Construction Mirror Article detail

HDFC Capital Advisors, owned by real estate private equity investment manager HDFC, has invested over Rs 1,550 crore in property developer Shapoorji Pallonji Real Estate’s portfolio of residential projects.The investment through structured debt instruments will go into six projects spread over around 7 million square feet in Mumbai and Pune. It will be used for financial closure of projects, repayment of high-cost debt and working capital, the companies said.“Our partnership with HDFC Capital Advisors will give us significant headroom to capitalize on growth opportunities in our target markets. This partnership will add tremendous value to our project pipeline and drive our growth,” said Venkatesh Gopalakrishnan, Chief Executive Officer, Shapoorji Pallonji Real Estate.Vipul Rungta, Managing Director and CEO, HDFC Capital Advisors, said that through the partnership with Shapoorji, HDFC Capital will focus on meeting the growing demand for high quality housing for middle-income households in India.“In line with the Government of India’s ‘Housing for All’ concept, HDFC Capital aims to increase housing supply in India by providing flexible, long-term capital to India’s leading developers,” he said. All the six projects he has invested in are greenfield projects in the middle income category with some elements of premium as well as affordable segments.One of these projects involves the redevelopment of a large housing estate in central Mumbai. Other projects include three plotted developments within Pune limits and a villa project that is part of the company’s larger layout in Pune’s Hadapsar locality.While all clearances have already been received for the central Mumbai project, clearances for other projects are expected soon. Prior to this partnership, HDFC Capital Advisors in August signed a deal with Ahmedabad-headquartered Lalbhai Group company Arvind Smartspaces to set up a Rs 900-crore platform for residential development.The ongoing consolidation in Indian real estate has gained momentum as established developers are gaining more market share in terms of sales and liquidity, as home buyers increasingly prefer developers with better execution track records and financial standing. Institutional investors are also guaranteeing better returns to such projects and developers, given the possibility of higher speed of bookings and sales.Shapoorji Pallonji Real Estate is an integral part of the Shapoorji Pallonji Group, a multi-business conglomerate. With a development potential of over 113 million square feet, the developer is working on projects in Mumbai, Pune, Bengaluru, Gurgaon and Kolkata.The company has projects in several segments including luxury apartments, aspirational homes for middle-income home buyers and mass housing projects. HDFC Capital, established in 2016, is the investment manager of HDFC Capital Affordable Real Estate Funds 1, 2 and 3 and is aligned with the Government’s ‘Housing for All’ initiative.It manages a $3-billion funding platform rated as the world’s largest private finance platform focused on affordable housing development. Funds managed by HDFC Capital provide long-term, flexible funding across the lifecycle of affordable and middle-income housing projects, including early-stage funding.HDFC Capital aims to finance the development of 1 million affordable homes in India through a combination of innovative financing, partnerships and technology, with a focus on sustainability.Recently HDFC’s wholly owned subsidiaries HDFC Property Ventures and HDFC Venture Capital have approved plans to merge with HDFC Capital Advisors. The combined platform will advise and manage around $4.1 billion in assets, potentially making it the largest private equity firm in India.