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Motilal Oswal Real Estate’s funds get exit worth INR 105 Crore from Kolte Patil project in Pune

Mumbai 19-Sep-2019

Motilal Oswal Real Estate’s funds get exit worth INR 105 Crore from Kolte Patil project in Pune

Mumbai, 19 September 2019: Motilal Oswal Real Estate (“MORE”), the real estate private equity arm of Motilal Oswal Group has exited from an investment with Kolte Patil Developers, a real estate developer having operations in the Pune, Mumbai and Bangalore market. The investment was across two funds India Realty Excellence Fund II (IREF II) and India Realty Excellence Fund III (IREF III) in a project called “City Avenue” which is adjacent to the Kolte Patil project “Western Avenue” in Wakad, Pune.
City Avenue is spread across 2.8 lakh sq. ft. comprising one residential and one commercial tower. The construction for the project commenced in the year 2016 and within just 3 years, the residential portion has been fully sold and delivered with OC while finishing work for the commercial phase is underway.
MORE had invested INR 58 Cr. through its funds IREF II and IREF III in December 2015 by taking an equity stake in the project and has now exited with an IRR of 23%+
IREF II is the second fund launched by MORE which achieved its final close in April 2015 at INR 500 Cr and has till date made 14 investments. The Fund has secured 10 exits at an average IRR of 21.4%. The Fund has returned 129% of fund corpus within 4 years from its final close. The Fund has another 30% capital invested across its balance 4 investments which would be divested over the next 1 year.
IREF III is the third fund launched by MORE which achieved its final close in August 2017 at INR 1,000 Cr and has till date made 22 investments. The Fund has secured 6 exits at an average IRR of 22.4%. The Fund has returned 26% of fund corpus within a period of 2 years from its final close.
IREF IV is the fourth fund launched by MORE which has recently achieved its third close at INR 1,050 Cr. The Fund has made 6 investments till date.
At a time when fresh disbursements by NBFCs and HFCs have slowed down considerably MORE has been actively assessing new propositions. In the last 3-4 months, MORE has committed INR 280 Cr across 4 investments through its funds IREF III and IREF IV.
This amount has been committed across projects with developers like Casagrand Group (in its residential projects in Chennai and Bangalore) and with Phoenix Group in its project in Hyderabad. The ticket size for each of these investments is between INR 50-80 Cr.
Sharad Mittal, CEO of Motilal Oswal Real Estate said, “Our strategy has always been to partner with trusted developers in top 6 cities and invest in their affordable/ mid-income housing projects through different structures (equity/ mezzanine) by providing capital at the right stage and conduct regular monitoring of the project.”
“The Kolte Patil Project is a good example of how even in tough market conditions a project can be successful based on parameters like right configuration and affordable price point, favourable location, the trust associated with the developer for timely delivery and quality of construction backed by active monitoring of the project.”
“We have recently announced the third close of our fourth fund IREF IV at INR 1,050 Cr. and we are looking to achieve final close in the next 2 months. We would like to thank all our investors for reposing their faith in our investment capability.”
Gopal Sarda, CEO of Kolte Patil Developers said, “The successful exit of MORE is a testimony to our continued focus on customer expectations and performance excellence to create value for all stakeholders. In what has been a challenging environment, the positive interplay of our four principal business drivers – approvals, sales, collections and delivery - has enabled us to execute this project within a short span of time. We are looking forward to partner with MORE on future projects, with whom we have alignment of growth strategy.”
About Motilal Oswal Real Estate
Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. (MORE) is the real estate private equity arm of Motilal Oswal Financial Services Limited (MOFSL). MORE is currently managing four real estate funds, namely India Realty Excellence Fund (IREF), India Realty Excellence Fund II (IREF II), India Realty Excellence Fund III (IREF III) and India Realty Excellence Fund III (IREF IV) along with PMS/ Prop Investments. Today, cumulative AUM under MORE stands at more than INR 3,200 Cr. IREF, launched in 2008 is an INR 200 Cr domestic real estate fund focused on equity investments in real estate projects in top three cities in India viz. Mumbai, Pune and Bangalore. IREF had made 7 investments and has secured exits in all 7 investments. On the back of its success, MORE launched IREF II - an INR 500 Cr. domestic real estate fund. IREF II has made 14 investments till date and secured 10 full exits at an investment level IRR of 21.4%. The third fund, IREF III is an INR 1,000 Cr domestic real estate fund focusing on early stage structured/ mezzanine investments. IREF III has made 22 investments across the top 6 cities in India with established developers and has secured 6 full exits at an investment level IRR of 22.4%. The fourth fund, IREF IV, is currently in fund raising stage and has announced third close at INR 1,050 Cr in September 2019. IREF IV has made 6 investments till date with a commitment value of INR 420 Cr.



For further details contact:
Rohini Kute Head, Corporate Communication,
Motilal Oswal Financial Services
Mob +91 9820196838
Mail: rohini.kute@motilaloswal.com