Jakarta. Riyadh Group Indonesia officially expanded into Malaysia with the acquisition of controlling stakes in two Malaysian property companies, the Indonesian property developer said.
Riyadh Group Indonesia (RGI) president director Bally Saputra Datuk Janosati signed a memorandum of agreement with managing director of Mainstay Properties, Teo Swee Phin on Sunday marking RGI’s commitment to invest $450 million into Indonesia’s neighboring country.
As previously reported, RGI – which owns the Riverside Apartments in Pancoran, South Jakarta, and Setiabudi Condominium in Medan, North Sumatra, – had planned to acquire controlling stakes in Malaysia's Mainstay Properties and Horizon KLPO, a subsidiary of a property developer Pembinaan Tetap Teguh (PTT) .
Sunday’s signing ceremony was witnessed by Malaysia’s Minister of Federal Territories Haji Khalid bin Abd. Samad. Under the deal, RGI and its local arms are to transform 55,000-square-meters in Space U8 Mall in Bukit Jelutong in Shah Alam, Malaysia with a more contemporary design. RGI’s investment will also see an enhancement of the planned Horizon Village Outlet (HVO) development in Serenia City in Sepang, Selangor.
"Riyadh’s investment and involvement is very much welcomed as it will provide us with a new perspective, and help distinguish our developments from those of our competitors. The HVO development in Sepang, for instance, will now be enhanced to include various complementary components," Teo of Mainstay said in the statement.
He added the collaboration with Riyadh will also provide Mainstay and PTT the opportunity to venture into the Indonesian market.
The agreement will see RGI acquiring a 65 percent stake in Mainstay Properties (the subsidiary of Mainstay that owns Space U8) as well as a 65 percent stake in PTT’s subsidiary, Horizon KLPO.
RGI’s acquisitions and subsequent investments will see the transformation of Space U8 into a commercial center that will showcase the best of Indonesia, featuring various Indonesian brands and products, as well as culinary and entertainment outlets.
Horizon KLPO is the landowner of 10.35 hectares of land in Serenia City Sepang and 6 units of factory lots. The land was initially earmarked for development of a premium outlet project (HVO) to be operated by US-based outlet shopping centre specialist – Horizon Group Properties.
The new HVO plans will consist of a two-storey premium outlet village and six tower blocks, which will house a hotel, high-end serviced apartments, as well as leisure, medical & wellness centers. The additional components will complement and further enhance the value of the original HVO project.
"Malaysia may look like a challenging country to many Indonesian investors, but there are a lot of business opportunities for us here given the country’s progressiveness and business-friendly environment,” Bally said.