Mumbai: Institutional investments in Indian real estate’s alternate asset classes touched a new high in 2022 at $0.9 billion, accounting for 18% of the inflows during the year. Investments into alternate assets, which saw a hike of 92% Year-on-Year (YoY) in investments during 2022, has jumped more than four fold since 2019, says a report by Colliers, a diversified professional services and real estate investment management company.
The inflows have seen a sharp jump in 2022 as investors pumped in money into some of India’s emerging sectors like data centers, life sciences, etc. The growth of alternate sectors is led by investors looking to diversify their portfolio, given steady returns in some traditional asset classes.
Investments in various sectors
Data centers accounted for about 52% of the investments in alternate assets, followed by others such as life sciences, holiday homes, hospitals, etc. However, the traction in investments was seen largely in data centers, with the other segments witnessing deals.
While inflows in alternate assets peaked, inflows into the office sector continued its dominant streak in 2022 as well, accounting for 41% share in total inflows. Inflows into the sector rose 50% YoY led by some large deals. As investors eye building a portfolio that they can bundle up as REITs, they continue to see resilience in greenfield and ready-to-move assets. Majority of the deals in the office sector were driven by global investors, who are looking at income-yielding assets.
“The investments in the Indian real estate have been consistent for the past few years and hence have the potential to grow due to the structural change in demand for capital. Apart from the income-yielding assets, there is a strong performance in the residential, retail, and hospitality sectors, where 2022 witnessed some large transactions and is likely to see more traction in the next couple of years. Performance credit, special situations, portfolio acquisitions, asset reconstruction, and related structures have been growing and are likely to attract more investments. During 2023, while we may see some postponement in deployment, there is ample dry powder in the market across core assets and alternate assets,” said Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India.
Investments in alternate assets
Year Investment Inflows in alternate asset classes (in USD mn)
2018 20
2019 196
2020 359
2021 453
2022 867
Source: Colliers
Investments in alternate assets
Year Investment Inflows in alternate asset classes (in USD mn)
2018 20
2019 196
2020 359
2021 453
2022 867
Source: Colliers
