HDFC to raise $500 million real estate private equity fund: Sources

HDFC Property Fund, set up by Housing Development Finance Corp Ltd, India's biggest mortgage lender, plans to raise a $500 million fund to invest in residential real estate projects, said people directly involved in the process.

HDFC plans to raise part of the private equity fund from investors, including Government of Singapore Investment Corp (GIC), investment firm Temasek Holdings and Oman's State General Reserve Fund, one of the people said.

HDFC, which will start approaching investors early next year, expects to generate returns of 21% over the seven-year life of the fund by investing in residential projects in western and southern India, the person said.

HDFC, GIC, Temasek and Oman's State General Reserve Fund declined to comment. The sources declined to be named as the fund raising plan is not public yet.