The Development Bank of Japan (DBJ) has made its first real estate investment in India by backing the H-DREAM Fund, managed by HDFC Capital Advisors, the real estate private equity arm of the HDFC Group, according to a company announcement.
H-DREAM stands for HDFC Capital Development of Real Estate Affordable and Mid-Income Fund. The platform invests in affordable and mid-income residential real estate, with a focus on green and sustainable building practices.
The fund has a target corpus of $500 million, along with a greenshoe option of an additional $500 million. Current investor commitments exceed $350 million, the company said in a media statement.
The investment marks a milestone in DBJ’s international investment strategy.
“The India-Japan relationship is a trusted partnership based on strong institutional cooperation. India has seen increased participation by Japanese investors in its financial and real estate sectors,” said Deepak Parekh, non-executive chairman of HDFC Capital.
“As a government-owned institution, DBJ’s first investment in real estate in India is significant for us and reinforces long-term investor confidence in the country,” he added.
Established in 2015 with an initial corpus of $100 million, HDFC Capital has since raised about $4.5 billion across five funds.Last year, the firm made headlines after the International Finance Corporation (IFC) committed up to $150 million to the H-DREAM Fund. DealStreetAsia had also reported that HDFC Capital’s existing limited partner (LP), the Abu Dhabi Investment Authority (ADIA), was also in talks to back the vehicle.
“HDFC Capital’s focus on early-stage financing for quality affordable and mid-income housing positions it well to deepen engagement with investors committed to diversification and sustainable development,” said Vipul Roongta, chief executive officer of HDFC Capital.
In India, around 275 million people—about 22% of the population—lack access to adequate and affordable housing, per industry estimates. The shortfall is especially acute in urban areas, where the housing deficit is estimated at nearly 18 million units, primarily across Tier 1 and Tier 2 cities.
The H-DREAM Fund aims to help bridge this gap by financing affordable and mid-income housing projects that meet green building standards. It is targeting India’s top seven metropolitan markets, including Delhi and Mumbai, with developments planned within a 100-km radius of these cities.
