Arnya RealEstates Fund Advisors has raised INR 375 crore in the first close of its maiden real estate fund, Arnya Real Estate Fund - Debt, launched in April. The fund targets INR 1,000 crore with an additional INR 1,000 crore green-shoe option, to be raised by March 2025. The fund will focus on structured debt investments in residential projects across India's top eight cities, aiming for returns over 20%. Arnya was founded by Sharad Mittal, leveraging his extensive real estate experience. This move aligns with the residential real estate sector's resurgence, driven by rising demand and developers' need for capital.
Arnya RealEstates Fund Advisors, an alternative investment management firm, has raised INR 375 crore, marking the first close of its maiden real estate fund. Launched in April, the fund - Arnya Real Estate Fund - Debt, had set an ambitious target of INR 1,000 crore, with a potential green-shoe option for an additional INR 1,000 crore.
The funds have been raised from a diverse group of investors including domestic family offices, ultra-high net-worth individuals (UHNWIs) and HNIs. The remaining INR 625 crore of the fund corpus will be raised by March 2025.
The firm was set up by Sharad Mittal, former executive director and CEO, real estate funds at Motilal Oswal Alternates. It plans to offer a varied range of real estate investment products, including debt, rental, and equity investments.
Registered as a Category II Alternative Investment Fund (AIF) with market regulator SEBI, Arnya's first fund will focus on providing early-stage growth capital in the form of structured debt, to residential projects in the top eight cities - Mumbai Metropolitan Region, Delhi-National Capital Region, Ahmedabad, Pune, Bengaluru, Chennai, Hyderabad and Kolkata.
The average deal size will be between INR 80 and 125 crore, and it will combine the fund's investment with co-investments from investors.
Mittal has so far overseen investments worth more than INR 10,000 crore across 175 projects in India. Through this fund, Mittal aims to leverage his deep market expertise and strategic relationships to deliver superior performance and long-term value to its investors. He is looking to generate an internal rate of returns of over 20% through investments in mid-market projects.
This strategic move was fueled by the resurgence of the residential real estate sector. The pandemic's aftermath had seen a remarkable turnaround, with surging demand driving up residential sales. Developers, emboldened by this revival, were actively seeking land parcels, fueling the need for capital. Arnya was already in active discussions with three developers for potential investments, with the first transaction projected to close within the next two months.
The Indian residential real estate sector across the affordable, mid-income, and premium segments has seen remarkable growth in recent years, driven by a surge in demand for homes, policy reforms, and urbanisation. Industry experts like JLL and Propstack projected a long-term debt requirement of INR 430,000 crore in the residential market alone by 2026.
Arnya is positioned at the forefront of this dynamic market, offering a unique opportunity for investors seeking high-return debt investments in a sector set for significant long-term growth.
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