REITs Lead Real Estate Fundraising, Outpacing Other Market Segments: Report
Real Estate Investment Trusts (REITs) have emerged as the dominant force in real estate fundraising, accounting for 43% of total capital raised since FY18. Smallcap real estate companies have also shown strong performance, delivering a 17% return over the past 12 months.
ReitsReal Estate FundraisingSmallcap Real Estate CompaniesWarehousing Sector GrowthCapital Markets Real EstateReal Estate NewsJul 31, 2025
Equirus noted that the trend remains consistent even over a longer horizon, with smallcap real estate players leading gains since March 2021, followed by midcap and largecap players. REITs, despite their popularity, delivered the lowest returns in that timeframe.
REITs dominate real estate fundraising since FY18
Real Estate Investment Trusts (REITs) have accounted for 43% of total capital raised via primary market sources since FY18, highlighting their growing role in institutionalising the Indian real estate sector. Out of the total ₹72,331 crore raised in the sector during this period, ₹31,241 crore was mobilized through REITs. The past 12 months alone saw over ₹26,000 crore raised by real estate companies via capital markets.
This trend underlines investor appetite for income-generating commercial assets amid rising demand for high-quality office and retail spaces. REITs continue to attract capital due to their relatively steady yields and transparency.
Warehousing stock surges 2X amid policy push and e-commerce boom
India’s warehousing sector has witnessed a significant transformation, with total stock more than doubling from ~213 million sq. ft. in 2019 to 438 million sq. ft. in 2024 across the top 8 Tier 1 cities. The total warehousing footprint, including Tier 2 and 3 cities, now stands at approximately 533 million sq. ft., according to the report.
Government policy interventions such as GST, Gati Shakti, Dedicated Freight Corridors (DFCs), and the Urban Infrastructure Development Fund (UIDF) have accelerated infrastructure development, enhancing connectivity and enabling the warehousing sector to move beyond metros.
Tier 2 and 3 cities now contribute approximately 95 million sq. ft., accounting for 18% of total stock, marking a fourfold increase since 2017. Notably, Grade A warehouses constituted about 80% of new absorption in top Tier 1 cities in 2024, while their share in emerging cities stands at around 30%, indicating a clear occupier preference for quality infrastructure.
The rise in e-commerce activity, with nearly 60% of demand now originating from non-metro cities, continues to drive the sector’s structural expansion.
Frequently Asked Questions
What is the performance of smallcap real estate companies over the past 12 months?
Smallcap real estate companies have delivered a 17% return over the past 12 months, outpacing other market segments.
How much capital have REITs raised since FY18?
REITs have raised ₹31,241 crore out of the total ₹72,331 crore raised in the real estate sector since FY18.
What factors have contributed to the growth in the warehousing sector?
Government policies such as GST, Gati Shakti, Dedicated Freight Corridors (DFCs), and the Urban Infrastructure Development Fund (UIDF) have accelerated infrastructure development and enhanced connectivity.
What is the current total warehousing footprint in India?
The total warehousing footprint in India, including Tier 2 and 3 cities, stands at approximately 533 million sq. ft.
What is the impact of e-commerce on the warehousing sector?
The rise in e-commerce activity, with nearly 60% of demand now originating from non-metro cities, continues to drive the sector’s structural expansion.
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