Real estate companies raise 3x more funds in FY25, REITs give better returns than Sensex: Report

Mumbai, July 3 (IANS) The Indian real estate sector has witnessed a remarkable surge in fundraising activity, with the amount of capital raised by companies tripling from Rs 1,09,554 million in FY24 to Rs 3,28,526 million in FY25, a new report said on Thursday.

This sharp increase reflects growing investor confidence and renewed momentum in the sector. Most of the funds were raised in the largecap real estate segment, which attracted Rs 3,93,898 million, according to data compiled by Equirus Capital.

Real Estate Investment Trusts (REITs) followed with Rs 3,12,012 million, while smallcap and midcap segments raised Rs 66,938 million and Rs 52,626 million, respectively.

The number of deals also jumped from just five in FY24 to 17 in FY25 -- reflecting strong investor interest in the sector.

The report also highlighted strong performance by REITs in the past year. For the 12-month period ending June 23, REITs delivered a return of 17.9 per cent, which is nearly three times higher than the Sensex’s return of 6.1 per cent.

In comparison, listed companies in the largecap, midcap, and smallcap real estate segments recorded negative returns over the same period.

However, over a longer time frame, smallcap real estate companies have emerged as the best performers.

Since March 2021, the smallcap segment has outperformed not just the large and midcap real estate stocks, but also REITs and the broader Sensex index.

The report suggests that despite short-term volatility, long-term investors in the smallcap real estate space have been rewarded well.

Meanwhile, REITs continue to attract interest for their relatively stable and higher returns, especially as the broader equity market remains uncertain.

Equirus Capital said the surge in fundraising and deal activity is a positive sign for the sector and could indicate a broader recovery in real estate investment cycles.

--IANS

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