Motilal Oswal Real Estate announces 1st close of its fifth real estate fund

Motilal Oswal Real Estate (MORE), the real estate equity arm of Motilal Oswal Financial Services on Wednesday announced the first close of its recently launched fifth real estate fund “India Realty Excellence Fund V (IREF V).”

The Fund, which was launched with a target corpus of Rs 800 crore has received commitments aggregating Rs 650 crore, it said.

The IREF V will focus on providing senior secured debt in post-approval projects. The Fund plans to deploy the capital in mid-income/ affordable residential projects across the top seven cities in India while selectively investing in commercial projects. 

The India Realty Excellence Fund  V would undertake 12-15 transactions in its entire fund life.

This Fund has been raised from high net worth individuals (HNIs) and family offices. The Fund is set up as an alternative investment fund (AIF Category II).

Sharad Mittal, Director & CEO of MORE said,“With this fund, we have repositioned ourselves to cater to capital requirements throughout the project lifecycle providing a complete financing solution and becoming the preferred financial partner for real estate developers. We have raised INR 650 Cr. for the fund within 3 months of launch and we would like to thank our investors for reposing faith in our investment capability.”

“There has been a huge gap in construction finance available in the sector over the last two years pursuant to the NBFC crisis and now the COVID pandemic. The real estate sector has gathered a lot of momentum during the last 6-7 months on the back of bottomed-out prices, peak affordability, historically low mortgage rates, Govt. incentives and increasing emotional value of home-ownership during the pandemic. Several developers have clocked record sales in the last two quarters of FY 2021. However, liquidity is still a concern which is where this fund will help our developer partners.”

“We plan to complete the fund raising and close the fund in a couple of months.” he said.

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 per cent. The Fund has returned 126 per cent of the money back to its investors.

MORE’s third fund, IREF III, which achieved its final close in 2017, has till date made 24 investments and secured 8 exits at an investment level IRR of 22.6 per cent. The Fund has returned 52 per cent 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 13 investments and secured 1 exit at an investment level IRR of 21 per cent.