In a bid to shore up revenues and unlock the value of its two prime real estate assets, cash-strapped Air India plans to lease out around 1.50 lakh sq ft of office space at its Mumbai headquarters and at Airlines House, its registered office located in Delhi.
The national carrier recently invited expressions of interest to appoint a real estate firm to advice it on the deal.
According to analysts, the airline could at best garner up to Rs 500 crore through the proposed leasing, considering the prevailing dull market conditions.
“We have around 3 lakh sq ft of space at our Nariman Point office in Mumbai and the Parliament Street office. Of this, over 1 lakh sq ft is under our use, while the rest is under-utilised. So we have decided to lease out around 1.50 lakh sq ft of space,” a source told PTI here.
Most of the floors of the 23-story sea-facing Air India Tower in Mumbai’s prime business hub Nariman Point have been lying vacant for quite some time with the only major occupant being the software behemoth TCS.
“In the current climate, the rentals in Mumbai and Delhi are hovering in the range of Rs 300-325 per sq ft. At these rates, Air India could get up to Rs 500 crore from the two properties,” a senior executive with a leading realty consultant said.
The executive added that the airline could get some premium for being in possession of landmark properties but it would not be very significant.
Air India expects the two landmark properties could evoke good interest from top Government establishments, domestic and global corporates and financial institutions.
“Both these properties are the best addresses in the two cities. Besides, they also offer good facilities and more usable areas. We expect a good response to our properties,” they said.
“The demand (for commercial space) at Nariman Point is pretty much average though there is no fresh supply. In fact, some of the global banks are shifting out of the prime CBD (central business district) and are moving northward to the city,” a highly-placed executive with a leading property brokerage firm said.