Private equity, M&A drive 3x jump in real estate capital in FY25

In FY25, India's real estate sector witnessed a threefold increase in capital raising, totalling Rs. 32,852.6 crore (US$ 3.85 billion) from 17 deals. This significant growth was primarily driven by heightened private equity and mergers and acquisitions (M&A) activities, both domestically and internationally, and an increase in the average transaction value, according to a report by Equirus Capital, a financial services firm. Despite the underperformance of listed real estate stocks across large-, mid-, and small-cap segments, which all lagged behind the Sensex's 7.4% gain over the same period, the real estate investment trusts (REITs) emerged as a bright spot, delivering a 12.2% return and highlighting their growing appeal. Since FY20, cumulative fund mobilisations through REITs and infrastructure investment trusts (InvITs) have surpassed Rs. 1,60,000 crore (US$ 18.74 billion), bolstered by their expanding asset base, robust institutional backing, and increasing retail investor participation. Entering the first month of FY26, the sector continued to attract substantial investment, with four deals totalling Rs. 3,176 crore (US$ 372 million). These deals included Eldeco Group Rs. 1,503 crore (US$ 176 million), DLF Kolkata TTSEZ Rs. 674 crore (US$ 79 million), SAMHI Hotels Rs. 751 crore (US$ 88 million), and Zillion Hotels & Resorts Rs. 247 crore (US$ 29 million). This sustained investor confidence and appetite for real estate as an asset class underscore the sector's resilience, institutionalisation, and long-term growth potential. As a result, real estate remains a focal point for private equity funds, strategic investors, and capital market stakeholders, positioning it for continued expansion and development in the coming years.