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JLL’s SFG reaches first close for Indian RE fund

The Segregated Funds Group has finished deploying its maiden Residential Opportunities Fund-I.

Segregated Funds Group (SFG), the Indian investment arm of real estate firm Jones Lang LaSalle (JLL), has raised INR120 crore ($18 million) at the first close of its new lending vehicle, Residential Opportunities Fund-II (ROF-II). The new fund is targeting up to INR300 crore.

According to a statement, the five-year closed-ended fund took less than five months to reach its first close. The fund will look at a mix of equity and debt structured deals with a size between INR20 to 50 crore. The expected return for debt investments is around 24 per cent IRR, Mridul Upreti, chief executive officer of SFG, told PDI.

“We have generated attractive returns from our investments in the first fund and have also committed the entire capital of ROF-I,” said Upreti.

“With the current market situation, our focus initially is to invest in value-dislocated situations such as bulk apartment inventory purchase at discounts and debt financing against project receivables in high-quality residential projects,” he added.

The fund will invest in residential investment opportunities in seven metropolitan areas of India (Delhi-NCR, Mumbai-MMR, Chennai, Bengaluru, Hyderabad, Pune and Kolkata). Two to three rounds of fundraising are expected.

The fund's predecessor, Residential Opportunities Fund-I (ROF-I), had INR161 crore. It completed eight transactions across Bengaluru, Noida and Chennai. The latest transaction from the fund was a INR25 crore investment in mid-luxury residential project “Skypot” in Chennai in May last year.

The SFG is a real estate private equity investment management entity under JLL. It focuses on direct investments in the Indian real estate market and manages a series of real estate funds with distinct investment themes, offering investors private equity-style returns.