India’s real estate sector is changing fast. Surprisingly, stalled and stressed projects are now drawing investor attention. Once seen as liabilities, these assets are turning into promising investment opportunities.
Stressed Projects: A New Asset Class
Over 5 lakh housing units remain stuck in India’s top cities. The reasons include the NBFC crisis, the pandemic, and regulatory shifts. But now, investors see these same assets as high-potential deals.
According to Labdhi Lifestyle CEO Vikas Jain, investors are shifting focus. He says stressed projects are no longer seen as risk-heavy. Instead, they are viewed as ways to fix supply in markets that are under-housed and overpriced.
Turnaround in Action
Labdhi Lifestyle recently took over a stalled project by Rajesh LifeSpaces in BKC. The project, renamed BKC EDGE, has a revenue potential of ₹900 crore. It is Labdhi’s second major turnaround in Mumbai. The company focuses on joint development and last-mile funding to revive such assets.
Jain adds that the right capital strategy can turn distressed projects into top-performing ones.
Why Investors Are Interested
Several factors are pushing investor interest:
- Heavy Discounts: Many projects are selling at 30 to 60 percent below market rates.
- Demand for Ready Homes: Buyers want homes that are near completion. This means faster returns for investors.
- Policy Support: The SWAMIH fund has pledged ₹15,000 crore to rescue stalled projects.
- Specialised Funds: Private equity firms and ARCs are creating distress-focused verticals.
Prashant Sharma of NAREDCO Maharashtra believes these projects can bridge India’s housing gap. He urges developers to work with financial institutions and seek fast approvals.
Mumbai at the Centre
The MMR region has over 70,000 stalled units across 493 projects. Many of these were delayed due to new environmental rules in eco-sensitive zones. This makes Mumbai a key ground for investment-led redevelopment.
Nihar Thakkar from The Mandate House says success depends on three things:
- Legal clarity
- Market-fit redesign
- Credible execution team
Without trust in delivery, no funding model will work, he warns.
Not Without Challenges
Risks remain:
- Legal cases between lenders, landowners, and buyers
- Delays in getting new approvals
- Buyer doubts about older, stalled projects
To reduce risks, many investors are setting up SPVs with known developers. This helps ensure clean titles and smoother execution.
The Big Picture
India’s real estate sector is looking for stability. Investors want safe, high-return options. Stressed projects, once ignored, are now becoming part of that story.
With the right mix of capital, policy, and delivery, these projects could become the sector’s next big win.
“In real estate, timing is everything. And for stressed assets, the time is now,” concludes Jain.
