MUMBAI: Property consultancy firm JLL India's investment arm JLL Segregated Funds Group is planning to raise its second real estate fund with a total target size of Rs 300 crore. The fund, to be raised in the domestic market, will focus on investing in residential projects in top seven property markets including Mumbai, Delhi-NCR and Bengaluru, a top company official said.
The total tenure of the proposed fund, which would be under Alternative Investment Fund category II, will be for five years, and it will invest in smaller residential projects through equity and highyield mezzanine deal structures.
"Our strategy of investing in smaller projects with shorter tenure in prominent micro markets has worked well for the first fund. Clocking a return of 30%, we have partly exited from the first investment that was made through an earlier fund concluded in late 2013," said Mridul Upreti, chief executive, JLL Segregated Funds Group, India.
In late 2013, JLL Segregated Funds Group had raised Rs 161 crore through final closing of its maiden real estate fund, Residential Opportunities Fund - I. The fund was amongst the first real estate funds to be registered with Sebi under the new Alternate Investment Funds (AIF) regulations.
After making two investments from the first fund, JLL's investment arm is now close to concluding its third investment in a residential project in Chennai. The new fund will also focus on smallticket deals of Rs 25-30 crore and target annual returns of around 25%, which is in line with the first fund's strategy.
Last month, JLL Segregated Funds Group had partly exited from its first investment made through this maiden fund clocking a 30% Internal Rate of Return (IRR) in less than a year's time. The fund had invested Rs 24 crore in a premium residential project of Bengaluru-based Assetz Property Group in February 2014.
"In residential property market, small is beautiful. Smaller investments in residential space ensure better control, monitoring of sales process, etc. On the contrary, scale is crucial in commercial segment deals," Upreti said.