Chelsfield shifts focus with bid for Exclusive hotels

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Chelsfield, the property company run by Elliott Bernerd, has entered the bidding for several of the Exclusive hotels being sold by Granada. Any acquisition would represent a further shift in emphasis towards the leisure industry for Chelsfield, which has a wide range of property interests including shopping centres, offices, a film studio and golf course, but as yet no hotels.

Mr Bernerd is understood to be interested in acquiring hotel rooms to serve its Wentworth golf course operation both near to the course and in central London. The Wentworth operation gives away large amounts of business to local and London hotels and its thought to be keen to claw some of it back.

Granada said recently it hoped to announce the disposal of the former Forte luxury hotels by the end of the year. Chelsfield already has in- house expertise in the hotel sector through the head of the Wentworth business, Willi Bauer, who used to run the Grosvenor House hotel in London.

Chelsfield's interest in hotels is in keeping with the company's move in recent years away from traditional property investments such as office blocks, which Mr Bernerd believes have only limited scope for growth. He has focused instead on big retail and leisure investments such as the Merry Hill shopping centre in the West Midlands, Wentworth and a proposed 850,000 square feet centre at White City in West London, which Chelsfield is developing in partnership with Godfrey Bradman, the former head of Rosehaugh.

One office development, Wool House in London's Carlton Gardens, has been put on hold while the company determines whether to apply for permission to turn the site into luxury apartments. Chelsfield owns several riverside office buildings in London which it is planning to convert into residential schemes, including one next to the Globe Theatre recreation in Southwark.

News of Chelsfield's shift accompanied interim profit figures, which emerged at the top end of analysts' expectations with profits rising from pounds 4.3m to pounds 6m and net assets per share up from 174p to 197p. The shares closed 1p higher at 281p.

Mr Bernerd said Merry Hill continued to be the principal contributor to a strong rental income performance. Rents rose 14 per cent in the period to pounds 17.4m. An application to build a 450,000 square feet extension to the shopping centre, which since June has been wholly owned by Chelsfield, is on the desk of the Environment Secretary, John Gummer. The project would involve a pounds 100m investment.

Chelsfield has become one of the property sector's best-regarded companies since floating three years ago. Earlier this year it launched a pounds 102m rights issue. Take up was over 99 per cent.