HDFC Capital Raises $1.22 Billion In First Close Of Affordable Housing Fund
The primary investor in the H-CARE 3 fund is a wholly-owned subsidiary of Abu Dhabi Investment Authority.
HDFC Capital Advisors Ltd. has received commitments from investors for its third affordable housing fund worth $1.88-billion to back projects aimed at building homes for low- and middle-income families.
The primary investor in HDFC Capital Affordable Real Estate Fund–3 is a wholly owned subsidiary of the Abu Dhabi Investment Authority, the subsidiary of HDFC Ltd. said in a statement.
“H-CARE 3 is one the largest funds raised to invest in the residential real estate sector in India with investors committing in excess of $1.22 billion towards the first close, which combined with potential reinvestments by the fund, creates an estimated total fund corpus of $1.88 billion,” it said.
The H-CARE 3 funds are expected to be committed towards investments over the next four-five years. Together with its first two rounds in 2016 and 2017, in which ADIA had invested, H-CARE 3 has a total funding platform of $3 billion, making it one of the world’s biggest for affordable housing.
The funds dovetail with Prime Minister Narendra Modi's 'Housing for All’ initiative. The Pradhan Mantri Awas Yojana scheme aims to increase housing supply.
“In India, housing will play an even more important role as a catalyst for growth with increased demand for affordable and mid-income housing...", Deepak Parekh, chairman at HDFC, was quoted as saying in the statement. "With support from marquee global investors like ADIA and partnerships with leading developers, the platform is well on its way to ensuring many more Indians become homeowners.”
Set up in 2016, H-CARE fund’s primary focus is to provide long-term, flexible debt across the lifecycle of real estate projects (including land, approval and last-mile funding) for the development of affordable and mid-income housing across India. Its projected development footprint is estimated at 280 million square feet.
The fund will invest in technology companies (construction technology, fin-tech, and clean-tech, among others) engaged in the affordable housing ecosystem.
“HDFC Capital’s target is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and technology, while focusing on sustainability,” the statement said. To achieve this, the company is in active discussions with leading global investors to raise additional funds to be invested in affordable housing in India, it said.