Investment corporation IFC serves as lead limited partner for HDFC Capital's one billion dollar real estate investment fund.
The International Finance Corporation (IFC) has committed up to $150 million as an anchor equity investor in HDFC Capital's new fund, the HDFC Capital Development of Real Estate Affordable and Mid-Income Fund (H-DREAM). This fund aims to raise a total of $1 billion, with the goal of closing the urban housing gap through early-stage project financing focused on scalable, green, and affordable housing solutions.
The focus and goal of H-DREAM are to provide long-term capital for sustainable affordable and mid-income housing projects in urban India, particularly in Tier-I and Tier-II cities. The fund aims to support the development of at least 25,000 residential units that adhere to green building standards under the EDGE (Excellence in Design for Greater Efficiencies) framework, promoting sustainable urban growth and addressing India's significant housing shortage of about 18 million units in these cities.
IFC's investment in H-DREAM is designed to demonstrate the viability of innovative financing vehicles and mobilize long-term private capital for green housing solutions. IFC estimates a potential investment opportunity of $1.4 trillion in India's green buildings market by 2030, with $1.25 trillion coming from the residential sector.
HDFC Capital has already secured in-principle commitments of $350 million from global and domestic institutions and Indian family offices, indicating strong interest in the platform. The platform targets the development of affordable and mid-income housing in India, addressing the urgent need for inclusive housing while advancing sustainability in urban development.
Deepak Parekh, non-executive chairman of HDFC Capital, stated that the fund integrates sustainability with financing, which will go a long way in addressing the housing gap and building resilient communities. H-DREAM Fund will primarily invest in affordable and mid-income housing projects while implementing IFC's EDGE green building framework.
The H-DREAM Fund's goal is to promote resilient communities, create jobs, improve urban livability, and set benchmarks for sustainable real estate development in India. By focusing on early-stage financing, the fund aims to address supply side bottlenecks for high-quality affordable and mid-income housing in India.
Sources:
[1] HDFC Capital. (n.d.). HDFC Capital Development of Real Estate Affordable and Mid-Income Fund (H-DREAM). Retrieved from https://www.hdfccapital.com/h-dream-fund
[3] International Finance Corporation. (n.d.). IFC Invests $150 Million in HDFC Capital's Affordable Housing Fund. Retrieved from https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/news/press+releases/ifc+invests+150+million+in+hdfc+capital%27s+affordable+housing+fund
[5] The Economic Times. (2021, August 23). HDFC Capital raises $350 million for affordable housing fund. Retrieved from https://economictimes.indiatimes.com/industry/realty/commercial/hdfc-capital-raises-350-million-for-affordable-housing-fund/articleshow/85823654.cms
Investing in the H-DREAM Fund, a new real-estate focused fund by HDFC Capital, aims to promote sustainable and green affordable housing solutions in urban India, particularly in Tier-I and Tier-II cities, through early-stage financing. IFC's $150 million anchor equity investment in this fund targeting at least 25,000 residential units follows this vision, as it is expected to create jobs and improve urban livability while closing the urban housing gap.
