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MAHARASHTRA, INDIA-ProLogis has established a new beachhead in a 50-50 development partnership with one of India’s leading developers, K Raheja Corp. The joint venture plans to invest $575 million [2,300 crores rupees] into developing 7.5 million sf of warehouse space within three years and up to 25 million sf in five years.

To lead the initiative, Denver-based ProLogis has seated Abhijit Malkani as its head of operations in India. The 10-year veteran is the former regional director of Indian and Middle East operations for NAI Global.

In recent years, ProLogis has pioneered development breakthroughs in Japan, China, South Korea and the Middle East. “Launching development in India, one of Asia’s most vibrant growth markets, is a logical next step,” Jeff Schwartz, ProLogis’ chairman and CEO, says in a press release.

The Indian partner will be at the forefront for land acquisitions, warehouse development and asset management. The spotlight initially will be pointed at the county’s fastest growing distribution locations: Mumbai, Chennai, Delhi, Bengaluru, Kolkata and Pune. To set the plan in motion, the JV has acquired 27 acres and is negotiating for another 33 acres in Loni near Pune. Talks also are under way for 140 acres in Bengaluru, 120 acres in Chennai, 99 acres in Kolkata and 70 acres in Mumbai.

“We have seen demand for modern warehouse space in India rise steadily over the past several years, owing to strong growth in manufacturing, widespread infrastructure improvements and greater interest among companies to outsource logistics requirements,” Schwartz says. ProLogis was unavailable for comment before deadline as was NAI Global to comment on Malkani’s departure.

In establishing the partnership, ProLogis is continuing a strategy that is key for US companies to enter foreign markets—adopting a local partner. K Raheja Corp. is a private, family-owned firm founded in 1956 and now boasting more than 6,000 employees. It develops office, retail, hotel and residential, with an annual construction docket of more than six million sf. To date, it has topped 2,200 project completions, including buildings for Armonk, NY-based IBM Global Services, New York City giant Morgan Stanley, the UK’s HSBC Holdings plc, Nokia Corp. of Finland, New York City-headquartered Accenture Ltd., Redwood City, CA-based Oracle Corp. and Citigroup Inc., also New York City headquartered.

“The majority of the existing distribution space in India is functionally obsolete,” C.L. Raheja, chairman of the private company, says in the release,”and we believe this new partnership will be successful in meeting the growing demand for high-quality logistics facilities here.”

The uptick is due in part to “the rapid growth of the country’s middle class,” Malkani says. The trickledown effect from the surge in residential and retail space has “increased demand for modern, efficient facilities for domestic distribution,” he adds. “By working closely with K Raheja Corp, a leading developer with a deep understanding of the Indian property markets, and leveraging ProLogis industrial development expertise, we will be able to capitalize on this emerging need for high-quality space.”

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