Indiareit Fund Advisors, the real estate private equity arm of Piramal Enterprises, has made its maiden investment from its Mumbai Redevelopment Fund, committing Rs 100 crore (18.2 million) for Mumbai based developer Omkar Realtors’ residential project in Bhoiwada, Central Mumbai. Construction major L&T is also a partner in the project.
The project is spread across a land area in excess of 17 acres, and has a potential free sale component of 25 lakh square feet, comprising six 40-60 storied residential buildings. Omkar has sold close to 600 units in the project during its project launch last year. L&T is building the rehabilitation component in the project and will start deliveries in next five months. The money invested by Indiareit will go towards clearing the remaining slums and for project development.
Around two years ago, Indiareit had come in as an investor in Omkar’s Worli redevelopment project.
Indiareit had recently raised the Rs 400 crore fund called Mumbai Redevelopment Fund, which will invest only in redevelopment projects across the city.
In another investment, Indiareit from its existing fund called Indiareit Domestic Scheme IV has committed Rs 100 crore for a basket of pre-identified 13 city centric projects by Pune-based Marvel Group. Marvel Group’s selected projects are spread across Pune, Bengaluru, Goa and Mumbai that are in various stages of construction and delivery. The basket includes eight projects in Pune, three in Bangalore, one each in Goa and Mumbai.
After this investment, the fund is left with Rs 70 crore which it will invest in next quarter. It is already in talks for the same which would complete the investments out of the fund which had a corpus of Rs 900 crore.
Khushru Jijina, managing director, Indiareit, said, “We have taken position in these projects through high yield structured investments with an equity kicker. The returns are in the range of upwards of 20 per cent and goes up to 30 per cent.”
The fund hopes to mark its exit in next 3.5-4 year time frame.
Indiareit has also disclosed that distributions have begun from Rs 440 crore worth of exits that were term sheeted three months ago with the first transaction (an SEZ in Hinjewadi, Pune) having secured the necessary government approvals to facilitate closure. The remaining exits are also on track to close/distribute within the next two months, it said on Tuesday.
(Edited by Prem Udayabhanu)