Real Estate Sector Enters Consolidation Phase, but Select Developers See Strong Pre-Sales: JM Financial
Sumit Kumar, Real Estate Research Analyst at JM Financial, discusses the consolidation phase in the real estate sector and highlights opportunities for select developers, including Keystone Realtors, Sobha, and Godrej Properties.
Real EstateConsolidationPresalesData CentersLuxury SegmentReal EstateSep 25, 2025
Kumar explained that the first half of the year is typically weak due to non-auspicious days and heavy rains, which have slowed sales. Despite these challenges, he remains optimistic about the second half of the year. “The absorption at launches has still been healthy, with about 50% of the inventory that is put up for sale being absorbed,” he said. Kumar expects stronger momentum in the coming quarters as launches are expected to pick up.
On specific companies, Kumar highlighted Keystone Realtors, which has been adding large redevelopment projects in Mumbai. Sobha, another key player, has a strong pipeline for the second half of the year with expected pre-sales growth of 30–35%. Godrej Properties is also anticipated to meet its 2025-26 (FY26) pre-sales target of ₹32,500 crore, despite recent stock weakness.
Kumar also pointed out that developers are exploring opportunities in real estate for data centers, describing this as “more like an annuity business, where the yields would be somewhere between 9.5% and 10% to start.” On a leveraged basis, returns could range from 18% to 25%, making it an attractive investment option for developers looking to diversify their portfolios.
Overall, while the real estate sector is entering a consolidation phase, select developers are well-positioned to capitalize on strong pre-sales and new opportunities in emerging segments like data centers.
Frequently Asked Questions
What is the current trend in the Indian real estate sector?
The Indian real estate sector is currently in a consolidation phase after three years of strong growth, with recent months seeing a slowdown in volume and some correction in prices.
Why is the first half of the year weak for real estate sales?
The first half of the year is typically weak for real estate sales due to non-auspicious days and heavy rains, which slow down the sales process.
Which companies are highlighted for strong pre-sales growth?
Keystone Realtors, Sobha, and Godrej Properties are highlighted for their strong pre-sales growth and robust pipelines for the second half of the year.
What are the expected yields for real estate data centers?
Real estate data centers are expected to yield between 9.5% and 10% initially, with leveraged returns ranging from 18% to 25%.
What segment is driving the real estate growth?
The luxury segment has been the primary driver of real estate growth, expanding at over 25% between FY22 and FY25.
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