PE firm MORE exits from investment in Pune realty project for Rs 105 crore

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New Delhi | Published: September 19, 2019 2:24:13 PM

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, has exited from its equity investment in a project being developed by Kolte Patil in Pune and received Rs 105 crore with a return of over 23 per cent.

The construction for the project commenced in 2016 and within just three years, the residential portion has been fully sold and delivered while finishing work for the commercial phase is underway (Representational Image)

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, has exited from its equity investment in a project being developed by Kolte Patil in Pune and received Rs 105 crore with a return of over 23 per cent. In December 2015, MORE had invested Rs 58 crore in this realty project. MORE said in a statement that it has “exited from an investment with Kolte Patil Developers” and got exit worth Rs 105 crore. MORE had invested Rs 58 crore through its funds by taking an equity stake in the project and has now exited with an internal rate of return (IRR) of 23 per cent plus.

The investment was across two funds namely India Realty Excellence Fund II (IREF II) and India Realty Excellence Fund III (IREF III), in project ‘City Avenue’ spread across 2.8 lakh sq ft comprising one residential and one commercial tower. The construction for the project commenced in 2016 and within just three years, the residential portion has been fully sold and delivered while finishing work for the commercial phase is underway, the statement said. IREF II is the second fund launched by MORE which achieved its final close in April 2015 at Rs 500 crore and has till date made 14 investments. The fund has secured 10 exits at an average IRR of 21.4 per cent.

IREF III, the third fund launched by MORE, achieved its final close in August 2017 at Rs 1,000 crore and has till date made 22 investments. This fund has secured 6 exits at an average IRR of 22.4 per cent. IREF IV has recently achieved its third close at Rs 1,050 crore. The Fund has made 6 investments till date. MORE, in the last 3-4 months, has committed Rs 280 crore across 4 investments through IREF III and IREF IV. This amount has been committed across projects with developers like Casagrand Group (in its residential projects in Chennai and Bengaluru) and with Phoenix Group in its project in Hyderabad.

The ticket size for each of these investments is between Rs 50-80 crore. MORE’s CEO Sharad Mittal said: “Our strategy has always been to partner with trusted developers in top 6 cities and invest in their affordable/ mid-income housing projects through different structures (equity/ mezzanine) by providing capital at the right stage and conduct regular monitoring of the project.” Gopal Sarda, CEO of Kolte Patil Developers, said, “the successful exit of MORE is a testimony to our continued focus on customer expectations and performance excellence to create value for all stakeholders.”

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