Thailand and India: A Comparative Analysis of Real Estate Private Credit as a Growth Engine

The real estate private credit markets in Thailand and India are diverging in their trajectories, with India emerging as a dynamic growth engine and Thailand grappling with systemic challenges. As global investors seek alternative financing solutions to unlock value in stalled projects and attract institutional capital, the contrasting dynamics of these two markets offer critical insights for capital allocators.

India: A Private Credit Powerhouse

India's real estate private credit market has surged to the second-largest in Asia-Pacific, with assets under management (AUM) ballooning from $0.7 billion in 2010 to $17.8 billion in 2023. This meteoric rise is fueled by regulatory reforms, such as the Insolvency and Bankruptcy Code, which streamlined project resolution, and a shift in developer financing toward non-bank lenders. According to industry reports, institutional investors, including global private equity firms and family offices, are flocking to India's market, drawn by yields of 10–14% and a maturing ecosystem of structured debt, last-mile project funding, and special situation financing.

The impact of private credit on stalled projects is particularly striking. Knight Frank reports that India's private credit sector has become a lifeline for developers facing liquidity crunches, with tailored solutions enabling the completion of stalled residential and commercial projects. For instance, structured debt instruments have revitalized half-built malls and office towers in cities like Mumbai and Bangalore, while special situation financing has rescued distressed assets from insolvency. By 2028, India is projected to contribute 20–25% of the region's private credit growth, cementing its role as a global capital magnet.

Thailand: A Market in Transition

Thailand's real estate private credit market, however, tells a different story. While the country's construction industry is projected to grow by 5.3% annually through 2029, driven by infrastructure demand and cement consumption, the private credit sector remains underdeveloped. Household debt in Thailand has soared to 90% of GDP, with housing loans accounting for 37.9% of this burden, stifling demand and exacerbating liquidity issues for developers. Property transfers have declined by 5–10% since 2023, and corporate bond defaults have spiked, with over 95 billion baht in maturing debt in 2025.

Despite government interventions-such as extending land leases to 99 years, reducing transfer fees, and cutting housing loan rates to 6.2–6.8%-Thailand's private credit market lacks the institutional depth seen in India. A 2025 case study of a collapsed 33-story Bangkok skyscraper, linked to poor engineering and compliance failures, underscores the sector's fragility. While private credit could theoretically bridge gaps in project financing, institutional capital inflows remain muted, with no comparable AUM growth to India's $17.8 billion milestone.

The Institutional Investor's Dilemma

The disparity in institutional interest between the two markets is stark. India's private credit boom has attracted $11.2 billion in APAC-wide investments in 2024, with global firms deploying capital into collateral-backed lending and structured debt. In contrast, Thailand's market, though rich in infrastructure potential, struggles to attract similar inflows due to regulatory uncertainty and a lack of transparent data on asset quality.

For investors, the choice is clear: India offers a proven model of private credit-driven revival, while Thailand remains a work in progress. Yet both markets highlight the transformative power of alternative financing in real estate. As global interest rates stabilize, the ability to deploy private credit into stalled projects-whether in India's bustling cities or Thailand's emerging hubs-will define the next phase of Asia-Pacific real estate growth.