Qatar Holding, a subsidiary of Qatar Investment Authority, is going to invest about $250 million in ArthVeda Fund Management’s (AVFM) Low and Middle Income (LMI) fund for affordable housing. This is a substantial foreign inward investment after the announcement of Indian’s Union Budget 2017 which granted affordable housing infrastructure status.
The Mumbai-based investment firm, AVFM has planned to fund in several affordable housing projects across top ten cities with an internal rate of returns about 18 to 21 per cent. This investment will contribute to the government’s initiative of providing housing for all by 2022 under the scheme Pradhan Mantri Awas Yojana (PMAY).
As confirmed by various sources, the centre needs to develop approximately 19 million urban affordable housing units in LMI category by 2022 across tier 1, 2 and 3 cities. The recent proposal of giving infrastructure status to affordable housing helps developers approach financial institutions at lower interest rate and tax exemption so that they can complete the project sooner and maintain margin better. The move also encourages lots of builders to focus on affordable housing sector which will enhance the supply.
Source: ET Realty