Cross border investments – Bangalore in top 10 in APAC list

Cross border investments – Bangalore in top 10 in APAC list

Cross border investments – Bengaluru entered the list of top 10 cities that attracted maximum cross-border investment in Asia Pacific (APAC) for the 1st time.  It will be receiving over USD 1.6 billion last fiscal according to property consultant CBRE.

APAC :

Asia-Pacific (abbreviated as APAC) is the part of the world  in or near the Western Pacific Ocean. The region varies in area depending on which context, but it typically includes much of East Asia, South Asia, Southeast Asia and Oceania.

APAC’s members include accreditation bodies, accreditation focal points and other organisations that have an interest in accredited conformity assessment results.

APAC is recognized by the Asia Pacific Economic Cooperation (APEC) as one of four APEC Specialist Regional Bodies (SRBs) that support the work of the APEC Sub-Committee on Standards and Conformance.

Cross-border investments :

Cross-border investment refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor

Cross-Border Transactions include both outbound and inbound transfers of property, stock, or financial and commercial obligations between related entities resident or operating in different tax jurisdictions.

CBRE South Asia Pvt. Ltd, – Cross border investments :

CBRE South Asia Pvt. Ltd. –  India’s leading real estate consulting firm’s Asia Pacific Investor Intentions Survey 2019 findings revealed that Bengaluru – the capital city of Karnataka- for the first time has featured in the list of top ten destinations for cross-border investment across Asia Pacific.

The survey revealed that India was among the top five preferred markets in APAC on the back of the launch of the first Real Estate Investment Trust – REIT (Embassy-Blackstone) and the resulting improved market transparency. The drivers for this trend were new infrastructure and potential growth opportunities in the market.

REIT – Real Estate Investment Trust :

The first REIT by Embassy Group and Blackstone Group LP was launched in India in March this year and it is expected to catalyse investments in the country.

Improved investor sentiment in office assets is likely to expose potential quality buildings as a fundraising avenue for developers and also propel major corporations to lease/purchase space in these development.

Preferred investment destination :

Bengaluru featured as the first Indian city in the list of preferred investment destination on the basis of its growing reputation across the globe as the home base to several international corporates,” said Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE.

Bengaluru city with a significant talent base and world-class infrastructure offers several investment grade options in office, retail, as well as residential segments,

Bengaluru is considered as one of the fastest growing cities in India with the presence of important players from the areas of information technology, biotechnology, pharmaceuticals, manufacturing and other sectors.

Money and Borders :

Cross-border investments in a changing global marketplace – Governments appear to have become bigger players in economic affairs, and we may be entering an era in which nationalist ambitions will make globalization more difficult to manage.

What is clear is the need for companies and funds pursuing cross-border investments to adapt their investment strategies and operations to function effectively at the intersection of government, business and finance.

The upside story on cross-border investment is one that companies can use to good advantage. Inbound and outbound investments confer substantial benefits – they create employment, stimulate R&D, generate tax revenues, and enhance competition.

Bengaluru Development Authority to tie up with realtors – Bengaluru

Bengaluru Development Authority to tie up with realtors – Bengaluru

Bengaluru Development Authority (BDA) – planning to tie up with realtors to over come the cash crunch in Bengaluru. 

There are very few people who wants to own BDA flats and villas  in the last years.  This has made Bengaluru Development Authority to decide on teaming up with private realtors.  This move by BDA will take away the authority’s power to decide on the real estate prices.

BDA – Bengaluru Development Authority :

The Bangalore Development Authority (BDA) came into being with effect from 6th January 1976 under a separate Act of the State Legislature viz. the BDA Act 1976. This Authority combined in itself the Planning functions of the City Planning Authority and the developmental functions of the erstwhile CITB.

Focus of Bengaluru Development Authority :

Development of Bengaluru in a planned manner, creating quality infrastructure, provision of sites and services and catering to the housing needs of the underprivileged are the focus areas of the BDA.

Since inception, the BDA has allotted 76,000 sites to individuals for construction of residential dwellings. In addition, more than 800 civic amenity sites have been given for use by various public utilities, as also organisations, catering to the felt needs of the particular locality.

Functional Divisions of Bengaluru Development Authority :

The Authority has the following main departments

1. Land Acquisition Department

2. Town Planning Department

3. Engineering Department

4. Allotment & General Administration Department

5. Finance Department

6. Law Department

7. Public Relations Department

8. Environment & Horticulture Department

Real Estate – Realtors :

Real estate is “property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general.

Residential real estate :

Residential real estate may contain either a single family or multifamily structure that is available for occupation or for non-business purposes.

Residences can be classified by and how they are connected to neighbouring residences and land. Different types of housing tenure can be used for the same physical type.

For example, connected residences might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.

Public Private Partnership model – Bengaluru Development Authority :

The BDA is cash-crunched.  The authority as sought the government’s permission to enter into the public-private partnership (PPP) model with private companies and realtors.

