Motilal Oswal Real Estate (MORE) has exited from a residential property being developed by Shriram Properties in Bengaluru, selling the stake to a group of high networth individuals and family offices for ₹125 crore. The exit was from a residential project — Shriram Greenfield — near Whitefield.
The names of the HNIs and family offices were not disclosed. MORE, the real estate private equity arm of Motilal Oswal Group, had invested ₹67 crore in December 2014 in exchange for an equity stake in the project. The exit comes with an internal rate of return (IRR) of 20 per cent, a 1.87 times gain.
“Our strategy has always been to partner with trusted developers in top six cities and invest in their affordable and mid-income housing projects through different structures (equity or mezzanine) by providing capital at the right stage and conduct regular monitoring of the project,” Sharad Mittal, CEO at MORE, said.
“The Shriram Greenfield 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,” he added.
Realty Excellence Fund II
Shriram Greenfield is a 2-million sq ft residential project being developed across two phases in Bengaluru, and more than 75 per cent of the project’s inventory has been sold.
The investment was made from MORE’s India Realty Excellence Fund II (IREF II), a ₹500-crore fund that had achieved final close in April 2015. The fund is now fully deployed across 14 investments (including re-investments).
“We have recently announced the first close of our fourth fund IREF IV at ₹575 crore and we are looking to achieve final close by end of the financial year,” Mittal said.
IREF II has secured eight complete exits at an average IRR of 21.2 per cent till date.
Founded in 2008, MORE is a wholly-owned subsidiary of MOPE Investment Advisors, the PE arm of Motilal Oswal Financial Services. At present, MORE manages four real estate funds — IREF, India Realty Excellence Fund II (IREF II), India Realty Excellence Fund III (IREF III) and India Realty Excellence Fund IV (IREF IV) — with cumulative assets under management of more than ₹2,700 crore.