As developers increasingly establish affordable housing as a pivotal aspect of their strategies, this concept is drawing notable interest from the real estate funds sector. The $250-million FIRE Capital Fund Ltd is set to make its inaugural investment in this arena.
Sources within the industry report that FIRE Capital is currently navigating the due diligence phase concerning its affordable housing investment. "The deal should finalize within 2-3 weeks," stated an insider familiar with the situation.
Although the identity of the real estate developer remains under wraps, it's been disclosed to DNA Money that the firm is based in eastern India. “It’s highly likely that the affordable housing project is coming up in West Bengal,” the source further revealed.
The project’s budget will range between Rs 8 lakh and Rs 15 lakh, accommodating various apartment sizes.
Gautam Vashisht, the executive director of investments at FIRE Capital Fund, expressed, “The intent is certainly there in the affordable housing segment in India, particularly in Tier II and Tier III cities.” However, he refrained from commenting on the potential investment regarding the affordable housing venture in eastern India.
Established in 2006 with an initial corpus of $250 million, FIRE Capital has already committed over $150 million across seven different investments. Its primary focus includes residential and mixed-use developments, starting with a significant investment in a 137-acre township project by the M Jhaveri Group in Indore. Their investment portfolio also features township projects spread across Jaipur, Bangalore, Nagpur, Chennai, Ahmedabad, and Dehradun.
Typically, this venture fund invests between $5 million and $30 million in projects. With approximately 80% of its corpus successfully allocated, FIRE Capital is gearing up to launch a second fund next year that is speculated to aim for $500 million. While the principal investors are expected to hail from the United States and European regions, there’s also an intention to secure a portion of funds from the Middle East.
The upcoming fund will continue to target real estate developments, focusing primarily on residential and mixed-use projects, including hotels, with a firm emphasis on India’s Tier II cities.