial statements and, therefore, the Directors continue to adopt the going concern basis in their preparation.

2. Changes in accounting standards

The accounting policies used by the Group in these condensed financial statements are consistent with those applied in the Group's financial statements for the year to 31 December 2025, as amended to reflect the adoption of new standards, amendments and interpretations which became effective in the year as shown below.

New standards adopted during the period

The following standards, amendments and interpretations were effective for the first time for the Group's current accounting period and had no material impact on the financial statements.

IFRS 7 and IFRS 9 (amended) - Classification and Measurement of Financial Instruments;

IFRS 7 and IFRS 9 (amended) - Contracts referencing Nature-dependent Electricity.

Standards in issue but not yet effective

The following standards, amendments and interpretations were in issue at the date of approval of these financial statements but were not yet effective for the current accounting period and have not been adopted early.

IFRS 19 - Subsidiaries without Public Accountability: Disclosures;

IFRS 18 - Presentation and Disclosure in Financial Statements.

Based on the Group's current circumstances, the Directors do not anticipate that their adoption in future periods will have a material impact on the financial statements of the Group, with the exception of IFRS 18.

IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 Presentation of Financial Statements and is effective for annual reporting periods beginning on or after 1 January 2027. IFRS 18 will not affect the recognition or measurement of items in the financial statements; however, its impact on presentation and disclosure is expected to be material.

Management is currently assessing the detailed implications of applying the new standard to the Group's consolidated financial statements. The following potential impacts have been identified:

•    Rental income, valuation movements, and gains or losses on disposal of investment property are expected to be presented in the operating category of the consolidated income statement, as they arise from the Group's specified main business activity of investing in investment property.

•   The presentation of certain line items in the primary financial statements may change as a result of the enhanced principles on aggregation and disaggregation.

•    Additional note disclosures will be required for management-defined performance measures and specified expenses by nature.

•    In the first reporting period in which IFRS 18 is applied, the Group will present a reconciliation between the restated comparative amounts presented under IFRS 18 and the amounts previously presented under IAS 1.

•   In the consolidated statement of cash flows, interest paid will be presented as financing cash flows and interest received as investing cash flows, rather than both being included within operating cash flows as they are currently.

The Group will apply IFRS 18 for the financial year ending 31 December 2027. Retrospective application is required and, accordingly, comparative information for the financial year ending 31 December 2026 will be restated on transition.

3. Significant judgments, key assumptions and estimates

The preparation of financial statements in accordance with the applicable framework requires the use of certain significant accounting estimates and judgements. It also requires management to exercise judgement in the process of applying the Group's accounting policies. Not all of these accounting policies require management to make difficult, subjective or complex judgements or estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may differ from those estimates. The following is intended to provide an understanding of the policies that management consider critical because of the level of complexity, judgement or estimation involved in their application and their impact on these condensed financial statements.

Significant judgement

Compliance with the real estate investment trust (REIT) taxation regime

As a REIT, the Group benefits from tax advantages. Income and chargeable gains on the qualifying property rental business are exempt from corporation tax. Income that does not qualify as property income within the REIT rules is subject to corporation tax in the normal way. There are a number of tests that are applied annually, and in relation to forecasts, to ensure the Group remains well within the limits allowed within those tests. The Group met all the criteria in 2025 in each case and is forecast to meet all the criteria in 2026, thereby ensuring its REIT status is maintained. The Directors intend that the Group should continue as a REIT for the foreseeable future.

Key source of estimation uncertainty

Property portfolio valuation

The Group uses the valuation carried out by external valuers as the fair value of its property portfolio. The valuation considers a range of assumptions including future rental income, investment yields, anticipated outgoings and maintenance costs, future development expenditure and appropriate discount rates.  The external valuers also make reference to market evidence of transaction prices for similar properties and take into account the impact of climate change and related environmental, social and governance considerations. More information is provided in note 9, including sensitivity disclosures.

Old Street Quarter onerous contract provision

The assessment of whether the Group's conditional contract to acquire the Old Street Quarter site is onerous under IAS 37 requires significant management judgement. This included determining the expected economic benefits arising from the future development of the site, the range of potential delivery strategies available and the probability weighting applied to those outcomes.

The measurement of the resulting provision is subject to estimation uncertainty, particularly in relation to assumptions regarding future property values, development costs, programme duration, discount rates and market growth rates. Changes in these assumptions could result in a material change to the provision recognised.

Further details of the provision recognised, the assumptions applied and the related sensitivities are provided in note 17 - Provisions.

4. Segmental information

IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal financial reports about components of the Group that are regularly reviewed by the chief operating decision maker (which in the Group's case are the three executive Directors assisted by the other 11 members of the Executive Committee) in order to allocate resources to the segments and to assess their performance.

The internal financial reports received by the Group's Executive Committee contain financial information at a Group level as a whole and there are no reconciling items between the results contained in these reports and the amounts reported in the financial statements.  These internal financial reports include the IFRS figures but also report the non-IFRS figures for the EPRA Earnings and Net Asset Value metrics.  Reconciliations of each of these figures to their statutory equivalents are detailed in note 25. Additionally, information is provided to the Executive Committee showing gross property income and property valuation by individual property.  Therefore, for the purposes of IFRS 8, each individual property is considered to be a separate operating segment in that its performance is monitored individually.

The Group's property portfolio includes investment property, owner-occupied property and trading property and comprised 96% office buildings* in central London by value (30 June 2025: 94%; 31 December 2025: 96%). The Directors consider that these individual properties have similar economic characteristics and therefore have been aggregated into a single operating segment. The remaining 4% (30 June 2025: 6%; 31 December 2025: 4%) represented a mixture of retail, residential and light industrial properties, as well as land, each of which is de minimis in its own right and below the quantitative threshold in aggregate.  Therefore, in the view of the Directors, there is one reportable segment under the provisions of IFRS 8.

All of the Group's properties are based in the UK. No geographical grouping is contained in any of the internal financial reports provided to the Group's Executive Committee and, therefore, no geographical segmental analysis is required by IFRS 8.  However, geographical analysis is included in the tables below to provide users with additional information.  The majority of the Group's properties are located in London (West End central, West End borders/outer and City borders), with the remainder in Scotland (Provincial).

* Some office buildings have an ancillary element such as retail or residential.

Gross property income

						Office buildings	Other		Total
						£m		£m		£m
Half year to 30 June 2026
West End central						64.3		1.0		65.3
West End borders/other						7.4		-		7.4
City borders						31.2		0.5		31.7
Provincial						-		2.5		2.5
Total						102.9		4.0		106.9
Half year to 30 June 2025
West End central						64.4		1.2		65.6
West End borders/other						7.2		-		7.2
City borders						33.7		0.5		34.2
Provincial						-		2.1		2.1
Total						105.3		3.8		109.1
Year to 31 December 2025
West End central						130.2		2.1		132.3
West End borders/other						14.6		-		14.6
City borders						66.5		0.8		67.3
Provincial						-		4.4		4.4
Total						211.3		7.3		218.6

A reconciliation of gross property income to gross property and other income is given in note 5.

Property portfolio

					Carrying value						Fair value
					Office						Office
				buildings		Other		Total		buildings		Other		Total
					£m		£m		£m		£m		£m		£m
30 June 2026
West End central					3,242.8		76.0		3,318.8		3,367.3		76.5		3,443.8
West End borders/other					248.2		-		248.2		257.6		-		257.6
City borders					1,129.6		6.1		1,135.7		1,146.9		6.2		1,153.1
Provincial					-		114.1		114.1		-		115.8		115.8
Total					4,620.6		196.2		4,816.8		4,771.8		198.5		4,970.3
30 June 2025
West End central					3,278.4		165.8		3,444.2		3,416.8		175.6		3,592.4
West End borders/other					259.4		-		259.4		270.4		-		270.4
City borders					1,147.3		6.2		1,153.5		1,176.1		6.2		1,182.3
Provincial					-		104.4		104.4		-		105.0		105.0
Total					4,685.1		276.4		4,961.5		4,863.3		286.8		5,150.1
31 December 2025
West End central					3,298.3		81.6		3,379.9		3,445.3		82.5		3,527.8
West End borders/other					262.9		-		262.9		273.2		-		273.2
City borders					1,153.0		6.2		1,159.2		1,172.5		6.2		1,178.7
Provincial					-		113.0		113.0		-		114.2		114.2
Total					4,714.2		200.8		4,915.0		4,891.0		202.9		5,093.9

A reconciliation between the fair value and carrying value of the portfolio is set out in note 9.

