Piramal launches Rs 350-crore realty fund

Fund has already seeded its first transaction, a Rs 50 cr investment in Mumbai and has identified a further pipeline of similar transactions even as fund raising progresses

Piramal Fund Management, the real estate investment arm of the Ajay Piramal Group, has launched the Indiareit Apartment Fund which seeks to buy residential apartments in Tier I markets. The fund will buy apartments at a discount compared to the market place by offering bulk purchases to  developers. It will raise funds from those investors who are looking towards investing in residential properties. “The fund expects an internal rate of return of 26 per cent and will offer a return of around 16 per cent to investors,” said Khushru Jijina, managing director at Piramal Fund Management.

The fund will have a corpus of Rs 350 crore and has already raised Rs 100 crore in the first 10 days of its launch, Piramal said, adding that the fund would have a greenshoe option of Rs 350 crore.

The average deal tenure is two to three years. IIFL Wealth Management is the exclusive distributor for the first close.“Earlier, developers often faced investors competing with them after buying apartments and selling them at lower rates. But in our case, we will enter into an agreement with developers to sell our apartments after a certain period,” Jijina said.
The Fund has already seeded its first transaction, a Rs 50 crore investment in Mumbai and has identified a further pipeline of similar transactions even as the fund raising progresses.

"This offering adds to our existing bouquet of services i.e. structured equity, senior debt, and construction finance and furthers our engagement with development partners to meet their requirements." Jijina said.