Bottom Line: Right on, Ritblat

IT IS hard to fault the logic of John Ritblat's latest property deal. Conrad Ritblat's shares have doubled since the merger last year with Sinclair Goldsmith, so asking shareholders to fund the purchase of the surveyor's West End and City offices makes eminent sense.

Not that investors have been hard done by. At this stage in the property cycle the argument for companies owning their workplaces is compelling, especially when the proposed offices provide plenty of room for expansion into the upturn. The wonder is that more have not made the switch from long, inflexible leases to the joys of home ownership.

The yields implied by the pounds 21m combined purchase price of the two buildings (7 per cent in the West End and 5.7 per cent in the City) do not suggest bargain basement prices.

But shareholders are tied into probable capital gains and released from the unpredictable shackles of rising rents.

The flexibility that gives a cyclical service business should not be underestimated.

Many a high-profile service provider would have given a great deal not to have been saddled with high fixed overheads just as revenues started to plunge.

The closing price of the shares, down 2p at 58p but 14 per cent higher than the theoretical ex-rights price of 51p, indicated the market's justifiable satisfaction with the deal.