5. Property and other income

	Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
		£m		£m		£m
Gross rental income		106.9		109.1		218.3
Surrender premiums received		-		-		0.3
Gross property income		106.9		109.1		218.6
Trading property sales proceeds1		6.9		2.4		118.1
Trading stock sales proceeds1		-		6.8		17.8
Service charge income1		30.2		20.3		46.9
Other income1		2.5		2.4		4.9
Gross property and other income		146.5		141.0		406.3
Gross rental income		106.9		109.1		218.3
Movement in impairment of receivables		(0.1)		(0.1)		(0.5)
Movement in impairment of prepayments		(0.4)		(0.5)		(1.4)
Service charge income1		30.2		20.3		46.9
Service charge expenses		(34.6)		(24.4)		(53.5)
		(4.4)		(4.1)		(6.6)
Property costs		(9.1)		(10.4)		(19.8)
Net rental income		92.9		94.0		190.0
Trading property sales proceeds1		6.9		2.4		118.1
Trading property cost of sales		(7.1)		(2.3)		(113.9)
(Loss)/profit on disposal of trading properties		(0.2)		0.1		4.2
Trading stock sales proceeds1		-		6.8		17.8
Trading stock cost of sales		-		(6.8)		(17.8)
Result on disposal of trading stock		-		-		-
Other income		2.5		2.4		4.9
Net surrender premiums received		-		-		0.3
Dilapidation receipts		-		0.1		0.2
Net property and other income		95.2		96.6		199.6
Onerous contract provision		(45.8)		-		-
Net property and other income including onerous contract provision		49.4		96.6		199.6

¹ In line with IFRS 15 Revenue from Contracts with Customers, the Group recognised £39.6m (half year to 30 June 2025: £31.9m; year to 31 December 2025: £187.7m) of other income, trading property sales proceeds, trading stock proceeds and service charge income within gross property and other income.

Gross property income includes £ 7.4m (half year to 30 June 2025:£ 0.2m: year to 31 December 2025:£ 3.7m) relating to rents recognised in advance of cash receipts.

Gross rental income includes £0.3m (half year to 30 June 2025: £0.2m; year to 31 December 2025: £0.5m) received in relation to DL/ Lounges. Other income includes £0.4m (half year to 30 June 2025: £0.3m; year to 31 December 2025: £0.6m) received from customer services.

Property costs includes £1.9m (half year to 30 June 2025: £1.8m; year to 31 December 2025: £2.9m) in relation to DL/ Lounges and customer services.

Other income relates to fees and commissions earned from tenants in relation to the management of the Group's properties and customer services. This was recognised in the Group income statement in accordance with the delivery of services.

Property costs include amounts in relation to non-recoverable service charge costs associated with vacant units during periods of refurbishment. These amounts are not significant and were previously capitalised in the carrying value of the property.

In April 2025, the Group part disposed of its trading stock which was transferred under development agreements to a third party upon completion.

Net property and other income including onerous contract provision was £49.4m for the period to 30 June 2026. It includes a non-cash charge of £45.8m arising from the recognition of an onerous contract provision in respect of the Group's conditional acquisition of the Old Street Quarter site. Further information is provided in note 17 - Provisions.

6. Loss on disposal

	Half year to 30.06.2026		Half year to 30.06.2025			Year to 31.12.2025
		£m		£m		£m
Investment property
Gross disposal proceeds		263.8		26.0		80.2
Costs of disposal		(4.5)		(0.4)		(1.6)
Net disposal proceeds		259.3		25.6		78.6
Carrying value		(241.4)		(25.7)		(76.9)
Adjustment for lease costs and rents recognised in advance		(24.2)		-		(3.9)
Loss on disposal		(6.3)		(0.1)		(2.2)

Included within gross disposal proceeds for the period to 30 June 2026 is £131.8m (£129.3m net of rental top ups) relating to the disposal of the Group's freehold interest in Horseferry House SW1, and £32.6m relating to the disposal of the Group's freehold interest in 80-85 Tottenham Court Road W1, both of which completed in June 2026.

Also included within gross disposal proceeds for 2026 is £101.9m relating to the surrender of the headleases at 38-52, 54-60 and 66-70 Baker Street, W1. A new headlease was granted simultaneously and is included within 'additions' in note 9. £3.3m of consideration was received that relates to the future development of the retail units on behalf of the freeholder and has been recognised as deferred income pending completion of those works.

7. Finance income and finance costs

					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
						£m		£m		£m
Finance income
Net interest received on defined benefit pension scheme asset						-		-		0.1
Bank interest receivable						0.3		0.1		2.0
Other						0.1		0.1		-
Finance income						0.4		0.2		2.1
Finance costs
Bank loans						(9.6)		(7.6)		(15.0)
Non-utilisation fees						(0.9)		(1.2)		(2.3)
Unsecured convertible bonds						-		(1.8)		(1.8)
Unsecured green bonds						(3.4)		(3.4)		(6.7)
Unsecured bonds						(6.6)		(0.9)		(7.6)
Secured bonds						(2.4)		(5.7)		(11.4)
Unsecured private placement notes						(7.2)		(7.8)		(15.6)
Amortisation of issue and arrangement costs						(1.5)		(1.6)		(2.8)
Amortisation of the fair value of the secured bonds						1.8		0.8		1.7
Obligations under headleases						(0.9)		(0.7)		(1.7)
Settlement of derivative financial instrument						-		(1.2)		(1.2)
Other						-		(0.1)		(0.2)
Gross interest costs						(30.7)		(31.2)		(64.6)
Less: interest capitalised						6.1		8.4		14.1
Finance costs						(24.6)		(22.8)		(50.5)

Finance costs of £6.1m (half year to 30 June 2025: £8.4m; year to 31 December 2025: £14.1m) have been capitalised on development projects including trading stock and trading properties, in accordance with IAS 23 Borrowing Costs, using the Group's average cost of borrowing during each quarter. These amounts are included within capital expenditure on the property portfolio in the Group cash flow statement under investing activities, which totalled £51.7m, (half year to 30 June 2025: £72.9m; year to 31 December 2025: £149.1m).

Total finance costs paid to 30 June 2026 were £31.4m (half year to 30 June 2025: £24.5m; year to 31 December 2025: £59.6m).

8. Tax charge/(credit)

					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
						£m		£m		£m
UK corporation tax and income tax in respect of result for the period						-		-		-
Utilisation of losses from prior years						-		-		-
Other						-		-		-
Corporation tax charge						-		-		-
Deferred tax
Origination and reversal of temporary differences						0.7		(0.5)		0.4
Tax charge/(credit)						0.7		(0.5)		0.4

In addition to the tax charge of £0.7m (half year to 30 June 2025: credit of £0.5m; year to 31 December 2025: charge of £0.4m) that passed through the Group income statement, a deferred tax credit of £0.4m (half year to 30 June 2025: charge of £1.1m; year to 31 December of 2025: charge of £1.1m) was recognised in the Group statement of comprehensive income. See note 18 for further details.

The effective rate of tax for the half year to 30 June 2026 is lower (half year to 30 June 2025: lower; year to 31 December 2025: lower) than the standard rate of corporation tax in the UK. The differences are explained below:

	Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
	£m			£m		£m
(Loss)/profit before tax		(17.9)		94.0		161.5
Expected tax (credit)/charge based on the standard rate of
corporation tax in the UK of 25% (2024: 25%)		(4.5)		23.5		40.4
Difference between tax and accounting profit on disposals		0.9		-		1.3
REIT exempt income		(9.4)		(11.2)		(19.4)
Revaluation deficit/(surplus) attributable to REIT properties		6.3		(10.6)		(13.7)
Expenses and fair value adjustments not allowable for
tax purposes		11.9		3.2		1.9
Capital allowances		(5.2)		(4.5)		(10.5)
Other differences		0.7		(0.9)		0.4
Tax charge/(credit)		0.7		(0.5)		0.4

