* FY group profit before tax up 38 pct to 506.9 mln stg
* Value of property assets unchanged at 5.8 bln stg
* Cuts exposure to super-prime London homes
* To reinvest in rental homes outside Mayfair and Belgravia
LONDON, April 29 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 British & Ireland unit to 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 emerging.
"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 declined to quantify how much of its central London residential estate it sold, but said deals included the sale of a strip of mid-19th century terraces in the Belgravia district for 115 million pounds ($193.3 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 rent out homes.
"Housing for rent is something that we're beginning to turn our minds to more than we've done in the past," Preston 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, Duke of Westminster, who was placed at No. 8 in Britain's Sunday Times Rich List last year with his 7.8 billion pound fortune.
Its 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 pounds, unchanged from 2012. ($1 = 0.5950 British Pounds) (Editing by David Holmes)