Adia invests in US$1 billion India real estate funds

By Rajive Singh

MUMBAI 23 December 2017: With the support of the Abu Dhabi Investment Authority (Adia), India’s HDFC Capital Advisors has achieved the initial close of its second affordable housing fund, the HDFC Capital Affordable Real Estate Fund – 2.

This will be combined with HDFC Capital Affordable Real Estate Fund – 1, H-CARE-1, which was raised last year, to create a US1 billion platform targeting affordable and mid-income residential projects in India’s leading 15 cities, said Wam.

Adia is the primary investor, through a wholly-owned subsidiary, in both H-CARE-1 and H-CARE-2.

The primary objective of the platform, according to a statement from HDFC Capital Advisors, is to provide long term, equity and mezzanine capital to marquee developers at the land and pre-approval stage for the development of affordable and mid-income housing, in line with the Indian Government’s goal of increasing overall housing supply, including the ‘Housing for All by 2027’ initiative.

For the H-CARE-2 Fund, commitments of $550 million have been made.

Khadem Al Remeithi, the Executive Director of Adia’s Real Estate and Infrastructure Department, was quoted in the statement as saying, “India’s housing market presents a compelling investment opportunity driven by the country’s continued economic growth and backed by supportive government initiatives. Our investment in HDFC’s platform aims to meet the strong demand for early-stage financing of housing projects and encourage the continued growth of the affordable and mid-income residential sector.”

ADIA investment in India

NEW DELHI: Economic relations between the UAE and India, which entered a new, dynamic phase with two recent visits to New Delhi within one year by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, is picking up steam.

A new business partnership between the Abu Dhabi Investment Authority (ADIA) and KKR India Financial Services (KIFS) has been announced in Mumbai with ADIA’s decision to become a “significant minority shareholder” in KIFS which offers an alternative credit business in India.

Hamad Shahwan Al Dhaheri, Executive Director of the Private Equities Department at Adia, said in a statement released in Mumbai through Kohlberg Kravis Roberts (KKR), the global investment firm which is the parent company of KIFS, that “becoming a shareholder in the Indian venture is consistent with Adia’s approach of seeking principal investments in market-leading businesses alongside strong and high-quality partners.”

He said, “India is one of the world’s fastest growing and most dynamic markets, and Indian businesses are increasingly seeking alternative credit solutions. KIFS has played an integral role in the development of this important form of financing in India and, through our investment in the company, we look forward to supporting the continued growth of the market.”

KKR manages multiple alternative classes of assets, including private equity, energy, infrastructure and real estate credit all over the world. Through its strategic manager partnerships and hedge funds, KKR aims to generate attractive investment returns for institutions such as ADIA. In 2009, its Middle East and North Africa subsidiary, KKR Mena Limited was granted a license by the Dubai Financial Services Authority to operate from the Dubai International Financial Centre (DIFC).

B.V. Krishnan, Chief Executive Officer of KIFS, said, “Adia’s investment in KIFS gives us a high-calibre partner to work alongside as we further scale our platform and deliver creative solutions in the Indian market. India continues to be an under-served financial services market, with shallow capital markets and an over-reliance on banks for wholesale financing. KIFS has consistently provided flexible credit financing solutions to companies and shareholders, keeping in mind their long-term objectives for their business.”

The extent of Adia’s investment in the Indian entity has not been revealed.