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| Edited By: Ashish K Tiwari |Source: DNA |Updated: Mar 17, 2018, 04:20 AM IST
IL&FS Milestone Realty Advisors is raising $400 million via an offshore fund. This will be the third fund raised by the joint venture between IL&FS and Milestone Capital, the earlier two were domestic funds.
The Milestone Capital senior management has already begun roadshows in some overseas markets. Ashish Joshi, managing partner - real estate, Milestone Capital Advisors, said the groundwork for the new fund began a couple of weeks ago.
“The target is to raise $400 million, including a green shoe option of $200 million. The money will be raised from potential investors in Gulf Cooperation Council (GCC), Europe, Hong Kong and Singapore,” said Joshi.
Christened IL&FS Milestone Core Fund LLC, the new fund will have a maturity of 5 years, with the possibility of extending the tenure by two years.
The asset class identified for investment includes Indian commercial developments, with a focus on leased out warehouses, offices, industrial parks, hospitals and hotels. Milestone Capital is optimistic on completing the process by the end of this year.
On the reasons behind doing an offshore fund, particularly when the overall fund-raising environment isn’t looking very conducive, Joshi asserted money was available for the right kind of concepts and for entities that have demonstrated results.
“Over the years we have developed the expertise of investing in high-quality yield generating real estate assets leased to blue-chip tenants. And the success of our investment strategy has been clearly demonstrated through our earlier funds. Besides, foreign investors still view India as a very highly attractive market for rental yield-based returns,” said Joshi.
IL&FS Milestone Realty Advisors had raised $500 million each through Fund-I and II. While Fund-I has been fully invested, around 25% of Fund-II is yet to be deployed. So far three investments have been made in Fund-II, including the recent acquisition of 74% stake in HCC’s 247 Park project at Vikhroli.
Industry sources told DNA Money that Milestone Capital is likely to close two more deals under Fund-II in the next couple of months.
“Two investments worth Rs 100 crore each are in the pipeline and should get concluded in the next 45-60 days. Both the investments are in commercial establishments being developed in Mumbai and Bangalore,” said a source.
