ICICI Prudential AMC launches Rs 750-crore realty fund

ICICI Prudential Asset Management Company has launched a Rs 750-crore fund to invest in rent earning office properties. “We are looking to raise the fund in the next two to three months. The fund will invest in pre-leased, completed office properties,” said Rahul Rai, head, real estate investment business at ICICI Prudential Asset Management Company.

The fund would target the return of 16-17 per cent and has a five-year fund life.

“Office properties provide attractive opportunity and we believe rents to strengthen further,” Rai said. 

ICICI Prudential joins the likes of Shapoorji Pallonji Group that recently floated a $500-million fund with Germany’s Allianz to invest in office properties. US-based Blackstone has invested over $3 billion in office properties and has over 70 mn sq ft of the portfolio, thus becoming the largest owner of offices. “Fund managers are betting on offices due to positive sentiment in the segment. The leasing is good and values are increasing.

Investors are able to earn yields of 8-9 per cent,” said Amit Goenka, managing director and chief executive at Nisus Finance Services. Goenka said since Reits (real estate investment trusts) are coming up, investors are also expecting listing gains.

Blackstone’s two joint ventures — one with Bengaluru-based Embassy group and another with Pune-based Panchshil — are planning to float Reits in the country.

ICICI Prudential AMC’s pre-leased office investments started in 2012 with investments in Mumbai, Pune and NCR. A couple of exits have been achieved at returns of 21 per cent and 17 per cent.