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Gurgaon Property News: Though the Budget did not have
anything substantial for the real estate industry, there is one sector
that has the developers buoyant - hospitality. Most builders in the Delhi
NCR are now keen on entering the hotel industry after the finance minister
announced a five-year income tax holiday for two, three or four-star
hotels. However, another spin-off effect would be on the land prices of
hotel
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sites - they are bound to go up as a result of the
announcement.
Says Kamal Taneja, MD, TDI, “Now, we will also look into
the possibility of coming up with such hotels in the region. Hence, it is
a positive step for us.”
The tax holiday also includes convention centres with a
seating capacity of not less than 3,000. However, the Budget lays down
that the hotels should be completed and begin operations in the National
Capital Territory of Delhi or in the adjacent districts of Faridabad,
Gurgaon, Ghaziabad or Gautam Budh Nagar during the period starting from
April 1, 2007 and ending March 31, 2010.
Says Sanjeev Aeren, MD, AEZ Group, “The Delhi NCR seems to have been the
only region that seems to have benefitted from the Budget, courtesy the
Commonwealth Games. This will help in making Delhi a world-class city and
give a major boost to the hospitality industry, encouraging developers to
foray into this sector in a big way.”
An increase in the number of hotels will also increase employment and
provide a great surge to the tourism industry. However, it will also have
a productive effect on the real estate sector as it is bound to increase
land valuations for hotel sites in the city.
Last month, a subsidiary of the Delhi-based Eros Group, The Millennium
Plaza notched up a five-acre plot for a hotel site in Sector 47, Gurgaon
for Rs 255.20 crores. This is bound to go even higher. Says Ankur
Srivastava, Managing Director, DTZ India, “This step is very clearly aimed
at addressing the severe shortage of hotel rooms in Delhi before 2010
Commonwealth Games. However, the Budget has failed to address the key
issue here - that of land availability for hospitality use. These tax
benefits may even have a counter productive impact as it can lead to
increased land valuations for hotel sites in the city. Tax exemptions
enhance free cash flows of the project thereby leading to an increase in
residual valuations of the project.”
Adds Sanjay Verma, Executive Managing Director, South Asia, Cushman &
Wakefield, "This will boost the hospitality and allied sectors in the NCR.
However, it needs to be clearly established if these tax-holidays can be
availed at any point in a block (of say, 10- years).
by http://www.financialexpress.com
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