Godrej Properties Ltd (GPL), the real estate development arm of the Godrej Group, has concluded a Rs.500 crore deal with Jet Airways to develop the latter’s two-acre plot in the Bandra Kurla Complex (BKC) area in Mumbai.
It will construct one million sq feet of floor space that can fetch up to Rs.3,000 crore at current rates, in three years. The BKC area commands a selling price of Rs.20,000-30,000 per sq ft, according to the sources close to the development.
Sources maintain the agreement was reached much earlier but signing was delayed since Jet was unable to sign the agreement because of an undertaking it had given to the Bombay High Court in the Air Sahara takeover case.
The undertaking expired in May, allowing Jet to conclude the deal. The development will also ease the country’s largest airline’s debt burden. It had a debt of Rs.13,000 crore at the end of the June quarter. The plot was acquired by the airline in 2008 for Rs.340 crore.
GPL will take on the Rs.360-crore debt obligation Jet has on the property and will also pay it Rs.135 crore to compensate for expenses that have already been incurred. Additionally, GPL agreed to sell 161,460 sq ft of carpet area to Jet at development cost.
“The space will be used as the state-of-the-art new headquarters for Jet. GPL and Jet will share the profits from the development in a 50:50 ratio,” the companies said in a statement.
“GPL has created a special purpose vehicle (SPV) to execute the project. Jet’s Rs.350 crore debt will be transferred to this SPV,” sources said.
Skidmore, Owings & Merrill, a leading architectural firm that has designed many outstanding developments across the world, including the world’s tallest building, the Burj Khalifa in Dubai, has been hired as the lead architect.
