Motilal Oswal Real Estate to Invest in Affordable Housing

Motilal Oswal Real Estate to Invest in Affordable Housing has plans to raise over Rs 575 crore through the first close of its fourth real estate fund India Realty Excellence Fund IV (IREF IV). The fund plans to deploy the capital in mid-income and affordable residential projects across six top cities in India while selectively investing in commercial projects. The new fund’s investment strategy will be an extension of the strategy of MORE’s two earlier funds, IREF II and IREF III. IREF IV would focus on early stage-structured equity and debt investments with established developers and undertake 12-15 transactions with average size of Rs 80 crore to Rs 150 crore each.

The fund plans to deploy the capital in mid-income and affordable residential projects across six top cities in India while selectively investing in commercial projects. The new fund’s investment strategy will be an extension of the strategy of MORE’s two earlier funds, IREF II and IREF III. IREF IV would focus on early stage-structured equity and debt investments with established developers and undertake 12-15 transactions with average size of Rs 80 crore to Rs 150 crore each. The money has been raised from high net worth individuals (HNIs) and family offices. The fund was set up as an alternative investment fund (AIF Category II).

Till date MORE has invested capital in the real estate sector through three real estate funds and portfolio management services (PMS) and proprietary (Prop) investments. Currently, MORE has assets under management (AUM) exceeding Rs. 2,100 crores. Of this, IREF has AUM of Rs 200 crore, IREF II has Rs 500 crores, IREF III Rs 1,030 crores and balance under PMS / Prop Investments. MORE is part of Motilal Oswal Private Equity (MOPE), which is the alternative investments platform of Motilal Oswal Group. The total AUM under MOPE is now over Rs 5,000 crore. Through three of its earlier funds, MORE established its partnership with various developers over the last four years. It has made six investments in Chennai’s Casagrande Group, five in Delhi-National Capital Region’s ATS Infrastructure, three in Mumbai’s Rajesh Lifespaces and two in Bangalore’s Shriram Properties.

The fund, according to Mittal, has a strong pipeline of deals for its fourth fund and plans to make its first investment over the next few weeks. The impact of government policies like Prime Minister Awas Yojna and the introduction of a regulator (RERA) is gradually playing out across all major cities of India indicating early signs of a recovery in the residential real estate. Nearly 75% of the new units launched are priced below Rs 75 lakh while apartment sizes over the years have fallen by over 12% showing the developer’s affinity towards affordable housing.

Get an awesome sticky message bar!Download