Realty investment in alternate asset classes up 18% to $ 867 mn

Hyderabad: Institutional investments in Indian real estate's alternate asset classes touched a new high in 2022 at $0.9 billion ($867 million), accounting for 18 per cent of the inflows in 2022, according to investment management company Colliers India. The firm said that this growth of alternate sectors is led by investors looking to diversify their portfolio, given steady returns in some traditional asset classes.

Investments into alternate assets, which saw a hike of 92 per cent y-o-y in investments during 2022, has jumped more than four-fold from $196 million in 2019. This surge in 2022 was backed by investors who pumped in money into some of India's emerging sectors such as data centers, life sciences among others. Colliers further informed that data centers accounted for about 52 per cent of the investments in alternate assets, followed by others such as life sciences, holiday homes, and hospitals. However, the traction was largely in data centers, with the other segments witnessing scattered deals, it added.

"The investments in 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," Managing Director, Capital Markets and Investment Services of Colliers India, Piyush Gupta said.

Informing about the trend in 2023, Gupta noted that this year may see some postponement in deployment, however "there is ample dry powder in the market across core assets and alternate assets," he said.

Followed by alternate assets, were inflows into the office sector which witnessed $1,978 million investments in 2022. Continuing its dominant streak in 2022 as well, accounting for 41 per cent share in total inflows, inflows into office sector rose 50 per cent y-o-y from $1,318 million in 2021. Colliers said that this huge inflow into this sector was led by some large deals, as investors 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.