MO Alts Targets Affordable Housing with INR 1,750 Crore Fund
Motilal Oswal Alternates (MO Alts), the alternative investment arm of Motilal Oswal Financial Services, has successfully raised over INR 1,750 crore for its latest venture, the India Realty Excellence Fund VI (IREF VI). This fund marks a significant step in MO Alts’ ongoing efforts to tap into the growing demand for mid-income and affordable housing across India’s major urban centres. Targeting early-stage investments, the fund will primarily focus on residential developments in cities such as Mumbai, Delhi-NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata, and Ahmedabad.
The demand for affordable housing in India has seen a sharp increase in recent years, driven by both economic growth and a rising middle class. According to Saurabh Rathi, Managing Director and Co-Head of Real Estate Funds at MO Alts, the residential real estate market in India is set to maintain its upward trajectory in 2024. He attributes this growth to a combination of factors, including robust economic conditions, stable interest rates, and supportive government policies. The firm has already allocated around INR 1,300 crore in investments this financial year, with INR 1,000 crore directed towards projects in cities like Mumbai, Pune, Chennai, Hyderabad, and Kolkata. The investments are being made in collaboration with some of India’s leading real estate developers, including Ajmera Realty, Runwal Enterprises, and Candeur Group.
The primary focus of IREF VI will be to bridge the capital gap for early-stage residential projects that are often overlooked by traditional funding sources. This will allow developers to secure the financing they need to complete projects aimed at the growing mid-income segment, an area with increasing demand for affordable yet quality housing. With a target corpus of INR 2,000 crore, the fund aims to address this pressing need for financial support while offering a solid return on investment. Over the past year, MO Alts has achieved strong exits from its previous funds, generating returns of INR 1,000 crore, further proving the firm’s expertise in making strategic investments in the real estate sector.
In terms of sustainability, MO Alts has made strides towards ensuring that its investments in residential developments follow green building practices and sustainable construction methods. As urban India continues to expand, it is crucial that real estate developments address the challenges of climate change and resource management. The firm’s strategy includes supporting projects that not only meet the growing demand for housing but also focus on long-term environmental sustainability. As more developers embrace eco-friendly building techniques and the government pushes for a reduction in carbon emissions, MO Alts is well-positioned to support such initiatives with its targeted investments in mid-income housing.
The success of MO Alts’ real estate funds, especially IREF VI, demonstrates the firm’s strong position in India’s real estate sector. With more than INR 9,500 crore in assets under management (AUM), the platform has proven its ability to identify and capitalise on high-potential real estate opportunities across the country. Moreover, the firm’s focus on early-stage projects in the affordable housing sector is helping to create much-needed housing options for India’s expanding urban population. As the country faces growing challenges related to urbanisation and infrastructure, it is clear that funds like IREF VI will play a crucial role in shaping the future of India’s real estate landscape.
