Sea facing Air India building finally lease out, rent income Rs.100 crs pm

From Money Control

The cash-starved national carrier has finally succeeded in monetising its past headquarters — the 23-storey Air India Towers — in the heart of the megapolis with just one floor being empty now and the rental income touching Rs 100 crore.

Most floors of the sea-facing 344 feet tall, centrally air-conditioned building measuring 2,20,000 sq ft on the historic Marine Drive in the Nariman Point area built in 1974, had been lying vacant for many years even when the flag carrier was headquartered in the building. In February 2013, the airline under the then chairman Rohit Nandan decided to shift its base to New Delhi.

The irony is that neck-deep in debt, the airline with over Rs 30,000 crore long-term aircraft purchase loans and over Rs 30,000 crore in accumulated losses, has been spending close to Rs 90 crore a year to upkeep the tower. “We are left with just one vacant floor now. We have already rented out 8 floors to the Income Tax department, and 4 floors each to State Bank of India and the Service Tax department.

We are talking to SBI for the remaining floor and hope to conclude this as well,” Air India general manager for finance Kirti Rao told PTI here today. Each of these floors have a carpet area of around 10,000 sq ft and at average price of Rs 350 per sq ft, the tower is worth around Rs 900 crore. The company ruled out selling the building, saying it would only renting it.

Rao said with this the airline has just two floors with them in the tower. The rest of the floors are occupied by TCS, Director General of Shipping and Bharatiya Mahila Bank, which has half of the ground floor. TCS has been the oldest tenant on the building. The Air India Tower had the country’s first escalator used in the ticket booking area, an underground two-layer parking facility, high speed elevators and fire-fighting equipment. Each floor had a lease price of Rs 2.50 per sq ft.

The asset monetisation plan was part of the January 2012 bailout of the airline under which it would be infused with over Rs 33,000 crore of taxpayers money. As per the turnaround targets, AI is required to rent, sell or re-develop its properties to gather revenues of Rs 5,000 crore in the next 10 years. This includes 106 properties across the country, as well three in Tokyo and London.

AI also has land parcels in Hong Kong, Nairobi, Mauritius, Mumbai, New Delhi, Gurgaon, Chennai, Kolkata and Coimbatore, most of which are yet to be sold or leased. Rao also said that the airline also concluded the sale of four of its posh apartments on the Peddar Road in south Mumbai to SBI for Rs 88 crore. The new owner is yet to take possession of the flats, he added.

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