The agreement will see the fund acquire one and two bedroom apartments in the Miller Homes Varcity North and Varcity South developments marking the first investment in Scotland by the fund.
Christopher Down, chief executive of Hearthstone, said: “We’re very pleased to announce this transaction with Miller Homes. The properties in Scotland will be a great addition to our existing portfolio.
“As the first Scottish properties they add a new dimension to the diversified nature of the fund as well providing a strong stable rental income.”
The units will be retained as investments by the fund and let on Scottish tenancies.
The new properties form part of Hearthstone’s diverse residential investment portfolio which is spread throughout the 11 economic regions of mainland UK.
Hearthstone is aiming to make residential property more accessible to financial service professionals, pension funds, local government and direct private investors.
Down said: “Our movement into the Scottish market forms part of our overall goal to change the way the UK invests in residential property which valued at £4trn is the UK’s largest asset class.
“Professionally managed, FCA regulated funds like ours will be crucial in channeling the much needed mainstream investment toward housing whether that be from individuals investing via an ISA or SIPP or institutional pension funds seeking stable, long-term returns from an asset class with historically low volatility.”
Anne Marie Britton, sales director for Miller Homes Scotland East, said: “We are delighted that Hearthstone Investments has chosen to make its first investments in Scotland at Varcity North and Varcity South.
“Both developments are incredibly popular due to their highly sought after setting close to Edinburgh city centre and diverse mix of luxurious properties which appeal to a wide variety of lifestyles, including first time buyers, growing families and downsizers.”
The deal takes the property assets under management to approximately £30m.
In 2013 the fund has also acquired a range of units in East Anglia and the East Midlands from Crest Nicholson and Morris Homes in addition to the 34 flat, £7.7m transaction with developer Quintain Estates and Development in February.