Benchmark spends pounds 120m on properties

Benchmark Group, the acquisitive property investment company, announced its biggest purchase to date yesterday as it snapped up a total of 12 properties for pounds 120m. It also pledged to spend a similar sum on suitable targets in the near future.

The news, which took the value of Benchmark's portfolio to pounds 330m, moved the company closer to its stated aim of having a portfolio worth pounds 500m by the year 2001.

Benchmark bought 11 properties from Friends Provident for pounds 82m, and a pounds 38m West End location, Wool House, from Chelsfield.

The group will raise pounds 119m for the deal through a rights issue of over 60 million new ordinary shares at 200p a share. Shareholders' approval will be sought at an extraordinary general meeting at the end of the month.

KC Wong, joint managing director, said he was casting his eye over "undervalued assets" over the next year, and could justify spending around pounds 100m if the opportunity arose. However, he added: "We're not growing for the sake of growing; we'll buy as and when the opportunities arise."

The Friends Provident deal on properties in central London and Leadenhall in the City, followed talks since last October, when FP sold a central London portfolio to Benchmark for pounds 113m, in return for a 35 per cent stake in the company. The move transformed Benchmark overnight from a pounds 3m tiddler into a business with a market worth of pounds 100m. The company was last night valued at pounds 147m. Shares jumped 4p to 244p yesterday.

Benchmark will undertake office refurbishments of the central London sites formerly owned by FP, and has applied for planning permission to create 22,000 square feet of offices in the Leadenhall location.

Mr Wong said the company had been "pointed in the direction" of the Chelsfield acquisition. Planning permission at Wool House has already been obtained, and work is to begin shortly on 97,750 square feet of offices, and a smaller area of residential developments.

Benchmark declared a maiden dividend of 3p a share for the year to the end of June this year, instead of a final dividend at the end of the year. As a result of the deals Benchmark would be taking on another three senior managers, Mr Wong said.