Real Estate word on newspaper

The plan is to make quick business and raise money for various infrastructure projects by constructing and selling villas and flats in namma Bengaluru.

The Bengaluru Development Authority is planning to undertake new housing projects under the Public Private Partnership model.  Once the government approves, the project will be undertaken on unused land.  The authority is also planning to sell the already constructed flats and villas with a more transparent and faster approach.

Unsold property by Bengaluru Development Authority :

The Bengaluru Development Authority is in possession of 2000 flats and 30 villas.  Under the new PPP model, the authority is planning to sell the land to a private company/realtor. 

Under the new model, good quality construction and the sale of the same will be the builder’s responsibility.  After the sales, the Bengaluru Development Authority will get a share of the apartments and villas.

According to the BDA Commissioner, the Government’s approval has been sought.

Implementation of PPP Model :

The PPP model is followed in the case of the BDA shopping complex in Koramangala.  In case of the housing projects, the Bengaluru Development Authority takes around 30 to 35% of the land or cash compensation along with flats and villas.

Under this model, the Bengaluru Development Authority will have a share in the project.  This divides BDA’s work. 

If this model goes well, the Bengaluru Development Authority plans to implement at the Dasanapura Village where work is on to construct 340 villas, 

Sewage into SWDs – Action on property owners – Bengaluru

Sewage into SWDs – Action on property owners – Bengaluru

Sewage into SWDs – Sewage water is being let into the SWD’s in Bengaluru by 497 properties. The Bengaluru Water Supply and Sewage Board (BWSSB) has issued notices to 389 of the property owners in namma Bengaluru ranging from houses to business establishments.

Bengaluru Topography :

Bengaluru is draped over the Deccan Plateau at an altitude of 949 meters (3113 ft.) above sea level, which gives it possibly the best climate among all the cities in India. Legend has it that Bengaluru  got its name from the words “BendhaKaaLu” (which means boiled beans in the local language Kannada).

King VeeraBallala of the Vijayanagara kingdom was once lost in a forest and happened to stumble upon a lonely cottage. An old woman that lived there could offer the starving king only boiled beans “BendhakaaLu” and the place came to be known as “BendhakaaLuooru” (ooru in Kannada means a city).

BendhakaaLooru later came to be known as BengaLooru in Kannada and Bangalore in English. However, historical evidence shows that “BengaLooru” was recorded much before King Ballala’s time in a 9th century temple inscription in the village of Begur. Even today “BengaLooru” exists within the city limits in Kodigehalli area and is called as “HalebengaLooru” or “Old Bangalore.”

Bangalore water supply and Sewage board :

The Bangalore Water Supply and Sewerage Board (BWSSB) is the premier governmental agency responsible for sewage disposal and water supply to namma Bengaluru.. It was formed in 1964.

BWSSB currently supplies approximately 900 million liters (238 million gallons) of water to the city per day, despite a municipal demand of 1.3 billion liters. Water for the city (with a population of 10 million) comes from a number of sources, with 80% of it coming from the Cauvery river.  Water is also drawn from the Arkavathy river, but the supply does not meet the demand.

Storm water drains – sewage seeping in:

A storm water drain is an infrastructure designed to drain excess rain and ground water from impervious surfaces such as paved streets, car parks, parking lots, footpaths, sidewalks, and roofs. Storm drains vary in design from small residential dry wells to large municipal systems.

Drainage/Sewage and storm water in the same drain

Drains receive water from street gutters on most motorways, freeways and other busy roads, as well as towns in areas with heavy rainfall that leads to flooding  and coastal towns with regular storms.  Even gutters from houses and buildings can connect to the storm drain.

Many storm drainage systems are gravity sewers  that drain untreated storm water into rivers or streams — so it is unacceptable to pour hazardous substances into the drains.  Storm drains often cannot manage the quantity of rain that falls in heavy rains or storms.  Inundated drains can cause basement and street flooding.

In many areas require detention tanks inside a property that temporarily hold runoff in heavy rains and restrict outlet flow to the public sewer. This reduces the risk of overwhelming the public sewer. Some storm drains mix storm water (rainwater) with sewage,  either intentionally in the case of combines sewers, or unintentionally.

Relationship to sanitary sewer systems :

Storm drains are separate and distinct from sanitary sewer systems. The separation of storm sewers from sanitary sewers helps prevent sewage treatment plants becoming overwhelmed by infiltration/inflow during a rainstorm, which could discharge untreated sewage into the environment.

Many storm drainage systems drain untreated storm water into rivers or streams. Many local governments conduct public awareness campaigns about this, lest people dump waste into the storm drain system.

Combined sewers :

Cities that installed their sewage collection systems before the 1930s typically used single piping systems to transport both urban runoff and sewage. This type of collection system is referred to as a combined sewer system (CSS).

