The initial close for Scheme 2 of HDFC Capital Affordable Real Estate Fund-3 (H-CARE 3) by HDFC Capital Advisors has secured $376 million. This is HDFC Capital’s fourth fund for investments in affordable housing.
A year ago, it closed $1.88 billion of H-CARE 3, bringing the total estimated fund corpus of Schemes 1 and 2 to around $2.2 billion (including potential reinvestments). According to the company, this makes H-CARE 3 one of the largest funds raised in India to invest in the residential real estate sector.
The latest fundraise combined HDFC-3’s Scheme 1 and 2 funds, as well as H – CARE 1 and 2, raised in 2016 and 2017, to create a $3.1 billion funding platform, according to HDFC Capital.
The first two funds have a combined corpus of more than $1.1 billion and are targeting low- and middle-income residential projects in India’s top 20 cities. H-CARE 3 will provide long-term, flexible equity and debt funding for affordable and middle-income housing projects throughout their life cycle, including early-stage funding. Furthermore, the fund will invest in technology companies involved in the affordable housing ecosystem (construction technology, fin-tech, sustainability-tech, and so on).
The company further added, “The H-CARE 3 funds are expected to be committed to investments over the next 3-4 years,” according to HDFC Capital. “In order to achieve this objective, the company is in active discussions with leading global investors to raise additional funds to be invested in affordable housing in India.
The primary investor in H-CARE 3 is a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), which purchased a 10 per cent stake in the company in May 2022. Meanwhile, HDFC will serve as the fund’s sponsor, and HDFC Capital will serve as its investment manager.
Established in 2016, HDFC Capital is one of three H-CARE funds, with National Investment and Infrastructure Fund (NIIF) among its core investors.
Deepak Parekh, Chairman of HDFC said that the HDFC Capital was a pioneer in investing in low- and middle-income housing projects in India. The HDFC Capital platform is well on its way to achieving its medium-term goal of funding one million affordable homes in India, thanks to the support of leading global investors such as ADIA and partnerships with trusted developer
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