HDFC Capital Advisors, the real estate-focused fund management arm of HDFC, and Mumbai-based property developer Rustomjee have formed a joint platform to develop affordable housing projects.
It is the third such platform for HDFC Capital, which has already signed deals with Mahindra Lifespaces, the real estate arm of Mahindra group, and Bengaluru-based Prestige Estates Projects. “HDFC Capital has given equity for our Global City project in Virar. We will do other projects with them under this platform,” said Boman Irani, chairman and managing director of Rustomjee.
He said they are evaluating three to four other projects which will be brought under the platform. However, Irani did not spell out the corpus earmarked for the platform.
HDFC didn’t reply to request for comment.
On Monday, Rustomjee announced that it has tied up with Ikea to furnish its 1,200 houses in Global City, which has a debt funding from Piramal Enterprises.
In February last year, Prestige and HDFC Capital announced a Rs 2,500-crore platform to invest in affordable housing projects.
A month earlier, HDFC Capital formed a Rs 500-crore investment platform with Mahindra Lifespaces.
HDFC Capital has raised funds for affordable housing actively. In October last year, the National Investment and Infrastructure Fund invested Rs 660 crore in HDFC Capital Affordable Real Estate–2 (HCARE 2), an affordable housing fund managed by HDFC Capital Advisors, and joined the Abu Dhabi Investment Authority as an investor in HCARE 2.
Collectively, HCARE 1 and HCARE 2 form a $1.1-billion investment platform, targeting affordable and mid-income residential projects in 20 big cities in the country.
The funds provide long-term, equity and mezzanine capital to marquee developers at the land and pre-approval stage.
In late 2017, HDFC Capital raised $550 million in an initial closure of H-CARE-2.
Shapoorji Pallonji has a similar platform with UK-based private equity firm Actis, the Asian Development Bank and the International Financial Corporation to build affordable homes under the brand Joyville.