Mumbai, Maharashtra, India
HDFC today announced the closing of its first sponsored international Real-Estate Fund, HIREF International LLC (the Fund) at USD 800 million. This shall make it one of the country's largest international real estate funds. The 9-year close-ended fund, open for subscription from only foreign investors was privately placed and was subscribed to by 28 investors.
Ms Renu Sud Karnad, Chairperson of HDFC Property Ventures Ltd. and Executive Director, HDFC Ltd, 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%. 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 Fund will have a conservative approach with no regional or sector bias and would invest in residential, commercial, hospitality, education, healthcare sectors and developers' entity level."
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. The Fund believes that the Indian real estate market currently presents a very compelling investment opportunity for investors. India's long-term global competitiveness stems from factors such as being the world's largest economy, rising productivity levels, superior-quality systems and processes, well developed financial markets, established legal and regulatory framework as well as significant labor-cost arbitrage. The growth in investor interest is driven by strong economic growth, a reasonably stable currency and healthy foreign exchange reserves, quality and cost competitiveness resulting in outsourcing opportunities (both in services as well as in manufacturing), supportive government policy-making and buoyant capital markets. In addition, the returns that numerous investments have generated in recent years have caught the attention of the investor community.
Mr. K. G. Krishnamurthy, Managing Director, HDFC Property Ventures Ltd said, "We will be identifying and advising on opportunities available with reputed developers in the major cities having sound fundamentals. The Fund's strategy is to take advantage of the current trends by investing in such companies and managing its investments in a manner that enables the developers of these Real Estate Projects to optimally harness the growing Indian economy and develop successful and profitable ventures for the Indian market.
With this international Real-estate Fund, HDFC will be the largest player in the real estate private equity space in India.
Source: Housing Development Finance Corporation Limited (Business Wire India)
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