BANK OF SCOTLAND is to buy a substantial stake in Kenmore, the fourth Scottish property company in which it has substantially invested in recent months.

Kenmore, which is based in Edinburgh and is chaired by John Kennedy, has been seeking equity after failed takeover talks with the Australian property group Mirvac last year.

The company has been looking for a third party to exploit opportunities for expansion. The agreement, with Bank of Scotland Corporate, part of HBOS, follows similar deals the bank has done with property developers Cala, Tulloch and Miller Group. The deal is said to worth more than £30m.

Bank of Scotland has been the provider of debt finance for the company for some years. The bank believes demand for housing and the fall in prices in the UK commercial property market make these deals attractive. Kennedy is one of Scotland's wealthiest men with a fortune estimated last year at £85m. He began investing in property 20 years ago.

Kenmore buys, develops and sells residential and commercial property across all sectors - office, industrial, retail and investment.

The company is one of the UK's biggest privately owned developers, with £1.7 billion of assets under management, and has been keen to expand. It began investing in Europe in 2002 and in recent years has established itself as a leading operator in France, Germany, Belgium, the Netherlands and the Nordic countries.

The Bank of Scotland and Kenmore already act in several joint ventures.

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