In a significant move marking the latest chapter in the saga of Jet Airways, a government-appointed liquidator has put up the defunct airline’s office space for auction. Located in Mumbai’s bustling Bandra-Kurla Complex (BKC), this offer includes an entire floor of the commercial tower Godrej BKC, with a reserve price set at Rs 335.24 crore.
The auction is slated for next month under the provisions laid out in the Insolvency and Bankruptcy Code (IBC) of 2016, targeting potential buyers who see value in this prime location. This development comes at a time when Jet Airways continues to navigate the complexities of its insolvency proceedings, leaving behind a trail of untapped assets.
Jet Airways, once a leading airline in India, has had a tumultuous journey since its operational suspension in 2019. The airline’s downfall led to a cascading effect on its tangible assets, including the office space now in question. Previously, in 2020, global investment heavyweight Brookfield Asset Management bought two office floors within the same building for a hefty Rs 490 crore, showcasing the high demand for office space in this strategic business hub.
The property being auctioned encompasses 83,000 square feet of office space, alongside rights to 70 exclusive parking slots. Interestingly, this section of the property has recently been sealed due to unpaid municipal dues, although a ruling from the National Company Law Tribunal (NCLT) reinstated access prior to the auction. This adds a layer of complexity to the bidding process.
Initial bidders are expected to submit an earnest money deposit of Rs 32.5 crore, a considerable upfront commitment that hints at the asset’s perceived value. The property is being auctioned on an ‘as is where is’ basis, meaning that any successful bidder must be prepared to take on existing liabilities, including taxes and dues.
Real estate analysts express cautious optimism about the auction, noting the historical price dynamics in the BKC area. In the prior auction held in 2020, Brookfield matched the reserve price, securing the property at Rs 28,900 per square foot—a remarkable 25% discount compared to prevailing market rates at that time. Factors such as limited new office supply and high demand in the business district played a key role in determining this valuation.
The Godrej BKC building, a 19-story commercial tower developed in collaboration with Jet Airways, has been home to an array of high-profile tenants, including global organizations like the World Bank and PayPal. Such esteemed occupants enhance the property’s appeal, making it a coveted target for investors looking to penetrate the lucrative real estate market of Mumbai.
Brookfield, which retains a right of first refusal (ROFR) from its previous acquisition, has the option to match any competitive bids that emerge during the upcoming auction. This gives the investment firm a strategic advantage should other bidders seek to acquire the space. If Brookfield chooses to exercise this right, it could potentially lead to a bidding war, elevating the final sale price.
For prospective bidders hoping to secure a prime office location in one of India’s most sought-after business districts, this auction presents an intriguing opportunity. However, bidders must also navigate the complexities tied to the existing obligations and liabilities of the property. It’s a high-stakes situation where the intersection of opportunity and risk is sharply defined.
As the auction date on June 2 approaches, the real estate market will undoubtedly be watching closely. With a backdrop marked by Jet Airways’ storied past, the outcome could redefine expectations for distressed assets in Mumbai’s commercial real estate landscape.
