Future Retail renews lease with Salman Khan for Mumbai property

Debt-ridden Future Retail Ltd has extended the lease on a commercial property owned by Bollywood actor Salman Khan on Linking Road in Mumbai’s Santacruz suburb at a rental of nearly Rs 90 lakh per month.

Future Retail has renewed the lease for two years through its wholly-owned subsidiary TNSI Retail. The 30,000 sq ft space is spread over four floors. It houses the flagship store of Foodhall, the gourmet retail arm of Future Retail.

Future Retail had leased the space in 2017 for five years from Khan for a monthly rental of Rs 80 lakh. The store is frequented by Bollywood celebrities and known for imported high-end gourmet products. It also houses Italian restaurant Sorrentina, popular among celebrities and CXOs. Foodhall is present in Mumbai, Bengaluru and the National Capital Region (NCR).

The agreement includes a clause to escalate rentals by 5% after the first 12 months. Future Retail earlier paid Rs 2.69 crore as security deposit for the lease agreement that was registered on Monday, according to records accessed through CRE Matrix, a real estate data analytics firm.

According to reports, Khan had bought the property for about Rs 120 crore in 2012

In July, the Mumbai bench of the National Company Law Tribunal (NCLT) allowed the initiation of insolvency proceedings against the Kishore Biyani-founded company. In April, Bank of India had moved the bankruptcy court seeking to initiate insolvency resolution proceedings against Future Retail that had defaulted on loan repayments.

Future Retail and Khan’s office didn’t respond to queries.

TNSI Retail was formed a few years ago when the Future Group started its airport retailing business with British retailer WHSmith’s stores in India. Earlier this year, following the collapse of Future Retail’s business, Foodhall was moved to TNSI. According to experts, this was aimed at keeping the Foodhall brand and business active and protecting its value, which could be used to account for a part of Future Retail’s liabilities.

In February, Reliance Retail took over more than 900 stores of Future Group, which was struggling to pay sub-lease rentals to Reliance Projects and Property Management Services.

The Reliance subsidiary had become the occupier of these stores following the landlord terminating lease agreements with Future Group on the count of non-payment of rentals during the pandemic period. Reliance Projects had then entered into sub-lease agreements with Future Group stores