Arvind SmartSpaces and HDFC Cap join hands for ₹900-crore realty platform

Realty developer Arvind SmartSpaces, part of the Ahmedabad-headquartered Lalbhai Group, has entered into an agreement with HDFC Capital Advisors to set up a ₹900 crore platform to undertake residential developments.
HDFC Capital Affordable Real Estate Fund-3 (HCARE-3) will invest ₹600 crore and Arvind SmartSpaces will infuse ₹300 crore in this joint investment and development platform.

The funds will be used for the acquisition of new projects for residential developments in the cities of Ahmedabad, Bengaluru, Pune and the Mumbai Metropolitan Region.

Arvind SmartSpaces will set up a separate special purpose vehicle to house the projects under this platform. The proposed platform is expected to create a revenue potential of ₹4,000-5,000 crore, excluding reinvestment potential.

"We are constantly exploring innovative sources of capital to augment our project pipeline and overall growth," Arvind SmartSpaces director Kulin Lalbhai said. "The proposed Rs 900 crore platform with HDFC Capital will help exponentially grow our footprints in targeted geographies and, in turn, is expected to create significant value for stakeholders."

According to him, this platform builds upon the performance of the previous platform with HDFC Capital set up in 2019 and triples their capital investment abilities in the short term.

In October 2019, Arvind SmartSpaces announced that it had entered into a strategic partnership with HDFC Capital Affordable Real Estate Fund 1 (HCARE-1). It was formed to focus on the development of affordable and mid-income housing projects. Developments under the first relationship were undertaken by a special purpose vehicle, Arvind Homes, set up with an initial investment of ₹250 crore.

"The proposed partnership is expected to give Arvind SmartSpaces significant headroom to capitalise on the growth opportunities in our focused markets," Arvind SmartSpaces managing director Kamal Singal said.

"We are already at advanced stages of finalisation of two projects, and we further expect 4-5 more such projects within the platform over the next 12 months," he said.

HDFC Capital, set up in 2016, is the investment manager for HDFC Capital Affordable Real Estate Funds 1, 2 and 3; and is aligned with the government goal to increase housing supply and support the Pradhan Mantri Awas Yojana-'Housing for All' initiative.