The logistics market in India is taking off, and staking a claim for a piece of this Rs 28,000 crore pie is the world’s largest logistics and warehousing developer ProLogis, with global assets worth $38 billion under management.
ProLogis has partnered with leading real estate developers K Raheja Corp to set up large-sized warehousing and logistics infrastructure in India through a 50:50 joint venture company called ProLogis K Raheja Corp Pvt Ltd. The JV plans to invest Rs 2,300 crore towards building the warehouses and logistics facilities in the next three years.
Most of this investment will be raised by way of equity. This is ProLogis’ first transaction in India. The joint venture has committed to invest more than $1 billion (Rs 4,000 crore) in five years.
“India offers exciting growth opportunities and we have seen the demand for modern warehouse space rise steadily over several years, owing to strong growth in manufacturing and greater interest among companies to outsource logistics requirements,” said Jeffrey H Schwartz, chairman and CEO, ProLogis.
Schwartz will be the chairman of the new company while K Raheja Corp group chairman C L Raheja will be the vice-chairman. The board will have equal representation from both sides.
The JV will acquire 100-150 acres of land across several cities such as Mumbai, Delhi, Chennai, Kolkota, Pune, Bangalore and Nagpur. The partners have already acquired 73 acres of land in Pune and the first warehousing facility will be operational in 2009-10 said company officials.
“India needs modern warehousing infrastructure as it would be world’s third-largest economy by 2020. We are diversifying into this space, as we foresee huge opportunities. The main focus of this joint venture will be food, auto components, consumer goods, retail and textile,” said Vishwas S Dhumal, CEO (Industrial Infrastructure and Logistics division) K Raheja Corp.