India’s small-cap real estate companies have delivered 17 per cent returns in the last 12 months. On the other hand, real estate investment trusts (REITs) contributed nearly 43 per cent of the funds raised through primary sources since FY18, a report said on Tuesday. “The total warehousing stock across top eight Tier 1 cities has more than doubled since 2019 from around 213 million square feet to 438 million square feet in 2024,” Equirus Securities, a financial service firm, said in its report.
The report noted that small-cap real estate companies have been the best-performing sector in the last 12 months, generating 17 per cent returns, followed by REITs at 15.2 per cent, and midcaps at 2.5 per cent.
In contrast to the small-cap real estate companies, the equity benchmark index Sensex delivered a mere 1.4 per cent return while the large-cap real estate listed companies posted a negative -2.9 per cent return, according to the report.
The report said that since March 2021, small-cap listed real estate companies have remained the best performing segment, followed by mid caps, large caps, benchmark Sensex, and finally REITs, which have delivered the lowest returns.
A total of Rs 723,310 million was raised in the real estate sector since FY18, of which REITs accounted for over 43 per cent, or about Rs 312,413 million.
According to the report, India’s warehousing sector is expanding its horizons with ’emerging opportunities’ beyond metro cities.
The increase in warehousing stock is driven by infrastructure upgradation, policy reforms and rising consumption in tier 2 and 3 cities.
The report said the total stock reached around 533 million sq ft in the year 2024 (CY 2024), up from around 300 million sq ft in CY 2019.
Government schemes 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 coming from smaller cities (around 60 per cent), and warehousing demand is rapidly moving beyond tier 1 hubs.
Tier 2-3 cities contribute about 95 million sq ft (18 per cent) to the total stock – a four-fold increase from 2017.
With the inputs of IANS
