IL&FS, Milestone open door for realty investment

MUMBAI: IL&FS Investment Managers and Milestone Capital Advisors have launched a real estate fund where investors can enter with as low as Rs 10 lakh. IL&FS-Milestone Fund-I is an yield-driven real estate investment fund based on a structure similar to the real estate investment trusts (REIT). Worldwide it is the most popular investment route for corporates and individuals to invest in real estate. The close-ended scheme will have a term of four years, with an option to extend the term by a year and if required by one more year. The fund is targeting a corpus of Rs 1,000 crore, which includes a greenshoe option of Rs 500 crore. The fund will remain open for subscription till October 30, 2007. IL&FS-Milestone Fund-I will be the first real estate investment fund in India to offer a low minimum investment commitment of Rs 10 lakh for individuals (in multiples of Rs 5 lakh thereafter) and Rs 1 crore for corporates, with the convenience of draw-down spread over 12 months. “The fund is especially attractive for individual investors who want to diversify their portfolios without the complication of investing in real estate directly,” Shahzaad Dalal, vice-chairman and managing director IL&FS In-vestment Managers said at a press conference on Monday. IL&FS-Milestone Fund-I will offer a quarterly yield distribution to investors and property appreciation benefits in the long term. The fund is targeting an annual yield of 11% (pre-tax) and an internal rate of return of 18-20% (pre-tax) with property appreciation. “With an investment focus on completed properties that are leased for a long-term period to high-quality tenants, the fund does not carry any development risk,” said IL&FS-Milestone Fund managing partner Ved Prakash Arya. He also added that the fund will target greater geographical and sectoral diversification through investing in offices, IT & ITES buildings, hospitals, hotels, warehouses and shopping malls across India. Individual investors can utilise this as a recurrent income source as well as accrue property appreciation benefits in the long term. The fund employs a conservative investment philosophy and a low-to-moderate leverage strategy.

http://economictimes.indiatimes.com/Markets/Real_Estate/ILFS_Milestone_open_door_for_realty_investment/articleshow/2357195.cms