MORE realty fund raises INR 500cr, targets INR 750cr in Round Three

Motilal Oswal Real Estate Investment Advisors Pvt. Ltd. (MORE), the real estate arm of diversified financial services company Motilal Oswal Private Equity, has raised INR 500 crore through its second property fund -- India Realty Excellence Fund (IREF) II. The company now plans to launch its third fund targeting a corpus of INR 750 cr.

Of the total corpus of INR 500cr, the fund has already invested an amount of INR 385cr spread across six transactions over the past 15 months. These include projects by several leading developers like Rajesh Lifespaces, Shriram Properties, Ahuja Developers, ATS Infra, Casa Grande and the Mahaveer Group. The company plans to invest the balance over the next 3-6 months prior to launching its third fund in the real estate category.

In April this year, IREF II had announced two big-ticket investments worth INR 100 crore, with the Mumbai-based Ahuja Developers and the Bengaluru-based Mahaveer Group.

MORE made its maiden investment from IREF II with Ahuja Developers in their upcoming residential project Prasadam at Ambernath (E). Ambernath is one of the fastest growing extended suburbs in MMR region with excellent infrastructure facilities, road and rail connectivity and fast developing social infrastructure driving the demand.

Subsequently the company turned its attention to the south and invested in two residential projects of the Mahaveer group at Yelahanka and Bommanahalli. Located in north Bengaluru, Yelahanka, is an emerging realty destination which is rapidly expanding due to the international airport.

Bommanahalli, the venue for the second project is situated in the city's south and is known as an established mid-income residential location with well-developed social infrastructure facilities already in place.

More recently, IREF II has invested in a 2mn sq ft residential project being developed by Shriram Properties at Old Madras Road (Bengaluru) that targets mid-income buyers. The fund has also invested in the Mumbai-based Rajesh Lifespaces residential project situated at Vikhroli, a fast developing suburb in central Mumbai.

The two other investments made by the fund were directed at the second phase of ATS Infrastructure's Pristine project located at Noida and Casa Grande's 5.5-acre land acquisition in Chennai.

MORE's first fund launched in 2010-2011 - the India Realty Excellence Fund (IREF) - has already returned approx 80 percent capital to its investors and is currently in the exit mode. The fund has till date made four complete exits with a gross internal rate of return of approx 20 percent, out of its total seven investments.

IREF II is the company's second real estate fund, managed and advised by the private equity firm with a mandate to invest mainly in select mid-income residential projects by developers with a quality track record around the fast developing MMR, NCR, Pune and Bengaluru regions.

The company had launched the IREF II fund with a target size of INR 300cr and a greenshoe option of INR 200cr early last year. The AIF category II fund is targeting a gross IRR of approx 23-25 percent and has a six-year tenure which includes two extensions of about a year each.

About Motilal Oswal Private Equity Business:
Motilal Oswal Real Estate Investment Advisors Pvt. Ltd. (MORE) is a wholly owned subsidiary of MOPE, formerly known as Motilal Oswal Private Equity Advisors Pvt. Ltd. MOPE is a subsidiary of Motilal Oswal Financial Services Ltd. (MOFSL), a diversified financial services group with businesses in Securities, Asset Management, Private Equity, Private Wealth Management and Investment Banking.