RBI set to lease Nariman Point plot from MMRCL for over ₹5,173 crore

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

Mumbai: The Reserve Bank of India’s (RBI’s) four-year hunt to find more office space in its backyard is close to culmination. India’s central bank has offered upward of ₹5,173 crore to the Mumbai Metro Rail Corporation Limited (MMRCL) to lease a 4.2-acre plot at Nariman Point.

FILE PHOTO: The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016. India's central bank kept its policy rate on hold at 6.75 percent on Tuesday, as widely expected, opting to wait until after the government's annual budget statement at the end February to decide on whether to cut interest rates further. REUTERS/Danish Siddiqui/File Photo (REUTERS)

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 interests from the Tata Group, Blackstone Group, Oberoi Realty, and RMZ Group via realty consultancy firm Knight Frank.

Sources said MMRCL scrapped the tender last week after the RBI showed interest in the plot, which is near its central office building in south Mumbai’s Fort area. The central bank has been looking to expand its office space for the last four years. It had even floated bids in August 2021 to acquire space either in south Mumbai or the Bandra Kurla Complex business district.

“Subsequent to RBI’s request to MMRCL for this land parcel, the MMRCL board has approved to consider the proposal appropriately. Accordingly, MMRCL has cancelled the tender,” a company spokesperson said. As per discussions between both organisations, MMRCL is likely to fetch more than the reserve price of ₹5,173 crore it had fixed.

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

The plot has a development potential of 1.6 million sqft, out of which 113,500 sqft would have to be handed over to the state towards rehabilitation. Had the bidder been selected, it would have the option of paying 100% of the amount upfront without any interest or 50% of the amount upfront and the balance over four years, with 12% interest per annum.

Upon the development of the plot, political party offices are to move back to their original addresses. The plot was acquired in 2017 to enable construction of the Metro 3 Line.