ICICI Prudential AMC buys over 0.5 million sq ft office space in Bengaluru for Rs 626 crore

ICICI Prudential Asset Management Company has acquired over half a million sq ft saleable area across multiple floors in a commercial tower Purva Zentech on Bengaluru’s Kanakapura Main Road at an enterprise value of around Rs 626 crore.

The transaction is among the larger office asset acquisitions by an institutional investor in India this year.

The acquisition has been made through Prishal Office Parks III, which is owned by ICICI Prudential Office Yield Optimiser Fund - AIF II, a Category II Alternative Investment Fund managed by ICICI Prudential Asset Management Company.


With this deal, ICICI Prudential becomes the owner of 56% stake in the commercial tower, the balance is owned by the land owner, that had entered into a joint development agreement with Puravankara to develop the plot.

“India’s commercial real estate opportunity is increasingly being driven by structural rather than cyclical factors. While rental yields and capital appreciation remain important, the country’s skilled and cost-efficient talent pool is making it an attractive destination for GCCs and MNCs,” Rohit Rathi, Principal-Real Estate, ICICI Prudential AMC, told ET.

The continued expansion of these businesses, according to him, is creating sustained demand for quality office space, offering investors the potential for both resilient cash flows and long-term capital appreciation.

With this transaction, ICICI Prudential Office Yield Optimiser Fund has concluded investing nearly 80% of its corpus of over Rs 2,700 crore that it concluded raising last week. ICICI Prudential AMC has invested around Rs 7,000 crore across eight real estate funds and portfolios so far, including five residential-focused and three commercial funds.

The acquired portion currently has 1.89 lakh sq ft of leased area, with a weighted average warm-shell rent of around Rs 76 per sq ft per month. Key tenants at the property include Ikea, Laguna and UST, with lease terms ranging from three to 10 years.

Puravankara also confirmed the conclusion of the transaction.

The investment has an expected horizon of three to five years. The asset-owning company holds property management rights for the entire building, with the fund to manage the common areas and property operations for the building.

For ICICI Prudential AMC, the acquisition adds exposure to Bengaluru’s commercial real estate market through an office asset with existing leasing and further potential for occupancy.

The transaction values the asset at around Rs 11,447 per sq ft based on the 5.46 lakh sq ft saleable area.

The transaction comes as Bengaluru continues to attract institutional capital into its office market, supported by demand from technology companies, global capability centres and other corporate occupiers.

Bengaluru has remained one of India’s largest office markets and has seen sustained investor interest in commercial assets with established occupiers and leasing potential. The city has also continued to attract investments from domestic and global institutional investors seeking exposure to income-generating office assets.