Indiareit looks to fundraising after INR440 crore exits

Indiareit Fund Advisors, the Mumbai-based private equity real estate firm, is plotting a next chapter of fundraising as it makes inroads into exiting current investments.

The firm announced it has exited from INR440 crore (€61.4 million; $80.3 million) of the assets on its books including a partial exit from a large-scale, mixed-use development in Pune and residential schemes in Mumbai and Pune and Coimbatore.

The exits, made on behalf of the firm’s domestic and offshore funds as well as on behalf of a third party mandate, are part of a strategy to exit from between $175 million and $200 million of its investments over a year.

Indiareit’s managing partner Khushru Jijina, who replaced Ramesh Jogani in September, told PERE the exits had given the firm confidence to further formulate its plans for future fundraisings. The firm has already had capital raising successes for its domestic funds and it is expected to launch an overseas vehicle in the first half of 2013 targeting $350 million.

Jijina said: “We have managed almost half of our target exits. Not only have we announced these exits but I’m happy to say we’re back in business. Hopefully in the next few months you’ll hear from us about our overseas fund also.”

Talks are understood to have already taken place with certain cornerstone investors and following a first closing, Indiareit is expected to appoint a placement agent with a view to casting its fundraising net further afield.

In terms of its exits, Indiareit has sold a stake in part of a 9 million square foot mixed-use township within a Special Economic Zone in Pune to Mumbai-based financial services group Infrastructure Development Finance Company (IDFC). On behalf of both its domestic and offshore funds, the firm had invested INR242 crore in a 30 percent stake in the township’s first phase.

Indiareit has also exited from its investments into two special purpose vehicles in Mumbai wrapped around residential developments. The firm invested INR150 crore originally and has already realised INR117 crore to end users and a further approximately INR190 crore of exits have been agreed. All in, the investments are expected to produce an IRR of 21 percent and a 2.05x equity multiple.

The firm also exited from a half-share investment in a 3 million square foot township project in Pune on behalf of its overseas fund for INR160 crore. For the fund, Indiareit invested INR109 crore but sold after only two years, recording an IRR of 20 percent and a 1.5x equity multiple.

And, on behalf of a third-party investment management mandate with London-based F&C REIT, the firm has exited from an investment in a residential asset in Coimbatore. No transaction details were announced.