Realty News Roundup: Rajya Sabha Discusses Real Estate Bill

Rajya Sabha will discuss the Real Estate Regulatory Bill today (Picture Credit: wikimedia.org)

The protests against the Real Estate Regulatory Bill is becoming more intense with each passing day. On the evening of May 5, 2015, the Rajya Sabha will discuss the Bill and opposition parties are likely to oppose it tooth and nail.

Here are the other important real estate stories of the day:

Real estate broking company Coldwell Banker India wants to establish 30 franchisees this year. DLF plans to raise about Rs. 3,600 crore to handle debt, and might launch India’s first REIT. Panchvati Builders allegedly defrauded 325 flat owners, though no action is taken against them yet. Real estate advisory firm Square Yards Consulting raised $6 million from investors abroad to expand its operations to multiple platforms.

Now, the stories in detail:

1. The Rajya Sabha is slated to debate the Real Estate Regulatory Bill today in the evening. The debate is likely to be intense, as the opposition parties are strongly against the government on several Bills governing real estate in India. As opposition parties insisted that the government should refer it to a select committee of Parliament, the government was forced to defer the Bill in the Rajya Sabha on April 29, 2015. Congress Vice-President Rahul Gandhi had criticized the Real Estate Bill, assuring flat buyers that the Congress will oppose the Bill inside and outside the Parliament. But, the government insists that the Bill had the support of a standing committee which has representatives from all political parties, and that the Bill respects the interests of customers and promotes the real estate sector.

2. Real estate broking company Coldwell Banker India plans to establish 30 franchisees this year, and might raise the number of franchisees to 100 by 2018. Mona Jalota, vice-president for operations and strategy, Coldwell Banker India said they wish to establish more franchisees in India because they see a great potential in the real estate markets in Chennai. Coldwell Banker India expects property in Chennai to experience steady growth in 2015.

3. To handle debt, DLF, India’s largest real estate firm, plans to raise about Rs.3,600 crore in this quarter by issuing securities, promoted by its IT-SEZ. DLF also plans to launch India’s first Real Estate Investment Trust (REIT) to monetize its commercial real estate assets. Though India’s tax norms have prevented the formation of REITs, now the situation is more favorable. REITs were given pass-through status in the Union Budget 2014-15, and long-term capital gains tax on REITs was abolished. The Finance Minister, Arun Jaitley, recently said that REITs would not be subject to Minimum Alternate Tax (MAT) either. So, India might see more REITs this fiscal year.

4. According to an Economic Times report, Panchvati Builders allegedly violated several regulatory norms and defrauded 325 flat owners. But, despite several complaints registered against the real estate company, it has managed to evade punishment. Panchvati Builders has not formed a registered cooperative society of flat owners even after 13 years, and the 20 families living in Suman Castle building on Amravati Road, Nagpur, were facing problems. The builder had also collected Rs. 25,000 from the flat buyers toward one-time maintenance cost, but they had not deposited the money in a bank, and did nothing to ensure maintenance of the flats.  

5. Real estate advisory firm Square Yards Consulting raised $6 million from investors in Singapore and Hong Kong. They also plan to raise their share in India’s primary residential market to 15% by the end of 2017. Square Yards Consulting also intends to scale up their operations across many platforms, including e-commerce. It has facilitated transactions worth $250 million in gross market value (GMV) for real estate in India, and $50 million in GMV for global real estate in its first year.