Jakarta. Indonesian sovereign fund Danantara is investing approximately $500 million in its recent acquisition of a hotel and land plots in Mecca, according to a senior official, as Jakarta moves forward with the Hajj Village plan.

Indonesia — the world’s largest Muslim-majority country — wants to build a “village” in Mecca dedicated to its pilgrims. As part of this grand plan, Danantara’s investment arm recently inked a deal with real estate firm Thakher Development Company to acquire the already operational Novotel Makkah Thakher City, about 2.5 kilometers away from Islam’s most significant mosque, Masjid al-Haram. Under the transaction, Indonesia will own three towers — each 28-storey high —  as well as 14 land plots spanning 4.4 hectares. 

“This deal alone totals slightly more than $500 million. We are planning to set up 13 towers and one shopping center. This is still subject to change. It will also require between $700 million and $800 million [in investments],” Danantara Chief Executive Officer Rosan Roeslani said in Jakarta on Wednesday.

According to Rosan, construction on the 4.4-hectare land will likely begin in Q4 2026. However, Rosan went on to say that what Danantara has actually signed is a “conditional sales and purchase agreement”, citing that Saudi Arabia’s law regulating real estate ownership by foreigners will take effect in January. Danantara also signaled that they would involve the state tourism firm Injourney in managing the hotel. Rosan revealed that the latest agreement made it the first land in Mecca to be owned by a non-Saudi.

Indonesia vs 90 Bidders
Jakarta is now competing against 90 bidders for another strategic land plot situated also around 2.5 kilometers away from Masjid al-Haram. Rosan claimed that local authorities had told Danantara that they were in the top 2 bidders. The bidding war does not pick its winner based on who offers the best price, but on how well-developed their master plan and design are. The price is fixed at around $750 million.

 “The [Saudi authorities] will announce the bid results either at the end of the year or in January,” Rosan said.

The Saudi government has allowed Indonesia to send up to 221,000 pilgrims in the 2026 Hajj season, the largest quota for a foreign country that year. In 2024 alone, around 2 million Indonesians flew to Saudi Arabia for the minor pilgrimage, Umrah.

President Prabowo Subianto has instructed Danantara to take the helm of this project. At a cabinet meeting in late October, Prabowo told his ministers that the Hajj Village would let Indonesia “manage everything on its own”, thereby enhancing the pilgrims' experience.