HDFC fund eyes investment in Puravankara unit

HDFC’s real estate fund is understood to be in advanced stages of investing around Rs 200 crore in a low-cost housing project being developed by the Bangalore-based Puravankara Projects. Puravankara Projects is executing the low cost housing project through a wholly-owned subsidiary Provident Housing & Infrastructure, set up last year. Investment banking sources indicate that HDFC is carrying out a due diligence of the project and the investment is likely to be funnelled into a special purpose vehicle floated by Provident for a 4,500 flats project in Bangalore. Provident is expected to launch the first phase of the project this quarter. The company is rolling out its Bangalore project after a relatively decent success it met with its low-cost housing project in Chennai. The company was able to sell close to 700 flats within a week of its launch. With these two projects, Provident is expected to roll out 6,000 houses in Bangalore and Chennai.Provident Housing during August 2008 had envisaged an investment of Rs 8,000 crore over five years and company officials maintained they are not going slow on the project. Provident is also looking to enter Mysore and Kochi markets at a later stage and is looking to acquire 200 acres for the expansion at a cost of around Rs 2-3 crore per acre.The company already has 70 acres and is looking at a total land bank of 550 acres in all for the project which will see the roll-out of close to 65,000 homes sized 750-1,000 sq feet. The houses will be priced between Rs 12 lakh and Rs 20 lakh.