What is a core-plus investment strategy?

A core-plus investment strategy in real estate is a moderate-risk investment approach that combines the stability of core assets with selective value-add opportunities. Investors target income-producing properties that are mostly stabilized but have potential for operational or physical improvements to increase returns.

Key Features of Core-Plus Strategy

• Good-quality properties located in strong or emerging markets
• Mostly occupied and income-generating assets
• Minor renovation or operational improvements required
• Potential to increase rents or occupancy levels
• Combination of stable income and moderate appreciation potential

Risk-Return Profile

1. Moderate Risk Level

   • Higher risk than core investments
   • Lower risk compared to value-add or opportunistic strategies

2. Balanced Return Potential

   • Typical target returns range between 10%–15% IRR
   • Returns come from both rental income and asset appreciation

3. Active Asset Management

   • Requires selective upgrades or lease optimization
   • Focus on improving operational efficiency and tenant quality

Core-Plus vs. Other Real Estate Strategies

• Core: Fully stabilized assets with low risk and steady income
• Core-Plus: Stable assets with moderate improvement opportunities
• Value-Add: Properties needing major repositioning or upgrades
• Opportunistic: High-risk developments or distressed projects

Examples of Core-Plus Investments in India

• Commercial buildings with lease rollover opportunities
• IT parks in growing secondary business districts
• Residential projects in expanding Tier 1 suburbs
• Retail assets requiring tenant mix improvements

Core-plus investing is suitable for investors seeking higher returns than traditional core assets while maintaining a relatively balanced risk profile. It offers a strategic mix of income stability and controlled value creation through targeted improvements.