HDFC Capital Advisors Ltd, wholly-owned subsidiary of HDFC Ltd, has achieved the initial close at $1.88 billion of its third fund focused on affordable housing, the HDFC Capital Affordable Real Estate Fund – 3 (H-CARE-3), the company said on Sunday.
The primary investor in H-CARE 3 is a wholly-owned subsidiary of the sovereign fund Abu Dhabi Investment Authority (ADIA).
“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, HDFC (Housing Development Finance Corporation Ltd) said in a statement.
A category 2 alternative investment fund (AIF), H-CARE 3’s primary focus is on providing 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, including early-stage funding.
In addition, H-CARE 3 will also invest in technology companies (construction technology, fin-tech, clean-tech etc.) engaged in the affordable housing ecosystem, it further said.
HDFC Ltd will be the sponsor and HDFC Capital will be as the investment manager for H-CARE 3.
HDFC Capital's funds
Set up in 2016, HDFC Capital also manages H-CARE 1 & 2, which together have a corpus of over $1.1 billion targeting affordable and mid-income residential projects in India’s leading 20 cities.
National Investment and Infrastructure Fund (NIIF) is also among the investors of the H-CARE funds.
H-CARE 3 combines with the HDFC Capital Affordable Real Estate Funds – 1 & 2, raised in 2016 and 2017 respectively, to create a $3 billion funding platform, among world’s largest private finance platforms focused on development of affordable housing.
The H-CARE 3 funds are expected to be committed towards investments over the next 4-5 years. H-CARE 3 Projected Development Foot-Print is estimated 280 million sq ft across affordable and mid-income residential projects across India.
HDFC Capital, in business of managing private equity funds focused on real estate, aims to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and technology, whilst focusing on sustainability. In order to achieve this objective, the company is in active discussions with leading global investors to raise additional funds to be invested in affordable housing in India.
“In India, housing will play an even more important role as a catalyst for growth with increased demand for affordable and mid-income housing. Combined with India’s growth prospects, I have never been as optimistic about the housing sector as I am today. HDFC Capital has been one of the pioneers of investing in affordable and mid-income housing projects in India. 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,” said Deepak Parekh, Chairman of HDFC Ltd.
“H-CARE 3 presents the opportunity to grow our existing relationship with HDFC, while continuing to address the significant demand for affordable housing in India. This builds on the success of previous H-CARE funds, which have supported the development of new mid-market housing projects across the country, in alignment with Indian government priorities,” said Khadem AlRemeithi, Executive Director of the Real Estate & Infrastructure Department, ADIA.
