Milestone to raise $250m for Indian RE

The firm’s third fund will target tier secondary and tertiary cities, particularly in Tamil Nadu.

Milestone Capital Advisors, a Mumbai-based domestic firm in India, is raising a Rs 1,000 crore ($250 million) fund, Milestone Domestic Scheme II.

The firm, founded by former Pantaloon Retail manager Ved Prakash Arya, will focus its new fund on secondary and tertiary cities in the southern region of Tamil Nadu. The fund will be used for land development, construction of energy efficient residential buildings and warehouses. It will focus on low-cost residential units in the range of Rs 10-25 lakh ($23,000-$58,000).

Milestone managing director Ved Prakash Aryailestone told news outlets at a press conference that the fund would be aiming for a potential return of 25-30 per cent. The fund will deploy 40 per cent for joint development projects and 60 per cent through special purpose vehicle route.

Ved Prakash Arya quit Pantaloon in early 2007 to launch the real estate fund. Arya, 38, was responsible for all M&A activities at Pantaloon.

The firm has already raised two real estate funds at Rs 250 crore and Rs 1000 crore. Milestone has made 14 investments out of their first fund. Both funds have been fully committed.

Affordable housing is becoming an increasingly popular sector in India as analysts expect an upcoming sharp pricing correction at the luxury end of the spectrum.