Real estate-focused private equity firm Milestone Capital Advisors has invested Rs 75 crore ($11.8 million) in a residential project of Chennai-based realtor Landmark Developers, the company said in a statement.
The investment has gone to a project christened Torrence, which is located in OMR, Chennai, and will be developed on a four-acre land parcel. It comprises four towers with 16 floors each and will throw up approximately 600 housing units of 2&3 BHK sizes. The project is in post-approval stage.
Located in close proximity of commercial and IT centres, the land parcel has been acquired from another Southern realtor Shriram Group.
Milestone has sealed the deal from the dry powder from Milestone Domestic Scheme III through the structured debt route for 36 months. It had recently topped up its investment from the fund in North-based developer ATS Group towards a project titled Dolce.
Though the firm is amid raising a new fund with a corpus of Rs 500 crore, its last two deals have come from its dry powder. The fund was launched in September last year and is yet to hit first close at a substantial amount.
Rubi Arya, executive vice chairman, Milestone Capital Advisors, said, “Apart from consistently distributing returns to our investors through regular exits across our funds, we have also been steadily making investments. Over the past couple of years, we have returned over Rs 2,000 crore and have invested over Rs 550 crore across multiple deals pan India. Recently, we exited 247 Park in Mumbai at a deal size of Rs 1,060 crore, possibly making is India’s largest real estate PE fund exit.”
“We are also closing a few more deals with reputed developers in Mumbai and Bangalore and will look to invest Rs 100-120 crore in residential real estate across metro cities, through our new fund Milestone Opportunities Fund 10, a structured debt investment opportunity for HNIs seeking high yield returns over shorter investment tenures,” she added.
As reported by VCCircle, the developer recently raised Rs 220 crore ($34 million) from the non-banking finance company (NBFC) arm of Edelweiss Financial Services in the form of debt. Debt as a funding instrument has become a mainstay in real estate, especially for tier II developers. It works as a secured route of funding with periodic payouts against riskier equity investment.
The real estate market of Chennai has climbed to the third spot, after Bangalore and Pune over the last five years, according to a recent study conducted by real estate research and analytics firm PropEquity.
Indeed, the report notes that the southern region as a whole has outdone northern and western markets on several parameters such as price appreciation, supply absorption and inventory. Delhi-NCR in north is the country's top market by volume while Mumbai (MMR) is the largest by value.
As for Milestone, its focus has been to clock exits and has divested a slew of investments in the recent past. The most recent of which is 247 Park, which gave it an internal rate of return (IRR) of roughly 30 per cent and a multiple of 2.5X. In the last one year or so, it has returned more than Rs 600 crore to its investors and the latest exit adds substantially to its exit figures.
Even while it is clocking exits from vintage funds and raising a new corpus, two of its senior executives Alok Aggarwal and Navin Kumar have quit the company.