HDFC Capital Advisors Ltd (HDFC Capital) has partnered with an affiliate of Cerberus Capital Management LP to launch a special situation platform focused on high-yield opportunities in the Indian residential real estate sector.
In a statement issued, the company said, “These platforms will seek to purchase inventory and provide last-mile funding for under-construction residential projects across India, among other real estate-related opportunities.”
“The development of the platform comes as a response to the series of shocks to the Indian residential real estate market that has created a significant need for capital, it further said, noting that many buyers have been unwilling to fund projects in advance of completion while traditional financing channels have come under severe pressure,” the statement said.
“The platform intends to partner with quality developers to provide capital solutions and expedite project construction and completion,” it added.
Speaking on the partnership, Deepak Parekh, Chairman, HDFC Ltd said, “Lack of buyer confidence in the ability of developers to complete projects combined with a slow-down in funding for real estate projects resulted in developers being starved of capital to complete on-going projects.”
“This platform, in partnership with Cerberus, has the potential to provide an impetus to the real estate sector by providing capital solutions to developers and restarting stalled housing projects,” Parekh added.
Commenting on the partnership, Frank Bruno, Co-Chief Executive Officer, Cerberus, said “The partnership will help support high-quality developers and leading projects.”
“We can 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,” Bruno added.