TVS ILP expands to 10 smaller cities due to FMCG warehousing demand

CHENNAI: TVS Industrial and Logistics Park (ILP) Private Limited, a division of TVS Mobility Group, is planning to expand into ten additional cities due to high demand in the fast-moving consumer goods and consumer durable (FMCG & FMCD) sectors.

Within the next three to four years, the business hopes to expand its 10 million square foot portfolio to 20 million square feet. In Vizag, Sricity, Patna, Jammu, Siliguri, Gauhati, Hubli, Jaipur, and Cuttack, it has acquired land and begun building. By 2027–2028, the corporation intends to expand into 35 cities, all of which are tier-II and tier-III cities. It is well-established in the south and intends to grow into the north and northeast regions.

In non-metropolitan areas, there is a lot of demand in Grade A projects, according to the company’s COO, Manikandan Ramachandran. There is currently no availability of grade A space outside of eight large cities, but this has altered as a result of customer demand to vacate non-compliant godowns during the epidemic, he said.

The company’s logistical costs are reduced as a result of the smaller cities serving as the center of consumption and neighboring communities.However, issues include growing land costs, a dearth of organized land aggregators, and time-consuming governmental regulatory requirements.It is a growing bet on Grade A warehouse space in non-metropolitan areas across industries. According to him, demand is being driven by FMCG and FMCD’s more aggressive move into Grade A area. The manufacturing sector also influences demand.

Although e-commerce used to be a significant factor in driving the need for warehouse space, Manikandan noted that there is currently a general trend of e-commerce businesses’ warehouse absorption slowing down. “They’re redesigning and using capacity 150% during festivals, despite demand,” he added, adding that things might be better the following year.