Motilal Oswal Alternates (MO Alts) has taken the real estate market by storm with the recent closure of its first two transactions from a new fund, totaling a hefty ₹190 crore investment. This move comes at a time when the demand for middle-income and affordable housing is on the rise, signaling a strong outlook for the sector.
The fund has allocated ₹100 crore to Chennai-based Radiance Realty Developers India Ltd, and another ₹90 crore to Pune-based Mantra Properties and Developers Pvt. Ltd for their upcoming residential projects. These investments mark early-stage bets by MO Alts, intended to support the developers in acquiring land for their future construction endeavors.
Building a corpus
Last year, MO Alts announced its plan to raise ₹2,000 crore through the India Realty Excellence Fund VI (IREF VI) focused on early-stage investments in middle-income and affordable residential projects across major cities. With the first close at ₹1,274 crore in February, the company aims to achieve a final close of ₹2,000 crore by 2024.
“Connectivity improvements and major infrastructure developments are paving the way for new growth hubs within cities, leading to a surge in demand across all market segments,” shared Anand Lakhotia, co-head of real estate at MO Alts. The company has a successful track record of investing in real estate through multiple funds and other proprietary ventures.
Looking for returns
In a thrilling turn of events, MO Alts made 15 investments totaling ₹1,016 crore in 2023-24, while exiting 23 investments with a capital of ₹1,102 crore during the same period. The post-pandemic revival in the real estate sector has sparked renewed interest from buyers, driving up residential sales and encouraging developers to secure new land parcels.
With plans to fund developers for land acquisition for residential projects, MO Alts is strategically positioning itself for future growth opportunities. Saurabh Rathi, co-head of real estate at MO Alts, emphasized the importance of developers expanding their land banks amidst changing market dynamics and increased housing demand.
Looking ahead, the company has five more transactions in the pipeline, totaling around ₹600 crore, currently undergoing due diligence. This strategic move underscores MO Alts’ commitment to supporting the real estate sector and capitalizing on emerging opportunities.
