HDFC mops up $800 mn for realty

PRIVATE EQUITY WATCH

Mortgage financier Housing Development Finance Corporation (HDFC) has announced the closing of its first sponsored international real estate fund, HIREF International LLC, after mobilising $800 million.

This makes it one of the country's largest international real estate funds. With this international realty fund, HDFC will become the largest player in the real estate private equity space in India.

The 9-year close-ended fund, open for subscription to foreign investors, was privately placed and was subscribed by 28 investors.

Renu Sud Karnad, chairperson of HDFC Property Ventures, and executive director, HDFC, said, "The objective of the fund is to invest in FDI-compliant real estate projects in India to achieve long-term capital appreciation. The fund will target equity returns of 20"�25 per cent. Through strong industry relationships and unparalleled expertise in the Indian real estate market, the fund expects to have a competitive advantage over similar funds and generate enhanced returns for investors."

KG Krishnamurthy, MD, said, "We will be identifying and advising on opportunities available with reputed developers in major cities having sound fundamentals. The fund's strategy is to take advantage of the current trend by investing in such companies and managing investments in a manner that enables the developers to optimally harness the growing Indian economy and develop successful and profitable ventures for the Indian market."

As demonstrated by other more developed economies in Asia and South America, a key beneficiary and driver of India's economic growth will be the real estate sector.

According to the release issued by the company, the fund believes that the Indian real estate market currently presents a very compelling investment opportunity for investors.