The cities’ rationale when combined sewers were built was that it would be cheaper to build just a single system. In these systems a sudden large rainfall that exceeds sewage treatment capacity is allowed to overflow directly from storm drains into receiving waters via structures called combined sewer overflows.

Contaminated water enters storm water drain

Storm drains are typically at shallower depths than combined sewers; because, while storm drains are designed to accept surface runoff from streets, combined sewers were designed to also accept sewage flows from buildings with basements

The BBMP vs BWSSB ‘passing the parcel’ game :

When it rains in Bengaluru, the rajakaluves or storm water drains will overflow as there is no scope for the water to seep into the ground.  The biggest problem is that the BBMP is in charge of storm water drains, while the BWSSB is responsible for managing Bengaluru’s sewage system.

Both BBMP and BWSSB are passing the buck.  It has been decades and no one is bothered to rectify the city’s sewage and storm water drain system.

So many sewage lines are connected to the Storm Water Drains.  People have been ranting about this issue and the agencies are not doing anything.

Notice to property owners – Sewage into SWDs :

The BWSSB has sent notices to 389 property owners and is in the process of puling up the remaining ones.  The details of the violation has been sent to the Karnataka State Pollution Control Board.

Apartment’s sewage water seeping into the storm water drain

The notice issuance is in the wake of the National Green Tribunal’s direction to the Karnataka State Government.  The direction is to take action and to plan to put an end to the contamination of run-off rainwater in SWDs.

Some of the Property owners – Sewage to SWDs :

Many apartment owners like Pebble Creak, Brooke Enclave on ITPL Main road, Chaitanya Prestige Shantiniketan on Whitefield road, Gopalan enclave on ECC road.  `

The educational institutions are also included in the list.  They are Shree Chaitanya Techno School in Mahalakshmi layout and also a number of paying guest accommodations in Ambedkar Nagar.

Apartment’s sewage discharge

The eastern part of Bengaluru top the list with 276 properties violating the rules. The BWSSB board is imposing a fine of Rs.5000 to violators all these time.  But now the BWSSB board wants to take the opinion of the legal cell to take serious action.

Option to property owners – Sewage connection :

Those property owners who are willing to follow the rules, the board will be imposing a penalty and to apply for the sewage connection.    The board is planning to take property owners who are violating to the court.  According to the Board KSPCB (Karnataka State Pollution Control Board) can file criminal cases against violators.

Legal actions will be taken against large apartment owners if found guilty .  Even individual houses will not be spared.

Need of the hour :

The unauthorized, rampant encroachment of marshlands and bugger zones of lakes, obstruction sewer pipes and manholes, encroachment of store water pipes, garbage dumped in the Storm Water Drains have blocked the outlets of rainwater.

What is needed in namma Bengaluru is a need of a shared project with the Bangalore Water Supply and Sewerage Board to have all the sewage go into trunk sewers on either side of the drain. The reason Bengaluru has faced floods is there is no place for sewage, which flows back into lakes.

Avinash Prabhu – Skyline Construction & Housing Pvt. Ltd.

Avinash Prabhu – Skyline Construction & Housing Pvt. Ltd.  and Kalmane Koffee’s owner.

The Co. started as a family owned enterprise with holdings in coffee plantations.  Later it branched out to property development.   Since two decades of its establishment Skyline Construction & Housing has become one of the trusted builders in Karnataka and recognized by CREDAI.

History of Skyline Construction & Housing Pvt. Ltd.

Skyline Construction recognized the opportunities in the real estate industry.  The team consists of dedicated architects and engineers. 

Skyline constructions

The Co. gained success by building world-class spaces giving outstanding high quality, value added buildings and services. 

The construction Co. has become one of the trusted builders in Karnataka.  Avinash Prabhu and Dhiraj Prabhu are the owners of the Co.

History of Kalmane Coffee:

Kalmane Coffee is Chikkamangaluru based.  It is a 125 year old coffee plantation company.  The main concentration was on exports but recently entered the domestic brand.  Avinash Prabhu is the Managing Partner.  They have coffee bars called Kalmane Koffees in the city.

Kalmane koffee outlet

The Kalmane group is a fourth generation coffee growers owning about 1,000 acres of coffee estate located in Chickmagalur district.

Skyline construction & Housing Pvt. Ltd. – Avinash Prabhu, Managing Director

Avinash Prabhu is the Managing Director of Skyline Constructions. He was arrested by Central Crime Branch (CCB) for cheating people out of Rs.100 crore after promising to build flats for them. This company swindled the money from  2OO members.

Avinash Prabhu

The CCB officials raided the house of Avinash Prabhu.   A case was filed against Abinash Prabhu by a buyer named Christopher Regel. 

Following the case filed at Hennur Police Station, the police arrested Avinash.  Later on the case was transferred to CCB.  The CCB team conducted raids at properties of Avinash Prahu and Dhiraj Prabhu. 

