Air India (AI) has initiated the process of leasing out its iconic 23-storey Nariman Point building in South Mumbai and another property in New Delhi, a move likely to help generate revenues for the cash-strapped carrier, which has a debt of nearly Rs 50,000 crore.The national carrier has invited expressions of interest from real estate consultant to lease out commercial premises in AI building at Nariman Point and Airlines House, Gurudwara Rakabganj Road, New Delhi.
The airline’s turnaround plan (TAP), prepared by SBI Caps and reviewed by consultants Deloitte, had identified AI properties in Nerul, Navi Mumbai and Baba Kharak Singh Marg and Vasant Vihar in Delhi besides the Nariman Point building as “some of the key assets for monetisation”. A government panel that vetted the plan had linked infusion of fresh equity into the airline to a detailed “asset monetisation plan”.
The TAP had projected a revenue of Rs 4,000 crore from monetisation for the first five years going up to around Rs 10,000 crore in the next ten years. Average rental rates for prime sea-facing commercial property at Nariman Point is upward of R400 a square feet per month.
“The TAP had made certain projections,” an AI official said. “However, we have decided to appoint a consultant to advise us on the issue. To start with, we want to lease out only two properties. We are hopeful to getting a good response as both are prime properties.”