UK listed residential property landlord Grainger has exchanged contracts to acquire a regional residential property portfolio from Sarunas Properties for £58 mln (€77 mln), reflecting a yield of 7.7%.

UK listed residential property landlord Grainger has exchanged contracts to acquire a regional residential property portfolio from Sarunas Properties for £58 mln (€77 mln), reflecting a yield of 7.7%.

The transaction, funded from existing resources, brings the company's total investment into residential assets in the UK regions to £76 mln in recent months.

The portfolio comprises 614 residential properties, which are predominantly tenanted and subject to Assured Shorthold Tenancies, located in Cambridgeshire, Greater Manchester, Lancashire, Cheshire, Derbyshire, Merseyside and Nottinghamshire, as well as a small proportion of properties in Scotland.

The purchase price of the portfolio represents a 12% discount to their £66 mln vacant possession value.

The portfolio, which generates an annual gross rent of £4.5 mln, provides opportunities for value enhancement through a combination of refurbishment, active asset management and capital realisation, Grainger said in a statement. It is anticipated to deliver a double digit total return over the next five years.

Andrew Cunningham, Chief Executive of Grainger, said: 'Today's acquisition and our wider investment activity over the last month support our strategy of increasing investment into the regions where we are seeing attractive investment opportunities, while capitalising on the improving momentum of the UK economy.'

The acquisition is expected to complete in May 2015.

Sarunas Properties is owned by the Pervaiz Naviede Family Trust, which in turn owns LPC Living, a residential property developer which has created more than 1,300 homes to date in some of the most deprived areas of northwest England. The trust also owns a number of commercial, retail and leisure sites across the UK.

Run by Pervaiz Naviede, the Pervaiz Naviede Family Trust run is involved in a range of philanthropic activities and is the principal benefactor of the Pamela Northcott Fund, a voluntary organisation providing advocacy and support to cancer patients across the UK.