Mumbai: Air India talks of Rs1/sqft a month rent in tower

Air India (AI) that has put its iconic tower, the Air India Building, located at Nariman Point on sale, has finally relaxed one of the several clauses after some of the prospective bidders raised a query. One of the clauses was the company will retain, 5,000 sq ft on the 22nd floor of the building and won't pay any compensation. Now they have decided that they will pay a rental of Rs 1 sq ft per month for the space. According to industry sources, going by the market rate the rentals for this area would be around Rs 10 lakh per month.

Air India (AI) had put the iconic tower located at Nariman Point on sale. A tender for the same was issued by the national carrier, on December 10. Only Government entities are allowed to participate in the bid. The reserve price for the building hasn't been decided by AI. Bids can be downloaded from Tuesday till December 29 and should be submitted at the Air India Corporate Office, Delhi. The last date for submitting the bid is December 31.

The building is built on a plot of land measuring 7512.60 sq mt leased from Mumbai district collector for 99 years and has 23 floors besides two basements. The total built-up area is 4.99 lakh sq ft.

Out of the 23 floors of the building 17 floors have been given on rent, and the approximate rental income earned for letting out the space is Rs 107 crore per annum.

The other clause that raised questions stated that AI will retain the logo on the top of the building and the name of the building should be maintained as 'Air India Building' by the buyer. The company would undertake to maintain the logo, but no rentals/compensation will be paid for continuing to display the logo. The second clause has remained unchanged.

According to the spokesperson of AI who confirmed the details, they made the clarification after certain queries were raised by prospective bidders. He, however, refused to disclose the number of bidders.

Rajiv Jain, a realtor from South Mumbai said, "Going by the ongoing rental rates in Nariman Point, which is anywhere between Rs 175-200 per sq ft, no less than Rs 10 lakh can be earned per month if given on rent."

Post the sale, the buyer must deposit 20 per cent of bid value within 30 days from the date of issue of acceptance letter. Balance 80 per cent of bid value along with other duties and taxes, if any, has to be deposited within 90 days from the date of issuance of acceptance letter. If the bidder fails to give the 80 per cent, it may lead to forfeiture of the initial 20 per cent. Earlier Air India had tried to sell this building, but that attempt failed.