HDFC Capital Advisors, the wholly-owned subsidiary of India’s largest mortgage lender, has invested Rs 500 crore in realty developer Runwal Group’s 115-acre township project in Dombivli near Mumbai, said two persons familiar with the development.
HDFC Capital Advisors is making this investment through its affordable and mid-income housing investment platform HDFC Capital Affordable Real Estate (H-CARE), which counts Abu Dhabi Investment Authority, the sovereign wealth fund of the Gulf emirate, and India’s sovereign fund, the National Investment & Infrastructure Fund, as principal investors.
“The investment has been made with a combination of equity and structured funding,” said one of the persons mentioned above.
Runwal Group’s arm Runwal Residency is developing this mixed-use project on a land parcel it has bought from Gammon India. The project with a total 13 million sq ft of development possibility, will be completed in a phase-wise manner in eight to 10 years. The company is currently in the process of getting the approvals for the project.
“We’ve had successful alliance with HDFC PMS in our earlier projects and have provided them highest equity returns in the country at our project Runwal Greens. We are now excited to work together on this affordable housing project,” Subodh Runwal, director, Runwal Group, told ET while confirming the development.
ET’s email query to HDFC remained unanswered till the time of going to press.
Through this platform, HDFC Capital is aiming to push established grade A developers towards affordable and mid-income housing projects as this will ensure not only increased supply but also the much-needed quality of construction.
The Runwal Group has partnered with global investors such as Singapore’s sovereign wealth fund GIC and Capita-Land. HDFC Portfolio Management Services had invested `500 crore in two Runwal Group projects in south Mumbai’s Nepean Sea Road and Mulund, a suburb of Mumbai.
HDFC PMS had exited the Nepean Sea Road project with a return of 24%, and the Mulund one with 68%, making it one of the most profitable exits in the country’s real estate sector.
Last year, HDFC Capital formed a Rs 2,500-crore platform to invest in affordable housing projects.