SBI, DGS to rent space in Air India Building

The move will boost the airline's asset monetisation programme

National carrier Air India has finalised a deal with the country's largest lender State Bank of India (SBI) to lease out four floors at its iconic headquarters at Nariman Point here, giving fillip to the airline's asset monetisation programme, sources said.

Besides, shipping regulator Directorate General of Shipping (DGS), is mulling to move some of its offices to the same building and has approached the Shipping Ministry on this issue.

"SBI has decided to lease from us four floors or 54,000 square feet at the rate of Rs 350 a square feet per month at Air India building in response to our tender," airline sources told PTI.

The realisation is much higher than the Rs 200-250 per square feet estimated by analysts, who expect the rentals in the Nariman Point area to fall as business activity in the city shifts to pockets like the suburban Bandra Kurla Complex.

Incidentally, SBI's headquarter is located in the Nariman Point area itself.

The shipping regulator DGS has also evinced interest in renting three floors or 40,500 square feet of space at the same rental as SBI, sources said.

The interest shown by the two entities has bolstered Air India's confidence and the carrier is already mulling, making an additional 35,000 square feet of space available for bidding in the same building.

"We had tendered for 1,60,000 square feet and have got interest for 94,000 square feet. We will now come with a re-tender for 1 lakh square feet which will include the amount of area yet to be bid from the first tender and an additional 35,000 square feet," sources said.