The property developing arm of the Sinar Mas Group conglomerate has signed a deal with Japan’s largest shopping mall developer and operator to build 20 shopping malls in Indonesia over the next eight years.
Michael Widjaja, chief executive of Sinar Mas Land, in a meeting with journalists on Friday announced that Sinar Mas and Aeon Mall would form a joint venture, called Aeon Mall Sinar Mas Land Indonesia (AMSL Indonesia).
The joint venture will kick things off by building the Aeon Mall BSD in Bumi Serpong Damai City, Sinar Mas’s 6,000-hectare township in Serpong, Banten.
Ishak Chandra, a managing director at Sinar Mas Land, said Aeon Mall would control 67 percent of the joint venture, with Sinar Mas holding the remaining 33 percent.
The chief executive of Aeon Mall, Soichi Okazaki, said that for the first stage, the company would build two new malls. The first, Aeon Mall BSD, will stand as a four-story shopping complex covering 125,000 square meters in total.
The second mall will be built in Deltamas, Sinar Mas’s industrial estate development in the Jakarta satellite city of Bekasi. Soichi said the mall in Deltamas would be built on land twice the size of AMSL Indonesia’s BSD project.
Construction of the mall at BSD will start in mid-2013 and is expected to be completed by the end of 2014. The mall in Deltamas will begin construction next year and conclude by the end of 2015.
Ishak said the mall in BSD alone would require $150 million to $200 million in investment, including the land and construction costs, but he did not specify the investment needed for the Deltamas project.
Ishak added that AMSL Indonesia plans to build a total of 20 malls over the next eight years. Projects after BSD and Deltamas may see additional partners enlisted.
“We may also involve other partners, such as partners that may own the land,” Ishak said. He said future malls would be built in a variety cities and suburbs across Indonesia.
Ishak said Aeon’s focus on suburban mall developments made it an ideal partner for Sinar Mas.
“Sinar Mas Land specializes in building townships, and we need facilities such as malls,” Ishak said. He did not specify the estimated total investment for the venture’s 20-mall ambitions.
Meanwhile, Soichi said the Greater Jakarta area’s relatively higher per capita income and Indonesia’s growth rate, at more than 6 percent in recent years, were good foundations for the retail business.