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The latest Equirus Securities report shows that Real Estate Investment Trusts have captured approximately 43 % of all capital raised through primary markets since FY18, while small-cap real estate firms have generated an impressive 17 % return in the past year outperforming REITs at 15.2 %, mid-caps at 2.5 %, and large-cap realty firms which posted negative returns. Meanwhile, the warehousing segment has doubled in scale, helped by policy reforms and expanding demand from e-commerce. Overall, investor appetite has shifted decisively toward nimble, high-growth firms and income-yielding instruments.
A recent analysis by Equirus Securities shows that Real Estate Investment Trusts (REITs) have raised 43% of all primary capital in the real estate sector since FY18. Out of INR 72,331 crore raised during this period, REITs alone mobilized INR 31,241 crore. This includes fund-raising from the four listed REITs in India. The strong performance underscores the continued appeal of REITs among investors looking for steady returns and transparent structures. Advertisement
While REITs remain the largest fund-raising segment, small-cap real estate companies have outperformed all others in returns over the past year. These companies delivered a 17% return-higher than REITs at 15.2%, mid-cap companies at 2.5%, and large-cap real estate stocks, which saw a decline of 2.9%. The performance gap has widened since March 2021, with small-caps consistently outperforming the broader real estate market.
In terms of capital raised over just the past 12 months, listed real estate entities collectively mobilized over INR 26,000 crore, further reflecting growing investor confidence in the sector. The trend also signals a shift in focus toward companies that offer both capital appreciation and income generation.
The warehousing sector has doubled in size between 2019 and 2024. Stock across India's top eight cities grew from 213 million sq ft to 438 million sq ft, while the total national warehousing footprint reached nearly 533 million sq ft. Notably, non-metro regions now contribute 18% to this figure, up from 15% in 2019. The demand has been fueled by strong policy support, infrastructure initiatives, and the rapid expansion of e-commerce.
Experts believe that although small-cap real estate firms may involve higher risks, they offer greater potential for returns, especially in a growing economy. Meanwhile, REITs continue to attract both institutional and retail investors because of their regulated structure and stable yields, often accessed through SIPs and lower entry points.
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