Growing interest in commercial property, infrastructure and income-generating assets is driving a fresh wave of investment in India’s real estate sector.
Indian real estate market: India’s wealthy investors are increasingly looking beyond the stock market and turning towards real estate, infrastructure and other assets that can generate regular income. The shift comes as returns from Indian equities have remained relatively modest over the past two years.
At least six new investment funds launched in India this year are looking to raise more than $1.25 billion for investments in real estate and infrastructure. This signals renewed interest in the country’s property market, particularly among high-net-worth individuals, family offices and private investors.
One of the major players in this space is Nuvama Wealth Management, backed by PAG, which manages around $39 billion in client assets. The company has raised approximately $420 million for a commercial real estate fund in partnership with Cushman & Wakefield Management. It is also planning to introduce more funds focused on income-generating properties and infrastructure projects.
Nuvama CEO Ashish Kehair said investors are showing greater interest in private credit and assets that provide regular cash flows. These include commercial properties, logistics facilities, warehouses and Real Estate Investment Trusts (REITs).
Real Estate Gains Attention as Equity Returns Slow
The growing interest in property investment comes at a time when the Indian stock market has lost some of its earlier momentum. The Nifty 50 delivered total returns of around 7% over the past two years, compared with approximately 29% from the US S&P 500 index.
This difference has encouraged wealthy Indian investors to diversify their portfolios and explore investment opportunities beyond listed shares.
According to available industry data, funds raised by Alternative Investment Funds (AIFs) from domestic investors nearly doubled to $64.5 billion between March 2024 and June 2026.
While private credit remains a popular investment choice, infrastructure, energy and real estate funds are also attracting growing interest.
Investors are particularly interested in funds that invest in completed properties and infrastructure assets. Such investments can generate regular income and may offer additional returns if the assets are eventually sold or listed through REITs or Infrastructure Investment Trusts (InvITs).
Investors Eye 12–15% Annual Returns
Real estate and infrastructure funds are targeting annual returns of around 12% to 15%. This is higher than the less than 8% yields generally available from three- to five-year AAA-rated corporate bonds.
However, actual returns depend on the quality of assets, investment structure, borrowing levels and the value achieved at the time of exit.
An August report by Julius Baer and EY India found that many Indian family offices are now allocating around 40% to 45% of their portfolios to alternative investments. These include private credit, venture capital, REITs and InvITs.
This marks a change from traditional investment patterns, where wealthy families largely preferred listed shares, fixed deposits, gold and direct property ownership.
New Funds Open Doors for Private Investors
Earlier, large real estate and infrastructure investments were mainly accessible to institutional investors such as pension funds and global private equity firms. High investment requirements, long investment periods and associated risks limited participation by individual investors.
However, specialised investment funds are now creating opportunities for family offices and wealthy individuals to participate in large projects.
Karan Shah, Head of Fixed Income and Real Assets at Neo Wealth, said these funds allow private investors to participate in major transactions that were previously dominated by institutional players.
Neo Wealth raised around ₹1,040 crore ($110 million) in July for its Real Asset Yield Fund. The fund will invest in listed and privately held REITs and InvITs. The company has also raised more than $500 million through two rounds of its Neo Infra Income Opportunities Fund.
Meanwhile, EAAA India Alternatives, one of India’s largest listed alternative asset managers, was listed on the Mumbai stock exchange earlier this month. As of June, the company managed nearly $5.2 billion in fee-paying assets across real estate, infrastructure and private credit. Its real asset business alone manages close to $3 billion through 10 active funds.
A Changing Investment Landscape
The growing flow of money into real estate and infrastructure reflects a wider change in India’s investment market. Wealthy investors are increasingly looking for assets that offer regular income, long-term value and opportunities for portfolio diversification.
Commercial properties, warehouses, logistics facilities and infrastructure projects are emerging as important investment options.
With specialised funds making large projects more accessible to private investors, real estate is once again gaining attention as an important part of India’s wealth management and investment landscape.
Source-Bloomberg
Read more..Economy: The Paradox of a Strong Economy and a Weak Stock Market