9. Property portfolio

Carrying value
			Total	Owner-	Assets		Total
			investment	occupied	held for	Trading	property
	Freehold	Leasehold	property	property	sale	property	portfolio
	£m	£m	£m	£m	£m	£m	£m
At 1 January 2026	3,316.3	1,512.3	4,828.6	53.5	-	32.9	4,915.0
Acquisitions	-	105.2	105.2	-	-	-	105.2
Capital expenditure	30.4	15.7	46.1	-	-	0.2	46.3
Interest capitalisation and staff costs	4.8	2.6	7.4	-	-	-	7.4
Additions	35.2	123.5	158.7	-	-	0.2	158.9
Disposals	(139.5)	(101.9)	(241.4)	-	-	(6.9)	(248.3)
Transfers	(106.7)	-	(106.7)	-	106.7	-	-
Revaluation	(19.3)	0.3	(19.0)	(1.6)	-	-	(20.6)
Movement in grossing up of
headlease liabilities	-	11.8	11.8	-	-	-	11.8
At 30 June 2026	3,086.0	1,546.0	4,632.0	51.9	106.7	26.2	4,816.8
At 1 January 2025	3,209.7	1,460.4	4,670.1	49.0	25.7	115.7	4,860.5
Acquisitions	0.2	5.9	6.1	-	-	-	6.1
Capital expenditure	54.1	15.5	69.6	-	-	1.4	71.0
Interest capitalisation and staff costs	3.2	4.6	7.8	-	-	1.8	9.6
Additions	57.5	26.0	83.5	-	-	3.2	86.7
Disposals	-	-	-	-	(25.7)	(2.3)	(28.0)
Revaluation	33.6	4.6	38.2	4.5	-	-	42.7
Movement in grossing up of
headlease liabilities	-	(0.4)	(0.4)	-	-	-	(0.4)
At 30 June 2025	3,300.8	1,490.6	4,791.4	53.5	-	116.6	4,961.5
At 1 January 2025	3,209.7	1,460.4	4,670.1	49.0	25.7	115.7	4,860.5
Acquisitions	0.2	5.8	6.0	-	-	-	6.0
Capital expenditure	92.9	38.5	131.4	-	-	24.7	156.1
Interest capitalisation and staff costs	7.4	6.8	14.2	-	-	2.3	16.5
Additions	100.5	51.1	151.6	-	-	27.0	178.6
Disposals	(51.2)	-	(51.2)	-	(25.7)	(109.8)	(186.7)
Revaluation	57.3	(5.1)	52.2	4.5	-	-	56.7
Movement in grossing up of
headlease liabilities	-	5.9	5.9	-	-	-	5.9
At 31 December 2025	3,316.3	1,512.3	4,828.6	53.5	-	32.9	4,915.0

Adjustments from fair value to carrying value
				Total	Owner-	Assets		Total
				investment	occupied	held for	Trading	property
		Freehold	Leasehold	property	property	sale	property	portfolio
		£m	£m	£m	£m	£m	£m	£m
At 30 June 2026
Fair value		3,218.2	1,563.5	4,781.7	51.9	110.5	26.2	4,970.3
Lease incentives and costs
	included in receivables	(132.2)	(68.2)	(200.4)	-	(3.8)	-	(204.2)
Grossing up of headlease liabilities		-	50.7	50.7	-	-	-	50.7
Carrying value		3,086.0	1,546.0	4,632.0	51.9	106.7	26.2	4,816.8
At 30 June 2025
Fair value		3,462.9	1,507.9	4,970.8	53.5	-	125.8	5,150.1
Revaluation of trading property		-	-	-	-	-	(9.2)	(9.2)
Lease incentives and costs
	included in receivables	(162.1)	(50.2)	(212.3)	-	-	-	(212.3)
Grossing up of headlease liabilities		-	32.9	32.9	-	-	-	32.9
Carrying value		3,300.8	1,490.6	4,791.4	53.5	-	116.6	4,961.5
At 31 December 2025
Fair value		3,472.0	1,535.1	5,007.1	53.5	-	33.3	5,093.9
Revaluation of trading property		-	-	-	-	-	(0.4)	(0.4)
Lease incentives and costs
	included in receivables	(155.7)	(61.8)	(217.5)	-	-	-	(217.5)
Grossing up of headlease liabilities		-	39.0	39.0	-	-	-	39.0
Carrying value		3,316.3	1,512.3	4,828.6	53.5	-	32.9	4,915.0

The property portfolio is subject to semi-annual external valuations and was revalued at 30 June 2026 by external valuers on the basis of fair value in accordance with The RICS Valuation - Professional Standards, which takes account of the properties' highest and best use. When considering the highest and best use of a property, the external valuers will consider its existing and potential uses which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the external valuers will consider the costs and the likelihood of achieving and implementing this change in arriving at the property valuation. There were no such instances in the year.

The valuation reports produced by the external valuers are based on information provided by the Group such as current rents, terms and conditions of lease agreements, service charges and capital expenditure. This information is derived from the Group's financial and property management systems and is subject to the Group's overall control environment. In addition, the valuation reports are based on assumptions and valuation models used by the external valuers. The assumptions are typically market related, such as yields and discount rates, and are based on their professional judgement and market observation and take into account the impact of climate change and related environmental, social and governance considerations. Each property is considered a separate asset class based on the unique nature, characteristics and risks of the property.

The external valuations for the entire portfolio at June 2026 were carried out by Knight Frank LLP.

Knight Frank valued the properties at £4,970.3m (30 June 2025: £5,150.1m; 31 December 2025: £5,093.9m). Of this total, £51.9m (30 June 2025: £53.5m; 31 December 2025: £53.5m) relating to owner-occupied property was included within property, plant and equipment. In addition, £26.2m (30 June 2025: £125.8m; 31 December 2025: £33.3m) was included within trading property.

The total fees, including the fee for this assignment, earned by Knight Frank LLP (or other companies forming part of the same group of companies within the UK) from the Group is less than 5.0% of their total UK revenues.

Staff and associated costs directly attributable to the management of major schemes are capitalised, based on the proportion of time spent on each relevant scheme.

Following exchange of contracts in February 2026 for the sale of its freehold interest in 90 Whitfield Street W1, the Group transferred £106.7m from investment property to assets held for sale, with completion expected in August 2026. A revaluation deficit of £5.6m relating to the asset held for sale is included within the revaluation deficit of £20.6m.

During the period the Group surrendered the headleases at 38-52, 54-60 and 66-70 Baker Street, W1, for proceeds of £101.9m. A new headlease was granted simultaneously for £105.2m and is included within 'additions'. £3.3m of consideration was received that relates to the future development of the retail units on behalf of the freeholder and has been recognised as deferred income pending completion of those works.

Net zero carbon and EPC compliance

The Group published its pathway to net zero carbon in July 2020 and has set 2030 as its target date to achieve this. £2.9m (half year to 30 June 2025: £45.9m; year to 31 December 2025: £88.9m) of eligible 'green' capital expenditure, in accordance with the Group's Green Finance Framework, was incurred in the half year to 30 June 2026 on the major developments at 80 Charlotte Street W1, 1 Soho Place W1, The Featherstone Building EC1, 25 Baker Street W1 and Network W1. In addition, the Group continues to hold carbon credits to support certain externally validated green projects to offset embodied carbon.

To quantify one of the impacts of climate change on the valuation, an independent third-party assessment was carried out in 2021 to estimate the cost of EPC upgrades across the portfolio. Following a review of the latest scope changes in building regulation, subsequent inflation, disposals, and work carried out to date, the estimated amount was £67.1m at 30 June 2026. Of this amount, a specific deduction of £27m was included in the 30 June 2026 external valuation. In addition, further amounts have been allowed for in the expected costs of future refurbishment projects.

Reconciliation of revaluation (deficit)/surplus
					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
						£m		£m		£m
Total revaluation (deficit)/surplus						(5.3)		51.2		67.5
Lease incentives and costs						(10.8)		0.5		(8.7)
Trading property revaluation adjustment						(1.1)		(8.6)		(2.0)
Other						(3.4)		(0.4)		(0.1)
IFRS revaluation (deficit)/surplus						(20.6)		42.7		56.7
Reported in the:
			Revaluation (deficit)/surplus			(19.0)		38.2		52.2
Group income statement						(19.0)		38.2		52.2
Group statement of comprehensive income						(1.6)		4.5		4.5
						(20.6)		42.7		56.7

Sensitivity of measurement to variations in the significant unobservable inputs

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy of the Group's property portfolio, together with the impact of significant movements in these inputs on the fair value measurement, are shown below:

		Impact on fair value measurement			Impact on fair value measurement
Unobservable input		of significant increase in input			of significant decrease in input
Gross ERV				Increase			Decrease
Net initial yield				Decrease			Increase
Reversionary yield				Decrease			Increase
True equivalent yield				Decrease			Increase

There are inter-relationships between these inputs as they are partially determined by market conditions.  An increase in the reversionary yield may accompany an increase in gross ERV and would mitigate its impact on the fair value measurement.

