The real estate sector has emerged as the largest recipient of investments from Alternate Investment Funds (AIFs), attracting ₹74,000 crore in the first nine months of FY2025, according to an Anarock Research report published by Hindustan Times.
This marks the highest share among all sectors, with real estate accounting for 15% of the total ₹5.06 lakh crore invested across various industries.
As of December 2024, AIFs have invested ₹73,903 crore into the real estate sector, showing an 8% growth from ₹68,540 crore at the end of FY2024. The report also highlights that other sectors, such as IT/ITeS, financial services, NBFCs, banks, pharma, FMCG, retail, and renewable energy, have received substantial investments, but real estate remains the dominant sector.
A significant contributor to this growth is the SWAMIH Fund, India’s flagship AIF. The SWAMIH Fund has injected over ₹35,000 crore to revive numerous stalled housing projects across the country. This initiative has been crucial in stabilizing the market and enabling the completion of thousands of housing units, benefiting homebuyers nationwide.
AIFs, which are privately pooled funds, invest in non-traditional assets like private equity, hedge funds, and real estate, offering high-risk, high-reward opportunities for experienced investors. Their flexibility and ability to address capital gaps at various stages of real estate development have positioned them as an essential financing mechanism amid increasing constraints on traditional funding sources.
Prashant Thakur, Regional Director and Head of Research at ANAROCK, emphasized that AIFs’ ability to pool capital from domestic and foreign investors creates a sustainable and scalable funding ecosystem. The growing adoption of blended finance models, AI-driven risk assessments, and streamlined regulatory frameworks are expected to further enhance the impact of AIFs in the coming years.
Despite the progress, the SWAMIH Fund’s journey has not been without challenges. Anuj Puri, Chairman of ANAROCK Group, noted that while the Fund has been instrumental in completing many stalled housing projects, it faces persistent hurdles, such as regulatory delays, lender resistance, and cash flow constraints.
Puri stressed that addressing these systemic bottlenecks is essential for unlocking the full potential of the Fund. He added that overcoming these challenges is key to bridging the gap between promise and execution, ensuring the Fund’s continued success in rescuing homebuyers who have no other recourse.
With AIF investments in real estate continuing to rise, this funding model is expected to play a crucial role in the sector’s recovery, helping to drive both growth and stability in the real estate market.