According to media reports, HDFC Property Fund may make first closing of its fourth real estate fund in March by raising $200 million from institutional and retail investors.
The fourth real estate fund was launched late last year with a target size of $500 million and has promised to deliver net internal rate of return of over 20 percent with an average ticket size of 40-50 crore.
The fund plans to invest in residential projects and redevelopment in cities such as Chennai, Pune, Bangalore, Mumbai and Delhi.
It is learnt that around 80 percent of the investors in the fund are repeat clients. HDFC has been in talks with sovereign funds, including Qatar Investment Authority, and Japanese and US investors to raise the capital.
According to Venture Intelligence, a research service focused on private equity and M&A, private equity investment in the real estate sector almost halved in 2012. PE funds made 66 investments in the real estate segment during the year.
Till date, the private equity arm of HDFC made 15 investments from its offshore fund and exited only one project, Lodha Excelus. The domestic fund, which has invested in residential projects, including Pune-based Vascon Forest Country and Chennai-based Metrozone, has invested in 18 projects, of which it has exited 11.