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Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, has announced that it is planning to commit additional funds of ₹1,000 crore in this fiscal for investments in realty projects.
Post the outbreak of Covid-19, the company has committed a total sum of ₹1,200 crore across residential and commercial projects in Mumbai, Bengaluru, Chennai, Hyderabad and Ahmedabad.
These investments have been made with Casagrand Group and Radiance Realty in Chennai, Ashwin Sheth Group and Marathon Group in Mumbai, Puravankara Group, Shriram Properties, Pacifica Group and Casagrand Group in Bangalore and Phoenix Group in Hyderabad, according to a statement.
Motilal Oswal real estate PE arm achieves first close of fifth fund
The real estate projects are a mix of plotted, villa and apartment projects in the affordable/ mid-income residential segment across these cities. There are also a couple of commercial projects in which MORE has invested through this platform.
These investments have come on the back of a severe liquidity crunch in the real estate market, post the IL&FS crisis. This was followed by the Covid pandemic, which aggravated the problem and wreaked havoc in normal course of business, it pointed out.
‘Small, medium realty developers find it hard to meet working-capital needs’
“We believe the current market is in an upcycle. However, capital available still remains scarce to meet the growing requirements. Through our funds, we cater to the capital requirement during the entire project lifecycle i.e. land and approval financing, construction finance and last mile funding,” said Sharad Mittal, CEO of Motilal Oswal Real Estate.
MORE reports profitable exits
MORE has also reported profitable exits in the last 18 months. It has secured 9 exits worth ₹800 crore through its platform.
From Q2 of 2020, the company has been seeing pick-up in home sales due to a mix of factors like increasing affordability, multi-decade low mortgage rates and the increased emotional value placed on home ownership during the pandemic.
“We believe that the fundamental factors combined with Government initiatives will drive housing demand even higher in the near future. We also believe that the liquidity scenario will improve, going forward, and the realty sector will receive the much-needed funding,” said Mittal.
MORE is currently managing four real estate funds. Its cumulative assets under management stand at about ₹5,000 crore.
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