Motilal Oswal Real Estate (MORE), the real estate investment arm of private equity firm Motilal Oswal Private Equity (MOPE), said on Tuesday that it has exited an under-construction residential project of south India-based developer Shriram Properties.
MORE said in a statement that it had taken an equity stake in Shriram Greenfield in Bengaluru in 2014 after investing Rs 67 crore. It has now sold this stake back to the developer.
India Realty Excellence Fund II (IREF II), MORE’s second fund, has exited the project with an internal rate of return (IRR) of 20%. In effect, the investor has clocked an exit value of Rs 125 crore, or 1.87 times its initial investment, in the space of three years.
Situated in the Whitefield area of Karnataka’s capital, Shriram Greenfield is a 2 million sq-ft residential project and will be developed across two phases.
Construction on the first phase of the project began in 2015 and is now nearing completion, the statement added.
IREF II achieved its final close in April 2015 at Rs 500 crore. The fund is fully deployed after making investments between 2014 and 2017.
MORE claims to have returned 107.5% of the fund corpus (including capital and interest) to its investors within four years of the final close. The fund has a further 40% capital invested across its balance six investments which it plans to exit over the next two-three years.
IREF II has till date secured eight complete exits at an average IRR of 21.2%. Late last year, it exited two investments from its second fund — two Bengaluru projects of Skylark Mansions and Mahaveer Developers.
“Our strategy has always been to partner with trusted developers in the top six cities and invest in their affordable/mid-income housing projects through different structures (equity/mezzanine) by providing capital at the right stage and conduct regular monitoring of the project,” said Sharad Mittal, chief executive officer of Motilal Oswal Real Estate.
IREF IV has a target corpus of Rs 1,500 crore. The fund was launched in May this year.
MORE is currently managing four real estate funds, namely IREF, IREF II, IREF III and IREF IV, along with proprietary investments.
MORE’s cumulative assets under management currently stand at more than Rs 2,700 crore.