For the first time in India, a yield-driven real estate investment fund registered with the Securities and Exchange Board of India (Sebi) has seen light of the day.
The fund, to be launched by IL&FS Investment Managers Ltd and Milestone Capital Advisors Private Ltd, will be called IL&FS-Milestone Fund-1 and will target a corpus of Rs 1,000 crore, including a green shoe option of Rs 500 crore
The key features of IL&FS Milestone fund is that it offers a low minimum investment commitment of Rs 10 lakh for individuals (in multiples of Rs 5 lakh thereafter) and Rs 1 crore for corporates. Both the categories of investors will be offered a facility of paying a upfront 30% on application with the balance amount to be paid in third month (30%) and 40% before the end of the 12th month.
The fund offers a quarterly yield distribution to investors and property appreciation benefits in the long term. The fund is targeting an annual yield of 11% (pre-tax) and internal rate of return (IRR) of 18-20% (pre-tax) with property appreciation.
?This is especially attractive for individual investors who want to diversify their portfolios without the complication of investing in real estate directly?, said Shahzaad Dalal, VC & MD, IL&FS Investment Managers Ltd.
Ved Prakash Arya, managing partner, IL&FS Milestone Fund, said, ?With an investment focus on completed properties that are leased long-term to high quality tenants, the fund does not carry any development risk.?