RESIDENTIAL property group Grainger Trust continued its expansion programme yesterday by bidding for an offshore investment fund.

Grainger Retirement Housing Limited (GRHL) - a division of Grainger, which is based in Newcastle - made the 145.86p-a-share offer for Capital Appreciation Trust (CAT), valuing the business at £71.6m.

The move came only days after Grainger revealed it had joined forces with property company Development Securities to make a £33.5m acquisition in Birmingham.

A month ago, the group announced the £21.4m acquisition of a 308-unit residential portfolio in Munich, Germany, and opened its first European office, in Mannheim.

CAT has 912 properties across the UK, the majority in McCarthy and Stone developments in the South.

Rupert Dickinson, Grainger chief executive, said the group wanted to look at ways of introducing more flexibility into the retirement home sector.

"This will be our first major acquisition in the increasingly important retirement home sector, and fits well with our existing home reversion business," he said. "We want to investigate ways of introducing more flexible tenure into the retirement home sector through a range of options, from rental, lifetime lease, through to shared equity.

"We think it is now becoming as important to offer elderly homeowners flexibility in stepping off the housing ladder as it has become for first-time buyers to get that first step up."

Peter Couch, Grainger's director of equity release, said: "As with our existing home reversion business, the key business drivers will be house price inflation and life expectancy of our tenants."

Earlier this week, Grainger - the UK's largest listed residential property firm - posted a 75 per cent rise in profits, and had developments in the pipeline worth £675m.

In the year to September 30, the group saw a 20 per cent rise in net asset value.