Managed workspace provider Bizspace has used up the £7m raised in July and the £1.7m pulled in this November to snap up a portfolio of commercial properties in the north-east of England. The purchase, from a partnership between UK Land Estates and regional development agency One NorthEast, cost £28.05m in total. £22m will be financed by debt. The portfolio comprises 22 properties with 335 business units. 275 tenants produce a net income of £1.9m per year. Managing director Neil Corderey explained that, by raising the funds earlier in the year, the company can reach critical mass through larger scale acquisitions and therefore generate strong earnings growth for its shareholders. Although average rents in the North-East are only £2.20 per square foot, the regional economy is strengthening so Corderey expects to gain from rental growth in the medium term. The enlarged company will operate from 54 sites nationwide with over 1,500 occupiers. House broker Teather & Greenwood believes the acquisition will have little affect in the current financial year, with pre-tax profits forecast at £2.62m, but will have a greater impact in 2006, lifting forecasts from £3m to £3.2m. The prospective p/e of 16.5 is below the sector average of 20.8 and at a significant discount to competitor Workspace, which boasts a rating of 34.7. Hold.