Avinash Prabhu was arrested at his office at Lavelle Road, Bengaluru on 3rd January 2019.  During the raid the officials discovered 15 different bank accounts throughout the city in Avinash Prabhu’s name.  All the 15 bank accounts have been frozen.  .

According to CCB reports, the police have recovered two vehicles a Range Rover and an Audi from Avinash Prabhu. His brother Dhiraj Prabhu is absconding. 

Conclusion :

Avinash prabhu and his brother Dhiraj Prabhu collected crores of rupees from people for constructing apartments at Hennur, Horamavu, Yelahanka andin Mangaluru.  The brothers used to take the customers to the location.  Then they used to show them around and collect a sum of money in advance.

After a few days the brothers Avinahs Prabhu and Dhiraj Prabhu used to pretend that construction had begun and again collect a large sum of money.  After collecting the sum they used to abandon the buyers.  The brothers neither repaid the buyers nor construct the apartment.

Unsold housing stock

Unsold housing stock in Bengaluru is stands at 80%.  Bengaluru sold only 20 of every 100 houses built in the year 2018.

Unsold housing sector in Benglauru

Unsold housing stock in Kolkata stood at 10 and Delhi-NCR around 5.  The forecast for the year 2019 is looking bleak.

Reasons for unsold housing stock

Booming commercial activity and a cutting edge startup culture had kept the real estate at Bengaluru vibrant.  But real estate market – the unsold housing stock has out performed all other metro cities in terms of unsold housing stock

The real estate market remains in the grip of a downturn as potential home buyers avoid purchases, leaving developers struggling with unsold housing inventory and interrupted projects.

Housing prospects in Bengaluru

The reasons for unsold housing stock can be due to the city’s evolution in terms of infrastructure development, transport and connectivity. Given the ever-escalating challenges the city faces on these fronts, a marked preference for walk-to-work options by home buyers has become evident.

Housing is the second-largest employer in India. It has seen a 30 per cent growth over the last two years. But new regulations, and a liquidity crunch after the NBFC crisis, has led to an increase in capital requirements for developers.

A large number of people are waiting for correction in GST rates. If you buy three months before the building is ready, then you pay 12 per cent GST post occupation there is no GST.

Prospects in future:

The industry as a whole has seen both the turmoil and the prospect that is likely to be the trend in 2019 as well. The big bang reforms implemented have brought about an imperative change in the tax, regulatory and business environment in India.

Affordable housing

Indian real estate has also witnessed a ‘systems re-boot’ – beginning with demonetization, the legislation on Benami Properties, RERA, GST followed by the amendment to the Bankruptcy and Insolvency Code.

Read more related to this topic: https://www.bangalorean.com/bbmp/festival-celebration-clearance-garbage/

Guidance Value of Properties – Bengaluru

Guidance value of properties in Bengaluru will be hiked from 5% to 20%.

The department of Stamps and Registration has planned an upward revision of up to 20% in the guidance value of properties in Bengaluru.  The revised values for Bengaluru and the rest of the State will be implemented from the last week of December.

Land and house registration in Bengaluru to spike

The last revision of guidance value of properties was done 3 years ago.

What is Guidance value of property?

The guidance value of properties is the non-negotiable price per sq. ft. for properties in a particular locality which is defined by the Government. This value is calculated based on the population, infrastructural and real estate development and other defining aspects of the locality and is liable to appreciate or depreciate.

The Government will raise the guidance value of properties for increasing the revenue. One of the main source of revenue for the State Government is through Registration fee for transfer of properties.   The price per sq. ft. of a locality cannot be lower than the one quoted by the Government. 

Different Guidance values :

The guidance value differs between localities as well as apartments or projects within the same locality. The Guidance value of property is set by the Committee constituted by the Inspector General of Registrar (IGR).

Properties to cost more in the city

The stamp duty payable for registration of document depends on the sale consideration amount or guidance value whichever is higher.  The guidance value depends on the usage of land such as industrial, commercial or residential.

Besides this, the properties situated adjacent to National and State Highways shall carry higher guidance value.  

Guidance value in Bengaluru :

The highest guidance value for commercial site is Rs.457400 per square metre in Jayanagar 11th Main road in Jayanagar 4th block.  Rs.344500 on OTC Road in Gandhinagar constituency. 

The lowest guidance in the residential category in Bengaluru in Rs.900 for economically weaker section in Jayanagar zone and Rs.1800 in Chikkanahalli in Basavanagudi Constituency. 

There is no revision in values in some places.  The revision in the values is made based on demand and development growth of the area.

Objections to guidance value:

The Department of Stamps and Registration received about 188 objections.  These objections were from 5 zones of Bengaluru. 79 objections were from Shivajinagar Constituency and 4 from Rajajinagar zone.

Demand for more Guidance Value from apartments

Majority of the objections were raised by builders and owners of villas and apartment complexes.   Builders from some of the areas want the guidance value of properties to be doubled.  This is to increase the market capital of the builders. 

