The Hindu Business Line : LIC to unlock real estate value

Life Insurance Corporation of India, the second largest property owner in the country after Indian Railways, is trying to unlock the value of its huge real estate assets.

The Corporation, which owns property worth Rs 18,000 crore, has appointed consultants and developers for advice on leveraging these assets. "These developers will negotiate with tenants and help us raze old buildings and construct new ones," Mr Thomas Mathew, Managing Director, LIC, told Business Line.

LIC has more than 1,500 properties in the country. It also has some in countries such as the Mauritius and Fiji. The corporation also owns several heritage properties including the Metropolitan building in Kolkata and the LIC buildings in Chennai and Delhi.

But the PSU behemoth has been involved in legal tangles, as it has not been able to revise the rent on the some of its ancient and prime properties in the metros.

This fiscal, LIC has set a target of raking in Rs 200 crore in terms of rental income from its estates, an 82 per cent jump from last year's Rs 110 crore. The business of real estate has been carved into a strategic business unit.

Mr Thomas Mathew said the corporation has in store multiple strategies to increase the income from estates. "Besides raising the rent and renewing leases on our properties, we are also trying to generate more space or Floor Space Index within the existing properties to increase rental income," he said.

LIC is building residential and commercial complexes at various cities. Housing projects are currently under way in cities such as Kolkata, Visakhapatnam, Pune, Thiruvananthapuram, Jaipur and Agra while commercial properties are being constructed in Raipur, Bangalore, Patna and Guwahati.

The corporation, armed with over 500 engineers, also offers consultancy in designing, engineering and building commercial complexes.