Having 18+ years of experience in investment and venture capital investments, Murali has guided 40+ early-stage startups, including Lenskart and Zivame, to success. He has achieved an MBA degree from ICFAI and a Mathematics degree from Kerala University. He has recently completed his PhD in Finance and Financial Management services to be in the forefront of the industry.

Real estate stands out as a rapidly emerging, highly profitable sector recognized worldwide. India currently holds the position of the second most populous nation following China and is projected to surpass it by 2030. India has exhibited a historic economic transition and pushed its GDP to a great extent. The Indian Real estate is vast and unique and it makes distinct in the global scenario. Besides, the primary players like developers, buyers, sellers, real estate agents, landlords, and tenants, the sector also supports more than 200 ancillary industries like steel, cement, timber, brick, and more.

With the emergence of technology, real estate and property management became smarter and easier, prompt, and hassle-free. Proptech or property technology sector includes several cutting-edge technologies like AI, Machine Learning, AR/VR, and more and this combined stream of technology has uplifted how property is checked, monitored, bought, and sold.

Revolutionary Growth of Indian Real Estate Market

The Indian real estate sector is undergoing a paradigm shift due to the integration of technological upliftment and digitization. The destructive impact of the pandemic has fostered the digital adoption across all sector of the industry, including real estate. Recently, numerous online portals and property listing platforms have emerged, enhancing transparency for buyers and sellers alike.

In contrast to past practices where agents or developers might engage in dishonest dealings, today's digital environment makes such actions nearly impossible. This shift has invigorated the real estate industry, even document verification can now be conducted online.

Proptech is reshaping this landscape by introducing virtual reality tours and IoT-based smart building management systems. These innovations not only streamline operations but also cut costs substantially, thereby increasing profitability and attractiveness within the sector.

According to the 2023-24 budget insights, Proptech extends beyond by improving operational efficiency, as it serves like a crucial driver for economic growth. These platforms successfully bridge gaps between agents and homebuyers while directing them towards verified expert service providers who cater both their budgetary needs and preferred locations effectively.

The companies which are offering services related to proptech effectively using technologies for more precise and error-free valuation of property, and utilizing automated proptech platforms to search and list property, streamline rental processes, digitise documentation and contracts, online property auctions, and smart home solutions, among others.

Contribution of Real Estate in Indian Economy

If we look at the scenario of FDI inflow in our country, we can observe that, it has surpassed all its previous records in 2024 and touched nearly 24 billion worth of investment. Throughout India, the real estate market has witnessed a rapid progress due to tremendous demand from the investor community.

On the other hand, there is a horrific hike in demand for flex spaces or commercial spaces in the major metro cities of India. The emergence of private developers and talented architects has led to the development of new real estate segments, such as luxury housing and commercial real estate.

According to one of the leading players of the PropTech sector, Spyre Proptech which blend technology with real estate as their foundation and invest in these sectors, are nurtured through the CREDAI network due to its extensive builder connections.

Emerging Location for Real Estate Investment

The emergence of the new locations is for the combination of government policies, strategic geographic positioning, sector-specific growth, and infrastructure advancements. The investors should focus on these areas since they present significant potential for high returns in the near future, propelled by changing business environments and demographic trends.

Throughout the country, the investment has become doubled. Irrespective of the categories like residential or commercial, real estate developers have seen top-notch progress. As per report of ICRA, Indian firms were expected to raise more than Rs. 3.5 trillion (US$ 48 billion) through infrastructure and real estate investment trusts in 2022, as compared with raised funds worth US$ 29 billion to date.

After the emergence of proptech, a lot of companies have touched billions of profit end that have entered the club of unicorn and soonicorns.

Cities such as Bhubaneswar and Indore are experiencing growth due to government-supported industrial initiatives. In contrast, tech-centric cities like Bengaluru, Hyderabad, and Pune are drawing investments in the IT, biotech, and automotive industries. Coastal locations like Kochi and Surat provide significant benefits in logistics and export activities. Meanwhile, Jaipur and Lucknow are becoming increasingly prominent for tourism, hospitality, and manufacturing sectors. These areas promise high returns thanks to burgeoning industries, a skilled labour pool, and enhanced business conditions.

Recent Trends in Real Estate IPOs

After the safe handling of Pandemic, the real estate industry has witnessed a transformative growth. During 2024, real estate IPOs generated a staggering Rs. 13,500 crore, which is nearly double the amount raised in 2023. This revolutionary growth was attributed to some factors like tremendous housing demand, increasing office leasing activities, and introduction of flexible co-working spaces.

Sustainability is playing a key role in real estate sector. Numerous real estate firms are targeting their IPOs towards residential projects, especially in affordable and mid-income housing sectors due to the increasing demand within urban regions.

Real estate IPOs are garnering significant attention from institutional investors, particularly as prominent and well-established developers making their market debut. Firms with substantial land banks and diversified portfolios are perceived as more appealing investment opportunities.

IPOs related to environmentally friendly, energy-efficient projects that mingle with global sustainability trends are increasingly attractive to socially responsible investors.

Real estate IPOs have brought broader market trends, such as evolving investment preferences, technological advancements, and an increased emphasis on sustainability and responsible investing. Nonetheless, similar to any IPO sector, these offerings carry different levels of risk.

Therefore, investors should thoroughly evaluate the fundamental real estate market trends along with interest rates and economic conditions before committing their investments.

Proptech is a specialized sector that has transformed how we live, work, and invest in spaces that support growth and shape the world toward a better tomorrow

Funding Scenario of 2025 in Real Estate

The landscape of funding in real estate for 2025 will be designed with a combination of traditional investment channels like REIT, institutional investment, and along with that, there would be a growing interest in tech-driven platforms, sustainability, and social impact investing.

Nonetheless, the technological advancements like PropTech and blockchain-based funding models will successfully create fresh opportunities for investors, while crowdfunding platforms will increase real estate accessibility for retail investors.

With the lower percentage of interest rate and government incentives which are providing affordable housing schemes, the industry is heading towards achieving a strong investment portfolio. This trend is particularly evident in emerging markets and projects focused on sustainability and social impact.

The diverse opportunities in funding options ranging from green bonds to crowdfunding are combined with the potential stabilization of economic factors such as interest rates. This level of flexibility is expected to create a favourable environment for real estate investments in 2025.

Emerging Expectation in Funding of 2025

During the upcoming year of 2025, the real estate investors would primarily focus on energy efficient buildings, and eco-friendly developments, and it will align with ESG compliant investment. Investors are likely to explore opportunities in mixed-use developments, residential properties within burgeoning urban areas, and affordable housing.

Additionally, they will be interested in commercial spaces tailored for hybrid work arrangements. Furthermore, emerging markets with expanding infrastructure and increasing urbanization are expected to attract substantial investment, offering prospects for significant growth over the next few years.