Foreign investments accounted for 78 percent of the total cumulative investments -- about $2 billion -- received between 2019 and the first half of 2023 in the alternative assets segment in India, according to a report by global investment management company Colliers on September 5.
"Driven by the emergence of shared economy, increased digitalisation, and supportive government policy initiatives, institutional investors, which were primarily focused on core asset classes, have been building up their non-core assets around data centres, life sciences, co-living, among others," the report added.
During 2022, investment inflows in alternatives touched $0.9 billion, almost quadrupling since 2019. Foreign investments in the sector have been the driving force and have witnessed a 6X rise in 2022, compared to 2019.
‘Foreign investors continue to bet on real-estate market’
"Foreign investors continue to bet on the Indian real-estate market, as India continues to be the fastest-growing economies across APAC, Europe and Americas, with the GDP pegged at 6.6 percent in 2023 by IMF," the report said.
"The alternative asset industry, which revolves around enhanced customer experiences, flexibility in office, residential, technology usage and data storage, is likely to provide significant partnership opportunities to investors and operators. While the core sectors continue to dominate the institutional inflows into the Indian real-estate sector, the share of alternatives has risen significantly from 3 percent in 2019 to 18 percent during 2022," Piyush Gupta, Managing Director, Capital Markets and Investment Services, added.
Data centres dominate inflows
Since 2019, data centres have received $1 billion of institutional inflows, with inflows rising multi-fold in the last 5 years.
During the period under review (2019- H1 2023), data centres accounted for about 51 percent share in the total investments in alternatives.
"Data centres in India have given promising returns at about 16-18 percent, much higher than 8-9 percent in core office assets, which have further accelerated investors’ interest in the space," the report said.
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