The stamp duty will be collected from the builders for the property when the buyer of the property is charged with higher guidance value.

Read more related to Properties: https://www.bangalorean.com/realestate/joy-ice-cream-prestige-land-case/

Maintenance charges for apartments

Maintenance charges for apartments is fixed by the owners of the apartment.

Every Housing Society or Apartment Owners Association at its formative stages has to decide on the structure of Society Charges it will collect.  This is called Maintenance charges for apartments.

Apartment maintenance charges

‘Maintenance charges for apartments’ is one of the  topics in the real estate realm. While most, if not all, the apartment owners have to pay these common maintenance charges.

Maintenance charges

When a rental property is contained in an apartment block or housing development, either the tenant or the landlord may be expected to pay an annual service charge. This charge will usually cover maintenance and repair work in communal areas.

These charges cover the costs incurred on amenities. The costs incurred on common areas, elevators, terraces, parking areas, expenses for building repair (covering all the charges for new additions and other structural changes).  The costs also includes water charges, parking charges, property tax, insurance premium charges, common electricity charges etc.

Real Estate Regulation Act

The Indian Parliament has passed an Act known as Real Estate (Regulation and Development) Act in 2016 – the most important flat maintenance charges law in the country.  This Act has established the long awaited Real Estate Regulatory Authority (RERA) in order to ensure transparent selling and buying process of all types of properties.

The builder or developer is responsible to provide maintenance for the sold property on a regular basis, the charges of which as Maintenance charges has to be borne by the resident.  However, it ensures that these charges are reasonable.

Government’s move to regulate maintenance charges for apartments:

The State government has issued a circular/notice that persuades the apartment associations to register.  The registration comes under The Karnataka Co-operative Societies Act, 1959.

There are increasing complaints on financial misuse and misappropriation by the apartment owners and associations.

All the apartment buildings, associations or societies charge for maintenance and indulge in financial activities.  There are no proper regulation if the apartment association is not registered under Karnataka Co-operative Societies Act, 1959 or Karnataka Ownership Flat Act, 1972.

Residents who are living in the apartments are paying charges towards maintenance and they also own an undivided share of land on which the building stands.

It is mandatory to register the apartment associations under the Karnataka Co-operative Societies Act or Karnataka Flat Ownership Act.  This helps in bringing financial accountability.

 

Jail term –  violation of building laws by owners

Jail term –   proposed by Karnataka Government for violating building laws.  The Government proposes punishment for officers and owners for allowing illegal construction in Benglauru.

The Karnataka State Government has proposed  Jail term (imprisonment)  introduction up to a maximum of 2 years.  This also includes fine  up to Rs.50,000/- for certain types of building violations. This proposal comes under the Karnataka Municipal Corporation (KMC) Act, 1976 across Karnataka State.

Fine amount :

The State government has also proposed to increase the fine amount between Rs.2000/- and Rs.5,000/- for some of the violations. The existing fine is as low as Rs.20/- .   The jail term or imprisonment is proposed from 2 days to 3 months for nonpayment of the fine.

On 27th November 2018 a copy of the draft notification was submitted before a Division Bench of the High court of Karnataka. A PIL was field by a city based advocate Mr.Umapathi.S.

Mr. Umapathi.S had complained in the petition that no punishment regarding the unauthorized deviation or construction was prescribed by the Government when Section 321B of KMC Act was introduced.

Jail term / Imprisonment

For 18 types of violations only fine will be imposed as punishment.  Jail term (imprisonment) will be imposed if the fine is not paid.

The City Corporation officials and the building owners are liable for jail term punishment.

An official if found guilty under Section 321B will be liable for a jail term of 2 years and fine up to Rs.50,000/-

If property owners and others who construct buildings in violation of Section 295(5) of the KMC Act and the building bylaws are punishable with a jail term of upto 2 yrs. and a fine of Rs.50,000/-

Change in Fine  and Jail term:

Present        Proposal              Condition

Rs.20/-         Rs.5000/-           Failure to keep the external part of the wall in proper condition

Rs.50/-         Rs.50,000/- &    For constructing an external roof, pandal or wall of a building, construction of shed or fence, of cloth,

Jail term of         grass, leaves, mats or  inflammable materials

2 years

The Government of Karnataka has given a time of 30 days for public and others to state and submit their objections and suggestions to these said proposals.

 

 

 

 

Joy Ice cream  – Prestige properties land case

Joy Ice Cream land case has resurfaced again.  The Prestige Projects and the Joy Ice cream had challenged the State Government.

joy Ice Cream land case

Case History:

Joy Ice Creams was allotted land in question measuring 3 acres and 23 guntas in 2006 by Karnataka Industrial Areas Development Board (KIADB).   The land is in Pattandur Agrahara in KR Puram.

