CLS is property's top performer

One reason for that discount is that it's difficult to deal in them: over 60 per cent are owned by executive chairman Sten Mortstedt and his wife. That keeps institutions away, but it's less of a barrier for private investors. And the quid pro quo of being a minority shareholder in the family investment vehicle of a Swedish property baron is that he has a strong interest in preserving the value of the shares. Maybe that's why CLS was one of the few property companies that did not issue equity at a steep discount in 2009.

That's one reason why it has outperformed its peers, but not the only one. Mr Mortstedt also sold about a third of the portfolio - about £400m of assets, including a 33 per cent share of the soon-to-be-built Shard skyscraper at London Bridge - in the first half of 2008. He didn't quite predict the property crash but, unlike other property executives, he reacted speedily when it hit. Also, he never bought prime property at bubbly valuations.

That dictum still holds. CLS sold out of its central London assets in 2008 and now focuses on high-yielding offices in the suburbs. These account for 43 per cent of the portfolio; offices in France (27 per cent), Germany (22 per cent) and Sweden (6 per cent) make up the balance.

This policy takes full advantage of the unusually wide gap between rental yields and the cost of debt, one of the most compelling quirks of the current property market. At the time of the last valuation in December, CLS's basic rental yield was 7 per cent, while Mr Mortstedt announced in May that the company's cost of debt had fallen to 3.8 per cent after various refinancing deals. Despite carrying a lot of debt, the company has excellent access to capital.

This has made CLS a successful cash generator. Strip out non-cash items, such as property revaluations, and earnings per share increased from 28p in 2009 to 65p last year. Distributions to shareholders have risen accordingly. Mr Mortstedt does not pay dividends, but buys back shares every six months via a tender. This is sensible while CLS's shares trade so far below their asset value. CLS paid out £12.3m last year, equivalent to a dividend yield of 4.6 per cent. That was well under half recurring earnings of £29.7m, so there's scope for buy-backs to grow.

The company also seems to be trading remarkably well. Its vacancy rate is 3.9 per cent, the lowest in a decade. About 65 per cent of its rental income is subject to indexation, guaranteeing growth even in a flat lettings market, and 40 per cent of it is paid by the public sector.

The company is wary of developments - perhaps after its harrowing experience with the Shard (after years of planning, it sold out when the project was refused debt in late 2007). But it is ramping up activity in Vauxhall, south London, where it is based, in anticipation of the area's gradual regeneration around the new US embassy. Last month it received planning consent for a mixed-use scheme with nearly 400 student rooms.