Real Estate Fund has recorded a steep rise due to the high returns it yields as is evident from the super-inflated real estate bubble . Attracted to the high returns, Real Estate Venture Funds are storming towards. The realty sector is escalating to newer heights and is a potential funds investment opportunity.A growth has been registered in the residential, commercial and industrial projects and specially office complexes for large conglomerates and avenues for real estate funds. The profits earned have encouraged financial assistance from all major domestic fund providers and also various foreign investors.The Real Estate Prices have ascended and so has the investments in Real Estate Funds. real estate investments have helped in the expansion of Real Estate Market tremendously.Government of has relaxed the various laws governing control and regulation of foreign investments and real estate funds that has encouraged flow of funds into the real estate sector in April 2004, Security and Exchange Board of allowed Venture Fund Investment in local real estate market. The contribution of Foreign Direct Investments and other foreign liquidity funds have seen a steady rise of 40 - 45% per year.

The entry of real estate funds in the already over-heated realty market is bound to cause quite a stir. A slew of real estate funds, promoted by Indian and foreign financial institutions, are scouring the real estate market for properties with assured returns to invest in. Property Fund, Venture Capital Fund, Kotak Mahindra Realty Fund, Kshitij Venture Capital Fund and India Advantage Fund are some of the prominent real estate funds in India.With the entry of real estate mutual funds, builders will be hard-pressed to develop quality projects and leeway for sub-standard construction practices will be considerably reduced. Real estate funds are expected to acquire real estate assets with quality blue chip tenants and focus on growing markets witnessing substantial urban development. Venture Capital Fund, promoted by Dewan Housing, has roped in banks, financial institutions, high net worth individuals and corporates as potential investors. The fund has focused on developing properties rather than invest in real estate. It has put more emphasis on secondary locations to add value. Real Estate Fund, the first scheme Property Fund, will invest in three broad categories of companies-projects: those in the planning stage, those in the development stage and those, which are complete. However is not keen on investing in shopping malls because it expects some shake-out in that space in the coming months.

Real Estate Fund is a significant component of the Indian realty market flooded with Indian and foreign financial institutions. The growing increase in the industrial, commercial and residential projects have boosted the real estate market in India. This has thrown open unlimited scope for the incoming of the Real Estate Funds. The profits have encouraged financial assistance from not only domestic funds but also lured many foreign investors to participate in the Real Estate Fund.The cooperating assistance from the government has further encouraged liquidity flow into the India real estate market sector. The foreign contributions in the Real Estate Fund have been witnessing a steady rise of 40%-45% per year. The domestic financial institutions have also build up their investments like their foreign counterparts. This combined participations from both along with contributions of the corporate houses has accelerated the growth of Real Estate Fund.

A deviation from the India real estate mutual fund is India Real Estate Investment Trust. The basic differences lie in the fact that unlike the mutual funds that are invested in company stocks, real estate investment trusts are traded in real estate stocks. Real estate investment trust also promise heavier liquidity as compared to real estate mutual fund.