A sensitivity analysis was performed to ascertain the impact on the fair value of a 25 basis point shift in true equivalent yield and a £2.50 psf shift in ERV on the property valuations. The Group believes this captures the range of variations in these key valuation assumptions. The results are shown in the tables below:

			West End	West End	City	Provincial
			central	borders/other	borders	commercial	Total
At 30 June 2026			£m	£m	£m	£m	£m
True equivalent yield
	+25bp		(130.6)	(8.5)	(42.5)	(2.6)	(181.0)
	-25bp		143.5	9.1	45.9	2.8	197.3
ERV
	+£2.50 psf		102.4	12.5	49.4	10.6	179.0
	-£2.50 psf		(102.4)	(12.5)	(49.4)	(10.6)	(179.0)

10. Property, plant and equipment

			Owner-occupied property						Solar park		Other		Total
						£m			£m		£m		£m
At 1 January 2026						53.5			12.2		2.4		68.1
Additions						-			2.7		0.3		3.0
Depreciation						-			-		(0.4)		(0.4)
Revaluation						(1.6)			-		-		(1.6)
At 30 June 2026						51.9			14.9		2.3		69.1
At 1 January 2025						49.0			-		3.0		52.0
Additions						-			3.1		0.1		3.2
Transfer from prepayments						-			2.5		-		2.5
Depreciation						-			-		(0.4)		(0.4)
Revaluation						4.5			-		-		4.5
At 30 June 2025						53.5			5.6		2.7		61.8
At 1 January 2025						49.0			-		3.0		52.0
Additions						-			9.7		0.2		9.9
Transfers from prepayments						-			2.5		-		2.5
Depreciation						-			-		(0.8)		(0.8)
Revaluation						4.5			-		-		4.5
At 31 December 2025						53.5			12.2		2.4		68.1
Net book value
Cost or valuation						51.9			14.9		9.9		76.7
Accumulated depreciation						-			-		(7.6)		(7.6)
At 30 June 2026						51.9			14.9		2.3		69.1
Net book value
Cost or valuation						53.5			5.6		9.5		68.6
Accumulated depreciation						-			-		(6.8)		(6.8)
At 30 June 2025						53.5			5.6		2.7		61.8
Net book value
Cost or valuation						53.5			12.2		9.6		75.3
Accumulated depreciation						-			-		(7.2)		(7.2)
At 31 December 2025						53.5			12.2		2.4		68.1

'Solar park' at 30 June 2026 represents £14.9m of expenditure in relation to the Group's c.85-acre, 18.4MW solar park in Scotland. Of the total £14.9m of costs, £2.5m was transferred in 2025 from prepayments as the costs met the criteria for recognition within Property, plant and equipment. Planning consent for this project was received in June 2023 with completion anticipated in 2026.

Artwork, which is included within 'Other', is periodically valued by Bonhams on the basis of fair value using their extensive market knowledge. The latest valuation was carried out in December 2024. In accordance with IFRS 13 Fair Value Measurement, the artwork is deemed to be classified as Level 3.

11. Other receivables (non-current)

30.06.2026		30.06.2025		31.12.2025
	£m		£m		£m
Rents recognised in advance	161.5		172.7		176.9
Initial direct letting costs	16.1		14.1		14.3
Prepayments	14.9		12.5		12.0
	192.5		199.3		203.2

Other receivables include £161.5m (30 June 2025: £172.7m; 31 December 2025: £176.9m) after impairments relating to rents recognised in advance as a result of spreading tenant lease incentives over the expected terms of their respective leases. This includes rent free and reduced rent periods, capital contributions in lieu of rent free periods and contracted rent uplifts. In addition, £16.1m (30 June 2025: £14.1m; 31 December 2025: £14.3m) relates to the spreading effect of the initial direct costs of letting over the same term. Together with £26.6m (30 June 2025: £25.5m; 31 December 2025: £26.3m), which was included as accrued income within trade and other receivables (see note 12), these amounts totalled £204.2m at 30 June 2026 (30 June 2025: £212.3m; 31 December 2025: £217.5m).

Prepayments represent £14.9m (30 June 2025: £12.5m; 31 December 2025: £12.0m) of costs incurred in relation to Old Street Quarter EC1. This was after a £2.6m (30 June 2025: £1.3m; 31 December 2025: £2.2m) impairment in accordance with IAS 36 Impairment of Assets. In May 2022, the Group entered into a conditional contract to acquire the freehold of Old Street Quarter island site. The site is being sold by Moorfields Eye Hospital NHS Foundation Trust and UCL, together the Oriel joint initiative ("Oriel"). Completion is subject to delivery by Oriel of a new hospital and subsequent vacant possession of the site, which is anticipated no earlier than late 2027. At that point, the site and the prepaid design and planning costs incurred will be included in investment property, subject to semi-annual external valuations. See note 17 for further details.

The total movement in tenant lease incentives is shown below:

30.06.2026		30.06.2025		31.12.2025
	£m		£m		£m
At 1 January	200.2		195.6		195.6
Amounts taken to income statement	7.4		(0.2)		3.7
Capital incentives granted	3.1		(0.2)		5.6
Movement in lease incentive impairment	0.2		-		(0.1)
Disposal of investment properties	(26.0)		-		(4.2)
Write off to bad debt	(0.2)		-		(0.4)
	184.7		195.2		200.2
Amounts included in trade and other receivables (see note 12)	(23.2)		(22.5)		(23.3)
At period end	161.5		172.7		176.9

12. Trade and other receivables

30.06.2026		30.06.2025		31.12.2025
	£m		£m		£m
Trade receivables	4.4		14.8		4.4
Other receivables	4.1		4.3		1.0
Prepayments	14.8		13.2		13.8
Taxation	3.7		-		-
Accrued income
Rents recognised in advance	23.2		22.5		23.3
Initial direct letting costs	3.4		3.0		3.0
Other	0.9		0.2		1.2
	54.5		58.0		46.7

Trade receivables are split as follows:
less than three months due	4.4		13.0		4.2
between three and six months due	-		1.2		0.2
between six and twelve months due	-		0.6		-
	4.4		14.8		4.4

Trade receivables are stated net of impairment.

The Group has £4.0m (30 June 2025: £3.7m; 31 December 2025: £4.1m) of provision for bad debts as shown below. £1.9m has been included in trade receivables, £0.3m in accrued income and £1.8m in prepayments and accrued income within other receivables (non-current). See note 11.

30.06.2026		30.06.2025		31.12.2025
	£m		£m		£m
Provision for bad debts
At 1 January	4.1		4.6		4.6
Trade receivables provision	0.3		(0.2)		0.1
Lease incentive provision	(0.3)		0.2		0.4
Service charge provision	(0.1)		-		0.1
Released	-		(0.9)		(1.1)
At period end	4.0		3.7		4.1

The provision for bad debts has been split as follows:
less than three months due	0.4		0.6		0.5
between three and six months due	0.3		0.3		0.2
between six and twelve months due	0.6		0.4		0.5
greater than twelve months due	2.7		2.4		2.9
	4.0		3.7		4.1

13. Non-current assets held for sale

				30.06.2026		30.06.2025		31.12.2025
					£m		£m		£m
Transfer from investment property (see note 9)					106.7		-		-
					106.7		-		-

In February 2026, the Group exchanged contracts for the disposal of its freehold interest in 90 Whitfield Street W1. The property was valued at £110.5m as at 30 June 2026. In accordance with IFRS 5 Non-current Assets Held for Sale, this property was recognised as a non-current asset held for sale and measured at the lower of its carrying value and fair value less costs to sell. As fair value less costs to sell exceeded the carrying value, the property was held at the carrying value of £106.7m (see note 9). Completion is scheduled for August 2026.

14. Trade and other payables

30.06.2026		30.06.2025		31.12.2025
	£m		£m		£m
Trade payables	7.8		8.2		8.0
Other payables	1.1		1.3		1.0
Taxation	-		5.3		1.2
Accruals	55.9		41.8		56.2
Deferred income	50.8		51.7		47.0
Tenant rent deposits	30.1		29.3		29.3
Service charge balances	25.9		31.4		25.3
	171.6		169.0		168.0

Deferred income primarily related to rents received in advance.

15. Net debt and derivative financial instruments

					30.06.2026				30.06.2025				31.12.2025
					Book		Fair		Book		Fair		Book		Fair
					value		value		Value		value		value		value
					£m		£m		£m		£m		£m		£m
Current liabilities
Other loans					-		-		20.0		20.0		-		-
6.5% secured bonds					-		-		177.4		177.0		176.6		175.7
2.68% unsecured private placement notes					-		-		55.0		54.0		55.0		54.9
					-		-		252.4		251.0		231.6		230.6
Non-current liabilities
1.875% unsecured green bonds					347.8		295.9		347.4		292.4		347.6		298.3
5.25% unsecured bonds					247.7		248.8		247.3		254.2		247.5		255.2
Unsecured private placement notes					399.2		347.6		398.7		344.0		398.7		349.3
Unsecured bank loans					411.0		414.5		305.2		307.0		261.2		265.0
					1,405.7		1,306.8		1,298.6		1,197.6		1,255.0		1,167.8
Total borrowings					1,405.7		1,306.8		1,551.0		1,448.6		1,486.6		1,398.4
Reconciliation to net debt:
Borrowings					1,405.7				1,551.0				1,486.6
Adjustments for:
	Leasehold liabilities				53.0				34.4				41.0
	Cash at bank excluding restricted cash ¹				(80.8)				(62.4)				(102.4)
			(see note 22)
Net debt ¹					1,377.9				1,523.0				1,425.2
¹ Comparative net debt has been re-presented following the reclassification of service charge cash balances from restricted cash to cash at bank.

The fair values of the Group's bonds have been estimated on the basis of quoted market prices, representing Level 1 fair value measurement as defined by IFRS 13 Fair Value Measurement.

