RBI offers ₹2,650 cr for new office plot at Nariman Point

The plot has a development potential of 1.6 mn sq ft, of which 113,500 sq ft will have to be handed over to the state to rehabilitate existing properties

Mumbai: The Reserve Bank of India (RBI) has offered ₹2,650 crore to the Mumbai Metro Rail Corporation Limited (MMRCL) for a 4.12-acre plot at Nariman Point on a long-term lease to expand its headquarters in south Mumbai.

RBI offers ₹2,650 cr for new office plot at Nariman Point

The plot has a development potential of 1.6 million sq ft, out of which 113,500 sq ft would have to be handed over to the state for rehabilitation of properties that existed earlier on the land. MMRCL had put the plot up for a 90-year lease in October through international property consultant Knight Frank.

An official aware of the discussions between the two parties said the RBI’s offer was around 25% more than what MMRCL expected to fetch for the plot. HT had earlier reported officials saying that the central bank had offered upward of ₹5,173 crore to MMRCL. However, the official clarified that ₹5,173 crore was the overall project’s cost, including construction, and MMRCL was actually expecting to fetch around ₹2,000 crore.

“Therefore, getting an offer of ₹2,650 crore is around 25% more than what MMRCL had expected to earn through monetisation,” said the official. “Discussions continue to be on track on this government-to-government transaction.”

MMRCL had put the plot on the block in October last year, with the proceeds to be utilised to initiate the repayment of debt raised from the Japan International Cooperation Agency (JICA) for the construction of the Metro 3 (Aarey-BKC-Cuffe Parade) line. The 33.5-km metro line is being built for ₹37,276 crore, out of which ₹21,280 crore has been lent by JICA.

The metro operator floated a bid in early October with a deadline of November end, which was extended twice to garner interest from the real estate industry, private companies, alternative investment funds, and foreign investment funds. It had received interest from the Tata Group, Blackstone Group, Oberoi Realty, and RMZ Group.

However, MMRCL scrapped the tender last month after the RBI showed interest in the plot. The central bank has been looking for additional office space for at least four years as its existing two buildings (the headquarters and the New Central Office) near Horniman Circle are saturated.

The plot earlier housed offices of various political parties, including that of the undivided Nationalist Congress Party (NCP), which has since been shifted to Ballard Estate. It was vacated to facilitate the construction of the Vidhan Bhavan metro station.