Within 40 days of executing the deed, Joy Ice Cream sold the land to Prestige Estate Projects Ltd. After purchasing the land from Joy Ice Creams, Prestige constructed a multi-storeyed residential building consisting of 21 floors and four villas.

Later, the government withdrew the condition relating to non-alienation of the land and the deputy commissioner also withdrew all conditions imposed while granting land. Subsequently, the land grant in favour of Joy Ice Creams was cancelled on the ground that it has violated the conditions.

The Joy Ice Creams and Prestige had challenged the Government order in the Karnataka High court.  The inquiry by the Revenue Secretary regarding the sale of the land has blamed the action of the KIADB as having resulted in the misuse of the plot.

The inquiry also raised issues on how the development plan was sanctioned. Even before getting the land, the joy ice creams had entered into an agreement of sale with the Prestige Projects.

This reveals that Joy ice Cream was not interested in building a software park and serviced apartment on its own.

The inquiry also raised issues on how the development plan for taking up the housing project had been sanctioned.

Enquiry by State Government:

The State Government had ordered a departmental enquiry against the officials who had recommended the extension of relaxation to the Prestige Estates.

prestige estates

The Lokayukta in 2014 had submitted a report against the officials who favoured the prestige estates.   The complaint was filed over the violation of land allotment by Joy Ice Cream Pvt. Ltd.

After 4 years, the revenue department took a decision to recommend a departmental enquiry.   The officials Mahesh babu (DC’s office), R. Lakshman Prasad (Sub-registrar) and an official who was Shirastedar recommended to the Government, the extension of relaxation to Prestige Estates.

On the basis of the Lokayukta report, the State government had sought for a detailed replay from the officials.  The High court quashed the State Government’ order of land allotment cancellation. An NGO, Samaja Parivartana Samudaya has filed an appeal challenging the single judge bench order.

The case is yet to come up for hearing.

Property tax hike – Bengaluru city

Property tax hike – Bengaluru city

BBMP(Bruhat Bengaluru Mahanagara Palike)  plans property tax hike – Bengaluru from April 2019.

The hike in the property tax in Bengaluru will be by 25-30%. This is to meet the pressure of taking important new projects by the BBMP.

If the BBMP goes ahead with property tax hike – Bengaluru,  the residential areas will pay 25% more  and commercial areas 30%.  If the coalition government approves and endorses the same, the rates will be coming to effect from 1st April 2019.

The BBMP revenue department has prepared a proposal for the property tax hike – Bengaluru.

BBMP Commissioner confirmed the proposal of property tax hike- Bengaluru by saying “revision of property tax is being done as per the Karnataka Municipal Corporation Act.  The Act mandates revision once in 3 years”.

BBMP is struggling to meet the deadline of the on-going projects due to financial problems.

Reasons for opposition to property tax hike – Bengaluru:

The move by BBMP to property tax hike – Bengaluru has irked the residents and property owners.  Many expressed  the city lacks basic infrastructure including good roads.  The garbage and solid waste management is a day to day crisis in the city.

The problems also include poor maintenance of street lights, bad footpaths and no drainage system.

Citizens of Bengaluru say there is no transparency in the system.  Nobody knows how much of revenue is being generated by BBMP through property tax.

Properties which comes under the new BBMP zones are yet to get ‘A’ Khata and do not have even occupancy certificates.  Some of the areas lack basic necessities such as water and sanitation connection.  Without providing these basic facilities BBMP is proposing Property tax hike-Bengaluru.

In some of the BBMP Zones even after paying property tax the areas have been neglected.  The citizens in these areas have seen little or no development in terms of infrastructure and amenities.

When was property tax raised previously?

With a similar aim, property tax  was raised by 20 % for residential building and 25% for non-residential properties in 2016. The civic body can revise the property tax in every 3 years, with a min. of 15% and max. 30% according to the Karnataka Municipal Corporations Act, 1976.

Some even suggested that the citizens must be able to penalize the BBMP for not performing their duties in the Bengaluru city.

The general opinion is that the property tax hike is unlikely to go ahead in an election year.

 

 

 

Jitendra Virwani – 2nd richest realtor in India

Jitendra Virwani-CEO Embassy Property Development

Jitendra Virwani started out in his father Mohan Virwani’s construction business as a teenager.  He went on to start his own development dynasty in 1993 with borrowed capital of $50,000 from friends.  The company was renamed as Embassy Property Developments.

The embassy brand is a well known brand in the real estate world.  The brand is known in business parks and housing industry.

He has a bachelors degree from Bengaluru University.  Jitendra Virwani is the CEO and Managing Director of Embassy Property development. The Co. is a privately held real estate developer based  in  Bengaluru and commenced operations in 1993 under Jitendra Virwani.

Jitendra Virwani’s  Embassy group is into real estate development like commercial, residential, hospitality, industrial warehouse spaces, services, retail and education.  The co. has also developed projects in different cities like Chennai, Hyderabad, Coimbatore and Pune.

