India’s alternative real estate sees $180 bn data centre investments; flex spaces exceed 100 mn sq ft: CBRE

India’s alternative real estate sectors—from data centres and flexible workspaces to life sciences and senior living—are entering a high-growth phase, backed by strong macro fundamentals and rising institutional interest, according to a report by CBRE South Asia Pvt.. Ltd.

The “India Alternate Sectors Outlook 2026” highlights that robust economic growth—projected at 7.6% for FY26—and a public capex push of ₹12.2 lakh crore are creating a favourable backdrop for expansion across emerging asset classes.

Data centres emerge as top investment magnet

India’s data centre (DC) capacity reached ~1,700 MW (26 million sq ft) in 2025, with a record 440 MW added during the year—marking a 160% year-on-year surge. Total investments in the sector are projected to exceed $180 billion in 2026, up nearly 45% from $126 billion in 2025.

Mumbai alone accounts for about 50% of capacity (~1.1 GW), while the top four markets—Mumbai, Chennai, Bengaluru, and Delhi-NCR—hold nearly 90% of total stock. The report expects capacity to grow another ~30% in 2026, driven by AI workloads, 5G rollout, and data localisation norms.

Flex, hospitality and new-age assets gain traction

Flexible workspaces have become a structural component of India’s office market, accounting for ~20% of total leasing activity in 2025. Total flex stock has crossed 100 million sq ft across the top nine cities, with Bengaluru leading at ~30% share.

In hospitality, occupancy levels touched ~64% in 2025, while revenue per available room (RevPAR) rose 11% year-on-year. Hotel deal activity surged 2.5 times to $456 million, signalling renewed investor appetite, particularly in premium and tier-II markets.

Life sciences, education, senior living draw capital

India’s life sciences sector is gaining momentum with a ₹10,000 crore government push and rising R&D demand, while pharma GCC leasing jumped 64% to 5.8 million sq ft. The broader bioeconomy has already reached $165.7 billion.

Meanwhile, the education sector is projected to become a $313 billion market by 2030, driven by policy reforms and private capital participation. Senior living is also emerging as a key theme, with India’s elderly population expected to reach 230 million by 2036, attracting large institutional investments.

Overall, the report underscores a structural shift in India’s real estate landscape, with alternate sectors evolving into core investment avenues amid changing occupier needs and long-term capital flows.