HNIs Invest Rs 74,000 Crore in Indian Real Estate via AIFs in FY25: Warehousing Leads
High-net-worth individuals (HNIs) have poured Rs 74,000 crore into Indian real estate through Alternative Investment Funds (AIFs) in FY25, with warehousing infrastructure emerging as a key focus. The shift to AIFs offers stronger governance, transparency, and professional management, making real estate investing more passive and yield-generating.
HnisReal EstateAifsWarehousingFamily OfficesReal Estate NewsJul 15, 2025
According to Ramandeep Sassi, Chief Business Officer – Fund Management at Welspun One, HNIs, UHNIs, and family offices have collectively channelled over Rs 74,000 crore into the Indian real estate market via the AIF route as of FY2025. Offering stronger governance, professional management, and transparency, AIFs are transforming real estate investing into an institutional, passive, and yield-generating opportunity for affluent investors.
There is growing interest from HNI, UHNI, and Family Office investors in real estate via the AIF route. This regulated structure offers stronger governance, transparent reporting, and a more institutional approach, especially important for large-scale projects. Warehousing, in particular, has emerged as a highly attractive asset class. Driven by rising demand from e-commerce, Q-commerce, and traditional sectors like auto and pharma, it presents a real, long-term opportunity.
AIFs provide access to high-quality assets with blue-chip tenants, while the fund manager manages the entire lifecycle, from land acquisition to leasing. For many HNIs, this is the first time they’re seeing a real estate investment that is institutional, fully compliant, and truly passive, without compromising on returns.
The shift from direct real estate investments to structured exposure through AIFs is driven by multiple factors. The most important is the ease of ownership, coupled with other factors like accessibility to large cheques through AIF pooled investments, mimicking fractional ownership, regulatory oversight by government authorities that adds to investor peace of mind, and professional fund managers managing the AIFs. Direct real estate investing can be time-consuming and operationally intensive—with challenges around land titles, tenant management, and compliance. AIFs strive to reduce this burden.
For HNIs, the inherent liking for real estate is now available in a simplified, dematerialised form, backed by outsourced asset management and institutional-grade tenants. Additionally, AIFs offer better visibility and transparency. Investors know exactly where their money is going, what’s being built, who the tenant is, and when returns are expected. This level of clarity and governance is a significant shift from traditional models.
In terms of investment volumes, ticket sizes typically begin around ₹1 crore and can go beyond ₹500 crore for large family offices. As of FY2025, over ₹74,000 crore has been invested into Indian real estate through the AIF route alone. That’s a clear sign of how institutional and high-net-worth capital is flowing into this space at scale.
Various themes available through AIFs have captured investors’ interest with allocations diversifying steadily. Rent-yielding commercial assets, particularly office spaces, continue to see inflows via AIFs, alongside infrastructure assets like highways, transmission lines, and renewables. In addition, we're also witnessing new opportunities emerging in warehousing infrastructure - such as in-city modes as a distinct asset category. What was once seen primarily as a land appreciation play is now viewed as a premium, yield-generating asset class, particularly in urban centres with growing demand from e-commerce, quick-commerce, and manufacturing.
Greenfield warehousing development AIFs have also seen keen interest from investors looking to ride the development curve, with a different risk-reward profile. Data centres are another emerging theme, drawing investors aligned with India’s digital infrastructure story, offering long-term leases and strong demand visibility. Residential development AIFs are also seeing early signs of investor interest, with the category evolving and holding good potential to scale, though these typically require a strong sponsor and clear execution story to win investor confidence.
Private wealth desks are increasingly working with fund managers to evolve real asset strategies that align with the varied risk-return profiles of their investor base. Family offices, on the other hand, are consolidating their physical real estate holdings and exploring joint development mandates in partnership with professional fund managers, leveraging institutional-grade expertise to unlock value. Most importantly, they are now actively financialising their exposure to real estate, moving from direct ownership to structured vehicles like AIFs for reasons outlined earlier: ease of management, regulatory oversight, and the ability to access premium assets without operational burden.
Over the next 2–3 years, we expect this shift to accelerate as both wealth desks and family offices build more strategic, long-term allocations to real assets, balancing income-generating assets with development-led growth opportunities.
Frequently Asked Questions
What are AIFs and how do they work in real estate investments?
Alternative Investment Funds (AIFs) are investment vehicles that pool money from multiple investors to invest in various assets, including real estate. They offer stronger governance, transparency, and professional management, making real estate investing more passive and yield-generating.
Why are HNIs and UHNIs shifting towards AIFs for real estate investments?
HNIs and UHNIs are shifting towards AIFs due to the ease of ownership, regulatory oversight, and professional management. AIFs provide access to high-quality assets with blue-chip tenants and reduce the operational burden of direct real estate investing.
Which sectors are seeing the most investment through AIFs in real estate?
Warehousing, commercial real estate, and infrastructure assets like highways and transmission lines are seeing significant investment through AIFs. New themes like data centres and in-city warehousing are also emerging as attractive asset classes.
What are the key benefits of investing in real estate through AIFs?
The key benefits include better governance, transparency, professional management, and the ability to invest in high-quality assets without the operational burden of direct ownership. AIFs also offer better visibility into where the money is going and when returns are expected.
How are family offices and private wealth desks evolving their real estate strategies?
Family offices and private wealth desks are consolidating their physical real estate holdings and exploring joint development mandates with professional fund managers. They are also moving towards structured vehicles like AIFs to financialise their exposure to real estate, balancing income-generating assets with development-led growth opportunities.
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