NIIF invests Rs 6.6 bn in HDFC's realty fund for affordable housing

The National Investment and Infrastructure Fund (NIIF) of India has invested Rs 6.6 billion in HDFC Capital Affordable Real Estate – 2 (H-CARE 2), an investment platform, managed by HDFC Capital Advisors (HCA).

H-CARE 2 has a corpus of Rs 42.9 bn. The Fund provides mezzanine finance to developers of mid-income and affordable urban housing projects. HCA is a wholly owned subsidiary of HDFC Ltd.

The agreement, which marks the second investment for NIIF’s Fund of Funds, will see NIIF join a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) as an investor in H-CARE 2, NIIF said in a statement.

Deepak Parekh, Chairman, HDFC said the current lack of flexible, long-term capital is one of the key challenges facing developers of affordable and mid income housing in India. This Fund will help address the demand-supply gap in affordable housing and will ensure that flexible financing is provided to quality developers”.

Sujoy Bose, MD & CEO, NIIF, said: “Housing remains a critical need in India and the demand for housing is expected to grow substantially with increased urbanization. This demand, in conjunction with reforms implemented in the sector creates an attractive investment opportunity for disciplined developers and knowledgeable investors”.

NIIF, fund manager anchored by Government of India, seeks to create long-term value for domestic and international investors seeking to invest in energy, transportation, urban infrastructure and other infrastructure-related sectors in India.