Amplus Realty Fund-I, first SEBI registered fund mainly focused on Gujarat real estate, on Monday said it has now made its first investment in a realty project and is actively looking for investments in city-centric prime high-end or mid-market residential or residential-led developments, plotting schemes in high growth areas of Ahmedabad, Surat & Vadodara in Gujarat, and a few highly favoured destinations like Mumbai, National Capital Region (NCR) and Bangalore.
The Fund has a target corpus of Rs 200 crore (with a green shoe option of Rs. 100 cr), and is open for subscription for second closing and is expected to achieve its targets by April 2013, given the investors' interest in Gujarat and other target cities.
Commenting on the Fund's investment strategy, Anuranjan Mohnot, CEO of Amplus Capital Advisors Pvt. Ltd., said, "The Fund has recently formed a joint venture with Assetz Homes Pvt. Ltd.
"The joint venture will invest more than Rs 110 crore through equity investment, debt and customer advances to develop mid & high-end residential project. The project is expected to get over in next three years."
"This project coming up at Rajaji Nagar, will have a saleable area of 2.5 lakh square feet and will consist of 2, 3 & 4 bedroom apartments in the price range of Rs 80 lakh to Rs 1.5 crore. Amplus Capital Advisors may invest a total of Rs 50-60 crore in multiple projects of the Assetz Group over next 2-3 years."
Amplus Realty Fund-I began raising funds from investors in May 2012 and it plans to collect Rs 200 crore by May 2013 from various investors in Gujarat, Mumbai and elsewhere.
"The potential for realty funding in Gujarat is huge. Of the estimated $20 billion invested by way of FDI and private equity funding in the Indian real estate sector, funds have largely gone to six major cities including Mumbai, NCR and Bangalore, while a highly developed state like Gujarat has managed to attract a paltry 1% or less of this huge corpus," said Mohnot.
"Amplus Realty Fund-I has been set up to tap this latent potential in Gujarat and has set a target of using half of its corpus to fund projects in the state, while the remaining funds will be deployed in projects at Bangalore, Mumbai and NCR to diversify the portfolio. We plan to invest between Rs 15 and Rs 25 crore in realty projects in future," he said.
The Fund is also looking for opportunistic investments in brownfield commercial or retail projects and redevelopment projects.
While investing, the fund will have following regional or sectoral cap: up to 25% of its corpus in a single project, up to 40% in a single group, up to 60% in a single city if a metro and up to 40% in case of a non-metro city.
Amplus Realty Fund-I has a commitment period of 5 years and its investment horizon is of 2-3 years generally.
The Fund's target rate of return is going to be 20-30% IRR. It will focus on self monetisation of the project, will not go for land banking and will not make investments in hotels, educational institutes or hospitals.