Milestone plans to raise funds for real estate sector

Chennai: Milestone Capital Advisors, an independent venture fund house, plans to raise a Rs 1,000-crore fund, “Milestone Domestic Scheme – II,” to invest in real estate sector.

Mr Ved Prakash Arya, Managing Director, Milestone Capital, said Milestone focuses on investing in emerging markets, particularly the tier-II and tier-III cities and towns. MDS-II, a SEBI-registered venture fund, hopes to attract investors, including high net worth individuals and financial institutions. It has a potential to offer returns of over 25-30 per cent.

It would deal in land layout and plotted development, a first time for Milestone and develop residential and warehouse projects. About 40 per cent of the fund would be for layout development and the rest for warehouse and residential projects.

A unique feature of this fund would be its concentration on offering low cost residential units in the range of Rs 10-25 lakh, which Mr Prakash described as a “recession proof segment” with a sustained demand.

Milestone will continue with its focus on Maharashtra, Gujarat and the four Southern States. In these markets, Chennai leads a clutch of cities including Mysore, Madurai, Mangalore, Visakhapattnam, in investments.

Milestone’s presence in Tamil Nadu and Chennai will be high. It is looking for land on the outskirts of Chennai and Madurai for its low cost housing projects and warehouses under MDS-II, he said.

Earlier, Milestone Capital floated two funds totalling over Rs 1,250 crore and these have been fully committed in real estate projects estimated at about Rs 3,200 crore.

Under the first fund, which was Rs 250 crore, with 400 investors, Milestone has invested in 14 projects — nine of them in Chennai in commercial and residential projects — spread across five cities. The other fund, jointly with IL&FS, raised Rs 1,000 crore with an investor base of 4,000, Mr Prakash said.

The company plans to invest about Rs 1,200 crore in Chennai through its various funds. The market here is not as heated up as Bangalore or Hyderabad because speculative investor interest in the market is less, he said.