The Development Bank of Japan has partnered with HDFC Capital to invest in a real estate fund, with a total targeted corpus of $1 billion, for the construction of affordable and mid-income housing projects in India.

In a statement on Thursday, HDFC Capital said that the Development Bank of Japan Inc (DBJ) has made its first real estate investment in India, but did not disclose the amount.

DBJ has committed capital to the HDFC Capital Development of Real Estate Affordable and Mid-Income Fund (H-DREAM Fund), managed by the HDFC Capital Advisors Ltd.

“The H-DREAM Fund has a target fund corpus of $500 million with a greenshoe of $500 million, with current investor commitments in excess of $350 million,” the statement said.

In August last year, IFC had committed up to $150 million as an anchor equity investment in H-DREAM Fund HDFC Capital is the real estate private equity arm of the HDFC Group.

HDFC Capital is one of the largest real estate private equity funds in India, with a focus on affordable and mid-income residential real estate. Its funds combine to create a platform in excess of $4.5 billion. H-DREAM Fund focuses on development of green, affordable and mid-income housing.

Deepak Parekh, Non-Executive Chairman, HDFC Capital, said, "The India-Japan relationship is a trusted partnership based on strong institutional cooperation. India has seen increased participation by Japanese investors in its financial and real estate sectors." “As a government-owned institution, DBJ's first investment in real estate in India is significant for us and reinforces long-term investor confidence in the country," he added.

Through this investment, DBJ said it will support the sustainable development of the Indian real estate market, which is facing a housing shortage.

"We are delighted to partner with DBJ in its first real estate investment in India. HDFC Capital's focus on early-stage financing for quality affordable and mid-income housing positions it well to deepen engagement with investors committed to diversification and sustainable development," Vipul Roongta, CEO, HDFC Capital, said.

DBJ's investment in H-DREAM Fund is made through HDFC Capital's offshore feeder fund structure, established under the International Financial Services Centres Authority (IFSCA) framework at the Gujarat International Finance Tec-City (GIFT City).

DBJ is a Japanese financial institution that provides integrated investment and loan services to companies and projects.

Published on May 28, 2026