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ICICI Pru Office Yield Optimiser

AUM ( cr) | Inc Date (30-Jun-2024)

Scheme Rating

IME Scheme Rating

4 of 5 stars

For investors seeking returns that are not co-related to the equity markets, this is a fairly decent option. The office yielding strategy of investing in leased office assets, to earn a recurring rental yield, with the potential for capital appreciation boosting returns to the mid-teens does have merit. This fund uses leverage & a tactical allocation to increase yields further to 15-18%, but this does come with an increased level of risks that investors should consider prior to investing.

IME Strategy Rating

4 of 5 stars

The fund targets mid-sized commercial RE, with minimum 70% exposure to pre-leased assets and limit tactical opportunities (near completion) to 30%. While typical office-yielding funds have relatively lower risk, there are 2 elements of the strategy that do bring in a certain level of risk – (a) 30% exposure to near-completion assets & (b) leverage at an asset level without any recourse to the fund. These additional elements (near-completion assets & leverage) help boost returns, but can lead to downside risks in case of any completion or lack of occupancy risk, which investors do need to consider.

AMC Rating

3 of 5 stars

AMC: ICICI Pru Alternatives (click link for detailed AMC review)

ICICI Pru Alternatives is part of a highly respected financial house in India. The AMC backs that up with strong team pedigree, and years/large AUM of execution in alternatives space.

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

Investment Strategy

ICICI Prudential Office Yield Optimiser Fund II is a Category II AIF that focuses on pre-leased, income-generating commercial real estate assets in India’s top business hubs. The fund aims to generate stable rental income and capital appreciation by investing in Grade A office properties with strong tenant profiles

Core Investment Approach

Investment in Income-Generating Office Spaces:

  • Targets mid-sized commercial real estate properties with high-quality tenants.
  • Focuses on pre-leased office spaces with long-term rental agreements.

Prime Locations with Strong Leasing Demand:

  • Investments in Mumbai, Pune, Bangalore, Chennai, Hyderabad, and NCR, where office leasing remains robust.
  • Selects assets in high-demand micro-markets with limited new supply.

Structured Portfolio Allocation:

  • 70%+ exposure to pre-leased office properties for stable rental yields.
  • Up to 30% in completed but vacant properties with high leasing potential.
  • Not more than 25% exposure to a single investee company/tenant to reduce concentration risk.

Exit Strategy & Yield Optimization:

  • Generates rental income (4-5% yield) plus capital appreciation (7-8%).
  • Expected total returns of 15-18% IRR through rental growth and asset revaluation.
  • Exit through REITs, institutional sales, or strategic buyouts after 5-6 years.

Risk Mitigation & Tenant Quality:

  • Targets AAA-rated corporate tenants and MNCs, ensuring rental stability.
  • Diversified portfolio to minimize vacancy risks and maintain liquidity.

Trailing Performance

1yr 3yr 5yr Since Inception
ICICI Pru Office Yield Optimiser

Performance as of: 31-Mar-25 | Inception Date: 30-Jun-24

Fund Managers

Rahul Rai | 4-star rated FM

Head RE | 34 yrs Experience | 14 yrs at current firm

Past Experience: SUN-Apollo Real Estate Advisors, E&Y

Rahul Rai joined the AMC in November 2010. With over 24 years of experience spanning Real Estate Investments, Corporate Finance and Tax & Regulatory assignments, he leads the Real Estate business practice at the AMC. Prior to joining the AMC, Rahul worked with SUN-Apollo Real Estate Advisors as Principal with the responsibility over the entire life cycle of the investment. He has also worked at Ernst and Young where he headed the Real Estate transactions practice and prior to that has worked with Arthur Andersen. Within the real estate sector, Rahul has exposure across all product classes and cities and has strong relationships with leading developers. He is a Chartered Accountant and Cost Accountant. He is a graduate in Commerce from Mumbai University.

Shekar Daga | 4-star rated FM

Head Pvt Capital | 26 yrs Experience | 4 yrs at current firm

Past Experience: Aion Capital, ICICI Bank

Shekhar Daga is the Head- Private Capital at ICICI Prudential AMC. In a career spanning over two decades, Shekhar has handled entire gamut of investment management across corporate lending, structured finance, private equity, special situation and distressed debt. Previously, he was a partner at AION Capital and served on the board of multiple portfolio companies including Clix Capital. He was earlier with ICICI Bank in their Structured finance and distressed debt group. Shekhar is a rank holder CA from Institute of Chartered Accountants of India.

Nimesh Shah | 5-star rated FM

CEO | 31 yrs Experience | 18 yrs at current firm

Past Experience: ICICI Bank

Nimesh Shah joined the Company in July 2007 as Managing Director and Chief Executive Officer. He has been instrumental in laying a foundation for building a superior asset management firm. He has over 30 years of experience in the banking and financial services industry. Prior to his current role, he was serving the ICICI Group as a Senior General Manager at ICICI Bank where he held several key roles in project finance, corporate banking and international banking functions. He is also a Director of the Mutual Fund industry trade body AMFI and a Chartered Accountant by qualification.

Fee Structure

Fee Structure Fee
Fixed Fee Structure 1.25
Variable Fee Structures 1% + 10% Performane Fee over 8% Hurdle (no catch up)
Exit Fees

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