Piramal Fund Management, which specialises in real estate funding, has exited from Omkar 1973 (pictured), a luxury residential project in central Mumbai, with 146 per cent return on its original investment of Rs 200 crore.
The company had invested Rs 200 crore in the property through optionally fully convertible debentures in 2011. It will earn about Rs 500 crore with the project developer buying back debentures from the fund.
The investment in that project was a part of Indiareit Domestic Scheme IV, which had a corpus of Rs 922 crore. “We had made eight investments under that scheme and we have already made three partial exits. In third quarter, we will make two more exits and so we would have exited fully or partially from six of the eight investments and about 75 per cent of the original fund size would be returned,” said Khushru Jijina, managing director, Piramal Fund Management.
“Whether the market is good or bad, investors will make money if they select the right developer and the right project and underwrite risks correctly,” said Jijina.
He added that about 50 per cent of Omkar 1973 has been sold out. “Our investment was de-risked.”
Earlier, the company had announced plans to raise a $150-million offshore fund for real estate financing, but has gone slow because of concerns raised by limited partners.
The company has also set up a real estate finance company in collaboration with Canada Pension Plan Investment Board. Jijina said the financing deals made by the joint venture company would be announced over the next few months.