Motilal Oswal plans to raise Rs 800 crore through fifth real estate fund

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Financial Services, plans to raise up to Rs 800 crore through its recently launched fifth real estate fund ‘India Realty Excellence Fund V (IREF V)’.

The fund will focus on providing debt for construction finance to projects which are in post-approval stage. It plans to deploy the capital in mid-income and affordable residential projects across the top seven cities in India (Mumbai, Delhi-NCR, Pune, Bengaluru, Chennai, Hyderabad and Ahmedabad) while selectively investing in commercial projects.

IREF V would focus on structured debt investments with established developers and undertake 12-15 transactions of
Rs 60-80 crore each. MORE expects to achieve first close by March 2021 and conclude fundraising in the next 6-9 months. Till date MORE has invested capital in the real estate sector through four real estate funds and PMS/ NCD investments. At present, MORE’s cumulative assets under management stands at more than Es 3,700 crore.

MORE MD & CEO Vishal Tulsyan said: “We believe that the sector is undergoing a structural shift and is at the cusp of a transformation. We will continue to grow our presence in this space through value investing over the coming years.”

MORE CEO and director Sharad Mittal, director & CEO as NBFCs put brakes on new lending and banks becoming selective, there has been a huge gap in construction finance in the real estate sector over the last two years. However, in the last six months, the interest rates have hit a multi-decade low, there has been stagnation in realty prices and also government support through stamp duty reductions.

“These factors will lead to a resurgence in residential demand over the next few years. We believe that this is an opportune time to launch our next fund which will focus on construction finance and post-approval funding,” he said.