Global institutional investors favour data centers & co-living as alternative real estate investments

financialexpress.com:

In recent years, the investment flow into the real estate’s alternative asset class has highlighted Data centers and co-living as the favored choices for global institutional investors. According to Colliers India’s latest report, alternative assets in India received cumulative investments of about USD2.0Bn during the last 4-5 years (2019-H1 2023), led by foreign investors. Foreign investments accounted for 78% of the total investments in the segment, as investors continued to seek newer markets and newer avenues segments to diversify their asset portfolio while enhancing risk adjusted returns.

Institutional investors, traditionally concentrated on core asset classes, have been diversifying into non-core assets such as Data centers, Life sciences, Co-living, among others. Foreign investors maintain their confidence in the Indian real estate market, given India’s status as one of the fastest-growing economies globally, with a projected GDP growth of 6.6% in 2023, according to the IMF. At a time when India’s economic outlook remains sturdy amidst global challenges, the business case for alternative investments will only strengthen.

“As conventional asset classes like Office, Residential, Hospitality and Retail are evolved with significant investor and operator penetration, the alternatives are now poised for exponential growth over next few years. Alternate asset industry which revolves around enhanced customer experiences, flexibility in Office, Residential, Technology usage and data storages is likely to provide significant partnership opportunities to investors and operators. While core sectors continue to dominate the institutional inflows in Indian real estate sector, share of alternatives has risen significantly from