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Motilal Oswal managed India Realty Excellence Fund invests in subsidiary of Godrej Properties Ltd. for development of premium Residential space in Bangalore

Mumbai 06-Oct-2010

Motilal Oswal managed India Realty Excellence Fund invests in subsidiary of Godrej Properties Ltd. for development of premium Residential space in Bangalore.

Mumbai, October 6, 2010: Funds managed and advised by Motilal Oswal Private Equity Advisors Private Limited (“MOPE”), has invested in Godrej Buildwell Private Limited (“GBPL”), a subsidiary promoted by Godrej Properties Ltd. (GPL).


The subsidiary will undertake development of a large high end Residential project. IREF has invested INR 45 crores and would invest another INR 5 crores in second tranche for equity stake of 49.9% in the SPV. The project is in an extremely prime location at Hebbal junction in Bangalore.


The site is strategically placed along the 'golden corridor' of Hebbal and Devanahalli, an area slated to become the next IT hub. The project has easy access to the 6-lane Golden Quadrilateral highway which ensures excellent connectivity and is at less than 30 minutes driving distance from the new International airport and 20 minutes from M.G. Road, the heart of Bangalore.


Mr. Harvesp Mehta, Director (Real Estate),MOPE, said, “We are pleased to announce our first project with Godrej Properties Ltd. (GPL). This investment was more in the nature of building a strong strategic relationship with Godrej Properties and explore possibilities of doing projects in  major metros across the country. Further, we strongly believe that the project will be one of its kind combining synergies of project development experience and market knowledge of both Godrej Properties Ltd and Motilal Oswal Private Equity. The alliance between these companies of high repute will go a long way in making the project a huge success “.

About Bangalore residential market:

Bangalore residential property market is witnessing a revival in fortunes on account of strong performance of the economy and changing dynamics of the IT industry. Bangalore residential property prices have seen a 15% increase from the 2009 troughs on the back of strong demand primarily driven by the city’s large IT workforce which has been rewarded by salary hikes (in the range of 15 to 20%) and bonuses to check employee attrition. At current levels Bangalore property prices are still about 20% below the peaks witnessed in 2007-08.

Developers expect prices to rise by a further 10% before March 2011 keeping in mind robust sales expected during the festival period. Consumers have been dormant for the last 18 months and are sufficiently liquid at present, this is expected to unleash a wave of pent up demand.

Demand for homes in established neighborhoods of Jayanagar, J P Nagar and R V Road on the second phase of the Metro route are already witnessing an increase. Areas around the outer ring road (ORR) and NH7 between Hebbal and Devanahalli are particularly attractive both from an end user and investor perspective given the infrastructure development coupled with development of IT parks.

About Motilal Oswal Private Equity Advisors Pvt. Ltd.

Motilal Oswal Private Equity Advisors Pvt. Ltd. (MOPE) is a wholly owned subsidiary of Motilal Oswal Financial Services Ltd. (MOFSL), a diversified financial services group with businesses in securities, Asset Management, Private Equity and Investment Banking.

MOPE has currently two funds under management - India Business Excellence Fund (IBEF) and also India Realty Excellence Fund (IREF). IBEF is sector agnostic fund focused on providing growth capital. IREF is Real Estate focused fund investing in Tier I cities. The fund has till date already invested in four projects – three in Mumbai and one in Bangalore.