The Co. has developed projects in 2 countries abroad i.e.  Malaysia and a business park  in Serbia.

Jitendra Virwani has been ranked the 2nd richest in the list with a net worth of Rs.23160 crore.  Mangal Prabhat Lodha of Lodha group tops the list with Rs.27150 crore.

Virwani’s achievement in real estate:

  • Embassy property development under Virwani is Bengaluru’s biggest developer of office parks.
  • Embassy Property Development, together with private equity firm Blackstone, will soon be listing India’s first-ever REIT
  • Embassy has a roster of multinational tenants such as Google, IBM and Warburg Pincus.
  • Son Karan, who works with him, is overseeing a joint venture in shared office spaces with WeWork.

Unlike some developers who consider only end-profits, Virwani is more focused on cash flows. He is not afraid to walk away from deals that would involve too much leverage.

Jitendra Virwani’s philanthropy:

Funds a State-run school for poor kids, now renamed as Stonehill Government Primary School

Passion :

He is passionate about horses.  Virwani owns a riding school in Bengaluru.

Owns the elite Stonehill International School, in the suburbs of Bangalore

The Way Forward: 

Virwani has a substantial commercial real estate portfolio which brings in steady rentals.  Jitendra Virwani’s Embassy Manyata Business Park stands tall as one of Bangalore’s premier office parks. Spread over 62 acres, it has 9 million square feet of office space and marquee tenants like IBM, Microsoft, Target and Cognizant.

Embassy’s office park business now covers over 14 million square feet generating approximately Rs 696 crore in rentals per year.

 

 

IIlegal building owners – pay double property tax

IIlegal building owners – pay double property tax

The Bengaluru civic body will tap into huge funds as it orders illegal structures in the Bruhat Bengaluru  Mahanagara Palike (BBMP) limits to pay double property tax.

Illegal buildings are increasing in the city and the respective authorities are not sure how safe the buildings are. With a move of collection of double tax, the civic body intends to increase its net revenue from the structures that cropped up with violations.

BBMP will soon bring to amend the Karnataka Municipal Corporation Act , 1976.  The move has been proposed in regard to a State government decision that allows the BBMP to roll up additional property tax from all the owners of unauthorized buildings and constructions.

Allowing BBMP to collect the double property tax, KMC Act,1976  is to be amended.  Once approved, the BBMP will identify the building owners violating by-laws and issue notices to them.

Property tax has to be paid by all persons/institutions who own/possess land/buildings within the limits of BBMP. Property tax is applicable for all properties/open lands within the limits of BBMP.  It is assessed on the basis of built-up area of the property/building.

With the functioning of such an order, a lot of constructions in BBMP area  will take a beating. After such an order, owner of illegal structures will be duty-bound to remit double the property tax of their property for the rest of time span, so long as the construction is illegal.

Other Proposals :

DCM says,there are a few other proposals to be amended in the KMC Act.  The BBMP has proposed to collect 50% of the building value as deposit  to prevent violators from getting a stay from Karnataka High Court before owners approach the Court.

The proposal also includes 3 months imprisonment for those who are found to have aided the violations.  BBMP Commissioner is of view that these measures will help in bringing an orderly development in namma Bengaluru.

The  Akrama-Sakrama scheme, still pending before the Supreme Court  allows all property owners to regularize some deviations.  But the scheme is covering the violations of the approved building plan.

Bangaloreans are of the view that as long as an illegal construction is not regularized, BBMP should not collect the property tax. The BBMP must take action against buildings which are not eligible for regularization terms and conditions.

 

 

Property Registration goes online at Namma Bengaluru

Property Registration goes online at Namma Bengaluru

Good news to all property owners as registration of property goes online at Namma Bengaluru. No hassle of visiting the sub-registrar office.

Registration of the documents of sale and purchase of immovable property is mandatory in India and ensures conservation of evidence, prevention of fraud and assurance of title.

A property needs to be registered for the purpose of sale, transfer, gift or lease in accordance with Registration Act 1908.  As per Section 17 of the Registration Act, 1908, all transactions that involve the sale of an immovable property should be registered.

Additionally, all transactions of gift of an immovable property, as well as lease for a period exceeding 12 months, are also mandatorily required to be registered.

To register property online, one needs the following documents :

  •  Identity proof of parties involved (Aadhaar Card, PAN card etc.)
  •  Two passport photographs of parties involved
  •  Sale deed
  •  Power of authority in case the party is representing someone else.
  • If the party is a company then power of attorney/letter of authority, along with a copy of the resolution of the company’s board,  authorizing him/her to carry out the registration and  certificate of incorporation
  •  proof of payment of stamp duty and registration fee
  •  Other documents as per the requirement of State.

Benefits of online-registration

  • The usual resource challenges at registrar offices are reduced drastically.
  •  Consumer pays a relatively affordable registration amount.
  • There is no need to visit multiple offices to register a property.
  • Details and documents pertaining to records can be accessed online.
  • Transparency in the registration process increases significantly, thereby, rationalizing broker fees and negating the need for bribes to officials.

