Air India, the financially strapped state-owned carrier which is looking to raise Rs 5,000 crore ($900 million) through monetisation of its land assets across the country and abroad over the next 10 years, has received bids from four property consultants to manage the transactions, according to sources close to the development.

Air India has set a target of raising Rs 500 crore through either sale or development of the properties by March 2013.

Four international property consultants bid on the request for proposal, including Jones Lang LaSalle India (JLL India), Cushman and Wakefield, Knight Frank and DTZ & Colliers, a source privy to the development told VCCircle on condition of anonymity. “JLL India is the L1 bidder and front-runner for the asset monetisation plan,” he added.

An L1 bidder is one who bids the lowest and typically receives the entire or majority quantity of the work.

E-mail queries sent to three of the bidders (JLL India, Knight Frank and DTZ & Colliers) did not elicit any response till the time of posting this article.

According to Air India’s original plan, approved by the Indian government on May 14 this year, the carrier was supposed to appoint a consultant by June 2012 to go ahead with its asset monetisation programme.

Air India targets to raise Rs 500 crore each year for the next 10 years. On October 10, it asked for proposal bids for appointment of real estate consultants for property monetisation in India and abroad.

Although Air India’s prized Nariman Point commercial office building is not part of this transaction, it includes various other assets.

In the first stage of monetisation, it has put up commercial office space, residential quarters, booking offices and open land parcels in Agartala, Ahmedabad, Amritsar, Aurangabad, Bangalore, Bhopal, Bhubaneshwar, Chennai, Coimbatore, Delhi, Goa, Gurgaon, Hyderabad, Jaipur, Jammu, Kolkata, Mangalore, Lucknow, Mumbai, Nasik, Patna, Pune, Trivandrum, Visakhapatnam and other cities.

Of its international assets, it has put 25,000 sq ft owned property in London on the block and two residential flats in Tokyo of nearly 3,000 sq ft each.

Air India is looking at monetising these assets through long leasing, asset sale, development, redevelopment and leveraging of properties. Through this value-generation programme, the debt-ridden national carrier is looking for upfront lease premium in lieu of the development rights given to the real estate developers. It is also looking at leasing of its surplus owned facilities at various domestic and international airports.

The last date for submission of bids was October 16, 2012. Air India plans to monetise some of its assets within six months of finalising the property consultant.

(Edited by Sanghamitra Mandal)

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