The Union Cabinet has approved the setting up of an AIF to revive around 1,600 stalled housing projects across top cities in the country.
Despite the government’s move to set up Rs 25,000 crore alternate investment fund (AIF) for the real estate sector, most analysts remain cautious and suggest the benefits will take time to flow in for the beleaguered players. That apart, there could be still be execution challenges. In a post market-hours announcement, the Union Cabinet on Wednesday had approved the setting up of an AIF to revive around 1,600 stalled housing projects across top cities in the country.
“The delay in the on-ground deployment of the stress fund gave rise to severe apprehensions about the main issues – that of stuck and delayed projects – that had remained unaddressed so far. The timeline for setting up this fund and its actual implementation is quite critical,” said Anuj Puri, chairman, ANAROCK Property Consultants.
As per ANAROCK’s estimate, a total of 5.76 lakh units (launched in 2013 or before) across budget segments are stuck in various stages of non-completion in the top seven cities. The Mumbai Metropolitan Region (MMR) alone, they estimate, has nearly 2-lakh units where the construction / completion has been delayed since then, which is valued at Rs 2.34-trillion. A recent report by Citi had pegged the total amount stuck in stalled projects across seven major Indian cities (Bengaluru, Mumbai Metropolitan region (MMR), National Capital Region (NCR), Ahmedabad, Hyderabad, Kolkata and Pune) at Rs 80,000 crore.
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