The Maharashtra government on Wednesday formally took ownership of Mumbai's iconic Air India building at Nariman Point after completing a ₹1,601-crore acquisition from Air India Assets Holding Ltd (AIAHL), marking the end of a long-running effort to secure additional office space for state departments.

The transfer agreement was signed between AIAHL and the state's Public Works Department (PWD) in the presence of Chief Minister Devendra Fadnavis at Mantralaya.

The 23-storey sea-facing tower, spread across about 46,470 square metres, is expected to become a key administrative centre for the state government. Several departments currently operating from rented premises across Mumbai are likely to be shifted to the building once renovation work is completed.

Addressing office space shortage

The acquisition comes as the state government continues to grapple with a shortage of office space around Mantralaya, the state's administrative headquarters. The issue intensified after a major fire at the Mantralaya complex in 2012, forcing multiple departments to relocate to offices spread across the city.

The state cabinet had approved the purchase proposal earlier, while the Union government cleared the transaction in 2024. To facilitate the deal, Maharashtra also agreed to waive nearly ₹298 crore in unrealised income and interest dues linked to the leased land on which the building stands.

Following the handover, Public Works Minister Shivendrasinhraje Bhosale reviewed redevelopment plans for the property and directed officials to carry out a detailed structural audit before renovation begins.

From aviation landmark to government complex

Built in 1974 on reclaimed land at Nariman Point, the Air India building served as the national carrier's headquarters for decades and became one of Mumbai's most recognisable landmarks. The property was transferred to AIAHL after Air India's privatisation and acquisition by the Tata Group, as part of the airline's non-core asset portfolio.

Air India first initiated plans to monetise the property in 2018. After several rounds of negotiations and competing bids, Maharashtra raised its offer and secured the asset.

Once refurbishment is completed, the landmark tower overlooking Marine Drive and the Arabian Sea is expected to play a central role in consolidating government operations in south Mumbai.