MUMBAI: Motilal Oswal Real Estate, an arm of Motilal Oswal Private Equity, has raised Rs 440 crore through its second property fund after exercising greenshoe option, a top company executive said. India Realty Excellence Fund (IREF) II will primarily invest in mid-income residential projects in Mumbai Metropolitan Region, National Capital Region, Bengaluru and Pune.
This follows the recent exit of the company's first fund, worth Rs 100 crore, from residential projects of Godrej Properties in Bengaluru and Xrbia Developers in Mumbai. IREF II has already made two investments— in Mumbai with Ahuja Developers and in Bengaluru with Mahaveer Group. "We are on track to raise Rs 500 crore through this close-ended fund in the next couple of months," Sharad Mittal, director & head, Real Estate Fund, at Motilal Oswal Real Estate, told ET.
"Out of the funds raised so far, we have alredy deployed .`100 crore in two projects. Based on the deal pipeline, we are hopeful of deploying over Rs 300 crore further from this new fund by March." Motilal Oswal Real Estate had launched the IREF II with a target size of Rs 300 crore and greenshoe option of .`200 crore in December 2013. The AIF category II fund has a six-year tenure including two extensions of a year each.
"The fund will be aiming for an IRR (internal rate of return) of 23-25 per cent annually from investments," Mittal said.