The fair values of the unsecured private placement notes were determined by discounting the contractual cash flows by the replacement rate. The replacement rate is the sum of the current underlying Gilt rate plus the market implied margin. These represent Level 2 fair value measurement.

The fair values of the Group's bank loans are approximately the same as their carrying amount, after adjusting for the unamortised arrangement fees, and also represent Level 2 fair value measurement.

The fair values of the following financial assets and liabilities are the same as their carrying amounts:

·      Cash and cash equivalents.

·      Trade receivables, other receivables and accrued income included within trade and other receivables.

·      Trade payables, other payables and accruals included within trade and other payables.

·      Leasehold liabilities.

There have been no transfers between Level 1 and Level 2 or Level 2 and Level 3 in either 2026 or 2025.

Unsecured bank borrowings are accounted for at amortised cost. At 30 June 2026, there was £414.5m (30 June 2025: £307.0m; 31 December 2025: £265.0m) drawn on the bank loans and the unamortised arrangement fees were £3.5m (30 June 2025: £1.8m; 31 December 2025: £3.8m), resulting in the carrying value being £411.0m (30 June 2025: £305.2m; 31 December 2025: £261.2m).

During the period, £55m of US private placement notes matured and were repaid in January 2026, and the £175m 6.5% secured bonds matured and was repaid in March 2026. The floating charges previously held over certain Group subsidiary companies in respect of the secured bonds were released following repayment. Those subsidiary companies held £343.0m and £339.9m of the Group's properties at 30 June 2025 and 31 December 2025, respectively.

The Group continues to maintain significant headroom on all financial covenants. 

16. Cash generated from operations

The table below shows the reconciliation of cash generated from operations.

					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
						£m		£m		£m
Profit from operations						6.3		117.2		210.5
Adjustment for non-cash items:
Revaluation deficit/(surplus)						19.0		(38.2)		(52.2)
Depreciation						0.4		0.4		0.8
Lease incentive/cost spreading						(5.4)		0.2		(4.3)
Share based payments						1.1		0.6		2.0
Ground rent adjustment						0.2		0.2		0.5
Onerous contract provision						45.8		-		-
Adjustment for other items:
Loss on disposal						6.3		0.1		2.2
Loss/(profit) on disposal of trading property and trading stock						0.2		-		(4.2)
Changes in working capital:
(Increase)/decrease in receivables balance						(17.2)		(3.8)		7.3
(Decrease)/increase in payables balance						(2.9)		(8.6)		5.4
Decrease in trading property and trading stock						4.6		5.5		104.5
Cash generated from operations						58.4		73.6		272.5

Cash generated from operations included £4.8m cash inflows (half year to 30 June 2025: £1.9m; year to 31 December 2025: £115.8m) from disposal of trading property and nil cash inflows (half year to 30 June 2025: £6.8m; year to 31 December 2025: £17.8m) in relation to disposals of trading stock. It also included £0.5m cash outflows (half year to 30 June 2025: £10.2m; year to 31 December 2025: £12.1m) in relation to expenditure on trading properties and nil cash outflows (half year to 30 June 2025: £0.2m; year to 31 December 2025: £0.6m) in relation to expenditure on trading stock.

See note 6 for information relating to the surrender and regrant of headleases which completed as a non-cash transaction in the period.

17. Provisions

				30.06.2026		30.06.2025		31.12.2025
					£m		£m		£m
Onerous contract provision					45.8		-		-
Other					0.5		0.4		0.5
					46.3		0.4		0.5

In May 2022, the Group entered into a conditional contract to acquire the freehold of Old Street Quarter island site. The site is being sold by Moorfields Eye Hospital NHS Foundation Trust and UCL, together the Oriel joint initiative ("Oriel"). Consideration for the site has been agreed as £239m before costs. Completion is subject to delivery by Oriel of a new hospital and subsequent vacant possession of the site, which is anticipated no earlier than late 2027.

At the December 2025 year end, we assessed the conditional contract and the site's potential redevelopment profitability under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and concluded that no adjustments to the financial statements were required. For the period to 30 June 2026, we have reviewed our assumptions and considered a range of different delivery options for the site, including full-site development, plot sales, and sale of the site with planning. This required us to apply assumptions on the use mix and end values, planning regulations, cost estimates, inflation, market growth rates and programme duration. The cash flows of each option were discounted using an appropriate discount rate and weighted by probability of their outcome. This analysis resulted in an onerous contract provision of £45.8m as the estimated costs are expected to exceed the economic benefit to be received. The provision has been recognised in the financial statements and will be reassessed every six months until acquisition. Once the property is acquired, the provision will be reversed and the property will be subject to fair value adjustments under IAS 40 Investment Property.

Sensitivity analysis has also been performed to assess the impact of applying different discount rates and market growth rates. A 50bps change in the discount rate would increase or decrease the provision by c.£6m and a 1% per annum reduction in the market growth rate would increase the provision by c.£22m.

18. Deferred tax

				Revaluation			Other		Total
					£m		£m		£m
At 1 January 2026					4.5		(2.2)		2.3
Charged to the income statement					0.6		0.1		0.7
Credited to other comprehensive income					(0.4)		-		(0.4)
At 30 June 2026					4.7		(2.1)		2.6
At 1 January 2025					3.5		(2.7)		0.8
Credited to the income statement					(0.1)		(0.4)		(0.5)
Charged to other comprehensive income					1.1		-		1.1
At 30 June 2025					4.5		(3.1)		1.4
At 1 January 2025					3.5		(2.7)		0.8
Charged to the income statement					(0.1)		0.5		0.4
Charged to other comprehensive income					1.1		-		1.1
At 31 December 2025					4.5		(2.2)		2.3

Deferred tax on the balance sheet revaluation is calculated on the basis of the chargeable gains that would crystallise on the sale of the property portfolio at each balance sheet date.  The calculation takes account of any available indexation on the historical cost of the properties. Due to the Group's REIT status, deferred tax is only provided at each balance sheet date on properties outside the REIT regime.

Deferred tax assets have been recognised in respect of all tax losses and other temporary differences where the Directors believe it is probable that these assets will be recovered.

19. Dividend

						Dividend per share			Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
			Payment date			PID	Non-PID	Total
						p	p	p		£m		£m		£m
Current period
2026 interim dividend			9 October 2026			26.0	-	26.0		-		-		-
Prior year
2025 final dividend			29 May 2026			40.0	16.0	56.0		62.9		-		-
2025 interim dividend			10 October 2025			25.5	-	25.5		-		-		28.6
						65.5	16.0	81.5
2024 final dividend			30 May 2025			45.5	10.0	55.5		-		62.3		62.3
Dividends as reported in the Group statement of changes in equity										62.9		62.3		90.9
2025 final dividend withholding tax			14 July 2026							(5.6)		-		-
2025 interim dividend withholding tax			14 January 2026							4.0		-		(4.0)
2024 final dividend withholding tax			12 July 2025							-		(7.1)		-
2024 interim dividend withholding tax			14 January 2025							-		3.9		3.9
Dividends paid as reported in the Group cash flow statement										61.3		59.1		90.8

20. Share buyback programme

During the period the Board approved the return of up to £50m (excluding expenses) of surplus capital to shareholders by way of a share buyback programme of the Company's ordinary shares of 5 pence each (the 'Buyback Programme'). The Buyback Programme commenced on 18 May 2026 and was still in progress at 30 June 2026. It will run until the earlier of its completion or 30 September 2026.

At 30 June 2026, the Company had repurchased 989,203 ordinary shares, totalling £18.1m (excluding expenses). The cost of acquiring these shares, including directly attributable costs, has been recognised as a deduction from equity. No gain or loss has been recognised in the income statement.

21. Transfer of reserves

Following the redemption of the 1.5% unsecured convertible bonds 2025, the £7.5m recognised in other reserves on issuance has now been released to retained earnings.

22. Cash and cash equivalents

				30.06.2026		30.06.2025		31.12.2025
					£m		£m		£m
Cash at bank ¹					80.8		62.4		102.4
Tenant rent deposits (restricted) ¹					30.1		29.3		29.3
					110.9		91.7		131.7
¹ Comparative amounts have been re-presented to classify service charge cash balances within cash at bank rather than restricted cash. Total cash and cash equivalents were unaffected.

23. Post balance sheet events

In July 2026, the Group entered into a new £100m unsecured revolving credit facility with Handelsbanken plc, a new lender to the Group. The facility has an initial five-year term, with two one-year extension options and a £50m accordion option. In addition, the Group exercised the first one-year extension option on its £450m unsecured revolving credit facility, extending the maturity date to July 2030.

