NIIF to invest Rs 660 cr in HDFC Capital realty platform to fund housing projects

National Investment and Infrastructure Fund (NIIF) on Tuesday announced an investment of Rs 660 crore in HDFC Capital's real estate platform that finances mid-income and affordable housing projects.

The NIIF will invest in HDFC Capital Affordable Real Estate – 2 (H-CARE 2), an investment platform, managed by HDFC Capital Advisors, a wholly owned subsidiary of HDFC Ltd, the company said in a statement.

NIIF will join a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) as an investor in H-CARE 2, it added.

H-CARE 2 is structured as a Category II Alternative Investment Fund with a corpus of Rs 4,290 crore. The fund provides mezzanine finance to developers of mid-income and affordable urban housing projects.

"Housing remains a critical need in India and the demand for housing is expected to grow substantially with increased urbanisation. This demand, in conjunction with reforms implemented in the sector creates an attractive investment opportunity for disciplined developers and knowledgeable investors," NIIF MD & CEO Sujoy Bose said.

This investment enables investors in the NIIF Fund of Funds to participate in the attractive mid-income and affordable housing sector in India, he added.

"H-CARE 2 now has a wider platform targeting affordable and mid-income residential projects in India and will play a significant role in progressing towards the government's flagship programme, Housing for All by 2022.

"Our partnership with NIIF is also recognition that housing is a catalyst for GDP growth. The current lack of flexible, long-term capital is one of the key challenges facing developers of affordable and mid income housing in India," Deepak Parekh, Chairman, HDFC Ltd said.

This fund would help address the demand-supply gap in affordable housing and ensure that flexible financing is provided to quality developers, Parekh added.