Disinvestment efforts in the case of debt-ridden national carrier Air India may not have attracted any bidders, but investors are making a beeline for the company’s valuable real estate assets. Especially its iconic Air India building at Nariman Point in Mumbai.
Air India, which has accumulated a debt of close to Rs 50,000 crore, had first put up the leasehold rights of the land and the building up for sale last December. The company was expecting to raise about Rs 600-700 crore for the asset. However, the building has raised interest from many public sector organisations, including the Jawaharlal Nehru Port Trust (JNPT), the Reserve Bank of India (RBI), Life Insurance Corporation (LIC) and the Maharashtra government, which has joined the race with an offer of Rs 1,400 crore, almost double the amount Air India had expected to raise.
The state-run JNPT and LIC have quoted Rs 1,375 crore and Rs 1,200 crore respectively. The offer from the RBI unknown, but reports say the central bank may want to take up the entire building and is willing to give advance lease rentals for 10 years with payment upfront.
Talks are also on between Maharashtra Chief Secretary U P S Madan, Civil Aviation Secretary Pradeep Kharola and Air India’s managing director Ashwani Lohani for the building.
Experts point out that there is more to the building than the real estate. “The building is not just about real estate... it is an icon for Mumbai. Also, the location is an advantage. It is very difficult to get such a huge space in that area. No wonder offices are making a beeline for it. Only government entities were permitted to participate in both rounds, otherwise many corporate were eyeing that building,” a senior executive of realty consultant Knight Frank said.
Built in 1974, the building was designed by New York-based architect John Burgee. Located on Marine Drive, facing the Arabian Sea, the building is a landmark that has been a mainstay on Mumbai’s skyline. The structure was also the first centrally air-conditioned building which boasted an escalator in India.
The building was also a witness to the infamous 1993 serial blasts, one of which took place in its basement. The blast killed 20 people and destroyed the Bank of Oman office, which was located just above the garage. The building has also served as the firm’s headquarters till 2013, before the head office was shifted to Delhi.