Significant Capital Influx
The Economic Survey 2024 reports that Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) collectively raised Rs 39,024 crore in FY24, a significant increase compared to the previous fiscal year. This capital influx is more than five times the amount raised in FY23.
Infrastructure Development
The survey highlights that the infrastructure sector mobilized just over Rs 1,00,000 crore through debt and equity issuances in the capital market during FY24. Specifically, REITs have raised Rs 18,840 crore from 2019 to 2024, while InvITs raised a total of Rs 1,11,294 crore over the same period.
Market Performance
The BSE Realty index gained 99% and the BSE India Infrastructure index surged 118% in the past year. Notably, Nexus Select Trust rallied nearly 31%, while Embassy Office Parks REIT and Mindspace Business Parks REIT saw gains of 19% and 12%, respectively. In contrast, IRB InvIT Fund and POWERGRID Infrastructure Investment Trust experienced declines of 6% and 17%, respectively.
Real Estate Sector Dynamics
The real estate sector saw robust activity with a record 5.2 lakh units launched in 2023, up from 4.3 lakh units in 2022. Q1 of 2024 continued this momentum with 1.2 lakh units sold, a 41% year-on-year growth. The survey indicates that new supply has consistently exceeded one lakh units since Q2 of 2022, reflecting strong demand-supply dynamics.
Credit Disbursal Improvement
Credit disbursal to the ‘commercial real estate’ and ‘trade’ sub-sectors improved in the second half of FY24, signaling a positive outlook for these areas within the services sector.