HDFC, Cerberus to create special situations platform for Indian residential real estate sector

HDFC Capital Advisors, a subsidiary of HDFC, has entered into a partnership with an affiliate of US private equity firm Cerberus Capital Management for creating a special situations platform for the Indian residential real estate sector.

The special situations platform will pursue buying of inventory and offer last-mile funding for under construction residential projects in India. It will also target other real estate-related opportunities.

Frank Bruno – Co-CEO of Cerberus Capital Management said: “Cerberus has a long track record of partnering with businesses and properties around the world. We are able to provide tailored solutions in sectors with dislocated funding channels in various forms, such as the purchase of assets, creation of operating and lending platforms, and provision of structured capital to best-in-class operators.

“Together with HDFC Capital, we look forward to supporting high-quality developers and leading projects in one of India’s most important sectors.”

HDFC Capital Advisors, Cerberus Capital Management to create special situations platform for Indian residential real estate sector

According to HDFC, the platform is being developed to address a series of shocks to the Indian residential real estate market that have created a considerable requirement for capital.

The Indian private lender said that several buyers have not shown willingness in funding projects in advance of completion. On the other hand, traditional financing channels have been reeling under tremendous pressure, said HDFC.

The special situations platform to be created by HDFC Capital Advisors and Cerberus Capital Management will look to partner with quality developers to offer capital solutions and accelerate project construction and completion.

Vipul Roongta – Managing Director and CEO of HDFC Capital Advisors said: “HDFC Capital is focused on providing flexible financing solutions to developers in the Indian residential real estate sector. Currently, there is a severe shortage of last mile funding for distressed under construction real estate projects of even well-intentioned developers.

“Our partnership with Cerberus in an important step towards easing financing constraints faced by good developers and projects and will kick start execution of residential real estate projects in India.”