BANGALORE: Global real estate services firm Jones Lang LaSalle Indian arm has raised Rs. 161 crore through its first fund focused on residential sector in India, a development that marks a cautious return of risk capital to the country's beleaguered property market.
The fund — called the Residential Opportunities Fund I, which will be operated by JLL India's investment management business, Segregated Funds Group — will invest Rs. 25-30 crore and target 25-30% returns, a senior executive said.
"The fund's focused investment approach is based on seeking value-added returns from inherently lower risk strategies. A significant portion of the capital has been raised from a combination of high net worth individuals, institutional investors and family offices," said Mridul Upreti, chief executive of JLL Segregated Funds Group.
The six-year, close-ended private equity fund will invest in small residential projects in prominent locations across seven cities in India including Delhi-National Capital Region, Mumbai Metropolitan Region, Bangalore, Chennai, Kolkata, Hyderabad and Pune.
"This is an important milestone for the group as it has reinforced belief in our strategy and we are now in a position to harness a significant market opportunity," said Upreti.
Axis BankBSE 0.52 % acted as the placement agent for the fund. ET was the first to report on JLL's fund-raising plans in March last year.
Segregated Funds Group is a new investment vehicle launched by the firm to invest in India's property market, which has been hit hard by the country's slowing economic growth and the ongoing global financial crisis.
Six real estate-focused funds raised about $388 million (Rs. 2,418.4 crore) in 2013, according to research firm Venture Intelligence, marking a steep drop from the previous year when eight such funds raised about $1.29 billion (Rs. 7,978.2 crore).
Indiareit Fund Advisors and ICICI Venture were the only private equity firms to raise over $100 million (Rs. 623.3 crore) last year.