A 2.5 acre plot at Bandra Kurla Complex that is in possession of Jet Airways is soon expected to be owned by Godrej Properties for Rs 550 crore.
Godrej Properties is likely to pay Rs 200 crore in cash and to absorb Rs 350 crore of debt — the money Jet borrowed from HDFC Bank in 2006 to buy the land from an arm of Maharashtra government for Rs 400 crore — for obtaining the right to develop the land located in the BKC, which has emerged as an attractive alternative to expensive South Mumbai locations.
Godrej will pay Rs 500 crore if the government grants additional FSI. The group can construct about 1 million square feet of saleable area, even if the project does not get the additional FSI.
The land purchase agreement makes it mandatory for Jet to develop at least 60% of the total area of the plot for self-use for five years. Jet is likely to keep at least 25,000 sq ft area for its proposed headquarters. According to the permissible FSI, Jet can build a tower up to a height of 56 meter on the plot. However, Jet has applied to the government asking for additional FSI ,as Wadhwa Properties have recently got a permission to construct an 80 meter-high tower in the same locality.
The property prices in BKC are pegged between Rs 30,000 – Rs 40,000 per sq ft. Keeping that in mind, Godrej properties may earn Rs 1,500-1,800 crore from the this project that shall take about three to four years for development.
The deal is likely to be signed within a couple of weeks. It has been so structured that both the companies shall share profits from the project. The profit sharing ratio is under negotiations.