Morgan Stanley Invests in Mumbai Warehouse Project With Prakhhyat Group

A fund managed by Morgan Stanley Real Estate Investing has partnered with Indian industrial builder Prakhhyat Group to develop a logistics project in Bhiwandi, near Mumbai.

The warehouse will span 700,000 square feet (65,032 square metres) at Prakhhyat Group’s K Square Logistics Park about 90 minutes’ drive northeast of central Mumbai in Maharashtra state. Dubbed One K-Square, the project will be built across 25 acres (10.1 hectares) and serve customers operating in e-commerce, third-party logistics and consumer goods and durables.

The venture marks the entry into Bhiwandi of MSREI, the private real estate investment management arm of the global investment bank, which has invested in over 5.6 million square feet of logistics assets in India, the partners said Monday in a release. Financial terms of the deal weren’t disclosed.

“Industrial and logistics as an asset class is a high-conviction theme across our investment strategy and we continue to strengthen our focus on logistics and last-mile connectivity with the booming online consumption in the country,” said Anand Iyer, vice president at MSREI India. “Hence our focus to develop a top-class warehousing park in one of the strongest logistics clusters in the country.”

Growing Shed Cluster

Mumbai-based Prakhhyat Group will act as development manager and take responsibility for project execution, leasing and asset management at One K-Square.

K Square Logistics Park, Prakhhyat Group’s flagship development, extends over 156 acres with a development footprint spanning more than 4 million square feet and housing domestic and international tenants across varied sectors.

“Our experience in this market has helped us establish a solid track record in the logistics space,” said Prakhhyat Group director Sandeep Bagla. “Through this partnership, we are thrilled to leverage our development expertise along with MSREI’s capabilities, as we create this marquee development in India’s most sought-after logistics submarket.”

Prakhhyat Group earlier this year sold a warehouse at K Square Logistics Park to the Indian arm of South Korea’s Mirae Asset Global Investments for INR 1.3 billion ($16 million). The transaction marked the first-ever acquisition on behalf of the Mirae Asset Credit Opportunities Fund, an alternative investment vehicle dedicated to the Indian property market.

Former Welspun One Principal

MSREI’s Iyer is a former principal at Welspun One Logistics Parks, the warehouse development platform backed by Mumbai-based Welspun Group. Welspun One’s flagship fund has a target size of INR 5 billion and aims to develop 300 acres of logistics space across Mumbai, Pune, Bengaluru, Chennai, Kolkata, the National Capital Region and Lucknow.

MSREI made its first splash in India’s logistics sector in 2019 when it bought a majority stake in KSH Infra, a Pune-based developer, for a reported INR 3.5 billion, giving the US investment manager a controlling interest in KSH’s two logistics and industrial parks. In early 2021, MSREI sold two warehouses at the parks to Singapore-listed Mapletree Logistics Trust for INR 4.55 billion.

Towards the end of 2021, MSREI entered a deal with local developer Lodha to develop a INR 6 billion logistics park spread across 72 acres at Palava Industrial and Logistics Park near Mumbai.