HDFC closes India fund on $800m

Indian housing lender HDFC has closed its first real estate fund for international investors—making the firm the largest player in the India private equity real estate space.

The Mumbai-based Housing Development Finance Corporation (HDFC) has closed on a new fund that will invest in Indian real estate on behalf of a foreign investor group. The HDFC International Real Estate Fund raised $800 million (€587 million) from 28 foreign investors.

“The objective of the fund is to invest in FDI-compliant real estate projects in India to achieve long-term capital appreciation,” Renu Sud Karnad, chair of HDFC Property Ventures and the executive director of HDFC, said in a statement. “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.”

The vehicle will target returns of 20 percent to 25 percent, according to Karnad. The fund is not focused on a specific region or sector, but could invest in residential, commercial, hospitality, education and healthcare projects, as well as in development companies. The close-ended fund has a nine-year life.

According to HDFC, with the close of the international fund, it is the “largest player in the real estate private equity space in India.”