Following the announcement of the share buyback programme, from the period end to 4 August 2026, a further 748,570 of ordinary shares totalling £15.3m (before costs) have been repurchased, bringing the total to 1,737,773 shares or £33.4m. The maximum number of shares that may be repurchased under the Buyback Programme is 11,229,093 ordinary shares. See note 20 for more detail.

24. Related party disclosure

There have been no related party transactions during the half year to 30 June 2026 that have materially affected the financial position or performance of the Group. All related party transactions are materially consistent with those disclosed by the Group in its financial statements for the year ended 31 December 2025.

25. EPRA performance measures

Number of shares
		Earnings per share measures						Net asset value per share measures
		Weighted average for the
		period ended						At period ended
	30.06.2026		30.06.2025		31.12.2025		30.06.2026		30.06.2025		31.12.2025
	'000		'000		'000		'000		'000		'000
For use in basic measures		112,137		112,258		112,241		111,267		112,258		112,236
Dilutive effect of share-based payments		34		346		13		142		380		12
For use in other diluted measures		112,171		112,604		112,254		111,409		112,638		112,248

The following tables set out reconciliations between the IFRS and EPRA Earnings for the period and earnings per share.  The adjustments made between the figures are as follows:

A -   Disposal of investment and trading property and associated tax.

B -   Revaluation movement on investment property and associated deferred tax.

C -   Fair value movement and settlement costs relating to derivative financial instruments.

D -   Non-operating and exceptional items including restructuring and IT transformation project costs and an onerous contract provision.

Earnings and earnings per share
				Adjustments				EPRA
			IFRS	A	B	C	D	basis
			£m	£m	£m	£m	£m	£m
Half year to 30 June 2026
Net property and other income			95.2	0.2	0.4	-	-	95.8
Onerous contract provision			(45.8)	-	-	-	45.8	-
Administrative expenses			(17.8)	-	-	-	0.9	(16.9)
Revaluation deficit			(19.0)	-	19.0	-	-	-
Loss on disposal of investment property			(6.3)	6.3	-	-	-	-
Net finance costs			(24.2)	-	-	-	-	(24.2)
Earnings before tax			(17.9)	6.5	19.4	-	46.7	54.7
Tax charge			(0.7)	-	0.6	-	-	(0.1)
(Loss)/earnings attributable to equity shareholders			(18.6)	6.5	20.0	-	46.7	54.6
Earnings per share			(16.59p)					48.69p
Diluted earnings per share			(16.59p)					48.68p
The diluted loss per share for the period to 30 June 2026 was restricted to a loss of 16.59p per share, as the loss per share cannot be reduced by dilution in accordance with IAS 33, Earnings per Share.
Half year to 30 June 2025
Net property and other income			96.6	(0.1)	0.5	-	-	97.0
Administrative expenses			(17.5)	-	-	-	0.1	(17.4)
Revaluation surplus			38.2	-	(38.2)	-	-	-
Loss on disposal of investment property			(0.1)	0.1	-	-	-	-
Net finance costs			(22.6)	-	-	1.2	-	(21.4)
Movement in fair value of derivative
	financial instruments		(0.6)	-	-	0.6	-	-
Earnings before tax			94.0	-	(37.7)	1.8	0.1	58.2
Tax credit			0.5	-	(0.1)	-	-	0.4
Earnings attributable to equity shareholders			94.5	-	(37.8)	1.8	0.1	58.6
Earnings per share			84.18p					52.20p
Diluted earnings per share			83.92p					52.04p

				Adjustments				EPRA
			IFRS	A	B	C	D	basis
			£m	£m	£m	£m	£m	£m
Year to 31 December 2025
Net property and other income			199.6	(4.2)	1.4	-	-	196.8
Administrative expenses			(39.1)	-	-	-	0.4	(38.7)
Revaluation surplus			52.2	-	(52.2)	-	-	-
Loss on disposal of investment property			(2.2)	2.2	-	-	-	-
Net finance costs			(48.4)	-	-	1.2	-	(47.2)
Movement in fair value of derivative
	financial instruments		(0.6)	-	-	0.6	-	-
Earnings before tax			161.5	(2.0)	(50.8)	1.8	0.4	110.9
Tax charge			(0.4)	-	(0.1)	-	-	(0.5)
Earnings attributable to equity shareholders			161.1	(2.0)	(50.9)	1.8	0.4	110.4
Earnings per share			143.53p					98.36p
Diluted earnings per share			143.51p					98.35p

EPRA net asset value metrics
							30.06.2026		30.06.2025		31.12.2025
							£m		£m		£m
Net assets attributable to equity shareholders							3,515.3		3,575.8		3,615.3
Adjustments for:
	Revaluation of trading properties						-		9.2		0.4
	Deferred tax on revaluation surplus1						2.4		2.3		2.3
	Fair value adjustment to secured bonds						-		2.6		1.8
EPRA Net Tangible Assets							3,517.7		3,589.9		3,619.8
Per share measure - diluted							3,157p		3,187p		3,225p
Net assets attributable to equity shareholders							3,515.3		3,575.8		3,615.3
Adjustments for:
	Revaluation of trading properties						-		9.2		0.4
	Fair value adjustment to secured bonds						-		2.6		1.8
	Mark-to-market of fixed rate debt						107.7		108.5		96.6
	Unamortised issue and arrangement costs						(6.7)		(6.1)		(7.9)
EPRA Net Disposal Value							3,616.3		3,690.0		3,706.2
Per share measure - diluted							3,246p		3,276p		3,302p
Net assets attributable to equity shareholders							3,515.3		3,575.8		3,615.3
Adjustments for:
	Revaluation of trading properties						-		9.2		0.4
	Deferred tax on revaluation surplus						4.7		4.5		4.5
	Fair value adjustment to secured bonds						-		2.6		1.8
	Purchasers' costs2						338.0		350.2		346.4
EPRA Net Reinstatement Value							3,858.0		3,942.3		3,968.4
Per share measure - diluted							3,463p		3,500p		3,535p

¹ Only 50% of the deferred tax on the revaluation surplus is excluded.

² Includes Stamp Duty Land Tax. Total costs assumed to be 6.8% of the portfolio's fair value.

Cost ratios (unaudited)
					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
						£m		£m		£m
Administrative expenses						17.8		17.5		39.1
Write-off/impairment of receivables						0.1		0.1		0.5
Other property costs						8.2		9.4		17.9
Dilapidation receipts						-		(0.1)		(0.2)
Net service charge costs						4.4		4.1		6.6
Service charge costs recovered through rents
	but not separately invoiced					-		(1.0)		-
Management fees received less estimated profit element						(2.5)		(2.4)		(4.9)
EPRA Costs (including direct vacancy costs) (A)						28.0		27.6		59.0
Direct vacancy costs						(5.8)		(6.8)		(10.5)
EPRA Costs (excluding direct vacancy costs) (B)						22.2		20.8		48.5
Gross rental income						106.9		109.1		218.3
Ground rent						(0.9)		(1.0)		(1.9)
Service charge components of rental income						-		(1.0)		-
Adjusted gross rental income (C)						106.0		107.1		216.4
EPRA Cost Ratio (including direct vacancy costs) (A/C)						26.4%		25.8%		27.3%
EPRA Cost Ratio (excluding direct vacancy costs) (B/C)						20.9%		19.4%		22.4%
In addition to the EPRA Cost Ratios, the Group has calculated an additional cost ratio based on its property portfolio fair value to recognise the 'total accounting return' nature of the Group's activities.
Property portfolio at fair value (D)						4,970.3		5,150.1		5,093.9
Portfolio cost ratio (A/D) - annualised						1.1%		1.1%		1.2%

Property-related capital expenditure (unaudited)
					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
						£m		£m		£m
Acquisitions						105.2		6.1		6.0
Development						35.4		56.1		129.8
Investment properties
	Incremental lettable space					-		0.2		0.3
	No incremental lettable space					11.6		16.0		26.4
	Tenant incentives					1.0		-		2.3
Capitalised interest						5.8		8.3		13.8
Total capital expenditure						159.0		86.7		178.6
Conversion from accrual to cash basis1						(107.2)		10.1		2.5
Total capital expenditure on a cash basis						51.8		96.8		181.1
1 The conversion from accrual to cash basis figure includes £105.2m in relation to the regrant of the headlease at 38-52, 54-60 and 66-70 Baker Street, W1, see note 9.

26. Gearing and interest cover

NAV gearing

				30.06.2026			30.06.2025		31.12.2025
				Note		£m		£m		£m
Net debt				15		1,377.9		1,523.0		1,425.2
Net assets						3,515.3		3,575.8		3,615.3
NAV gearing ¹						39.2%		42.6%		39.4%
¹ Comparative amounts have been re-presented to reflect the revised treatment of service charge cash balances and related service charge liabilities. This resulted in corresponding changes to comparative net debt and leverage measures.

