AIFs Are Reshaping Real Estate Financing In India

Mumbai: The real estate sector in India dominated alternate investment funds (AIFs) net investments, with Rs 73,903 crore in the nine months of FY25, says the Anarock report compiled by SEBI.

Talking to Bizz Buzz, Dr Prashant Thakur, Regional Director & Head – Research, Anarock Group says, “Alternate Investment Funds (AIFs) are reshaping real estate financing in India, offering critical capital to projects facing funding shortfalls. These high-risk, high-reward vehicles cater to sophisticated investors and now account for 15 per cent of all AIF investments.”

As of 9M FY25, real estate drew in INR 73,903 crore of AIF capital - an 8 per cent increase over FY2024, when it attracted INR 68,540 crore. ANAROCK’s report finds that real estate leads among sectors like IT/ITeS, Financial Services, NBFCs, and Pharma. AIFs, supported by domestic and foreign investors, offer a scalable funding model, he said.

Their impact will grow with blended finance, AI-led risk assessment, and regulatory streamlining.

Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate-focused Alternative Investment Fund (AIF): AIFs have become an important investment vehicle for institutional investors and HNIs and also widened the scope for developers to secure funding. In a declining interest rate environment when deposit rates are falling, return on equities are unstable and real estate is showing signs of slowdown, the time is idea for investors to look at safe and stable markets like Delhi to tap into the Rs 6 lakh crore redevelopment potential in South Delhi or invest in the upcoming supply with the approval of MPD 2041 expected soon.