GIC, Temasek, Oman to invest in HDFC property fund: source

By Aditi Shah

MUMBAI (Reuters) - The Government of Singapore Investment Corp (GIC), investment firm Temasek and Oman's State General Reserve Fund have committed to invest $200 million in a real estate fund run by Indian mortgage lender HDFC, a source with direct knowledge of the matter told Reuters.

The investment is in a $500 million real estate private equity fund launched late last year by HDFC Property Fund, founded by Housing Development Finance Corp (HDFC), India's biggest mortgage lender, the source said, speaking on condition of anonymity as the information is not public.

HDFC Property Fund declined to comment, GIC and Temasek did not respond to an email and State General Reserve Fund could not be contacted immediately.

HDFC Property Fund plans to announce the fund's first close by the end of July or mid-August, the source said, adding that it expects to raise the remaining $300 million by end-December.

The seven-year fund, for overseas investors only, aims to generate annual returns of 23 or 24 percent and will invest in residential projects in Asia's third-largest economy, the source said.

Investment in Indian real estate by private equity funds fell to $1.95 billion in 2012 compared with $9.8 billion in 2007, according to Chennai-based data firm Venture Intelligence, as rising costs and sluggish home sales hurt developers in a slowing economy. (Additional reporting by Saeed Azhar in Singapore and Dinesh Nair in Dubai; Editing by Anand Basu)