Loan-to-value ratio

					30.06.2026		30.06.2025		31.12.2025
				Note		£m		£m		£m
Group loan-to-value
Net debt				15		1,377.9		1,523.0		1,425.2
Fair value adjustment of secured bonds						-		(2.6)		(1.8)
Unamortised discount on unsecured green bonds						1.0		1.2		-
Unamortised discount on unsecured bonds						1.1		1.3		2.3
Unamortised issue and arrangement costs						6.7		6.1		7.9
Leasehold liabilities				15		(53.0)		(34.4)		(41.0)
Drawn debt net of cash (A)						1,333.7		1,494.6		1,392.6
Fair value of property portfolio (B)				9		4,970.3		5,150.1		5,093.9
Loan-to-value ratio (A/B) ¹						26.8%		29.0%		27.3%
EPRA loan-to-value
Drawn debt net of cash (A)						1,333.7		1,494.6		1,392.6
Debt with equity characteristics						-		(20.0)		-
Net payables adjustment ¹						98.7		94.7		106.4
Adjusted debt (C)						1,432.4		1,569.3		1,499.0
Fair value of property portfolio (B)						4,970.3		5,150.1		5,093.9
EPRA loan-to-value (C/B)						28.8%		30.5%		29.4%
¹ Comparative amounts have been re-presented to reflect the revised treatment of service charge cash balances and related service charge liabilities. This resulted in corresponding changes to comparative net debt and leverage measures.

Net interest cover ratio

					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
			Note			£m		£m		£m
Group net interest cover ratio
Net property and other income				5		95.2		96.6		199.6
Adjustments for:
	Other income			5		(2.5)		(2.4)		(4.9)
	Net surrender premiums			5		-		-		(0.3)
	Loss/(profit) on disposal of trading properties			5		0.3		(0.1)		(4.2)
Adjusted net property income						93.0		94.1		190.2
Finance income				7		(0.4)		(0.2)		(2.1)
Finance costs				7		24.6		22.8		50.5
						24.2		22.6		48.4
Adjustments for:
	Finance income			7		0.4		0.2		2.1
	Other finance costs			7		-		(1.3)		(1.4)
	Amortisation of fair value adjustment to secured bonds			7		1.8		0.8		1.7
	Amortisation of issue and arrangement costs			7		(1.5)		(1.6)		(2.8)
	Finance costs capitalised			7		6.1		8.4		14.1
						31.0		29.1		62.1
Net interest cover ratio						300%		323%		306%

Net debt to EBITDA

					Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
			Note			£m		£m		£m
Net debt to EBITDA
Net debt (A)				15		1,377.9		1,523.0		1,425.2
(Loss)/profit for the period						(18.6)		94.5		161.1
Add back: tax (credit)/charge				8		0.7		(0.5)		0.4
(Loss)/profit before tax						(17.9)		94.0		161.5
Add back: net finance charges				7		24.2		22.6		48.4
Add back: movement in fair value of
		derivative financial instruments				-		0.6		0.6
						6.3		117.2		210.5
Add back: loss on disposal of investment property				6		6.3		0.1		2.2
Add back: revaluation deficit/(surplus)				9		19.0		(38.2)		(52.2)
Add back: depreciation				10		0.4		0.4		0.8
Add back: IT transformation project costs						0.4		-		0.4
Add back: onerous contract provision				17		45.8		-		-
Add back: restructuring costs						0.5		-		-
EBITDA for the period						78.7		79.5		161.7
EBITDA - prior 6 month period						82.2		80.5		n/a
EBITDA - rolling 12 months (B)						160.9		160.0		161.7
Net debt to EBITDA (A/B) ¹						8.6		9.5		8.8
¹ Comparative amounts have been re-presented to reflect the revised treatment of service charge cash balances and related service charge liabilities. This resulted in corresponding changes to comparative net debt and leverage measures.

27. Total accounting return

				Half year to 30.06.2026		Half year to 30.06.2025		Year to 31.12.2025
					p		p		p
EPRA Net Tangible Assets on a diluted basis
	At end of period				3,157		3,187		3,225
	At start of period				(3,225)		(3,149)		(3,149)
(Decrease)/increase					(68)		38		76
Dividend per share					56		56		81
(Decrease)/increase adding back dividend					(12)		94		157
Total accounting return					(0.4%)		3.0%		5.0%

28. List of definitions

Better Buildings Partnership (BBP)

The BBP is a collaboration of the UK's leading commercial property owners who are working together to improve the sustainability of existing commercial building stock.

Building Research Establishment Environmental Assessment Method (BREEAM)

An environmental impact assessment method for non-domestic buildings. Performance is measured across a series of ratings; Good, Very Good, Excellent and Outstanding.

Capital return

The annual valuation movement arising on the Group's portfolio expressed as a percentage return on the valuation at the beginning of the year adjusted for acquisitions and capital expenditure.

Company Voluntary Arrangement (CVA)

An insolvency procedure allowing a company with debt problems or that is insolvent to reach a voluntary agreement with its creditors to repay its debt over a fixed period.

Diluted figures

Reported results adjusted to include the effects of potential dilutive shares issuable under the Group's share option schemes and the convertible bonds.

EBITDA

Earnings before interest, tax, depreciation and amortisation.

Earnings/earnings per share (EPS)

Earnings represent the profit or loss for the period attributable to equity shareholders and are divided by the weighted average number of ordinary shares in issue during the financial period to arrive at earnings per share.

Energy Performance Certificate (EPC)

An EPC is an asset rating detailing how energy efficient a building is, rated by carbon dioxide emission on a scale of A-G, where an A rating is the most energy efficient. They are legally required for any building that is to be put on the market for sale or rent.

Estimated rental value (ERV)

This is the external valuers' opinion as to the open market rent which, on the date of valuation, could reasonably be expected to be obtained on a new letting or rent review of a property.

European Public Real Estate Association (EPRA)

A not-for-profit association with a membership of Europe's leading property companies, investors and consultants which strives to establish best practices in accounting, reporting and corporate governance and to provide high-quality information to investors. EPRA's Best Practices Recommendations includes guidelines for the calculation of the following performance measures which the Group has adopted.

-       EPRA Earnings Per Share

Earnings from operational activities.

-       EPRA loan-to-value ratio (LTV)

Debt divided by the property value. Debt is equal to drawn facilities less cash, adjusted for debt with equity characteristics, adding back the equity portion of hybrid debt instruments and including net payables if applicable. Property value is equal to the fair value of the property portfolio including net receivables if applicable.

-       EPRA Net Reinstatement Value (NRV) per share 

NAV adjusted to reflect the value required to rebuild the entity and assuming that entities never sell assets. Assets and liabilities, such as fair value movements on financial derivatives are not expected to crystallise in normal circumstances and deferred taxes on property valuation surpluses are excluded.

-       EPRA Net Tangible Assets (NTA) per share

Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax.

-       EPRA Net Disposal Value (NDV) per share

Represents the shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax.

-         EPRA capital expenditure

The total expenditure incurred on the acquisition, enhancement, and development of investment properties. This can include amounts spent on any investment properties under construction or related development projects, as well as the amounts spent on the completed (operational) investment property portfolio. Capitalised finance costs included in the financial statements are also presented within this total. The costs are presented on both an accrual and a cash basis, for both the Group and the proportionate share of joint ventures.

-       EPRA Cost Ratio (including direct vacancy costs)

EPRA costs as a percentage of gross rental income less ground rent (including share of joint venture gross rental income less ground rent). EPRA costs include administrative expenses, other property costs, net service charge costs and the share of joint ventures' overheads and operating expenses (net of any service charge costs), adjusted for service charge costs recovered through rents and management fees.

-       EPRA Cost Ratio (excluding direct vacancy costs)

Calculated as above, but with an adjustment to exclude direct vacancy costs.

-       EPRA Net Initial Yield (NIY)

Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the EPRA property portfolio, increased by estimated purchasers' costs.

-       EPRA 'topped-up' Net Initial Yield

This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent free periods (or other unexpired lease incentives such as discounted rent periods and stepped rents).

-       EPRA Vacancy Rate

Estimated rental value (ERV) of immediately available space divided by the ERV of the EPRA portfolio.

-       EPRA like-for-like rental income growth

The growth in rental income on properties owned throughout the current and previous periods under review. This growth rate includes revenue recognition and lease accounting adjustments but excludes properties held for development in either period and properties acquired or disposed of in either period.

Fair value adjustment

An accounting adjustment to change the book value of an asset or liability to its market value.

Ground rent

The rent payable by the Group for its leasehold properties. Under IFRS, a liability is recognised using the discounted payments due. Fixed lease payments made are allocated between the interest payable and the reduction in the outstanding liability. Any variable payments are recognised in the income statement in the period to which it relates.

Headroom

This is the amount left to draw under the Group's loan facilities (i.e. the total loan facilities less amounts already drawn).

