HDFC Capital, the real estate private equity arm of the HDFC Group, has created a Rs 1,000 crore ($112 million) platform in partnership with Hero Realty to develop housing projects across tier-1 and 2 cities in India.
The real estate arm of Hero Enterprise, established in 2006, currently has five projects under development totalling about 6.4 million sq. ft., with another five projects spanning roughly 8 million sq. ft. in the pipeline.
“We see tremendous potential in India’s tier 1 and 2 cities, where infrastructure growth and rising aspirations are driving demand for mid-income housing,” Vipul Roongta, MD & CEO at HDFC Capital, said in a statement.
“This collaboration [with Hero Realty] will enable housing development in towns that are well-connected and are extensions of major metros, which serve as employment hubs,” he added.
Hero Realty claims to have completed around 8.4 million sq. ft. of residential developments and 200 acres of industrial parks.
The firm operates in the NCR, Punjab and Uttarakhand.
“With this partnership with HDFC Capital, we will be able to scale faster into Tier 1 and Tier 2 cities, addressing the significant unmet demand for mid-income housing while delivering on our promise of superior living experiences,” said Rohit Kishore, CEO, Hero Realty.
HDFC Capital finances the development of affordable and mid-income housing, a segment that aligns with the Indian government’s ‘Housing for All’ programme.
The firm is currently in the process of raising its sixth fund, for which it is targeting a corpus of $1 billion (about Rs 8,770 crore).
It is understood to be in talks with the Abu Dhabi Investment Authority, which is expected to join as a co-investor, sources had earlier told DealStreetAsia.
Earlier this year, the International Finance Corporation committed up to $150 million to the vehicle – the H-DREAM Fund – one of the first private credit funds focused on affordable and mid-income residential projects.
