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Motilal Oswal Real Estate makes exits worth $75 mn across projects

Mumbai 27-Aug-2019


MotilalOswal Real Estate makes exits worth $75 mn across projects

Mumbai, 27 August 2019:Motilal Oswal Real Estate (“MORE”), the real estate private equity arm ofMotilal Oswal Group has, since March2018, made exits cumulating to more than $75 mn (INR 525 Cr) across 7investments through its funds India Realty Excellence Fund II (“IREF II”)and India Realty Excellence Fund III (“IREF III”).

These 7 exitshave been in projects by developers like Casagrand Builders (Chennai), ATSGroup (NCR), Shriram Properties (Bangalore) and Rajesh Lifespaces (Mumbai) withan average IRR of 21%. The latest exithas been from a residential project being developed by Casagrand Builders inKarapakkam, Chennai at an IRR of 21.8%.

Cumulative AUM under MORE stands at approx. $ 465 mn (INR 3,200 Cr) across four real estate funds and PMS/ Propinvestments having made 50 investmentsthrough the platform and having completely exited 27 investments.

IREF II is thesecond fund launched by MORE which achieved its final close in April 2015 at $70 mn (INR 500 Cr) and has till date made 14investments. The Fund has secured 9exits at an average IRR of 21.3%. The Fund has returned 127% of fund corpus within 4 years fromits final close. The Fund has another 30%capital invested across its balance 5 investments which would be divestedover the next 2 years.

IREF III is thethird fund launched by MORE which achieved its final close in August 2017 at $140 mn (INR 1,000 Cr) and has till date made 22 investments. The Fund has secured5 exits at an average IRR of 22.0%. The Fund has returned ~26% of fund corpus within a period of 2years from its final close.

IREF IV is thefourth fund launched by MORE which has recently achieved its second close at $120 mn (INR 850 Cr). The Fund has made 6 investments till date.

MORE is part ofMotilal Oswal Private Equity (MOPE), which is the alternative investmentsplatform of Motilal Oswal Group. The cumulative AUM under MOPE is more than $ 1 bn (INR 7,000 Cr.)

Mr. Sharad Mittal, Director  & CEO of MOREsaid “Our strategy has always been topartner with trusted developers in top 6 cities and invest in their affordable/mid-income housing projects through different structures (equity/ mezzanine) byproviding capital at the right stage.

Currently we aim to deploy capital in the top metrocities and prefer to remain light on investments in Mumbai and Delhi NCR. Thesector is currently going through a challenging phase; however, we believe thatthe next cycle of growth in the sector would be led by affordable housing.

The sector has been grappling for liquidity post theIL&FS crisis. Fresh disbursements by NBFCs and HFCs have slowed downconsiderably and refinancing of projects has been tough.

These exits, which have come at such a difficult cyclefor the realty sector, lend credence to our investment strategy and robustunderwriting and asset management process.

We are also looking at making 2 more exits in the nextcouple of months from our second fund IREF II. With those exits, there shallonly be 3 investments left in the fund which we would be looking to wind upwithin a year’s time.

On the fund raising side, we had recently announcedsecond close of our fourth realty fund (IREF IV) at Rs. 850 Cr. We have tilldate raised commitments of Rs. 1,000 Cr and would be looking to achieve finalclose by the end of the year.”


AboutMotilal Oswal Real Estate

Motilal OswalReal Estate Investment Advisors II Pvt. Ltd. (MORE) is the real estate privateequity arm of Motilal Oswal Financial Services Limited (MOFSL). MORE iscurrently managing four real estate funds, namely India Realty Excellence Fund(IREF), India Realty Excellence Fund II (IREF II), India Realty Excellence FundIII (IREF III) and India Realty Excellence Fund III (IREF IV) along with PMS/Prop Investments. Today, cumulative AUM under MORE stands at more than Rs.3,200 Cr. IREF, launched in 2008 is a ~Rs 200 Cr domestic real estate fundfocused on equity investments in real estate projects in top three cities inIndia viz. Mumbai, Pune and Bangalore. IREF had made 7 investments and hassecured exits in all 7 investments. On the back of its success, MORE launchedIREF II - a Rs 500 Cr. domestic real estate fund. IREF II has been fullycommitted and has invested with established developers such as ATS Group,Casagrand Group, Shriram Properties, Kolte Patil Developers etc. IREF II hasmade 14 investments till date and secured 9 full exits at an investment levelIRR of 21.3%. The third fund, IREF III is a Rs. 1000 Cr domestic real estate fundfocusing on early stage structured/ mezzanine investments. IREF III has made 22investments across the top 6 cities in India with established developers andhas secured 5 full exits at an investment level IRR of 22.0%. The fourth fund,IREF IV, is currently in fund raising stage and has announced second close atRs. 850 Cr in March 2019. IREF IV has made 6 investments till date with acommitment value of Rs. 420 Cr.


For Further Details Contact:

Rohini Kute

Head of Corporate Communications, Motilal Oswal Financial Services

Mob +91 9820196838

Mail: rohini.kute@motilaloswal.com