NEW DELHI: Sahara India's hunt for iconic properties globally
has now taken it to Air India's 23-storeyed landmark headquarters at Mumbai's
Nariman Point. Cash-strapped AI had recently decided to keep the top three
floors and lease out the remaining 16 lakh square feet to generate about Rs 50
crore a year. The Lucknow-based Sahara group wants to lease the entire area for
30 years.
However, AI sources said the Sahara bid has not been accepted as the airline wants to lease the building for shorter period. A Sahara spokesman said the group wants the AI Building but did not elaborate for what purpose. "We have advertised to lease the building, except the top three floors, for a period of three to five years while Sahara wants it for 30 years to possibly house a hotel here. So, there is no option of leasing the building to them. Also, if one party takes the entire building then they may want to rename this landmark. One of our terms and conditions is that the building must remain as AI Building," said a senior official, adding that the Sahara bid has not been accepted.
AI does not want what Chicago witnessed some time back - see the name of its landmark Sears Tower change to Willis Tower. At the time of its completion in 1973, it was the tallest building in the world. London-based insurance broker Willis Group Holdings agreed to lease a portion of the building - still the tallest in US - in March 2009 and obtained the building's naming rights.
However, AI sources said the Sahara bid has not been accepted as the airline wants to lease the building for shorter period. A Sahara spokesman said the group wants the AI Building but did not elaborate for what purpose. "We have advertised to lease the building, except the top three floors, for a period of three to five years while Sahara wants it for 30 years to possibly house a hotel here. So, there is no option of leasing the building to them. Also, if one party takes the entire building then they may want to rename this landmark. One of our terms and conditions is that the building must remain as AI Building," said a senior official, adding that the Sahara bid has not been accepted.
AI does not want what Chicago witnessed some time back - see the name of its landmark Sears Tower change to Willis Tower. At the time of its completion in 1973, it was the tallest building in the world. London-based insurance broker Willis Group Holdings agreed to lease a portion of the building - still the tallest in US - in March 2009 and obtained the building's naming rights.
"We are going to lease out four floors in the next fortnight
and have bids for four more floors from government departments but their rates
are below our expectations. We have mulled over the reasons for the below
expectation response and discovered that the short three to five year lease may
be preventing people from approaching us," said the official.
Some interested parties have told AI brass that they would need to invest a lot in the areas they plan to lease. Renting the same for a short 3-5 year period, they claim, did not justify such an investment. The AI board is now going to review the lease period.
AI desperately needs to raise cash to survive. On Tuesday, the aviation ministry told Parliament that the airline has a debt burden of Rs 47,226 crore as on July 31, 2012. According to its approved financial restructuring plan, AI is required to raise Rs 5,000 crore over a decade through asset monetization. The airline has appointed a global real estate consultant to examine its properties in India and abroad and suggest a roadmap for their monetization.
Some interested parties have told AI brass that they would need to invest a lot in the areas they plan to lease. Renting the same for a short 3-5 year period, they claim, did not justify such an investment. The AI board is now going to review the lease period.
AI desperately needs to raise cash to survive. On Tuesday, the aviation ministry told Parliament that the airline has a debt burden of Rs 47,226 crore as on July 31, 2012. According to its approved financial restructuring plan, AI is required to raise Rs 5,000 crore over a decade through asset monetization. The airline has appointed a global real estate consultant to examine its properties in India and abroad and suggest a roadmap for their monetization.
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