By Mr. Abhay Ray 
Introduction
According to the Grant Thornton Bharat Real Estate / REITs Dealtracker, Q1 2025, India’s real estate sector witnessed a robust surge in deal activity, with 28 transactions totaling $1.2 billion reflecting a remarkable 133% year-on-year growth in volumes and more than a five-fold jump in values compared to Q1 2024. This momentum came despite a subdued IPO and QIP landscape, reflecting sustained investor confidence in the sector. While overall values were down 51% quarter-on-quarter due to the absence of large QIP deals seen in Q4 2024, strong private equity and M&A activity kept investor sentiment buoyant, supported by six large-ticket PE deals driving 77% of the total deal value.
The Surge of Real Estate Deals in India: A Glimpse into Q1 2025
In the first quarter of 2025, India’s real estate market experienced an exceptional surge in deal activity, registering 28 transactions with a combined value of $1.2 billion. This remarkable performance, according to a recent report by Grant Thornton Bharat, highlights a 133% growth in deal volumes and a five-fold increase in deal values compared to the same period in 2024.
The Rising Tide of Private Equity
Out of the 28 deals, 17 were Private Equity (PE) and Venture Capital (VC) transactions, totaling a massive $1,050 million. This figure underscores the strong investor interest in the real estate sector, even amid a relatively quiet period for Initial Public Offerings (IPO) and Qualified Institutional Placements (QIP). These PE/VC deals have become the cornerstone of real estate growth, reflecting investor confidence and continued demand in the market.
Mergers and acquisitions hold ground; deal value softens
Mergers and acquisitions (M&A) remained stable with 11 deals recorded, totaling USD 137 million. However, overall deal value declined 56% from the previous quarter due to fewer large-scale transactions.
Domestic consolidation continued to dominate M&A activity. Notably, Nitco Limited executed four acquisitions, while Japan-based Mitsubishi Estate Co. acquired a 49% stake in Birla Estate for USD 64 million. These deals indicate a healthy consolidation phase in the real estate industry, where companies are strategically acquiring assets to enhance their portfolios and expand their market presence.
The Emergence of Small and Medium REITs
A noteworthy highlight of this period is the rise of small and medium-sized Real Estate Investment Trusts (SM REITs). With four new registrations and one listing, the REIT market in India is beginning to open up access to capital markets for a broader range of developers and investors. This trend is particularly relevant for commercial and retail assets, where the sector has been seeing steady growth.
Shabala Shinde, Partner & Real Estate Leader at Grant Thornton Bharat, expressed optimism about this segment. She stated that while Q1 2025 saw muted IPO and QIP activities, the growth in SM REITs is positioning the real estate market for long-term prosperity.
REITs accelerate role in market consolidation
Real estate investment trusts (REITs) are increasingly playing a pivotal role in consolidating income-generating commercial and retail assets.
“The real estate sector kicked off 2025 on a strong note, with private equity driving nearly 90% of total deal activity this quarter,” said Shabala Shinde, partner and real estate leader at Grant Thornton Bharat.
“What stands out is the growing role of REITs in aggregating stable-yielding assets, and the emergence of small and medium REITs as a game-changer for broader access to capital markets,” she added.
Conclusion
The $1.2 billion surge in real estate deals during Q1 highlights the growing confidence and investment activity within the sector, with private equity firms and REITs playing a pivotal role. While the first quarter of 2025 marked an impressive start, there is cautious optimism as the real estate sector anticipates further opportunities and challenges. The decline in values in Q1 2025 compared to Q4 2024, attributed to a lack of IPOs and QIPs, signals that the market might stabilize in the coming months. As PE firms and REITs continue to dominate the space, the market is expected to remain vibrant, with further investments likely in the coming quarters. This trend not only signals a recovery in real estate but also positions the sector for sustained growth, benefiting developers, investors, and the broader economy.
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