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Sobha Gets Top Honours in India’s First Ever Real Estate Best Practices Audit Report

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Sobha

Bangalore, Karnataka, India

After standing at the top of the Brand Rating for the last two consecutive years, Sobha Ltd. has yet again proved its market differentiation. The company has been ranked number one in Track2Realty’s Best Practices Report-2017 – one of the most credible works done by the country’s real estate think-tank group. This is first of its kind in-depth report on best practices prevalent in real estate sector in the country. As a matter of fact, out of the ten metrics that were evaluated in this study for “Best Practices” Sobha clinched top position on 6 of those.

The methodology employed towards this in-depth study was rigorous and versatile. Top 100 companies in real estate sector in the country were picked up and evaluated in this study. The companies were picked up based on their market size, market impact, market differentiation/contribution, investors’ choice and public perception. These companies were thereafter, evaluated on the defined metrics of: Fiscal Management, Execution, Market Depth, Consumer Connect, Transparent Deals, Functional Professionalism, Care, Employer, Communication and Desirable Practices.

Each of these metrics had 5-7 sub-metrics and the process of evaluation was based on rigorous in-house research, followed by detailed qualitative survey amongst the organized segment of investors, HNIs, NRIs and other influential stakeholders of the Indian real estate.

This was further sanitized with a pan-India public perception survey. A large sample size of 10,000 respondents were interviewed with a set of open-ended and close-ended questions to understand the consumer psychograph and outlook about these real estate companies.
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Mr. Ravi Menon, Chairman, Sobha Ltd. was delighted when he said. “This recognition is extremely humbling. This has completely vindicated our company’s philosophy which was so thoughtfully delineated 22 years back by our founder Mr. PNC Menon. Sobha’s unique backward integrated model has proven its mettle time and again and has helped us to hold our head high even during times of deep distress. Thanks to our founder and his foresight that we continue to carry in his footsteps exuding perseverance, dexterity and resilience. And many thanks to all the stakeholders out there who have recognized the toil and efforts that we all Sobhaites put together to bring our customer’s dreams closer to them by making good quality homes delivered on time.”

Mr. J C Sharma, Vice Chairman & Managing Director, said, “Sobha Ltd. has been ranked number one with the metrics of Execution, Consumer Connect, Transparent Deals, Care, Communication and Desirable Practices. The cumulative ranking of Sobha Limited can easily earn the laurels of becoming a sort of case study of best practices in the Indian real estate. What has elevated the positioning of Sobha Limited is the fact that it has been way ahead of other developers in a 20-city public perception survey.”

Furthermore, he said, “In the backdrop of RERA, such incisive reports are most timely and relevant which will help large number of players to professionalize their services. This is indeed a laudable effort from the Track2Realty’s team as it serves as the beacon to all those companies which want to come up. This is also the time to note that Sobha is one of the most professionally run companies where engineering excellence, transparency, innovation and value creation are at the core of all its activities.”

At a time when the buzzword in the Indian real estate is the compelling need to adopt the best practices, followed globally, Track2Realty has released its first-ever best practices report on the Indian real estate market. This insightful report segregates the good from the bad practices and highlights those companies that are closer to adopting the best practices and those which have yet to gain ground.

Sobha has been the first among the 10 developers across the Indian markets that could get A+ (Outlook Positive) rating in Track2Realty Best Practices Report 2017. A few other developers could earn A Rating (Stable to Positive). Most of the other developers could at best earn B+ (Outlook Stable), while some of the large developers by market size could only stand at the bottom with B Rating (Negative to Stable) or C Rating (Outlook Negative).

Source: businesswireindia.

Regulations

373 Maharashtra Cities To Fall Under PMAY Scheme

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The state of Maharashtra has added 232 cities to the existing 142 which makes it 373 cities under the Pradhan Mantri Awas Yojana Scheme (PMAY).

The officials at the housing department feel that this step will aid the government take up more projects under the PMAY scheme.

Sachin Kulkarni, Builder shared his concerns over the lack of coordination between the department in executing PMAY projects. He said, “This is a good sign. However, the PMO’s seriousness in promoting HFA is diluted by the time it reaches the authorities. Apart from collecting application from interested beneficiaries, nothing has moved on the ground in urban centres. I hope that this initiative moves on fast track”.

