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Entrepreneurial property developer Terrace Hill reported a leap of 20.2% in its key measure of performance, triple net asset value (TNAV) per share, to 48.1p over the year to last October. That reflects the strong commercial property market in the UK. The group, run and 70 per cent-owned by Robert Adair, has taken advantage of these soaring prices to sell fully valued assets in London and re-invest in earlier-stage developments. Consequently the level of work in progress rose by 60% to £90m.

This bodes well for the future, as these developments rise in value as they near completion. At present the shares, at 49p, are at a slight premium to TNAV. This is justified because house broker Numis envisages that TNAV should rise by 20% or so over the coming year. Demand for commercial property remains high, particularly with the new pension rules coming in and the launch of Real Estate Investment Trusts towards the end of the year.

Terrace Hill has a very flexible outlook and has proven that it can read the runes of the property market. Five years ago, the group was predominantly invested in residential assets. Now this only makes up a quarter of the company’s interests. Adair plans to spin out the residential arm, which focuses on building affordable homes in Scotland, in the near future. Office developments now dominate the portfolio.

Terrace Hill	AIM	£52.45m	24.75p	-0.25p
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