The sale of the famous Air India Building at Mumbai's tony Nariman Point neighborhood could get Rs. 600-700 crore, land experts stated, far underneath the value the 23-storeyed building could have brought 10 years prior. Nariman Point, once among the world's costliest office areas, has lost its sheen as an ever increasing number of organizations move to the Bandra-Kurla Complex (BKC), as per property advisors.

 

"The structures at Nariman Point are old and are not helpful for setting up present day workplaces with vast floor plates and computerization offices," said Pankaj Kapoor, managing director, Liases Foras, a real estate advisory firm. The former headquarters of the national carrier, considering the intricacy of property and restricted redevelopment potential, could get the carrier about Rs. 650-700 crore, said Kapoor.

 

"Many individuals additionally live inside the region of BKC, at private buildings adjacent, and travel to BKC for work which has led Nariman Point to additionally lose its allure as a prime office area," Kapoor said.

 

As indicated by a land merchant, who would not like to be named, property rates remain at Rs. 28,000 to Rs. 32,000 for every square foot, contingent upon structures, for buy at Nariman Point. At BKC, the rates are Rs. 32,000 to Rs. 35,000 for each square foot.

 

The property rates at Nariman Point, before the financial crisis a decade ago, remained at over Rs. 50,000 for every square foot.

 

The person specified above said that under the present market situations, selling Air India building could get about Rs. 600-650 crore for the airline.

 

The rental cost at Nariman Point area remains at Rs. 180-250 per square foot, down from Rs. 450-500 for each square foot amid its peak (before the 2008 money related emergency), depending upon the building, the land representative specified above said. Current rentals at BKC remain at about Rs. 180-350 for every square foot, contingent upon the building.

 

The government has begun discussions for the sale of the Air India building to the country’s biggest container port Jawaharlal Nehru Port Trust (JNPT) as part of efforts to raise funds for the cash-strapped national carrier, PTI had reported on 27 June.

 

The building, which remains in a zone of more than 220,000 square feet, has a few empty floors, as per an Air India official, who would not like to be named.

 

Floors in the building overlooking the Arabian Sea have been leased to the directorate general of shipping, State Bank of India, and Tata Consultancy Services Ltd, among the others. In contrast, Express Towers, which sold for Rs. 870 crore in 2014, was spread more than 400,000 square feet and had 10-15% opportunity amid the deal.

 

Union minister for shipping Nitin Gadkari had on Tuesday said that the ministry has requested that JNPT purchase the Air India building. The minister said that the building could be given to lease to government workplaces after the deal.

 

A senior Air India official disclosed to Mint that Air India has been not able meet its benefit monetization target due to issues with arrive titles and end- user restrictions.

 

"The airline could have effectively gotten near Rs. 900-1000 crore by offering the Air India buildings 10 years back. Today, with the property rates at Nariman Point falling, the building could bring about Rs. 700-800 crore," said the official, who would not like to be named.

 

Air India has cleaned up Rs. 543.03 crore so far from monetization of its assets in prime areas between financial year 2012-13 and 2017-18, priest of state for avionics, Jayant Sinha told the Lok Sabha in February.

 

The central government had in 2012 approved a monetization plan for Air India that set a target of Rs. 5,000 crore, by 2021-22, to be raised by the airline by selling its real estate assets.