Capital raised by Indian real estate highest in past 7 yrs: Equirus Capital

India's real estate sector raised Rs 23,080 crore in FY25, led by REITs and large developers, with fresh IPOs and capital infusions signalling investor confidence in property assets

Capital raised by India’s real estate sector has hit a seven-year high of Rs 23,080 crore in FY25, according to Equirus Capital. The sector recorded 12 deals during the year.

 

The Mumbai-based investment banking firm stated that since FY18, total fund mobilisation in the segment has reached Rs 72,331 crore, led by Real Estate Investment Trusts (REITs) at Rs 31,241 crore, followed by large-cap realty firms (Rs 20,437 crore), mid-cap players (Rs 12,496 crore), and small-cap companies (Rs 8,156 crore).

 

Small-cap real estate stocks have been the best-performing segment since March 2021, followed by mid-caps, the report said. In contrast, large-cap realty stocks have underperformed both mid- and small-cap peers, while REITs have emerged as the lowest-performing equity instrument within the real estate sector.

   

From a 12-month perspective, however, REITs have been the best-performing real estate asset class, delivering returns of 21.3 per cent. In contrast, large-, mid-, and small-cap real estate stocks have all posted negative returns over the same period.

 

Earlier in October, Anarock Group reported that while India’s REIT ecosystem remains dominated by commercial office assets, the next wave of growth is expected to come from retail malls and other asset categories. This shift is being driven by the consolidation of high-quality retail assets, steady consumer spending, and rising urban incomes.

 

According to Anarock Research, the Indian retail REIT market could grow to between Rs 60,000 crore and Rs 80,000 crore by 2030, representing roughly 30–40 per cent of India’s overall REIT market, which is projected to reach $25 billion (around Rs 2 lakh crore) by the same year.

 

India’s four listed office REITs currently encompass nearly 133 million square feet of Grade-A office space, according to Colliers’ report “REITs Unlocked: Accelerating India’s Real Estate Maturity”. An additional 371 million square feet — about 46 per cent of the existing Grade-A stock — has the potential for future REIT listings.

 

Last week, the promoters of Embassy Developments completed a Rs 1,160 crore fund infusion by converting warrants into equity shares at Rs 111.51 apiece. The move aims to strengthen the company’s balance sheet and support future growth initiatives.

 

Meanwhile, Blackstone and Sattva Group have filed for an initial public offering (IPO) of their joint venture, Knowledge Realty Trust, to raise up to Rs 6,200 crore (approximately $712 million). The issue is expected to be the largest REIT offering in India.