India’s Motilal Oswal Real Estate hits pause on investments

Hyderabad, India. Photo by arihant daga on Unsplash

Motilal Oswal Real Estate, the real estate investment arm of Motilal Oswal Private Equity Advisors Pvt. Ltd (MOPE), has hit a pause on investments and decided to wait and watch, given the uncertainty of the current situation owing to the covid-19 crisis, said a top executive.

MOPE has made a final close of its Indian Realty Excellence Fund or IREF-IV at 1150 crore. It has already committed 550 crore across nine investments in Chennai, Pune, Hyderabad and Ahmedabad from the IREF IV fund.

The fund, which invests in mid-income residential projects and selectively in mid-sized commercial office projects, was launched in mid-2018, largely from high-networth investors and family offices.

The new fund, like those previously, has focused on smaller deals, mainly in the range of 40-80 crore each. The investments have been made in projects of developers such as Chennai’s Casagrand Group, Ashoka Builders and Phoenix Group in Hyderabad, and Pune’s Montvert Group.

Along with the remaining capital from the new fund, MOPE has dry powder of around 1000 crore to be invested.

“There is absolute uncertainty right now, and the impact on construction will be there for six months. Projects will get delayed because the sites are locked, sales are not happening and repayments may get postponed. We will take our time to invest though there will be demand for capital,” said Sharad Mittal, director and head, real estate investment, MOPE.

The real estate sector, which was limping back to normalcy after a prolonged slowdown, which was aggravated by the crisis among non-banking financial companies (NBFCs), is now facing a new crisis with the current lockdown.

Mittal said that MOPE’s strategy to work with established developers in their respective geographies has helped and as of March, all dues have been paid.

“We will focus on asset management now. We have 34 live projects, where we have invested in. I believe that the impact of this crisis will get reduced over a period of time but leveraged developers will be affected more than the rest,” he said.

The cumulative assets under management (AUM) of MOPE combining its funds and portfolio management services is around 3,600 crore.

This article was first published on livemint.com.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.