Prologis plans big India expansion – Industry News

Prologis, the world’s largest warehousing company, has bought 320-acre land across India in the past 12 months and is building 7 million sq ft of warehousing space across four sites in Chennai, Bengaluru, Hosur and Pune.

“We have bought more land than anybody else in the last 12 months. We may have bought more land than the next two people combined,” said Vineet Sekhsaria, head of India, Prologis.

The US-based company has 1.3 billion sq ft of warehousing space across four continents, of which 801 million sq ft is in the US alone. It has $205 billion worth of assets under management globally.

“We are not limited by capital but by opportunities,” Sekhsaria said, adding: “Demand, supply, title, diligence – all of those things have to stack up.”

The company has earlier said it will invest $1 billion to develop its centres at the four sites.

As of June, Indospace is the largest warehousing developer in India, with 51.6 million sq ft of space, of which over 30 million sq ft is operational. Blackstone-owned Horizon Industrial Parks is the second-largest, with about 43 million sq ft, of which over 20 million sq ft is upcoming, according to consultancy firm JLL.

Challenges and opportunities of land aggregation

Industry experts point out that contiguous land parcels, title issues and litigations are the major concerns in land aggregation for any warehousing developer in the country.

Sekhsaria agreed. “If we look at 30 land parcels, we end up doing two. If we look at 60-70 land parcels, we evaluate 15-20. There is no secret sauce here. We don’t buy land with title issues,” he said.

Prologis is currently focusing on Chennai, Bengaluru and Pune and will cover Delhi and Mumbai this year.

Forward-looking strategy: Beyond warehousing

Sekhsaria said the centres will be well-thought out and well-designed. “Every 5-6 years, whatever you build becomes redundant. So, we don’t just come with capital, we come with certain thought,” he added.

Giving an example of how Indian roads have become wider and multi-lane, he said the infrastructure development has allowed bigger trucks to come on the roads, making logistics efficient. “We have worked not just in Europe and the US, but also in counties such as China, Mexico and others,” he said.

According to experts, rental growth has not been commensurate with the growth in land prices, but Sekhsaria said there are still opportunities that offer good returns.

Prologis is also getting into areas such as data centres and solar energy, as it did in the US markets. In the US, the company is the second-largest on-site solar provider. “So, in India, too, that is the plan (solar energy) over a period of time. We will also explore getting into data centres at some point in time,” he said.