Page 31 - Indian Transport & Logistics News July - August 2024 Issue for Website

Subramaniam believes that InvIT “We ensure that the customer is with
will be able to generate capital and us before we get into the market. We
fund TVS ILP’s future growth and he don't do any speculative land buying.
spoke to Indian Transport & Logistics The problem comes when we are doing
News (ITLN) about the challenges, speculation,” he said.
opportunities and future of the Indian “We give all the specifications
warehousing sector. that are required from the client's
There has been a steady flow requirement and we ensure that we
of investments into the Indian get a rental which is sufficient to take
warehousing and logistics park care of our cost of capital. And we are
sector. For instance, in July 2024, the able to earn a spread on the same with
fund and logistics park development time,” he added.
management platform Welspun One To avoid the challenges of land
announced the closure of its second acquisition, TVS ILP also buys
fund totalling ₹2,275 crore. In fact, Once InvIT becomes government lands and Subramaniam
Lingotto, the investment management operational all assets informs that state governments have
company owned by Dutch holding with rental income will been very supportive in this sense.
company Exor controlled by the move to this vehicle “Government land is one thing
Agnelli family, acquired a 21 percent which we are consciously trying to
stake in TVS ILP. and that will create focus on given that governments today
However, the Indian warehousing a continuous flow of are extremely forthcoming in wanting
sector is also not without challenges for assets being prepared to create employment.”
new investments and new players. For and made ready by TVS “For example, we've got land
instance, Panattoni, one of the largest ILP and moving on to in Cuttack (Odisha), Vizag (Andhra
industrial real estate developers in the InvIT. Pradesh) and Madhya Pradesh from
the world, marked its debut in Asian the government through a single
markets in July 2022 with the opening Ramnath Subramaniam window clearance,” he added.
of its first operational headquarters in TVS IM There are also several positive
India, located in Bengaluru. However, signs in the macroeconomic scenario
Panattoni criticised the land acquisition for the logistics and warehousing
process in India which took them 8 a challenge. You won't get 100 acres of sector. Subramaniam thinks stable
months to clear the formalities of its land without any litigation. Funds come government in the centre, rural
first land complex. with large capital at interest rates which economy picking up, connectivity
“Land acquisition in India has are competitive and hence they want to infrastructure and evolving state
always been a challenge and it will come and deploy the money that they government policies as opportunities
continue to be,” says Subramaniam. have raised with size and scale,” he said. in the warehousing sector.
He points out that challenges for “People have been able to get land “Countries around the world are
large funds emerge when they look but when all are clustering towards the seeing upsets in terms of stability
for large land parcels and land around same pocket the prices go up. Everybody of government and continuity of
warehousing clusters that have wants to go to Bhiwandi (Maharashtra), government policies. India has scored
already peaked. NCR (Delhi) or Nelamangala a big point with the same government
He said, “If you have to go and buy a (Karnataka),” he added. coming back for the third time in a row
hundred-acre land, it is going to remain Hence, Subramaniam notes that in terms of continuity of progress and
TVS ILP goes into markets where policies for the next five years,” he said.
preferably there is no other Grade A While the India shining
warehousing developer. phenomenon has gone very well
“We had the first-mover advantage with the urban population, the rural
in most of the places where we population and pockets of them
entered. For example, when we have been impacted. Subramaniam
entered Hosur, we were the first. Same thinks that the state and central
with Madurai and Siliguri. But we also governments understand this and
entered these markets because our their focus on rural employment
clients wanted us to.” and women's issues through various
He also emphasised that they enter schemes, will probably also see rural
into a market with their customers. India making a comeback.
29
www.itln.in July - August 2024