Ajay Piramal group's Piramal Fund Management has raised $50 million (Rs 300 crore) for the offshore real-estate fund - Indiareit Offshore Fund-3. This is the first time that the group has raised funds from institutional investors abroad.
The offshore fund, which has a corpus of $150 million, will invest in residential projects in India. Piramal is hopeful of closing the fund in the next six months, said Khushru Jijina, managing director, Piramal Fund Management.
The fund will co-invest with another domestic fund of Piramal, called Domestic Fund-5, and the size of each deal will be Rs 100-150 crore, Jijina said. The offshore fund will look at a return of 24 per cent, Jijina added.
"Global sentiments for Indian real estate investments are improving thanks to the initiatives of the new government," he said.
Meanwhile, Piramal has crossed the initial fund size of Rs 350 crore for its Indiareit Apartment Fund, by raising Rs 500 crore from investors. It has also exercised the option of raising the target to Rs 700 crore.
"Compared to others, the apartment fund is a five-year one and investors can see money coming back in 18 months," said Jijina.
The apartment fund buys apartments in bulk from developers at discounted rates. It has already disbursed its first deal - a Rs 50-crore investment in Omkar Alta Monte in Mumbai. It has also approved two other deals - in Mumbai (Bandra Kurla Complex) and in Chennai.
Jijina said the fund manager would do 13-14 deals from the apartment fund. Piramal is also looking to exit from its fourth fund in the next four months, he added.