Jakarta. Riyadh Group Indonesia, a Jakarta-headquartered property developer, has earmarked more than $400 million to expand its business in Malaysia, the company's chief and owner Bally Saputera Datuk Jano Sati said on Friday (31/08).
Bally said the group, which owns among others the Riverside Apartments in Pancoran, South Jakarta, and Setiabudi Condominium in Medan, North Sumatra, plans to acquire controlling stakes in Malaysia's Mainstay Properties and Horizon KLPO.
Speaking to the Jakarta Globe on Friday (30/08), the Padang-born businessman, who is also Nepal's first honorary consul in Jakarta, said Malaysia offers investment prospects for investors, including from Indonesia.
"Malaysia may look like a challenging country to many Indonesian investors, but for many who can see it correctly, there is a lot of business we can do there," said Bally, who is also an advisor to the Indonesian Real Estate Developers Association (REI).
He said Indonesians and Malaysians share the same ancestral roots, so they have a strong emotional attachment.
The businessman said Riyadh Group Indonesia plans to acquire a 65 percent stake in Mainstay Properties, which controls the 55,000-square-meter Space U8 Mall in Bukit Jelutong in Shah Alam, Selangor.
Bally added that the group also plans to acquire a 65 percent stake in property developer Horizon KLPO, which controls 10 hectares of prepared land in Sepang, Selangor.
Riyadh Group Indonesia top executives, including Bally, signed a memorandum of understanding with the top management of Mainstay Holdings and Pembinaan Tetap Teguh, the parent companies of Mainstay Properties and Horizon KLPO, respectively, on Aug. 25, as the first step of a strategic partnership between the Indonesian and Malaysian companies.
"In November, the level will be increased to a cooperation agreement," he said.
He said if the plan to acquire Mainstay runs smoothly, Riyadh Group Indonesia, as the new majority shareholder, will initiate a rebranding of Space U8 Mall and change its concept and marketing strategy, as the mall's occupancy rate is currently below 50 percent. He said the name and concept will be a blend of the identities and characters of the two nations.
Bally said the mall would be transformed into a shopping center that features Indonesian products, while it will also promote the Tourism Ministry's "Wonderful Indonesia" campaign in Malaysia. He said he has invited retailers, supermarket chains, entertainment companies, culinary service providers and travel agents to open outlets in the mall.
He added that Riyadh Group Indonesia may spend $15 million on this transformation.
Meanwhile, Bally said Riyadh Group Indonesia plans to invest about $400 million to develop a superblock, which will include apartment towers, factory outlets, hotels and a leisure center on the 10 hectares the company will acquire in Sepang.
He said the company will seek funding for this massive project, which will include six 33-story high-end apartment towers with a total of 2,200 accommodation units. There will also be six factory outlets, with each covering an area of 4,000 square meters and a built-up area of 2,000 square meters.
The businessman said the project will include a 500-room five-star hotel and 200-rooms three-star hotel. The company expects to attract about 150 international brands as tenants in the mall.
"Over there, I hope people do not just get a chance to enjoy food, but also authentic Indonesian music. Visitors can get a lot of information on potential places to visit in Indonesia," he said.