HDFC Capital closes $1 billion affordable housing fund
HDFC Capital Advisors, an arm of mortgage leader HDFC, has closed its second affordable housing fund, creating a $1-billion corpus, the lion’s share of which is flowing in from the Abu Dhabi Investment Authority. With the latest round of funding commitment from the Abu Dhabi sovereign fund, and those from HDFC which is the sponsor, the fund has raised USD 550 million as the corpus. Called HDFC Capital affordable real estate fund-2, it will be combined with the first fund raised in 2016 together creating a USD1-billion corpus targeted at affordable and mid-income residential projects in top 15 cities, HDFC said in a statement.
The new funds will have a development footprint of 75 million sqft across affordable and mid-income residential projects in the leading 15 cities over the next two-three years, it added. The main objective of this fund, headed by Vipul Roongta, chief executive of HDFC Capital Advisors, is to provide long-term equity or mezzanine capital to marquee developers at the land and pre-approval stage to develop affordable and mid-income housing.
Earlier this week, HDFC had said it would raise up to Rs 13,000 crore selling almost 5 per cent to investors. This would be the first equity raising by the company in a decade. The company had also said it was open to inorganic growth in the affordable housing segment and that a portion of the money to be raised would be set aside for this. The funds align with the government goal of increasing the overall housing supply, including the housing for all by 2022 initiative, HDFC said, adding “the primary investor in both the funds is a wholly-owned subsidiary of the Abu Dhabi Investment Authority.”