HDFC Capital Advisors Ltd, the real estate private equity arm of top Indian mortgage lender Housing Development Finance Corp, has scooped additional capital for its third fund focused on affordable housing projects.
The firm, which marked the initial close of the fund a year ago, said it has now achieved the preliminary close for Scheme 2 of the HDFC Capital Affordable Real Estate Fund – 3 (H-CARE 3) garnering $376 million.
H-CARE 3 Schemes 1 and 2 put together will create a total estimated fund corpus of $2.2 billion (including potential reinvestments). This makes H-CARE 3 the largest ever fund raised to invest in the residential real estate sector in India. The money is expected to be invested over the next three-four years.
Vipul Roongta, Managing Director and CEO, HDFC Capital, said, “Urbanization is an irreversible trend in India which combined with the thrust given to affordable housing by the government will result in an exponential growth in the demand for affordable and mid-income homes.”
The primary investor in H-CARE 3 Schemes 1 and 2 is Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund of the Gulf emirate.
Mohamed AlQubaisi, Executive Director of the Real Estate Department, ADIA, said, “Through the H-CARE funds, HDFC has established a successful track record of supporting the development of new affordable residential stock across the country. Our latest investment in the H-CARE platform aims to support its growth as it continues to meet the growing demand for early-stage financing of housing projects in India.”
H-CARE 3 Schemes 1 and 2 and HDFC Capital Affordable Real Estate Funds – 1 and 2, raised in 2016 and 2017, respectively, create a $3.1 billion funding platform focused on development of affordable housing.
H-CARE 3 will provide long-term, flexible funding across the lifecycle of affordable and mid-income housing projects including early-stage funding. In addition, H-CARE 3 will also invest in technology companies (construction technology, fin-tech, sustainability-tech etc.) engaged in the affordable housing ecosystem.