Small real estate companies in India provide 17% return; REITs contribute nearly 43% of fundraising activities since FY18
Small real estate companies in India have received 17% returns over the past 12 months. On the other hand, since fiscal 2018, Real Estate Investment Trusts (REITS) contributed nearly 43% of the funds raised through major sources. “Since 2019, the total warehousing stocks in the top 8 cities have more than doubled from approximately 213 million square feet in 2024 to 438 million square feet in 2024,” Equirus Securities, a financial services company, said in its report.
The report notes that small real estate companies have been the best performing sector over the past 12 months, generating a 17% return, followed by REIT at 15.2% and 2.5% in the Chinese stock market.
The report said that, contrary to small real estate companies, the stock benchmark index Sensex offers only 1.4% returns, while the return rate for large real estate listed companies is negative -2.9%.
The report said that the listed small real estate companies remained the best performing segment since March 2021, followed by mid-caps, large hats, benchmark Sensex and finally REIT, with the lowest returns.
Since FY18, a total of Rs 723.3 crore has been raised in the real estate sector, with REIT accounting for more than 43%, about Rs 312.413 crore.
According to the report, India’s warehousing sector is expanding its horizons with “emerging opportunities” that surpass the “emerging opportunities” of metropolitan cities.
The increase in warehousing stocks is caused by infrastructure upgrades, policy reforms, and increased consumption in 2 and 3 cities.
The report said that total stock in 2024 (CY 2024) reached approximately 533 million square feet, up from 300 million square feet of CY in 2019.
Government programs such as GST and Gati Shakti are promoting warehousing expansion and connectivity.
According to the report, this growth is driven primarily by e-commerce demand in smaller cities (about 60%), and warehousing demand quickly surpassed the 1-tier hub.
Level 2-3 cities contribute about 95 million square feet (18%) of total stocks, a fourfold increase from 2017.
With the investment of IANS
