India’s real estate sector raised Rs 23,080 crore in capital through 12 deals in FY25, reaching a seven-year high, a report said on Thursday. 

Total fundraising in the real estate sector since FY18 reached Rs 72,331 crore, with Real Estate Investment Trusts (REITs) leading the sector, raising Rs 31,241 crore, according to the report from the investment banking firm Equirus Capital.

REITs were followed by large-cap real estate firms at Rs 20,437 crore, mid-cap real estate firms at Rs 12,496 crore, and small-cap companies at Rs 8,156 crore.

REITs achieved the highest returns in the past 12 months at 21.3 per cent, surpassing all other real estate asset classes. Large-, mid-, and small-cap real estate stocks posted negative returns during the same period.

However, small-cap real estate stocks have outperformed other players in terms of returns since March 2021, with mid-cap stocks following. Large-cap stocks have underperformed these segments, with REITs being the lowest-performing equity instrument, the release noted.

Earlier this month an Anarock report said that India’s REIT ecosystem, dominated by commercial office assets, is poised for a big shift, as the next wave of growth can come from retail malls, shopping centres, and mixed-use developments.

By 2030, India’s retail REIT market may reach Rs 60,000–80,000 crore, representing approximately 30–40 per cent of the anticipated Rs 2 lakh crore REIT universe, the report said.

This shift in trend will mirror the path of mature economies, where retail REITs form 15 per cent to 25 per cent of total REIT market capitalisation

Institutional players are expanding aggressively in high-income, consumption-driven clusters of Tier-II cities such as Indore, Coimbatore, Surat, Bhubaneswar, and Chandigarh.

SEBI recently reclassified REITs as ‘equity’ for mutual fund investments to enhance diversification opportunities and support the growth of real estate as an investible asset class.