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    Arvind SmartSpaces, HDFC Capital Advisors to set up Rs 900-cr residential development platform

    Synopsis

    HDFC Capital Affordable Real Estate Fund - 3 (HCARE-3) will be investing Rs 600 crore, while Arvind SmartSpaces will infuse Rs 300 crore in this joint investment and development platform.

    Arvind SmartSpaces, HDFC Capital Advisors to set up Rs 900-cr residential development platformiStock
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    Realty developer Arvind SmartSpaces, part of the Ahmedabad-headquartered Lalbhai Group, has entered into an agreement with HDFC Capital Advisors to set up a Rs 900-crore platform to undertake residential developments.

    HDFC Capital Affordable Real Estate Fund - 3 (HCARE-3) will be investing Rs 600 crore, while Arvind SmartSpaces will infuse Rs 300 crore in this joint investment and development platform.

    The funds will be utilised for acquisition of new projects for residential developments in the cities of Ahmedabad, Bangalore, Pune and Mumbai Metropolitan Region (MMR).

    Arvind SmartSpaces will set up a separate special purpose vehicle (SPV) to house the projects under this platform. The proposed platform will create an overall revenue potential of Rs 4,000-5,000 crore excluding reinvestment potential.

    This will further strengthen the strategic partnership between Arvind SmartSpaces and HDFC Capital Advisors.

    "We are constantly exploring innovative sources of capital to augment project pipeline and overall growth. 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," said Kulin Lalbhai, Director, Arvind SmartSpaces.

    According to him, this platform builds upon the robust 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 entering into a strategic partnership with HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1). This partnership was formed to focus on the development of affordable and mid-income housing projects in India while ensuring quality and timely delivery of finished units.

    These proposed developments under the first relationship were undertaken by a special purpose vehicle ‘Arvind Homes’ set up with an initial investment of Rs 250 crores.

    "The proposed partnership is expected to give Arvind SmartSpaces significant headroom to capitalise on the growth opportunities in our focused markets," said Kamal Singal, Managing Director and CEO of Arvind SmartSpaces.

    "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. The platform is expected to generate significant upside to Arvind SmartSpaces' project pipeline while efficiently managing the risk profile of the balance sheet.”

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

    HDFC Capital manages a $3 billion funding platform that has recently been rated as one of the world’s largest private finance platforms focused on development of affordable housing.

    The funds managed by HDFC Capital provide long-term, flexible funding across the lifecycle of affordable and mid-income housing projects including early-stage funding.

    HDFC Capital’s target is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and technology, whilst focusing on sustainability.


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