Maharashtra CM Devendra Fadnavis recently states that the in order to create more housing stock the state’s Slum Rehabilitation Authority scheme be brought under PMAY so that it can receive the subsidy to create more affordable housing. He clearly mentioned that the government intends to create more housing stock and it was taking various initiatives and making policy changes for it.

Also Read- Affordable Housing To Get A Boost With PMAY’s Scope To Be Extended To Private Lands

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Real Estate Sector May Fall Under GST What Does It Mean For Buyers?

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One after the other the real estate sector has witnessed massive policy and law changes in its systems. Nonetheless, the tide has not passed yet. The GST council will take up a proposal to bring it under the uniform nationwide levy.

As the industry is still recovering from the RERA Act, the finance minister, Arun Jaitley said that there is a strong case to include real estate in the new indirect tax regime. He said this last week and also mentioned that GST Council will discuss it in November.

At present, the home buyers are paying 12 percent GST on under-construction properties. This percentage includes two taxes which are stamp duty and registration. The rate of which varies in each state but GST will make them uniform.

Santosh Dalvi, KPMG India partner (indirect tax) said, “If the entire real estate is brought under GST, they would have to abolish the stamp duty and we don’t know how the government plans to compensate the states for their loss.”

The stamp duty with registration and GST comes to approximately 18 percent for under construction properties. He further said, “So, it’s important to look at what rate it will be taxed at. We can then look at consumer prices”.

While agreeing, Bipin Sapra, EY partner (indirect tax), added, “It’s going to be a test for the government”.

Developers also pay taxes on raw materials. However, unlike other businesses, they don’t get any tax refunds through input credit. GST taxes every stage of the business activity to better compliance and compensates for it by permitting refunds.

Anuj Puri, Anarock Property Consultants chairman, said “By including real estate under GST, builders can get a fair amount of input credit, helping bring down costs,” He added that it would make homes cheaper for buyers.

According to Sapra, it will depend on the tax rate applicable.

Niranjan Hiranandani, co-founder of Hiranandani Group said, “Real estate under GST ambit means consumers will only have to pay one final tax.” He stated that with the commencement of RERA it brings transparency and GST would reduce the burden in terms of taxes payable while buying the home. He concluded, “Not only will this create positive sentiment but it should also boost actual sales”.

Also Read: Affordable Housing Is The Changing Face Of Indian Real Estate

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Home Buyers Will Be Covered Against Builders Who Are Going Bankrupt

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In a move to protect home buyers from builders declaring their bankruptcy, the Insolvency & Bankruptcy Board of India (IBBI) has amended rules which make it necessary for any company to showcase how they have dealt with interests of all stakeholders. This is directed towards companies like Jaypee Infratech and some of the entities of Amrapali Group.

The regulator has informed about the revised rules last week. This will ensure that banks and other creditors do not get away by protecting their interests at the expense of others who are impacted by the action.  Banks are part of the creditors’ committee. They become an important decision-making body after a company is admitted for bankruptcy.

An expert bankruptcy lawyer said, “The change in the rules has plugged a gap as flat buyers are of the view that there is nothing to protect their interests.”

According to the new law that was enacted last year intends to speed up the resolution process in a period of 180 days, with a possible extension of 90 days. This will be done by appointing insolvency resolution professionals who will take charge of the company’s operations and prepare a plan. As per the law, an information memorandum will be finalized if the creditor’s committee is willing to take applications from other interested companies to take over the company.

The insolvency experts say that the law providing for the plan binds corporate debtor (the company) and its members, employees, guarantors, and creditors, other stakeholders involved in the resolution plan. However, there are no obligations mentioned in the rule to give any treatment to the stakeholders other than the financial creditors (banks) and operational creditors, which includes vendors and others who may have dues.

The National Company Law Tribunal, based on the comfort provided by the revised rules, will choose the final resolution plan based on bids that are received. The lawyer further said, “The tribunal will not clear the resolution plan without giving notice to all stakeholders and the flat buyers can raise objections at that point of time.”

Also Read: Tanvi Group Fail To Deliver Homes And Declare Bankruptcy

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