HDFCCap­i­tal to form 3 in­vest­ment plat­forms for af­ford­able hous­ing

Business Standard - - COMPANIES - RAGHAVENDRA KAMATH

HDFC Cap­i­tal, the real es­tate fund man­age­ment arm of HDFC, is look­ing to form three plat­form in­vest­ment deals with prop­erty de­vel­op­ers for af­ford­able hous­ing, said sources in the know.

Plat­forms are like joint ven­tures wherein the part­ners bring in cap­i­tal and the de­vel­oper part­ner de­vel­ops projects.

HDFC Cap­i­tal has in prin­ci­ple agreed to form a plat­form deal with Mum­bai-based Rus­tom­jee and is in talks with two other de­vel­op­ers for sim­i­lar deals, sources said. “They have re­alised that af­ford­able homes are sell­ing well de­spite the slow­down. That’s why they are look­ing at tie-ups with se­ri­ous play­ers,” said a source. An email sent to HDFC did not elicit any re­sponse.

HDFC Cap­i­tal has raised over $1 bil­lion from the Abu Dhabi In­vest­ment Author­ity (ADIA), Na­tional In­vest­ment and In­fra­struc­ture Fund (NIIF) and oth­ers, said sources in the know.

In Fe­bru­ary last year, Pres­tige and HDFC Cap­i­tal an­nounced a ~2,500-crore plat­form to in­vest in af­ford­able hous­ing projects. A month ear­lier, HDFC Cap­i­tal formed a ~500-crore in­vest­ment plat­form with Mahin­dra Lifes­paces.

■ HDFC Cap­i­tal plans to form a plat­form deal with Mum­bai based Rus­tom­jee

■ The firm has raised over $1 bn in funds from ADIA) , NIIF

■ SBI Ven­tures is also launch­ing a ~350 cr af­ford­able hous­ing fund

■ Nisus Fi­nance is look­ing to launch a ~500-cr fund for af­ford­able hous­ing

HDFC Cap­i­tal formed a sim­i­lar deal with NCR-based ATS In­fra­struc­ture.

While US-based Black­stone re­cently bought a con­trol­ling stake in Aad­har Hous­ing Fi­nance, do­mes­tic fund man­agers are getting into this seg­ment. SBI Ven­tures, a step-down sub­sidiary of SBI, is launch­ing a ~350-crore af­ford­able hous­ing fund. It will tar­get top eight cities in the coun­try.

An­other Mum­bai-based fund man­ager, Nisus Fi­nance, is look­ing to launch a ~500-crore fund and raise money from do­mes­tic in­sti­tu­tions and fam­ily of­fices.

The fund man­ager plans to in­vest ~5060 crore per deal and look­ing at an in­ter­nal rate of re­turn of 20-21 per cent, said Amit Goenka, man­ag­ing di­rec­tor and chief ex­ec­u­tive, Nisus Fi­nance. “We are fo­cus­ing on projects that meet PMAY (Prad­han Mantri Awas Yo­jana) cri­te­ria,” Goenka said.

In 2015, the Cen­tre an­nounced the credit-linked sub­sidy scheme (CLSS) un­der PMAY (Ur­ban), of­fer­ing an in­ter­est sub­ven­tion of 6.5 per cent on hous­ing loans up to ~6 lakh for a ten­ure of 20 years to eco­nom­i­cally weaker sec­tions (EWS) and low­in­come groups (LIG).

The scope of the CLSS was widened to in­clude the mid­dle-in­come cat­e­gory. With ef­fect from Jan­uary 1, 2017, the MIG scheme was rolled out, with an up­front in­ter­est sub­sidy of upto ~2.3-2.35 lakh to bor­row­ers, cov­er­ing two in­come seg­ments — ~600,001 to ~1,200,000 (MIG-I) and ~1,200,001 to ~1,800,000 (MIG-II) per an­num.

Anu­jPuri, chair­man at Ana rock Prop­erty Con­sul­tants, said the govern­ment was try­ing to fuel the af­ford­able hous­ing seg­ment by in­cen­tivis­ing both sup­ply and de­mand. Ac­cord­ing to Anarock re­search, 38 per cent of the launches be­tween 2013 and 2018 per­tained to the af­ford­able seg­ment (units priced less than ~40 lakh).

“With so much im­pe­tus to af­ford­able hous­ing, this seg­ment has seen a bet­ter off­take than other seg­ments. There­fore, with an aim to reap re­turns in this boom­ing phase, many PE funds are look­ing to launch af­ford­able hous­ing fo­cused funds,” Puri said.

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