GVK group leases airport land to Oasis Realty for Rs. 580 crore.

To generate funds from its realty assets, the operator of Mumbai’s airport said that it has leased a plot of land to Oasis Realty Pvt. Ltd. for Rs.580 crore. The lease is part of an overall development of a 22 million sq. ft commercial business complex called GVK SkyCity, which will be built over a period of 10 years. Mumbai International Airport Pvt. Ltd (MIAL), which is promoted by a GVK Group-led consortium, said the leased land has a potential for commercial development of 1.1166 million sq. ft. The transaction has been finalized for Rs.580 crore at the rate of about Rs.5,000 per sq. ft of built-up area, the firm said. Taking the Oasis Realty deal as the benchmark, the GVK Group may earn at least Rs.10,000 crore for 22 million sq. ft of land around the airport, real estate consultants say. 'GVK SkyCity would be developed in 7-10 years. In this year, at least two million sq. ft of land would be developed,” said G.V. Sanjay Reddy, vice-chairman of GVK Power and Infrastructure Ltd. “We are trying to develop another BKC.' BKC refers to Bandra-Kurla Complex, a commercial complex in the suburbs of Mumbai built to decongest South Mumbai. Architect firm HOK has been hired to develop GVK SkyCity, Reddy said, which will have hotels, serviced apartments, convention centres, entertainment centres, and retail and office spaces. The first phase of GVK SkyCity will be developed over 12 million sq. ft, said A. Issac George, director and chief financial officer of the GVK Group. “We were waiting the (business) cycle to turn up,” he said. MIAL, which has a debt of around Rs.8,000 crore, hasn’t yet decided how to use the money from the lease, George said. To be sure, rival GMR Group had landed into trouble while monetizing the land at Delhi airport. In 2013, the government’s public accounts committee, headed by the Bharatiya Janata Party’s Murli Manohar Joshi, vetted a special audit on the matter of the Delhi airport operator’s subsidiaries that was ordered after a report by the Comptroller and Auditor General of India (CAG).

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