By SHAZNI ONG / Pic By ISMAIL CHE RUS
Riyadh Group Indonesia (RGI) has expanded into Malaysia with the acquisition of controlling stakes in two local property companies.
Property players Mainstay Holdings Sdn Bhd and Pembinaan Tetap Teguh Sdn Bhd (PTT) signed a memorandum of agreement with the Indonesian property developer, which has committed to investing US$450 million (RM1.9 billion) as part of its venture into the Malaysian property market.
The joint venture would result in the revamp of the 55,000 sq m Space U8 Mall in Bukit Jelutong, Shah Alam, as well as the enhancement of the planned Horizon Village Outlet (HVO) development in Serenia City, Sepang.
The cooperation agreement was formalised between RGI president director Bally Saputra Dt Janosati and Mainstay/PTT MD Teo Swee Phin (picture). Also present was Federal Territories Minister Khalid Abdul Samad.
Teo said the collaboration with RGI would pave the way for Mainstay and PTT to tap into the Indonesian market.
“RGI’s investment and involvement is very much welcomed as it will provide us with a new perspective and help to differentiate our developments from those of our competitors.
“The HVO development in Sepang, for instance, will now be enhanced to include various complementary components,” he told reporters at the event on Monday.
The agreement will see RGI acquiring a 65% stake in Mainstay Properties Sdn Bhd, the subsidiary of Mainstay that owns Space U8, and a 65% interest in PTT’s subsidiary, Horizon KLPO Sdn Bhd.
Horizon KLPO is the landowner 10.35ha of land in Serenia City and six factory lots.
The land in Sepang was originally earmarked for the development of a premium outlet project (HVO) to be ope- rated by the US-based outlet shopping centre specialist — Horizon Group Properties.
The agreement would see two major projects to be carried out.
Firstly, RGI’s acquisitions and subsequent investments will see the transformation of Space U8 into a commercial centre that will feature various Indonesian brands and products, culinary and entertainment outlets.
The second would be the building of a mixed-use development of the new HVO, where the project will integrate both residential and commercial spaces, bringing a city township together under its name.
The projects would comprise a two-storey premium outlet village and six tower blocks that will house a hotel, high-end service apartments, as well as leisure, medical and wellness centres.
Bally said while Malaysia may look like a challenging country to many Indonesian investors, there are plenty of business opportunities for them given the country’s progressiveness and business-friendly environment.
On reasons behind RGI’s decision to enter the Malaysian property market when the country is facing a soft and challenging market, he said: “We should play the market when it is sluggish. We should not wait until the market is good.”