Home / Business and Economy / Japan Bank Backs India Housing Fund
Japan Bank Backs India Housing Fund
7 Nov
Summary
- Sumitomo Mitsui Trust Bank invests in HDFC Capital's affordable housing fund.
- This marks the bank's first entry into the Indian real estate fund market.
- The fund focuses on affordable and mid-income housing with green building standards.
Sumitomo Mitsui Trust Bank (SuMiTB) has made its inaugural investment in an Indian real estate fund by committing capital to the HDFC Capital Development of Real Estate Affordable and Mid-Income Fund (H-DREAM Fund). This strategic move was announced on November 6 and channeled through an offshore feeder fund at Gujarat International Finance Tec-City (GIFT City).
The H-DREAM Fund, managed by HDFC Capital Advisors, targets a corpus of $500 million, with an option to raise an additional $500 million. It has already secured over $400 million in investor commitments. The fund's primary objective is to finance residential projects aimed at the affordable and mid-income segments.
A key aspect of the fund's strategy is its commitment to sustainability. It mandates that financed projects must comply with the Excellence in Design for Greater Efficiencies (EDGE) green building framework. Furthermore, the fund adheres to the International Finance Corporation's (IFC) Environmental and Social Performance Standards, integrating environmental and social considerations into its investment decisions.
For SuMiTB, Japan's largest trust bank, this investment signifies a crucial entry into India's dynamic real estate fund market. HDFC Capital Advisors, the real estate private equity arm of the HDFC Group, manages a platform of approximately $5 billion focused on housing finance. This collaboration is expected to lay the groundwork for a sustained relationship between SuMiTB and the broader HDFC Group.
