MUMBAI: Yes Bank has started the process for obtaining physical possession of Reliance Centre, the headquarters of Anil Ambani’s Reliance Group in Mumbai. The bank is seeking to either sell the property to realise its dues, or may move its headquarters there.
In July, the private lender had taken symbolic possession of the sprawling complex situated off the Western Express Highway and overlooking the Mumbai airport. The action was taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act to recover dues of Rs 2,892 crore from Reliance Infrastructure. In terms of the act, the bank has to give a two-month notice before taking possession, which the bank had done in May.
Speaking to TOI, Yes Bank MD & CEO Prashant Kumar said, “This is a security for our loan. We had already taken symbolic possession, now we are moving to take physical possession. We would like to monetise it, but we may also move our offices there.”
A Reliance Infrastructure spokesperson said, “The matter is sub judice, and as legally advised, the company will take all effective steps to protect its interest.” Sources close to the group said that it is premature for Yes Bank to make plans for the property as the legal process could go on for some time.
Even during the peak of the pandemic, the premises on the 21,432-sqmtr plot was valued at Rs 1,000-1,100 crore. Currently, the commercial real estate market is subdued as there is uncertainty over demand for office space in the aftermath of the pandemic as many believe that work-from-home may become a norm.
However, there are private equity investors who are bullish on real estate. In June, Canadian investment firm Brookfield acquired two floors of office space earlier owned by Jet Airways for Rs 490 crore. The Jet Airways headquarters is located in the business district of Bandra Kurla Complex, which is 5km from the Reliance Centre.
Yes Bank currently operates out of the Indiabulls Finance Centre in Lower Parel where it leased the top six floors. According to news reports in 2011, the deal was struck at Rs 125 per sqft per month for 1.6 lakh sqft. However, since the reconstruction of the bank after its revival by investors led by SBI, the lender has been cutting costs. It has asked all offices to renegotiate rentals and has been rationalising branches and ATMs.
Reliance Group had shifted to the new headquarters in 2018. After its debt crisis, the group has shrunk its operations. Most of the offices were consolidated in the north wing and part of the property was listed for lease. The lockdown due to the pandemic resulted in further consolidation of office space as staff were asked to work from home.