HDFC Capital raises $1.22 bn for affordable housing fund

HDFC Capital, a wholly owned subsidiary of HDFC Ltd said it has raised $1.22 billion towards its third fund, the HDFC Capital Affordable Real Estate Fund – 3 (H-CARE-3) which is focused on affordable housing.

H-CARE 3, combined with potential reinvestments by the fund, would create an estimated total fund corpus of $1.88 billion. HDFC Capital is a real estate PE arm of HDFC Ltd.

It was set up in 2016 with a vision to provide assistance to build 1 million affordable houses. It has alsoaligned with the Government of India’s goal to increase housing supply and support the Pradhan Mantri Awas Yojana — ‘Housing for All’ initiative. H-CARE 3 combined with the HDFC Capital Affordable Real Estate Funds — 1 & 2, raised in 2016 and 2017 respectively, would create a $3 billion funding platform which would be one of the world’s largest private finance platforms for affordable housing.

The fund will provide long-term, flexible funding across the lifecycle of affordableandmid-income housing projects including early-stage funding.In addition, it will also invest in technology companies (constructiontechnology,fin-tech,clean-tech) engagedintheaffordable housing ecosystem.

HDFC Capital’s target is to finance the development of one millionaffordablehomesinIndia through a combination of innovative financing,partnerships and technology, whilst focusing on sustainability.

To achieve this objective, the company is in discussions with leading global investors to raiseadditional funds to be invested in affordablehousing in India.

Deepak Parekh, Chairman, HDFC Ltd, said, “In India, housing will playaneven more important role as a catalyst for growth with increased demandforaffordableandmid-income housing. Combined withIndia’sgrowthprospects, I have never been as optimistic about the housing sector as I am today.”HDFC Capital has been one of the pioneers of investing in affordableand mid-income housing projects in India.

With support from marquee global investors like ADIA and partnerships with leading developers, the platformis well on its way to ensuring many more Indians become homeowners,” he said.

Khadem Airemeithi, Executive Director, Real Estate &InfrastructureDepartment, ADIA, said, “H-CARE 3 presents the opportunitytogrowourexisting relationship with HDFC, while continuing to address thesignificant demand for affordable housing in India.” “This builds on thesuccessofprevious H-CARE funds, which have supported the development ofnewmid-markethousingprojectsacrossthecountry, in alignment withIndian government priorities,” he added.