CHELSFIELD, Elliott Bernerd's recently floated property vehicle, confirmed yesterday that it is proceeding with an pounds 80m, 120,000sq ft London office development in St James's, writes Tom Stevenson.

Mr Bernerd said Wool House would be funded jointly with AMP Asset Management. 'Conditions are favourable to begin development in selected locations where we believe tenant demand exceeds existing or projected supply.'

Rents in the West End of London have been rising after a lack of development during the recession made it almost impossible to find top quality space of more than about 50,000 sq ft.

Chelsfield's other high-profile investments include 60 per cent of the Wentworth golf course and 50 per cent of the Merry Hill shopping centre in Dudley, West Midlands. It is planning a further pounds 22m investment at Merry Hill to acquire more shops.

Mr Bernerd said that coming rent reviews would increase the income from Merry Hill. He expected to be expanding the centre soon to meet tenant demand.

Profits in the six months to June almost doubled from pounds 2.04m to pounds 4.03m. After the December flotation earnings per share slipped slightly from 2.2p to 2.1p. A 1p dividend is to be paid with 1.4p more expected at the full year.

There was no property valuation at the halfway stage but net assets are estimated to have increased from 151.8p to 161.6p. The shares, floated at 155p, closed unchanged at 163p.