UPDATE 1-Grosvenor sells some prime London properties and targets cheaper rentals
* Full year group profit before tax rises 38 pct
* Value of property assets unchanged at 5.8 bln pounds
* Cuts exposure to super-prime London homes
* To reinvest in rental homes outside Mayfair and Belgravia (Updates with figure on prime central London home sales)
LONDON, April 29 (Reuters) - The owner of much of London's upmarket Mayfair and Belgravia districts has sold millions of pounds of prime properties, seeing recent rampant price rises as unsustainable and preferring to invest in rental homes in cheaper districts.
Grosvenor Group, controlled by the Duke of Westminster - one of Britain's richest men, said it had cut its exposure to super-prime London homes last year, making sales that helped its Britain and Ireland unit treble profit.
Demand from foreign investors in search of a safe haven has pushed London's luxury home prices up by 68 percent since 2009, compared with a rise of 49 percent in greater London as a whole, according to property consultancy Knight Frank, leading many analysts to express concern that a bubble might be forming.
"I'm more concerned about it (high-end residential pricing) than I was last year," said Chief Executive Mark Preston, who last year called the rate of growth in London luxury house prices unsustainable.
"It's very much a deliberate initiative on our part to capitalise on prices that we think are high," Preston said on Tuesday as the private company released its annual report.
Grosvenor said it sold off 240 million pounds ($400 million) worth of central London homes, including row of mid-19th century terraces in Belgravia for 115 million.
The company intends to reinvest in rental homes outside its traditional Mayfair and Belgravia turf, targeting more affordable neighbourhoods, Preston said. It is looking at securing up to three schemes, having already spent 70 million pounds on a site in the Bermondsey district last year, where it intends to let homes.
"Housing for rent is something that we're beginning to turn our minds to more than we've done in the past," he said. "We're recognising that London desperately needs more in that mid-market area where people are literally priced out," he said.
The firm is controlled by the Grosvenor family, headed by Gerald Grosvenor, who was No. 8 in Britain's Sunday Times Rich List last year with his 7.8 billion pound fortune.
Grosvenor's London estate, which it has owned for more than 300 years, comprises 300 acres of Mayfair and Belgravia with more than 1,500 homes, shops and offices as well as investments in China, Europe and North America, and a fund management arm.
The company said group profit before tax rose 38 percent to 506.9 million pounds in 2013. The value of its property assets was 5.8 billion, unchanged from 2012. (Editing by Louise Ireland)