NEW DELHI (INDIA): Motilal Oswal Real Estate (MORE), the real estate arm of Motilal Oswal Private Equity has announced its fourth and final close of India Realty Excellence Fund III (IREF III), the third real estate fund with Motilal Oswal Real Estate. The Fund has raised commitments aggregating to Rs. 1030 crore.
MORE till date has invested capital in the real estate sector through three real estate fundsand NCDs/ Prop investments. Today, cumulative AUM under MORE stands at more than Rs. 2,000 crore spread across IREF (Rs. 200 crore), IREF II (Rs. 500 crore), IREF III (Rs. 1030 crore) and balance under NCDs / Prop Investments.
The latest Fund (IREF III) has concluded 12 transactions till date across top 6 cities in India with marquee developers. The Fund is ~70% committed and is expected to be fully committed by the end of thisfinancial year having a strong pipeline of deals. The Fund focuses on early stage mezzanine/ structured equity investments with established developers across the top 6 cities in India.
Sharad Mittal, Director& Head of Real Estate Funds at MORE said “This is yet another important milestone for MORE as we achieve final close of our third real estate fund. IREF III fund has attracted great interest among investors, once again reflecting the trust in MORE’s focused approach. We would like to thank our investors who have reposed their faith in ourinvestment capability. MORE Funds have generated superior long-term results for its investors.”
“We believe that post RERA & GST, consolidation in the industry is inevitable. Only large and serious players havingmeaningful scale, dedicated focus towards timely delivery and customer satisfactionwould do well. Given the RERA regulations, our kind of capital shall become much more suited to these developers going forward.We see significant growth and opportunity in the regularized markets, especially with the continued progress towards broader institutional ownership,” Mittal added.
“We are looking to invest Rs. 1000 crore in this fiscal year,” he said.
MORE’s investment strategy is based around providing capital at the right time (early stage investments) to established developers for their projects in established micro-markets. The company has strong relationships with dominant players in each micro-market and this is reflected through the multiple transactions that it has executed with these developers across its three funds in the past 4 years.Casa Grande (Chennai – 6 investments), ATS Group (Delhi NCR – 4 investments), Shriram Properties (Bangalore – 3 investments), Rajesh Lifespaces (Mumbai – 3 investments) are the examples of MORE’s investment strategy.
MORE’s macro calls of focusing on mid income housing (prices ranging between Rs. 4000 – 6500 psft) for the past 4 years has yielded good results and the same has been backed by the Government withincreased focus towards this segment through policies/ initiatives like PMAY, Infra Status to Affordable Housing, Interest Subsidy etc.”
MORE’s second fund, IREF II, which achieved its final close in 2015, has till date made 13 investments and secured 4 complete exits at an investment level IRR of more than 25%. The Fund has returned ~35% of the money back to its investors within 2 years of its final close.IREF II has been the better performing funds amidst a tough real estate market and the fund has also recently been awarded the “Real Estate Fund of the Year – Domestic” at the CNBC Awaaz Real Estate Awards 2016-17.
Vishal Tulsyan, the CEO of MOPE said “Our real estate fund business has scaled up over the past few years and our AUM now stands over Rs 2,000 crore. We see abundant opportunities in the sector to scale up and going forward our real estate fund business would continue to be a critical piece of our private equity fund management business.”