Jet Airways’ BKC office space up for auction over loan default

Mumbai: Private sector lender HDFC Ltd has put on the block a prime office space owned by Jet Airways (India) Ltd at Mumbai's Bandra Kurla Complex (BKC) post failure by the grounded airline to repay a loan amount of around ₹415 crore.

The office space that spans 52,775 sqft is part of Jet Airways Godrej BKC, a 12-storey premium commercial building, and will be auctioned on May 15 at a base price of ₹245 crore, said a public notice issued by HDFC Bank.

"The borrower has failed to repay the amounts due to HDFC Ltd. Accordingly, HDFC Ltd has become entitled to enforce its mortgage over the immovable property," the notice said.

Jet Airways, which was until recently India’s second-largest airline, was shut down under the weight of high debt and a severe cash crunch. The airline owes 11 banks, including nine Indian banks, about ₹11,261 crore. On Tuesday, Naresh Goyal, founder of the airline, offered to infuse ₹250 crore of his own funds an attempted to revive the carrier.

Popularly known as Godrej BKC, the office building was developed by Godrej Properties Ltd in partnership with Jet Airways which owned the prime land. Jet Airways had got the land in 2008 for ₹826 crore through an auction by the Mumbai Metropolitan Region Development Authority (MMRDA). Two years, the airline entered into a pack to jointly develop the land.

A much sought after office destination in Mumbai's upcoming financial district, the building made headline four years ago when pharmaceutical major Abbot India signed a ₹1479-crore deal, the biggest ever commercial office transaction, to set up its new corporate office within the complex.

According to real estate consultants, the property would attract several investors given its strategic location and shortage for prime office space in Mumbai.

"The reserve price is well positioned as it is approximately at a discount of 10-15% when compared to similar graded properties and, as a result, should attract investor interest," said Karan Singh Sodi, managing director( Mumbai), JLL India, a property consultant firm.