HDFC and realty firm Arvind SmartSpaces have set up a Rs 250-crore fund to develop affordable and mid-income housing projects. Arvind SmartSpaces, part of the Lalbhai group, said in a statement that it has “entered into a strategic partnership with HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1) — a fund managed by HDFC Capital Advisors, a wholly owned subsidiary of HDFC Ltd”. The partnership will focus on the development of affordable and mid-income housing projects across the country. The proposed developments will be undertaken by a special purpose vehicle Arvind Homes Pvt Ltd set up with an initial investment of Rs 250 crore, it added.
“Housing remains a crucial need in India and the demand for affordable housing is expected to grow substantially with increased urbanisation. HDFC’s endeavour is to help address the demand-supply gap in affordable housing in India by providing flexible, long-term capital to leading developers across India,” Renu Sud Karnad, managing director, HDFC Ltd. Vipul Roongta, MD & CEO of HDFC Capital Advisors, said the company’s partnership with Arvind SmartSpaces will focus on the development of high-quality affordable and mid-income housing in a cost-effective manner. “This in line with HDFC Capital’s strategy of partnering with top rated developers with a good track record of development and delivery and a long-term view of affordable housing.”
Arvind SmartSpaces Chairman Sanjay Lalbhai said, “We are confident that this joining of hands between the two…will create long-term value for all the stakeholders.” Kamal Singal, MD and CEO of Arvind SmartSpaces, said the proposed structure has enough flexibility in-built to ensure that long-term patient capital is made available to the business without putting undue pressures on its balance-sheet to take care of short and medium business cycles. Arvind SmartSpaces has about 7 million square feet of real estate development across the country. The company has real estate developments in Ahmedabad, Gandhinagar, Bengaluru and Pune.
Housing Development Finance Corporation (HDFC) has assisted over 72 lakh families to own their houses. HDFC’s average home loan size is Rs 27.8 lakh. It is the first institution to cross one lakh beneficiaries under the Pradhan Mantri Awas Yojana (Urban)’s credit-linked subsidy scheme. HDFC Capital Advisors provides investment management services for real estate private equity financing and is one of the largest fund managers in the country. The company is the investment manager to HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1) and HDFC Capital Affordable Real Estate Fund 2 (H-CARE 2), both Sebi-registered Category II Alternative Investment Funds.
The primary investors in the H-CARE funds include a wholly-owned subsidiary of the Abu Dhabi Investment Authority and the National Investment and Infrastructure Fund. H-CARE 1 and H-CARE 2 combined will create a USD 1.1-billion platform targeting affordable and mid-income residential projects in India’s leading 20 cities. Currently, about USD 1 billion of investments is committed with leading developers across India in the affordable and mid-income housing space.