Set Your Eyes on Bangalore's Navi Mumbai Neo Bangalore Takes Off

Neo Bangalore is taking off with great promise. Neo Bangalore aka Hoskote. The promise of Hoskote makes it another Navi Mumbai in making. A planned township, with established industries coming in and world-class connectivity, that's what Neo Bangalore is all about. The government too has seen the promise of Hoskote and that would translate into better facilities and sops.

Those who have expressed interest in this growth area have given a number of reasons. Primarily, the attraction is to live in a place that will be well planned and has good infrastructure. As one industry player said, “Neo Bangalore should be able to distill all the good features of Bangalore city and highlight the same. The soothing greenery, the lure of managed growth and the promise of a bustling activity will be enough to attract people here.” That's exactly how it had happened in Navi Mumbai. Aimed at decongesting Mumbai, Navi Mumbai became a hot   property   with the land rates doubling more than ten-folds as businesses and residences came up to accommodate the people. Today, it is a well known destination to live and work.

Similarly, the city of Bangalore is welcoming a similar satellite township that will take on its multitudes. Neo Bangalore fits the bill perfectly.

Why Neo Bangalore

At Neo Bangalore it would be exactly like living in old Bangalore with swanky new facilities. “People are nostalgic about old Bangalore but they definitely want the buzz of the new. A satellite town like Neo Bangalore will combine the two elements making it a winsome solution,” says an old Bangalorean who is quite fed up of traffic and mushrooming commercial establishments in his once-upon-a-time quiet neighbourhood.

Neo Bangalore will be able to extend the promise of Bangalore city without diluting its ethos or credence. As people begin to look at other cities as an alternative to Bangalore, it becomes logical to look closer home for an answer. Neo Bangalore will satisfy all those who remain true Bangaloreans.

The Promise:

Satellite Township

With Bangalore being one of the fastest growing cities of India, several new developments have happened. Among them is Neo Bangalore, an area of great promises and expectations. It is not a place where time will stand still. It will be about great ambiance, good infrastructure and fantastic connectivity.

Infrastructure

The government recently inaugurated a BMTC bus depot built at the cost of Rs 4.70 crores. A new integrated satellite township with proper infrastructure has been put in place. Good road planning has taken a precedent over here. The proposed Satellite Township Ring Road (STRR) covering 284 km will connect Hoskote with important satellite towns around Bangalore. The Intermediate Ring Road (IRR) covering 188 km, also connects Hoskote to the rest of Bangalore. The tremendous growth experienced the last three years has led to an increase in property prices, if reliable industry sources are to be believed. The year-on-year increase of prices is said to be about 30%.

Budget 2015 Brings REITs Closer to Realty

REIT regulations expected to bring much-needed relief to cash-strapped developers

Introduction of REIT regulations has been lauded as one of the most important reforms in the real estate sector as it is expected to bring relief to the cash-strapped developers. It is expected to free up cash for developers of commercial assets, who have been facing liquidity issues with limited options for raising funds.

REITs are essentially trusts or companies that raise capital by issuing units or raise debt from investors, invest directly or through a special purpose vehicle (SPV) into revenue-generating real estate assets such as; shopping centres, offices, commercial spaces, etc. The income thus generated from assets of REITs is distributed among its unit holders.

Finance Act 2014 paved the way for introduction of REITs in India. It introduced specific provisions regarding taxation which was one of the key factors for the success of REITs. It was accorded a ‘tax pass-through’ status which means that income earned by the trust would be taxed in the hands of unit-holders and not trust, avoiding double taxation on the same income.

However, there were some issues that the industry felt were not adequately addressed by the finance minister in the last budget. From a taxation standpoint, there were some issues regarding sponsor taxability and some of the provisions being highly tax-inefficient vis-a-vis the sponsors. There were certain gaps on the pass-through front, concerns about levying dividend distribution tax or DDT at the SPV level, the stamp duty on contribution of assets to REIT, etc., which needed to be addressed.

Against this backdrop, the real estate sector was hoping that Budget 2015 would address some of the issues and provide the much-needed impetus to the sector.
The finance minister in his Budget speech acknowledged the need to give a boost to REIT listing in India as its success could play a pivotal role in reviving activity in the sector. Budget 2015 amendments have now brought the sponsor at par with the investor by allowing him to avail of the benefit of concessional tax rate on transfer of units of a REIT that have been subject to security transaction Tax (STT). Thus, short-term capital gains arising thereof would be subject to tax at the rate of 15%t and tax exemption has been provided in respect of long-term capital gains, a welcome step that puts the sponsor’s REIT units at par with other listed securities as far as the tax rates are concerned.

Further, rental income received by REIT for directly owned assets, has been given a pass-through and is not subject to withholding on distribution to the REIT. Such leasing income will be taxable only in the hands of the REIT investors and is subject to withholding on distribution by REITs to unit holders. The withholding is at a 10% rate for resident unit holders and at the applicable rate of tax for non-resident unit holders. It is yet to be seen whether non-resident unit holders will be allowed concessional rates prescribed under the applicable tax treaties.

However, some key areas including exemption from levy of DDT for the SPVs, applicability of minimum alternative tax or MAT on the sponsor at the time of contribution to the REIT have still not been addressed. Though passthrough status has been provided for rental income received by the REIT, no such amendment was made in respect of other revenue streams such as maintenance income received by REIT, making the structure possibly inefficient.

The policy is still silent on tax treatment in case of direct transfer of immoveable assets to the trust and while the Budget addressed concerns regarding transfer of shares of SPV by a sponsor providing them with a concessional tax rate, the holding period of three years for REIT units to qualify as long-term capital asset still does not put them at par with listed equity shares for which such period of holding is only 12 months.

Allowing foreign investments in REITs can be critical for its successful implementation. Amendments in foreign exchange management act or FEMA regulations for permitting foreign portfolio investors or FPIs and NRIs to invest in units of REITs without any cap or restrictions would be a welcome move. Modifications in the external commercial borrowings or ECB regulations should also be made so that REITS can leverage foreign debt.
Another issue that requires attention is applicability of stamp duty on transfer of asset by a sponsor to a REIT. Such charges etc render this model as highly cost-inefficient.

Sobha Rain Forest (Aspirational Homes)

Sobha Developers launched their new residential apartment project called Sobha Aspirational Homes  (in March 2015). Located in Balagere, near Varthurwithin close proximity Marathahalli, Outer Ring road, Varthur road, Sarjapura Road and Whitefield known as ‘Golden Quadrilateral’, the project is a boon for those looking for luxury and comfort in their dream home. Based on the theme it is being made, the project is rightly called Sobha Rain Forest

Sobha is well known for its quality standards and commitment. They are planning to develop this apartment project with pre-cast technology using best in class imported machinery from Germany and Italy. This makes these apartments all the more a wanted place for the people here.

Sobha Rain Forest Options
This project is spread over a massive 81 acres with a capacity to house almost 6000 families. The apartment size is expected to be in the range of 650 to 1200 square feet. Offering 1 BHK and 2 BHK apartments, these residences are specially designed keeping in mind nuclear families and professionals.

The prices Sobha homes has always been competitive and this time is no different. These apartments are competitively priced to make sure that they are well within the reach of the customers.