Bottom Line: Regalian highlights the bumps

THE SEVEN property giants that have raised more than pounds 1bn between them this year may have hogged the headlines but, in share price terms at least, the real excitement has been among the tiddlers.

Olives Property, an obscure Bristol company that once owned a paper mill, has seen its shares jump by a third to yesterday's close of 41p when two new directors came on board to acquire a property portfolio; Clayform, on its death bed for the past 18 months, has more than doubled from 14p since Martin Landau, of Imry Merchant Developers fame, took a 5 per cent stake. The hint that it could be poised to bid for MEPC - 118 times its size - sent its shares up a further 4p to 37p yesterday.

There will be many more flurries as investors try to spot which companies (or, more important, which entrepreneurs) will be the winners of the 1990s. The ride could be bumpy - as Regalian Properties shows.

Two months ago, its shares jumped 20 per cent in a day when it announced it had sold eight luxury apartments opposite Kensington Palace, worth more than pounds 2m apiece, and hinted of 'substantial interest' in the other 12, which could eradicate its debts. Yesterday, however, its shares were marked down 3.75p to 19.75p as it disclosed a pounds 83.5m loss - three times last year's - passed its dividend and said its borrowings were still equal to its shareholders' funds.

Both reactions were overdone. Investors would have been wise to wait for more evidence of purchaser interest before chasing the shares. Paradoxically, the size of the loss makes it more likely that the next news will be good.

The loss is largely due to pounds 75m of write- downs which means its properties should at last be in the books at realistic levels (indeed it hopes to come out with a profit on Kensington Palace Gardens). The fact that it still has net worth after more than pounds 108m of write-offs in the last two years sets it apart from its bombed-out peers. Provided that it can sell the remaining residential property, in Docklands as well as Kensington, it should be able to repay its debt.

What will be left? It jointly owns a number of development sites but getting the finance for these could be difficult until the market has substantially improved. It has agreed one residential joint venture and is actively seeking others.

David Goldstone, chief executive, hopes to break even this year and make some profit next. If he succeeds, the shares could be worth buying. But there are risks. And some question whether, at 64, he has the energy to drive the group into the next phase of the cycle. Perhaps he should be looking for someone like Mr Landau.