ProLogis forms warehousing venture with Arcapita
ProLogis plans to construct a US$1 billion portfolio of warehousing facilities throughout the Middle East, following a joint venture with Bahraini investment firm Arcapita.
The company, which will trade under the name ProLogis Middle East, intends to locate its warehouses close to major population centres and seaports in various GCC countries, including Saudi Arabia, Kuwait, Bahrain and Oman.
"Saudi Arabia will be the starting point for ProLogis Middle East, due to its strategic location, land availability and large population base," said Jeff Schwartz, chief executive officer of ProLogis.
"Our experience in Dubai has given us a better understanding of the dynamics for logistics properties in the GCC region, where we believe local and multinational companies will increasingly demand modern distribution centres to serve the region's growing needs."
Under the terms of the agreement, ProLogis Middle East will acquire, finance, develop and manage the warehousing projects. It plans to commence construction on the first sites within the second half of 2008 and expects two thirds of the developments to be specifically tailored to customer requirements, with the remainder comprising inventory, sale-leaseback and fee development transactions.
"This new partnership is well positioned to meet this demand, combining the global development expertise of ProLogis with Arcapita's strong regional relationships and knowledge," added Schwartz.
"We plan to leverage our first mover advantage and existing customer relationships to create a logistics warehouse platform and fill a previously underserved market with quality warehouse space."