Realty to get indirect push from Budget proposals

Focus on urban development likely to boost growth across asset classes

- PRACHI PISAL & SANKET KOUL

The government’s Budget announcements providing tax holiday for data centres, setting up of city economic regions (CERs) and funding to improve infrastructure in Tier-II and -III cities may give an indirect boost to India's realty sector, said industry executives.

“Although direct real estate announcements were limited in the Budget, the focus on manufacturing and urban development is likely to accelerate growth across asset classes such as industrial and warehousing, data centres, retail hospitality and, to an extent, office market as well,” a Budget impact analysis by Colliers India stated.

In a bid to entice global cloud service providers such as Microsoft, Google, and Amazon to use more of Indian data centres, Finance Minister Nirmala Sitharaman on Sunday announced a tax holiday till 2047 for foreign cloud service providers using Indian data centre services.

As a result, industry experts believe that developers will now leverage their strengths in land acquisition, construction, regulatory approvals, and tenant management while increasingly viewing data centres as long-term, stable-yield assets, with typical returns of 15-20 per cent. This shift, they say, is being driven by rising data usage, increased 5G penetration, and growing storage needs.

"The proposed tax holiday will significantly accelerate data centre growth by attracting global hyperscalers and deepening longterm investment, positioning India as a preferred hub for digital infrastructure and cloud-based service economy," said Badal Yagnik, managing director and chief executive officer (MD&CEO) at Colliers India.