ICICI Pru­den­tial AMC unit sells of­fice as­sets to HNIs

HT Estates - - FRONT PAGE - Mad­hurima Nandy mad­hurima.n@livemint.com

BEN­GALURU: ICICI Pru­den­tial Real Es­tate In­vest­ments, a di­vi­sion of ICICI Pru­den­tial AMC Ltd, has sold four of its five com­mer­cial of­fice in­vest­ments to ul­tra-rich in­di­vid­ual in­vestors and fam­ily of­fices, a top com­pany ex­ec­u­tive said.

Among them are one in­di­vid­ual build­ing, and sev­eral stand­alone of­fice units.

With the fifth exit, ex­pected later this year, it would have ex­ited all its of­fice in­vest­ments, made dur­ing 2012-14 un­der its port­fo­lio man­age­ment scheme, Rahul Rai, head of real es­tate busi­ness at ICICI Pru­den­tial AMC said.

ICICI Pru­den­tial Real Es­tate In­vest­ments had in­vested around Rs450 crore across five trans­ac­tions in Mum­bai, Pune and Noida for a 550,000 sq. ft port­fo­lio, which was leased to large in­ter­na­tional ten­ants. These ex­its re­sulted in an in­ter­nal rate of re­turn (IRR) of 10-21% on the in­vest­ments, Rai said.

ICICI Pru­den­tial AMC is also cur­rently rais­ing its first com­mer­cial of­fice real es­tate al­ter­na­tive in­vest­ment fund (AIF) to make fresh in­vest­ments in pre­leased and fin­ished of­fice as­sets.

“There is de­cent ap­petite for of­fice in­vest­ments from HNI ( high net- worth in­di­vid­ual) in­vestors, given that ex­pec­ta­tions from the res­i­den­tial sec­tor have been muted. Un­like res­i­den­tial, in­vest­ments in com­pleted of­fice projects in­volve less risk,” Rai added.

San­jay Puri, man­ag­ing di­rec­tor of real es­tate con­sul­tancy Sure Shot Sug­ges­tions said there is alot of de­mand­for‘strata sale’ in of­fices, which is ba­si­cally sale of of­fice units. The con­sul­tancy ad­vised on a cou­ple of these exit trans­ac­tions in The Cap­i­tal build­ing in Mum­bai’s of­fice hub Ban­dra-Kurla Com­plex.

In 2017, ICICI Pru­den­tial Real Es­tate In­vest­ments launched its first com­mer­cial of­fice AIF—the Rs750 crore ICICI Pru­den­tial Of­fice Yield Op­ti­miser Fund, which in­cluded a Rs250 crore green-shoe op­tion. A green-shoe op­tion al­lows a fund to raise ad­di­tional money from in­ter­ested in­vestors.

Rai said the first close of the fund has been achieved but did not dis­close the amount raised.

“We look for­ward to de­ploy the cap­i­tal raised and will sub­se­quently con­sider rais­ing the re­main­ing cap­i­tal. Over a pe­riod of time, we ex­pect the com­mer­cial of­fice in­vest­ment busi­ness to grow stronger. For in­vestors, it pro­vides an op­por­tu­nity to di­ver­sify across 5-10 as­sets,” Rai said.

ICICI Pru­den­tial Real Es­tate In­vest­ments has around Rs3,700 crore of real es­tate as­sets un­der man­age­ment, and has thus far made 63 in­vest­ments and 23 ex­its.

Over the last few years, in­di­vid­ual in­vestors have largely stayed away from mak­ing fresh in­vest­ments in res­i­den­tial projects while strug­gling to sell off and exit ear­lier in­vest­ments, amid stag­nant prices and tepid buyer in­ter­est.

Dur­ing the same pe­riod, the com­mer­cial of­fice seg­ment as an as­set class has fared much bet­ter, with high de­mand for such space and huge in­sti­tu­tional in­vestor in­ter­est.

“With res­i­den­tial in­vest­ment not gen­er­at­ing that kind of yield, there is a lot of in­ter­est among in­di­vid­ual, smaller in­vestors to buy­of­fice space. Be­cause there is no ac­cess yet to REITs ( real es­tate in­vest­ment trusts), where will an in­di­vid­ual park his money in real es­tate,” asked Jug­gyMar­waha, ex­ec­u­tive man­ag­ing di­rec­tor at prop­erty ad­vi­sory JLL In­dia.


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