The iconic Air India building, mostly vacant over the last two years, has finally found occupants with Cafe Coffee Day (CCD) taking the last available slot and the national carrier deciding to hold on to two floors.
The building has attracted rents as high as Rs 300 per square feet per month, an Air India official told FE. According to sources, this rental includes overheads such as property tax, maintenance charges, and fittings. “We expect to earn a rental income of Rs 85 crore per year from our tenants in the building,” the official added.
The national carrier is also setting up an aviation museum spread over 9,200 sq ft on the ground floor of the sea-facing property at Nariman Point and will host a range of artifacts collected and owned by the airlines since its inception.
The space set to be leased by CCD was earlier used as a ticketing counter by the airline in the building.
At present, occupants in the building include the service tax department (three floors), income tax department (seven floors), Tata Consultancy Services (two floors), State Bank of India (four floors), Shipping Corporation of India (SCI) apart from Mahila Bank, which is located on the sea facing side of the ground floor.
“Air India will keep two floors, including board rooms, for its staff in the building,” the senior Air India official said.
“We also hope the aviation museum, which will be housed on the ground floor of the building, to be ready in the next three-four months. It will house paintings, artifacts and other historical souvenirs that will give a lot of insight to youngsters about the country’s rich aviation history,” the official added.
The 23-storeyed Air India building, which housed most senior executives of the airline before the headquarters were moved to New Delhi in February 2013, has been mostly vacant since 2013. Several parties like the Forward Markets Commission (FMC) and Directorate General of Shipping (DGS) had earlier shown interest to rent/lease out space in the building, but these didn’t materialize due to various reasons, including the high rent demanded by the airline.
Air India has been facing major difficulties in monetising land assets as required under its 2012 turnaround plan (TAP). What helps in this case is that lease rentals have dropped by as much as 37% since 2012-13. Rents in the last few months for Nariman Point Grade A buildings are at Rs 220 per square feet per month, a report released in April 2015 by real estate consultant CBRE South Asia Private said.
* Air India expects to earn a rental income of Rs 85 crore per year from its tenants in the building
* The national carrier is also setting up an aviation museum spread over 9,200 square feet on the ground floor of the
* Occupants in the building include the service tax department (three floors), income tax department (seven floors), TCS (two floors), SBI (four floors) and SCI, apart from Mahila Bank