Interest rate swap

A financial instrument where two parties agree to exchange an interest rate obligation for a predetermined amount of time. These are generally used by the Group to convert floating rate debt to fixed rates.

Key Performance Indicators (KPIs)

Activities and behaviours, aligned to both business objectives and individual goals, against which the performance of the Group is annually assessed.

Lease incentives

Any incentive offered to occupiers to enter into a lease. Typically the incentive will be an initial rent free or half rent period, stepped rents, or a cash contribution to fit-out or similar costs.

Loan-to-value ratio (LTV)

Drawn debt net of cash divided by the fair value of the property portfolio. Drawn debt is equal to drawn facilities less cash and the unamortised equity element of the convertible bonds.

Mark-to-market

The difference between the book value of an asset or liability and its market value.

MSCI Inc. (MSCI IPD)

MSCI Inc. is a company that produces independent benchmarks of property returns. The Group measures its performance against both the Central London Offices Index and the UK All Property Index.

National Australian Built Environment Rating System (NABERS)

This is a building performance rating system, introduced into the UK, which provides an energy performance benchmark using a simple star rating system on a 1-6 scale. This helps property owners understand and communicate a building's performance versus other similar buildings to occupiers. Ratings are validated on an annual basis.

NAV gearing

Net debt divided by net assets.

Net assets per share or net asset value (NAV)

Equity shareholders' funds divided by the number of ordinary shares in issue at the balance sheet date.

Net debt

Borrowings plus bank overdraft less unrestricted cash and cash equivalents.

Net debt to EBITDA

Net Debt to EBITDA is the ratio of gross debt less unrestricted cash to earnings before interest, tax, depreciation and amortisation (EBITDA).

Net effective rent

Net effective rent is the actual rental income a landlord receives after adjusting for all concessions, incentives, and rental uplifts over the term of the lease, spread over the full lease term. It reflects the true economic value of a lease.

Net interest cover ratio

Net property income, excluding all non-core items divided by interest payable on borrowings and non-utilisation fees.

Property income distribution (PID)

Dividends from profits of the Group's tax-exempt property rental business under the REIT regulations.

Non-PID

Dividends from profits of the Group's taxable residual business.

Real Estate Investment Trust (REIT)

The UK Real Estate Investment Trust ("REIT") regime was launched on 1 January 2007. On 1 July 2007, Derwent London plc elected to convert to REIT status.

The REIT legislation was introduced to provide a structure which closely mirrors the tax outcomes of direct ownership in property and removes tax inequalities between different real estate investors. It provides a liquid and publicly available vehicle which opens the property market to a wide range of investors.

A REIT is exempt from corporation tax on qualifying income and gains of its property rental business providing various conditions are met. It remains subject to corporation tax on non-exempt income and gains e.g. interest income, trading activity and development fees.

REITs must distribute at least 90% of the Group's income profits from its tax exempt property rental business, by way of dividend, known as a property income distribution. These distributions can be subject to withholding tax at 20%.

If the Group distributes profits from the non-tax exempt business, the distribution will be taxed as an ordinary dividend in the hands of the investors (non-PID).

Rent reviews

Rent reviews take place at intervals agreed in the lease (typically every five years) and their purpose is usually to adjust the rent to the current market level at the review date. For upwards only rent reviews, the rent will either remain at the same level or increase (if market rents are higher) at the review date.

Reversion

The reversion is the amount by which ERV is higher than the rent roll of a property or portfolio. The reversion is derived from contractual rental increases, rent reviews, lease renewals and the letting of space that is vacant and available to occupy or under development or refurbishment.

Scrip dividend

Derwent London plc sometimes offers its shareholders the opportunity to receive dividends in the form of shares instead of cash. This is known as a scrip dividend.

Task Force on Climate-related Financial Disclosures (TCFD)

Set up by the Financial Stability Board (FSB) in response to the G20 Finance Ministers and Central Bank Governors request for greater levels of decision-useful, climate-related information; the TCFD was asked to develop climate-related disclosures that could promote more informed investment, credit (or lending), and insurance underwriting decisions. In turn, this would enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system's exposures to climate-related risks.

'Topped-up' rent

Annualised rents generated by the portfolio plus rent contracted from expiry of rent free periods and uplifts agreed at the balance sheet date.

Total property return (TPR)

Total property return is a performance measure calculated by the MSCI IPD and defined in the MSCI Global Methodology Standards for Real Estate Investment as 'the percentage value change plus net income accrual, relative to the capital employed'. 

Total accounting return (TAR)

The movement in EPRA Net Tangible Assets per share on a diluted basis between the beginning and the end of each financial period plus the dividend per share paid during the period expressed as a percentage of the EPRA Net Tangible Assets per share on a diluted basis at the beginning of the year.

Total shareholder return (TSR)

The growth in the ordinary share price as quoted on the London Stock Exchange plus dividends per share received for the period, expressed as a percentage of the share price at the beginning of the year.

Transmission and distribution (T&D)

The emissions associated with the transmission and distribution losses in the grid from the transportation of electricity from its generation source.

Underlying portfolio

Properties that have been held for the whole of the period (i.e. excluding any acquisitions or disposals made during the period).

Underlying valuation increase

The valuation increase on the underlying portfolio.

Yields

-       Net initial yield

Annualised rental income based on cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased by estimated purchasers' costs.

-       Reversionary yield

The anticipated yield, which the net initial yield will rise to once the rent reaches the estimated rental values.

-       True equivalent yield

The constant capitalisation rate which, if applied to all cash flows from the portfolio, including current rent, reversions to valuers' estimated rental value and such items as voids and expenditures, equates to the valuation having taken into account notional purchasers' costs. Rent is assumed to be received quarterly in advance.

-       Yield shift

A movement in the yield of a property asset, or like-for-like portfolio, over a given period. Yield compression is a commonly-used term for a reduction in yields.

29. Copies of this announcement will be available on the company's website, www.derwentlondon.com, from the date of this statement.  Copies will also be available from the Company Secretary, Derwent London plc, 25 Savile Row, London, W1S 2ER.

Independent review report to Derwent London plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Derwent London plc's condensed consolidated interim financial statements (the "interim financial statements") in the Interim Results 2026 Announcement of Derwent London plc for the 6 month period ended 30 June 2026 (the "period").

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The interim financial statements comprise:

●      the Group Condensed Balance Sheet as at 30 June 2026;

●      the Group Condensed Income Statement and Group Condensed Statement of Comprehensive Income for the period then ended;

●      the Group Condensed Cash Flow Statement for the period then ended;

●      the Group Condensed Statement of Changes in Equity for the period then ended; and

●      the explanatory notes to the interim financial statements.

The interim financial statements included in the Interim Results 2026 Announcement of Derwent London plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Interim Results 2026 Announcement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The Interim Results 2026 Announcement, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Interim Results 2026 Announcement in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the Interim Results 2026 Announcement, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the Interim Results 2026 Announcement based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report.

Use of this report

This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

London

5 August 2026

Notes to editors

Derwent London plc

Derwent London plc owns a commercial real estate portfolio predominantly in central London valued at £5.0 billion as at 30 June 2026, making it the largest London office-focused real estate investment trust (REIT).

Our experienced team has a long track record of creating value throughout the property cycle by regenerating our buildings via redevelopment or refurbishment, effective asset management and capital recycling. We typically acquire central London properties off-market with low capital values and modest rents in improving locations, most of which are either in the West End or City Borders. We capitalise on the unique qualities of each of our properties - taking a fresh approach to the regeneration of every building with a focus on anticipating tenant requirements and an emphasis on design. Reflecting and supporting our long-term success, the business has a strong balance sheet with modest leverage, a robust income stream and flexible financing.

We are frequently recognised in industry awards for the quality, design and innovation of our projects. Landmark buildings in our 5.2 million sq ft portfolio include 25 Baker Street W1, 1 Soho Place W1, 80 Charlotte Street W1, Brunel Building W2, White Collar Factory EC1, Angel Building EC1 and Tea Building E1.

As part of our commitment to lead the industry in mitigating climate change, Derwent London has committed to becoming a net zero carbon business by 2030, with its updated pathway published in 2025. Our science-based carbon targets have been validated by the Science Based Targets initiative (SBTi). In 2013, we launched a voluntary Community Fund which to date has supported 200 community projects in central London.

The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is 25 Savile Row, London, W1S 2ER.

For further information see www.derwentlondon.com or follow us on LinkedIn.

Forward-looking statements

This document contains certain forward-looking statements about the future outlook of Derwent London. By their nature, any statements about future outlook involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. Actual results, performance or outcomes may differ materially from any results, performance or outcomes expressed or implied by such forward-looking statements.

No representation or warranty is given in relation to any forward-looking statements made by Derwent London, including as to their completeness or accuracy. Derwent London does not undertake to update any forward-looking statements whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast.

 

END