India: HDFC Capital, Tribeca form $72m mid-income housing platform

Photo: Reuters

HDFC Ltd’s real estate focused fund management arm HDFC Capital Advisors and Tribeca Developers, builders of Trump Towers in India, have formed a ₹500-crore investment platform to build premium to mid-income houses in Mumbai and National Capital Region (NCR).

While HDFC Capital will finance the projects through a combination of debt and equity, Tribeca will develop them, said Kalpesh Mehta, founder, Tribeca Developers,over the phone. The platform plans to build around five projects totalling around 3000 units in Mumbai surburbs, Gurugram and Noida in the next four too five years.

These projects will comprise studio apartments, one and two bedroom flats costing between ₹80 lakh to ₹2 crore per unit depending on the location.

The platform will launch its first project in the second or third quarter of next financial year. Located in Gurugram, the project comprises 600 units spanning across 1 million sqft. HDFC Capital has already committed ₹135 crore towards the project.

In the recent past, HDFC Capital has formed several such housing platforms mostly in the affordable residential category with developers including Mahindra Lifespaces Developers Ltd and Prestige Estates Projects.

In 2017, HDFC Capital had closed its second affordable housing fund of around $1-billion corpus, of which a major chunk of it was raised from the Abu Dhabi Investment Authority.

“The largest opportunity today from both demand as well as land supply side is in the mid-income. It is purely opportunistic,” said Mehta. At present, Tribeca is developing four ongoing Trump Tower luxury housing projects in Pune, Mumbai, Gurugram and Kolkata in partnership with local developers. The Trump branded residences are priced between ₹3.5-15 crore in India.

Tribeca’s entry into the mid income to premium segment comes following Trump Organisation’s announcement two years ago not to enter any new deal to develop Trump Towers across the global. The New York-based firm is a business venture of US president Donald Trump.

Most of the funds under the new platform will invest on construction of the projects as wells deposits over land, Mehta said. “We are not taking any land risk. So we are not buying any land. We will develop the projects either through joint venture or development management agreement with land owners,” he said.

With the residential real estate sector in a consolidation phase, several developers are increasingly choosing to be land owners while staying away from the development business, said Mehta said. “This has opened up huge opportunity for developers like Tribeca to partner with land owners or local builders to jointly develop the land,” he added.

“Housing remains a crucial need in India and the demand for housing is expected to grow substantially with increased urbanisation. HDFC’s endeavour is to participate in the huge opportunity of mid income and affordable housing in the country. We are committed to partnering with developers who are aligned with our vision and values,” Deepak Parekh, chairman, HDFC Ltd said in a statement

This article was first published on livemint.com