Mumbai: The headquarter of defunct Kingfisher Airlines will be up for auction on Thursday. Known popularly as Kingfisher House, the property is expected to generate interest among corporate houses and retailers, mainly because of its proximity to the highway, though some real estate agents and advisers say the price of the property is on the higher side.

Located near the domestic airport at Mumbai’s Vile Parle area, the property is being put up for e-auction through which interested buyers will bid for it online. The base price for this multi-storey building, with a built up area of over 17,000 sq.ft, has been set at 150 crore.

In February last year, a consortium of 17 banks led by the country’s largest public sector lender State Bank of India (SBI) had taken possession of Kingfisher House in a bid to recover loans granted to the airline. Kingfisher has pending dues of over 9,000 crore which banks are trying to recover.

Last month, SBI Capital Markets Ltd (SBICap), an investment bank unit of SBI, issued a public notice saying the property would be sold through an e-auction under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002. SBICAP Trustee Co. Ltd, a security trustee of the consortium, will manage the auction.

“Kingfisher House will find buyers mainly because of its strategic location. It is not a very large property but a very high potential in terms of development. It is a strategic location for many businesses specially related to aeronautics, airlines-related businesses, logistics or even corporate houses and banks," said Sanjay Dutt, executive managing director, Cushman & Wakefield.

He said the property could even be converted into a hotel, though there will be height restrictions, as it is close to the airport. The location may not be ideal for residential buildings, he said.

“Few other interested buyers could be retailers and even if one does a makeover of the building, it could be of immediate use. It has the highway potential and has a lot of retail value to it," Dutt said.

However, some other real estate advisers feel that the price of the property is on the higher side as it is way above the market rate around the area. Average commercial property prices around Vile Parle area is at around 28,000 per sq.ft, according to various online property listings.

A real estate consultant, on conditions of anonymity, said the “expectation of 150 crore (by the lenders) is too high for the property" given the slowdown in the real estate market, though there has been a pick up in demand for commercial properties in prime locations.

As per the public notice for e-auction, Kingfisher House also come with an outstanding property tax of 67 lakh which is yet to paid.

Kingfisher, founded by liquor baron Vijay Mallya and once India’s second-biggest airline, stopped flying in 2012 as it ran out of cash. In November lenders called for interest in movable assets—primarily vehicles and assets related to airline businesses—from prospective buyers. They have also moved to auction immovable properties like Kingfisher House.

Kingfisher Airlines’ operating licence was suspended in October 2012 by the Directorate General of Civil Aviation, following a strike by the airline’s employees.

Close