The real estate investment arm of Housing Development Finance Corporation (HDFC) has collaborated with global private equity firm Cerberus Capital for a special situations platform.
The platform co-created by HDFC Capital Advisors will buy inventory and provide last-mile funding for under-construction residential projects along with related opportunities in the country.
The Economic Times, quoting sources, said that the size of the platform is $1 billion.
The platform comes in the wake of a series of shocks to the Indian residential real estate market after which buyers have become hesitant to purchase under-construction projects while traditional financing channels for developers have come under severe pressure.
“Lack of buyer confidence in the ability of developers to complete projects, combined with a slowdown in funding for real estate projects, has resulted in developers being starved of capital to complete ongoing projects. This platform has the potential to provide an impetus to the real estate sector by providing capital solutions to developers and restarting stalled housing projects,” said Deepak Parekh, chairman, HDFC.
“Cerberus has a long track record of partnering businesses and properties around the world,” said Frank Bruno, co-chief executive officer of Cerberus.
“Currently, there is a severe shortage of last-mile funding for distressed under-construction real estate projects of even well-intentioned developers,” Vipul Roongta, managing director and chief executive officer, HDFC Capital.
HDFC Capital provides investment management services for real estate private equity financing. The company is the investment manager to HDFC Capital Affordable Real Estate Fund I and HDFC Capital Affordable Real Estate Fund II.
Cerberus has over $53 billion in assets across complementary credit, non-performing loans, real estate, and private equity.
Since 2019, it has been active in India across numerous verticals. Cerberus has been involved in the acquisition of non-performing assets, provision of capital to corporates, and creation of financial services and real estate platforms.