HDFC Capital Advisors Ltd, a wholly owned subsidiary of HDFC Ltd, has set up a platform with real estate developer Arvind SmartSpaces Ltd, a part of the Lalbhai Group, the companies said in a statement.
The platform will focus on the development of affordable and mid-income housing projects in India. HDFC Capital has sealed the platform through its fund HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1).
The partnership will take up developments under a special purpose vehicle - Arvind Homes Pvt. Ltd – with an initial investment of Rs 250 crores.
Renu Sud Karnad, managing director at HDFC Ltd, said housing remains a crucial need in India and the demand for affordable housing is expected to grow substantially. “HDFC's endeavour is to help address the demand-supply gap in affordable housing in India by providing flexible, long-term capital to leading developers across India,” she said.
Vipul Roongta, managing director and chief executive officer at HDFC Capital, said the partnership with Arvind SmartSpaces is in line with firm’s strategy of partnering with top rated developers with a good track record of development and delivery.
Kamal Singal, managing director and chief executive officer at Arvind SmartSpaces said that the proposed structure has enough flexibility inbuilt to ensure that long-term patient capital is made available to the business without putting undue pressures on its balance-sheet.
HDFC Capital currently manages HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1) and HDFC Capital Affordable Real Estate Fund 2 (H-CARE 2).
The primary investors in the H-CARE funds include a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and the National Investment and Infrastructure Fund (NIIF).
H-CARE 1 and H-CARE 2 together have a $1.1 billion platform targeting affordable and mid-income residential projects in India's leading 20 cities. The primary objective of this platform is to provide long-term, equity and mezzanine capital to marquee developers at the land and pre-approval stage for the development of affordable and mid-income housing in India.
It has so far committed $ 1 billion of investments to developers across India in the affordable and mid-income housing space.
Recently, HDFC Capital tied up with realty firm Tribeca Developers to set up a platform that will develop mid-income housing projects.
Previously, it backed couple of developers focussed on housing in the mid-income and affordable segments. This includes north India-based ATS HomeKraft, in which HDFC Capital picked up a stake.
It also signed a partnership with Mumbai-based Prestige Estates Projects for developing affordable homes in India.