HDFC Capital in talks with developers for affordable housing platform

HDFC Capital, the property fund-management arm of HDFC, is in talks with leading developers in Kolkata and Ahme­dabad to float an affordable housing platform, said a source. The names of the developers could not be ascertained.

In an investment platform, which is like a joint venture, a PE fund brings in capital and a developer identifies land parcels and develops multiple projects.

HDFC Capital has floated at least five platforms for affordable housing with developers such as Mahindra Lifes­paces, Tribeca and Rustomjee for west India and with Prestige Estates for south India. It also picked up a stake in ATS Homekraft, the affordable housing arm of ATS Infrastructure.

“The idea is to cover key property markets with different affordable housing platforms,” the source said.

Though there is a buzz about the fund manager floating a new fund for affordable housing and investors have already committed money, the company’s spokesperson denied it. 

HDFC Capital has invested $1 billion with residential property developers over the last two years, probably the highest in the segment.

HDFC Capital has raised $1.1 billion for affordable housing under $450 million H-CARE-1 and $650 million 

H-CARE-2 funds, which were raised in 2016 and 2017, respectively, and committed most of the corpus. Both funds have a tenure of 12 years and 9 years, respectively.

Abu Dhabi’s sovereign fund ADIA, National Investment and Infrastructure Fund (NIIF) and others invested in its previous fund.

“We are getting a lot of enquiries from good developers and for good projectsm which was not the case earlier,” the source said.

Shobhit Agarwal, managing director of Anarock Capital, said: “It is a very grounded fund management company and understands the need of the hour. It has backed large developers and brought the right products to the market.” 

Overall, $8.6 billion has come in real estate in 2017 and 2018. Of which, $930 million came in residential real estate. In Q1, 2019, about $200 million came in residential real estate, according to Anarock Property Consultants.

Firm’s investments

• HDFC Capital has floated platforms with Mahindra, Tribeca, Rustomjee, Prestige and ATS Homekraft

• HDFC Capital has invested $1 billion with residential property developers over the last two years

• HDFC Capital has raised $1.1 billion in funds for affordable housing under $450 million H-CARE-1 and $650 million H-CARE-2 funds 

• Both funds have a tenure of 12 years and 9 years, respectively

• Abu Dhabi’s ADIA, National Investment and Infrastructure Fund (NIIF) and others invested in its previous fund

Souce: HDFC Capital