Chelsfield holds on to a few aces

Chelsfield has emerged as a property sector stars under the astute guidance of its chairman, Elliott Bernerd. Merry Hill, a Mecca for West Midlands' shoppers, has seen its value leap after the Government called a halt to other out-of-town shopping centres. However Chelsfield's plans for a big expansion on its own site have likewise been thwarted, at least temporarily. That said the group still has several aces up its sleeve, especially in London. It should get planning permission by the start of next year for a huge site at White City, where it is looking to build a pounds 500m retail development, while its mixed retail and residential development in Paddington could be even bigger.

Chelsfield's latest pre-tax profits, up from pounds 6m to pounds 10m in the six months to June, owned much to a good performance from the recent Westbury Hotels acquisition from Granada. The shares rose 8.5p to 334p, well clear of Merrill Lynch's year-end net asset value forecast of 262p. However the White City development alone could add up to 100p to that figure.

Property stocks have enjoyed a good run on the back of a long-awaited upturn in the property cycle. There is more to come, but investors are best advised to stick with quality stocks in the event that the market begins to falter. Mr Bernerd's abilities means Chelsfield looks a better bet than most. With the shares well off their high, they look attractive.

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