Air India may have relocated its headquarters to New Delhi to be closer to the center of power to avail the bailout package, but its erstwhile deserted headquarters at Nariman Point has turned out to be cash cow helping the Maharaja to meet part of its operational expenses and loan repayment liabilities.
This iconic Air India building (in picture) which opened in 1974 to house the headquarters of Air India, is now earning rental income to Rs 85 crore a year which is used to tide over part of Air India’s financial crisis.
However, this huge rental income can meet only six days of the Maharaja’s losses considering its annual loss of Rs 5547 crore (over Rs 15 crore per day) reported for the year 2014-15.
As part of its turnaround plan approved by the Government, Air India is monetizing its real estate assets by renting our surplus office space and selling properties to augment funds. Leasing out space at the Air India building is part of this strategy.
By now the airline has leased out 20 floors of its 24 floor building to different tenants which include State Bank of India (SBI), Income Tax Department, Service Tax Department and Tata Consultancy Services.
“We have got very good rates from our tenants and space has been leased out with rates varying from Rs 285 to Rs 350 per sq ft per month. These are long term leases and we are earning rental income of Rs 85 crore a year from this building,” an Air India spokesperson said.
Other than 21, 22, 23rd and the first floors, all other floors have been leased out and now Air India is looking for a bank to lease out its ground floor measuring 9,000 sq ft.
Earlier Air India had invited bids from restaurant and cafeteria owners to rent out the ground floor but it could not materialize as a leading coffee chain backed out recently.
“We think a bank will be a better fit into the profile of our other tenants and we already have two banks operating at our premises,” the spokesperson added.
Last month the Air India had received approval from the Union cabinet to sell four apartments in South Mumbai to SBI for Rs 88 crore. The apartments are expected to be transferred during this month.
Air India has to meet an annual target of Rs 500 crore through monetization of real estate assets and the steady rental income from the Air India building is a big help.
