GREEN Property, in a further expansion, has acquired a British property portfolio from Morgan Grenfell Property Asset Management, for £68.5 million.

The deal will be financed by a £55 million seven year term loan arranged through HSBC Investment Bank and Dutch bank DePfa, and from internal sources. Gearing would go up to 115 per cent which was "not that far from the group's year end target of 100 per cent", said managing director Mr Stephen Vernon.

The loan will be secured on some of the properties. With the expected sale of some properties, the gearing would be back to 100 per cent next year, he said. The company, he added, was quite happy to trade up "in an improving market".

Mr Vernon sees plenty of scope for further development in Britain where the property market has only reached the "first stage of recovery". The latest deal represents the "beginning of the group's development programme" in Britain.

The portfolio being acquired comprises most of the assets of the Morgan Grenfell Property Ventures Fund, together with an industrial estate in Watford. It consists of 11 properties producing a rental income of £5.45 million, representing an initial yield of 7.8 per cent.

The portfolio comprises some two million square feet of commercial property. Over 80 per cent is represented by four properties; an office building in London's west end, a retail and residential estate in Kensington, and industrial estates in Watford and Treforest, near Cardiff. The remaining properties comprise offices in the City of London, Victoria, also in London, Epsom in Surrey and Maidenhead in Kent. There are also industrial buildings and sites in Leeds and in Crawley, Essex and a warehouse in Guildford, Surrey, with planning permission for redevelopment as offices.

Mr Vernon said Green approached the Morgan Grenfell subsidiary about a deal. Mr Simon Cooke, managing director of Morgan Grenfell Property Asset Management, said the disposal "consolidates a good long term performance record for the unit holders".

The Treforest site has a further 5 acres available for redevelopment and the group now intends to "rebrand" the estate and provide it with a new image. The site in Leeds was strategically placed as it fronted a 5.5 acre site which was ripe for development, he said.

Mr Vernon stressed that Green had 90 transactions in Britain so far this year. He intended to shortly "extract some of the value of what we have done".

Green opened the Blanchardstown Shopping Centre last month. It has just refinanced the centre, replacing the syndicate of banks with Wurtenberge Hypobank. Blanchardstown had now moved from being a development to an investment, Mr Vernon noted.