Motilal Oswal’s realty fund commits $17M in three projects in Mumbai, Bangalore

Motilal Oswal Real Estate Investment Advisors Pvt. Ltd (MORE), the real estate arm of Motilal Oswal Private Equity, has invested Rs 100 crore ($16.6 million) in three residential projects—one belonging to Ahuja Developers in Mumbai and two by Mahaveer Group in Bangalore—striking the first set of deals from its recently raised fund ‘India Realty Excellence Fund II LLP ‘(IREF II).

The fund has invested in Ahuja Developers’ upcoming project Prasadam at Ambernath (E). “Our association with Motilal Oswal Real Estate for project Prasadam in Ambernath stems from the company’s vision to partner with credible and long-term institutional investors,” Gautam Ahuja, MD, Ahuja Developers, said in the statement.

Besides, the fund is investing in two residential projects of Mahaveer Group. The projects are located in Yelahanka and Bommanahalli in Bangalore.  

“Both the transactions are in line with the fund’s strategy of doing mezzanine structures with developers having a proven track record. We are glad to associate with credible names like Ahuja and Mahaveer,” Sharad Mittal, director & head - real estate investments at MORE, said.

MORE made the first close of the IREF II—its second real estate dedicated private equity fund—at Rs 225 crore ($36 million) earlier last month. 

The fund was launched in November 2013 and focuses on mezzanine debt transactions, which provide regular income through fixed coupon and a subsequent project- linked upside. It is targeting an IRR of 25 per cent.

IREF II will look for deals in residential sector in top five cities—Mumbai, Delhi NCR, Bangalore, Pune and Chennai.

Four years ago, MORE had raised Rs 200 crore under its first fund called 'India Realty Excellence Fund' (IREF). This fund has been invested completely and the firm is looking at exiting some of the portfolios too. It had struck deals with average investment size per project of Rs 20-30 crore.

IREF has invested in seven projects in Mumbai, Pune and Bangalore with developers like Godrej Properties and Supreme Universal. Within 12 months from the end of the investment period, IREF has returned around 60 per cent of the total capital commitment.

(Edited by Joby Puthuparampil Johnson)

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