St Michael’s School in Hyderabad pays rent for its premises like any other educational institution. The difference lies in how much it pays.

In a city where tech giants such as GoogleHindustan TimesGoogle renews lease for 3.7 lakh sq ft office space in Hyderabad for five years at a monthly rent of ₹2 cr per month and Tata Consultancy ServicesEconomic TimesTCS leases over 1 million sq. ft. in Hyderabad in major office deal are paying around Rs 55 per sq ft per month for their gleaming, Grade A commercial offices, St Michael’s School is paying…almost double that. A whopping Rs 98Google DriveLease deed per sq ft per month. 

The arrangement adds up to Rs 15.5 croreGoogle Drive Lease deed in annual rent, a 15-year lock-in, a 5% annual escalation, and Rs 90 croreGoogle DriveDeed of hypothecation in debt secured against the school. A truly outlandish sum, considering that same year, another CBSE school in the same district leased its property at Rs 23Google DriveSun City lease deed per sq ft per month.

Usually, when landlords make such demands, tenants throw a counter-punch. Instead, St Michael’s simply tapped out. Why? Because this wasn’t standard rental combat; it was a Fight Club like arrangement. The landlord was the tenant. Both parties were effectively the same person. If that sounds confusing, it’s meant to.

The first rule of Fight Club is you don’t talk about Fight Club. Or in this case, private-equity deals, which was the reason behind this strange set up. 

But as Elevate CampusesElevate CampusesCompany website, the PE-backed edu-infra platform that will own St Michaels, prepares for its IPO, a lot of these murky details that were, until now, private, have become public as part of mandatory disclosures.