Sumitomo Mitsui Trust Bank (SuMiTB), a Japanese financial institution, has committed capital to HDFC Capital Development of Real Estate Affordable and Mid-Income Fund (H-DREAM Fund), marking its first investment in an Indian real estate fund.
The investment, announced on November 6, has been made through HDFC Capital Advisors’ offshore feeder fund structure established under the International Financial Services Centres Authority (IFSCA) framework at Gujarat International Finance Tec-City (GIFT City).
H-DREAM Fund, managed by HDFC Capital Advisors, has a target corpus of $500 million, with an additional greenshoe option of $500 million. The fund has secured investor commitments of more than $400 million so far, according to the companies.
The fund provides financing to residential real estate projects focused on affordable and mid-income housing. It also requires projects it finances to follow the Excellence in Design for Greater Efficiencies (EDGE) green building framework.
The fund has adopted the International Finance Corporation’s (IFC) Environmental and Social Performance Standards and the EDGE framework to incorporate environmental and social considerations into its investments.
For SuMiTB, the investment marks its entry into India’s real estate fund market. The Japanese bank said the commitment would serve as the foundation for a longer-term relationship with HDFC Capital and the broader HDFC Group.
HDFC Capital Advisors is the real estate private equity arm of the HDFC Group and a subsidiary of HDFC Bank. Its funds together represent a platform of around $5 billion, with a focus on financing affordable and mid-income housing projects.
SuMiTB, established in 1925, is Japan’s largest trust bank, with $2.1 trillion in assets under custody and $1.2 trillion in assets under management, according to the company.
Japan’s SuMiTB makes first investment in Indian real estate fund through HDFC Capital