SBI may revalue Mallya’s Kingfisher House in Mumbai to attract bidders

The actual value of Kingfisher House, the former headquarters of the defunct Kingfisher Airlines, was pegged at a little more than Rs 50 crore — about a third of the reserve price that SBI Caps had fixed at Thursday’s auction.

After the Thursday event failed to attract buyers, sources said lead banker SBI may reduce the reserve price and offer the property for re-auction.

The valuation which was done by multiple partners, including real estate consultant Knight Frank, had considered various factors including the quality of construction, age of property and scope of upgradation, which excludes vertical development as it is located close to the airport, said sources.

Mails sent to Knight Frank elicited no response.

“We may have to look at slashing the reserve price by about 10% and invite new bids in the next auction process which generally takes place within a month,” said a senior official who asked not to be named.

The 17,000 square feet Kingfisher House is located in a prime suburb of Mumbai, close to the Western Express highway and the airport.

Despite the prime location, bidders were deterred by the high price and additional investment needed to spruce it up.

Also, fears of subsequent litigation have kept interested bidders at bay, said real estate experts. “The banks have fixed a price which is higher than what the consultants had valued it, to realise more. With the real estate market still depressed it will need a reduction in price,” said a realty experts.

SBI didn’t respond to queries.

Another real estate consultant Liases Foras told HT the reserve price was at least 40% higher than what it should have been.