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India Alternative Real Estate Booms: $180B Data Centers, 100M Sq Ft Flex Space

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AuthorRiya Kapoor|Published at:
India Alternative Real Estate Booms: $180B Data Centers, 100M Sq Ft Flex Space
Overview

CBRE's latest outlook reveals India's alternative real estate sector is entering a high-growth phase. Data centers are set to attract over $180 billion in investments by 2026, with capacity surging 160% year-on-year. Flexible workspaces now exceed 100 million sq ft nationwide. Hospitality, life sciences, and senior living also show strong momentum, fueled by robust economic growth and institutional capital.

Data Centers Lead the Charge

India's data center market is expanding rapidly, with capacity projected to reach around 1,700 MW by 2025. The country added a record 440 MW in 2025 alone. Investment is expected to climb from $126 billion in 2025 to over $180 billion by 2026. Mumbai continues to be the primary hub, holding half of the nation's total capacity.

Flexible Workspaces Secure Market Share

Flexible workspaces now make up about 20% of all office leasing activity in India as of 2025. This segment's total footprint has surpassed 100 million square feet across the country's top nine cities, with Bengaluru showing the most significant growth.

Hospitality and Life Sciences Gain Traction

In the hospitality sector, occupancy levels climbed to around 64% in 2025, and revenue per available room (RevPAR) saw an 11% rise. Hotel deal activity more than doubled to $456 million, signaling robust investor confidence. The life sciences sector is also gaining traction, supported by government initiatives and increasing R&D demands, contributing to a broader bioeconomy valued at $165.7 billion.

Other Emerging Sectors Attract Capital

Beyond these, the education sector is poised for substantial growth, aiming for a $313 billion market by 2030. Senior living is emerging as a critical theme, driven by India's aging population and attracting considerable institutional investment. These expanding alternative sectors are rapidly evolving into core investment avenues, reflecting shifting occupier needs and sustained capital flows.

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