NEW DELHI: Over the past 12 months, smallcap real estate companies have topped the performance charts in the real estate sector, yielding a remarkable 17% return, as reported by Equirus Securities. This performance surpasses other segments, with REITs (Real Estate Investment Trusts) at 15.2%, midcap real estate stocks at 2.5%, and the benchmark Sensex at just 1.4%. Meanwhile, largecap real estate firms have underperformed with a decline of -2.9%.
Equirus observes that this trend has remained steady even over an extended timeframe, with smallcap real estate firms consistently leading since March 2021, followed by midcap and largecap players. Although REITs have gained popularity, they recorded the lowest returns during this period.
REITs Lead Real Estate Fundraising Since FY18
Since FY18, Real Estate Investment Trusts (REITs) have accounted for 43% of total capital raised from primary market sources, underlining their growing importance in institutionalizing the Indian real estate landscape. Of the ₹72,331 crore raised in the sector during this timeframe, ₹31,241 crore came from REITs. In just the past 12 months, real estate companies have raised over ₹26,000 crore through capital markets.
This development reflects a strong investor interest in income-generating commercial assets, driven by a soaring demand for high-quality office and retail spaces. REITs continue to attract funding due to their relatively stable yields and transparency.
Warehousing Stock Doubles Amid Policy Changes and E-Commerce Surge
India’s warehousing sector has undergone significant growth, with total stock more than doubling from approximately 213 million sq. ft. in 2019 to 438 million sq. ft. expected by 2024 across the top 8 Tier 1 cities. Including Tier 2 and 3 cities, the total warehousing footprint now stands at around 533 million sq. ft., according to the report.
Policy interventions like GST, Gati Shakti, Dedicated Freight Corridors (DFCs), and the Urban Infrastructure Development Fund (UIDF) have accelerated infrastructure enhancements, improving connectivity and allowing the warehousing sector to extend beyond metropolitan areas. Tier 2 and 3 cities now account for approximately 95 million sq. ft., representing 18% of total stock—a fourfold increase since 2017. Notably, Grade A warehouses represent about 80% of new absorption in top Tier 1 cities in 2024, while their share in emerging cities is around 30%, indicating a clear preference for quality infrastructure among occupiers.
The rise in e-commerce, with nearly 60% of demand originating from non-metro cities, continues to drive the sector’s structural expansion.
