All seems to be well with Air India operationally, but the national carrier’s plan to rent out space in its iconic building at Nariman Point, Mumbai, is likely to hit a pocket of turbulence as the area is losing sheen as a hub of commercial realty.
The difficulties in renting out 16 of the building’s 22 floors have started with the airline receiving only two bids till November 3 — the last date for receiving the request for proposal from interested parties. The lukewarm response forced Air India to extend the date till November 29, with a hope that more bids may trickle through.
It remains to be seen whether the airline will be able to find tenants for its property. The fact that Air India Building was not lapped up points to the emergent scene where Nariman Point, which houses several businesses, is fast losing out on the prime commercial space rankings in the financial capital.
Nariman Point always had an aspirational quotient, which drew businesses to set base in one of the many towers that dot the landscape with the Arabian Sea for company. Even the sea view and the proximity to the Queen’s Necklace are not enough to charm the prospective tenant, for other realities have taken over.
The first among them is the price factor and the emergence of other business districts that offer many an advantage, such as Bandra Kurla Complex or BKC, Lower Parel and Prabhadevi.
“With a per square foot rent of R275 to R325, Nariman Point is expensive and offices are being shifted to areas with lesser charges. Companies with deep pockets are shifting to BKC, others are shifting to Prabhadevi and the cheapest office space are available in Lower Parel,” says Ramesh Nair, managing director (western region) of international property consultancy Jones Lang LaSalle.
The monthly per square feet rates at BKC is Rs 250 and above followed by Prabhadevi at Rs 200 plus. Lower Parel is the cheapest among them at a per square feet rate of Rs 150 plus.
Analysts add that it is not just the price factor. The various buildings at Nariman Point