Indonesia’s Danantara marks first overseas deal with Mecca asset purchase
The purchase is part of a long-term plan to support better services for Indonesian haj and umrah pilgrims
[JAKARTA] Indonesia’s Danantara has signed a deal to acquire a hotel and land in Mecca, Saudi Arabia, from Thakher Development, marking the sovereign wealth fund’s first overseas investment.
Danantara Investment Management, the fund’s investment arm, said on Sunday (Dec 14) that it agreed to acquire a 1,461-room Novotel hotel, along with about 4.4 hectares of land in Thakher City, a mixed-use development about 2.5 km from the Grand Mosque.
It did not disclose financial terms.
The assets are part of a long-term plan to provide better services for Indonesians performing the haj and umrah pilgrims (minor pilgrimage); developments are expected to include projects providing around 5,000 hotel rooms, subject to feasibility studies and regulatory approvals, Danantara said.
Indonesia, the world’s most populous Muslim-majority nation, sends more than a million umrah pilgrims annually, and has a haj quota exceeding 200,000.
The fund is working with local partner Al Khomasiah Real Estate Development to ensure compliance with Saudi regulations, it said.
Thakher Development, a private real estate developer, did not immediately respond to a request for comment outside normal business hours.
Danantara added that it is also coordinating with the Saudi government in an ongoing bidding process, as part of its plans to support Indonesian pilgrims.
Bloomberg reported in November that Danantara had bid about US$1 billion for a large land parcel in Mecca, citing people familiar with the matter.
Danantara has said the Mecca development aligns with President Prabowo Subianto’s directive to establish a “haj village” that would streamline travel and lodging for Indonesian pilgrims, a move that is widely seen as aimed at shoring up his popularity with voters. BLOOMBERG
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