Please check Maulya mobile app to know guidance value of any property.  Maulya App will facilitate the user to the find the respective SRO and DRO office location, Department of Stamps & Registration, Government of Karnataka with the details of the person in-charge.

The online services are available at https://kaverionline.karnataka.gov.in/

 

 

Allotees return  sites – Kempegowda layout

Allotees return  sites – Kempegowda layout

Allotees return sites  in the Kempegowda Layout phase-2 are surrendering their sites to the Bangalore Development Authority (BDA), similar to phase-1.

Reasons for allotees return of sites :

The reasons are also the same – financial constraints, poor infrastructure and BDA’s construction clause. However, another addition to the list is that most of the sites are in low lying areas and near to water-bodies, making construction difficult and costly.

The allotment of Bangalore Development Authority (BDA) sites to 4,970 allottees in the Second Phase of the Nadaprabhu Kempegowda Layout which had a controversial start with same sites allotted to many continues to be dogged by problems.

Though specific numbers are yet to emerge, a considerable number of allotees are put off over being allotted sites very close to Storm Water Drains (SWD), in violation of the National Green Tribunal (NGT) norms on buffer zones.

Sites under litigation for years have been allotted to some, while over 50 site holders have been allocated properties facing a graveyard. Site owners in some sectors have not been provided a map about their site thereby keeping them in the dark about their surroundings.

This has become a matter of worry for BDA officials as this is the second consecutive time the citizens are returning the sites in the same layout.

In phase-1, over 400 allotees had surrendered their sites. This is the first layout the BDA is developing after the Arkavathy Layout. The officials are now working out on measures to ensure that the BDA’s image is not tarnished.

One of the allotee who returned his site, told that finances were too difficult to manage.  It is a challenge to arrange the amount for the site and also to construct a home. Payments and construction have to be completed within the stipulated time of 60 days and five years.

Surge in Housing loan – increase in defaulters

Surge in Housing loan – increase in defaulters

There is surge in housing loans but raise fears of defaults.  According to analysis of data released by the Reserve Bank of India (RBI), banks’ home loan exposure grew by Rs 1.42 lakh crore, second only to the jump in lending to Non-Banking Financial Companies (NBFCs).

Housing loans disbursed by Indian banks surged by 15.6% in the past 12 months to Rs 10.5 lakh crore, but one-third of this amount given to economically weak borrowers is giving bankers sleepless nights.

According to real estate firms, the uptick in loan growth to the sector is driven by the affordable housing segment.
According to data provided by real estate advisory Anarock, the number of homes sold in the affordable housing segment has seen a jump of 32.5% over the same period last year. Affordable housing accounted for about 40% of all supply in seven major cities from January to October this year.

According to RBI’s research, housing loans up to Rs 2 lakh had the highest level of non-performing assets (NPAs) or bad loans, essentially loans on which defaults are likely, in 2016-17. The apex bank said in a report earlier this year that NPAs in the sub-Rs 2 lakh ticket size were the highest at 10.4% for the period under consideration.

Some are of the opinion that the impact was due to  demonetization and GST.  The low cost housing is popular with dabbawalla, vegetable vendors and the middle class whose basic income is cash.

Office Space at Bengaluru:

Office Space at Bengaluru:

India’s office market is likely to remain firm with Bengaluru accounting for the maximum demand among the major cities, according to a report by Colliers International.  Bengaluru remained the front-runner in office leasing, witnessing a record break.  Co-working or flexible working spaces have made their entry into the market in a big way.

Starting a business and setting it up is not an easy task.  Getting office space in a prime location is important for any businessman.  Like face is the index of the mind, workplace reflects the business ideas as well as the owner’s mind set.

Modern age business entrepreneurs are not in favor of traditional office spaces.  Office space has undergone evolution with the people who work.  People are ready to take risk with the changing time, work culture and the changing trends in the industry.  More importance is given for an interactive, motivational, inspiring, fun filled work-space.

The employers gives prominence in making the employees feel at home and comfortable culture.  Workplace is available for all types of businesses without a pinch in the pocket.   Community building is given importance.  This has increased the sharing of offices and co-working spaces.

Bengaluru has shown a remarkable increase in the absorption of office space in the country.  The city maintained its Silicon Valley status and recorded the highest absorption  with 6.5 million sq. feet.   This is due to the increase in Startups, IT/ITeS boom in the city along with banking, financial services, insurance (BFSI) and engineering and manufacturing.  Bengaluru is considered as the start-up hub of the country.  Due to this a lot of demand for office space has increased.

About 2.4 million square meters of ‘A’ Grade office space is scheduled to be ready in Bengaluru by 2020.  The maximum concentration is in Outer ring road and Whitefield and the rest is scattered across north.