Neo-realty investment firm MYRE Capital has launched its latest structured debt investment opportunity in Hyderabad for accredited investors. In a statement, Myre Capital said the investments will be in the form of high-yield Lease Contract Discounting secured by hard collaterals and lease rental receivables from blue chip tenants like Claranet and iLenSys in Gachibowli, Hyderabad.
According to the statement, the minimum investment size for this opportunity is Rs 15 lakh with a 13% target Internal Rate of Return (IRR).
MYRE Capital aims to raise Rs 19.15 crore for this opportunity and the operator for this property is Skootr Global Private Ltd., which already manages over 6 lakh sq. ft. in India.
This product has been launched under MYRE’s new Lease-Contract Discounting Investment vertical to offer first-of-its-kind alternative real estate investment opportunities. The statement said that MYRE aims to scale this new vertical to Rs 350 crore in FY23.
The new vertical has been structured based on an adaptation of the ‘Lease Rental Discounting’ model in which the tenure of the investments is kept below the lock-in period for the subtenants so that the returns of the investors are secured.
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The monthly rentals are collected in an Escrow account with first disbursement to the investors. With a 13% target IRR, this framework presents a compelling risk-return proposition, providing accredited investors with unprecedented access to differentiated opportunities in the commercial real estate sector.
MYRE Capital will operate the vertical offline for now with exclusive opportunities. The platform intends to transition this vertical to online over the next quarter.
MYRE has already seen immense traction from potential accredited investors for the new product. The opportunities in the LRD (Lease Rental Discounting) vertical will offer non-dilutive growth capital to managed leasing operators against contracts with future rental receivables and other repayment guarantee mechanisms. The operator uses capital to finance the CAPEX like fitted-out offices that are secured by long term contracts with MNC & blue chip tenants. The sub-tenants’ monthly lease rental services the growth capital offered by investors.
“Our aim is to provide complete transparency and security to our investors therefore the entire principal and interest will be repaid to investors within the lock-in period of the lease contract. We see immense appetite and potential of growth for neo-realty products in India and we aim to scale this vertical to INR 350 crores by the end of next year. We are working on bringing multiple products to the table in the real estate sector for our investors to diversify their portfolio” said Aryaman Vir, Founder & CEO, MYRE Capital.
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To further safeguard the investor’s interest and mitigate risks, MYRE Capital is requiring operators to also provide an overarching guarantee. This means that if on the 12th of any given month, due to any reason whatever the funds in the escrow are not sufficient to cover the principal + interest payment to investors, the operator has an obligation to cover the difference by the 15th of the month , the company said in the statement.