Motilal Oswal Real Estate commits INR1,200 Cr through its platform post pandemic

by Shrutee K

Mumbai, 22^nd December 2021: Motilal Oswal Real Estate (“MORE”), the real estate private equity arm of Motilal Oswal Group has post the outbreak of COVID-19cumulatively committedINR1,200 Cr through its platform. This amount has been committed across residential and commercial projects in Mumbai, Bangalore, Chennai, Hyderabad and Ahmedabad.

These investments have been made with Casagrand Group and Radiance Realty in Chennai, Ashwin Sheth Group and Marathon Group in Mumbai, Puravankara Group, Shriram Properties, Pacifica Group and Casagrand Group in Bangalore and Phoenix Group in Hyderabad. The real estate projects are a mix of plotted, villa and apartment projects in the affordable/ mid-income residential segment across these cities. There are also a couple of commercial projects in which MORE has invested through this platform. It also marks MORE’s first investment with Puravankara Group, AshwinSheth Group, Marathon Group and Pacifica Group. 

These investments have come on the back of a severe liquidity crunch in the real estate market post the IL&FS crisis. This was followed by the pandemic which aggravated the problem and wreaked havoc in normal course of business. 

MORE has also successfully been getting profitable exits in the last 18 months. Over the last 18 months, MORE has secured 9 exits worth INR800 Cr through its platform. 

Sharad Mittal, CEO of Motilal Oswal Real Estate said, “We believe the current market is in an upcycle, however capital available still remains scarce to meet the growing requirements. Through our funds, we cater to the capital requirement during the entire project lifecycle i.e. land and approval financing, construction finance and last mile funding.” 

“As we emerged out of the first COVID led lockdown in Q2 last year, we saw housing sales pick up due to a mix of factors like increasing affordability, multi-decade low mortgage rates and the increased emotional value placed on home ownership during the pandemic. We believe that the fundamental factors combined with Government initiatives will drive housing demand even higher in the near future. We also believe that the liquidity scenario will improve going forward and the realty sector will receive the much needed funding.” 

“With such a buoyant demand atmosphere, there has been an increased deal flow over the past 12 months. While we have committed more than INR 1,200 Cr in the past 18 months, we have maintained a cautious approach and stuck to our investment philosophy. Our successful exits over the past 18 months are a result of this tried and tested investment philosophy and hands-on asset management.” 

“In addition to the amounts already committed, we plan to commit INR 1,000 Cr more during this financial year.” 

MORE is currently managing four real estate funds. MORE’s cumulative assets under management currently stand at aboutINR5,000 crore. 

MORE’s second fund, IREF II, which achieved its final close in 2015, has till date made 14 investments and secured 11 exits at an investment level IRR of 21.3%. The Fund has returned ~135% of the money back to its investors. 

MORE’s third fund, IREF III, which achieved its final close in 2017, has till date made 26 investments and secured 10 exits at an investment level IRR of 22.5%. The Fund has returned ~67% of the money back to its investors.

MORE’s fourth fund, IREF IV, which achieved its final close in 2020, is currently under deployment and has till date made 16 investments and secured 5 exits at an investment level IRR of 20.3%. 

IREF V is the fifth fund launched by MORE which has recently achieved its third close at INR 1,085 Cr. The Fund has made 5 investments till date.  

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 five real estate funds, namely India Realty Excellence Fund (IREF), India Realty Excellence Fund II (IREF II), India Realty Excellence Fund III (IREF III), India Realty Excellence Fund IV (IREF IV) and India Realty Excellence Fund V (IREF V) along with PMS/ Prop Investments. Today, cumulative AUM under MORE stands at about INR 5,000 Cr. IREF, launched in 2008 was 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. The second fund, IREF II is an INR 500 Cr domestic real estate fund which has made 14 investments till date and secured 11 full exits at an investment level IRR of 21.3%. 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 26 investments across the top 6 cities in India with established developers and has secured 10 full exits at an investment level IRR of 22.5%. The fourth fund, IREF IV, is an INR 1,150 Cr fund having made 16 investments till date and has secured 5 exits at an investment level IRR of 20.3%. The fifth fund IREF V, is an INR 1,500 Cr fund currently under deployment. The Fund has made 5 investments till date.