Grainger has spent £160m on a residential portfolio in London.

The listed company said it has bought 61 properties in the Knightsbridge and Chelsea districts of the UK capital from Property Investments (Chelsea).

The price paid, Grainger said, was at a discount to the portfolio’s vacant possession value.

The portfolio is spread across nine streets in Knightsbridge and Chelsea, with 45 of the 61 houses subject to regulated tenancies. It currently generates £1.92m in gross annual rent.

Grainger said the “unmodernised nature” of the majority of the assets provided potential for value enhancement over the long term through refurbishment. The primary long-term profit driver will be the crystallisation of the capital value upon sale at vacancy.

Last year, Dutch asset management giant APG entered the UK residential property market, acquiring part of a £350m (€416m) portfolio with Grainger.

The manager invested £158m in a new unit trust, GRIP, buying part of G:res1, one of Grainger’s property funds. At its height, the G:res1 portfolio included nearly 2,200 units, located mainly in London and the south east of England.