Industrial REIT ProLogis (NYSE: PLD) announced the formation of a Middle East branch in April.

The new company, ProLogis Middle East, is the result of a joint venture agreement between ProLogis and Arcapita, a global investment company based in Bahrain. The newly formed company will acquire and develop a $1 billion portfolio of warehouse assets throughout the Gulf Cooperation Council region, which includes Bahrain, Kuwait, Saudi Arabia, Oman and Qatar.

Chairman and Chief Executive Officer Jeffrey H. Schwartz noted that ProLogis has previous development and acquisition experience in Dubai, which he says has prepared the company for operation in other Middle Eastern countries. He also speculated that demand for industrial facilities in the region is likely to increase significantly in the near future.

“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,” he said. “As we have done in other nascent logistics markets, 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.”

Atif Abdulmalik, chief executive officer of Arcapita, expressed similar sentiments.

“The Middle East currently has a shortfall in the supply of modern, institutional-quality warehouses,” Abdulmalik says. “Given steadily rising gross domestic product regionally, leading to increased demand amongst consumers, we believe the demand for high-quality distribution facilities will continue to grow rapidly and that ProLogis has the experience and global expertise to satisfy this market.”