The company’s real-estate fund plans to invest the corpus in residential projects, a sector which has been starved for funds
Indiareit Fund Advisors (Pvt) Ltd has completed raising Rs100 crore through a green-shoe option for its domestic fund ‘INDIAREIT Domestic Fund Scheme IV’, on Wednesday. It is an investment advisory firm promoted by Piramal Enterprises. Under this domestic fund, the company has already raised Rs500 crore and has an option to raise another Rs250 crore through a green-shoe option.
Currently the company’s total corpus stands at Rs600 crore. The company plans to raise the remaining Rs150 crore within the next one-and-a-half months through domestic high net-worth individuals (HNIs). The fund-raising will be completed by August 2010.
“We have completed raising Rs100 crore today and our total corpus currently stands at Rs600 crore. The remaining Rs150 crore would take another month-and-a-half,” said Ramesh T Jogani, managing director and chief executive officer, Indiareit Fund Advisors.
The company plans to deploy the money over the next three years by investing in the residential sector. It plans to pay back investors returns between the fourth and seventh years. Indiareit plans to give 20% internal rate of return (IRR) on investment to its investors. The fund is currently looking at a deal in Mumbai, two in Bengaluru and one in Delhi.
It has already deployed Rs597crore which it raised under ‘INDIAREIT Domestic Fund Scheme III’. It invested in 30 lakh sq ft in saleable area properties spread across Mumbai, Bengaluru and Hyderabad. It invested in Mumbai with Aristo Realty Developers Ltd (in commercial and residential property) and the Neptune Group (at an enterprise level). In Bengaluru, it has invested with the Skyline Group (residential property) and in Hyderabad with Northwood (‘Retreat’, a 120-acre gated community project). The fund has made two partial exits out of the Aristo projects in Mumbai and has given 11% returns on the total capital invested.
Currently, most of the fund houses are reluctant to invest in the realty market as it does not seem to give good returns. The houses which have invested during 2005, 2006 and 2007 are not able to exit their real-estate investments because projects are either in the ‘land’ stage or construction stage. But Indiareit thinks this is the best time to invest as other players are not investing in the realty sector. “Our skill is to invest when others are not investing,” said Mr Jogani.
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