Mortgage lender Housing Development Finance Corporation's (HDFC) private equity real estate arm HDFC Capital Advisors and engineering major Larsen & Toubro's property development company L&T Realty are in advanced talks to set up a ₹4,000 crore residential development and investment platform, Economic Times reported.
The report informed that the realty platform will be structured to be an Alternative Investment Fund (AIF) and will invest in mid-market residential projects across the country.
Both HDFC Capital Advisors and L&T Realty will inject capital into this platform and the developer will be responsible for the execution of the projects in which the joint entity will make investments, added the report.
“The discussion is at an advanced stage and a call on the amount of the respective capital injection by HDFC Capital and L&T Realty is likely to be taken soon,” the report noted, quoting a source.
The investment platform will raise the fund from the markets after taking into account the exact capital injection by HDFC Capital and L&T Realty, it added.
It was earlier reported that HDFC Capital has plans to invest around $2 billion in affordable housing, having secured the first closing of a fund that is one of the world’s largest for residential property investments.
The fund, which is called HDFC Capital Affordable Real Estate Fund-3 (H-CARE-3), had already raised $1.22 billion as of mid-January, with the lead investor being a wholly-owned unit of the Abu Dhabi Investment Authority (ADIA), said the report. It added that the total corpus of H-CARE-3 will be close to $2 billion, including possible reinvestments.
HDFC Capital’s goal is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and sustainability-focused technology.
Funds raised from H-CARE-3 will go toward investments over the next 4-5 years with a projected development footprint estimated at 280 million square feet in affordable and middle-income residential projects in major cities in India.