Kirkmore Securities, which owns a number of mixed-use freeholds in Islington and Hampstead, is said to have approached the company via advisory group Rhino Investment Management.
Grainger has appointed Lazard to sell the German portfolio, which is comprised of up to 6,000 residential properties. Sources close to the group said Kirkmore had not approached Grainger about an offer yet.
The proposal, first reported by the Sunday Times, comes as the property group tries to fend off growing pressure from activist shareholder Crystal Amber.
Grainger last week moved forward the start date of incoming chief executive Helen Gordon to December from early 2016.
It has also refinanced some of its debt pile after pressure from the listed activist. Crystal Amber had said it was paying too much to service the borrowings.
Crystal Amber, led by chief executive Richard Bernstein, has also urged fund managers in the insurance industry to bid for the entire company. It claims Grainger, which trades at a discount to assets, would be a good investment match for insurers’ “long-term future liabilities”. Grainger declined to comment.