Indonesia First Foreign State to Buy Land in Mecca After Danantara Deal
Jakarta. Sovereign wealth fund Danantara announced Monday it had completed its 4.4-hectare land acquisition in Mecca, making Indonesia the first foreign state to buy property in Islam’s holiest city.
The fund’s investment arm bought the land plots within the major urban development Thakher Makkah. The purchase brought Indonesia closer to setting up a “Hajj village”, an accommodation complex dedicated to pilgrims from the world’s largest Muslim-majority country and elsewhere. Danantara had already acquired Novotel Thakher Makkah, an up-and-running hotel with 1,461 rooms and suites. The purchase also followed Saudi Arabia’s decision to allow foreign property ownership.
According to Danantara, the fund will use the land plots to set up hospitality facilities, retail, and other supporting amenities. It has also appointed real estate developer Al-Khomasiah as its local development partner. Danantara will move to feasibility studies, approvals, and applicable licensing documentation for the plots, without disclosing a timeline for the groundbreaking.
“Our focus is to manage these assets with rigorous investment discipline while developing an integrated ecosystem that enhances the quality of accommodation and services available to pilgrims from Indonesia and around the world,” Danantara boss Rosan Roeslani was quoted as saying in a press statement.
He signaled plans that Danantara will also be on the lookout for opportunities in Islam’s second-holiest city of Medina and other “mutually beneficial” partnerships outside of real estate.
Thakher Development chief executive officer Faisal Shaker said that having Indonesia as “the first foreign state to own property in our destination reflects international confidence in Thakher Makkah”.
President Prabowo Subianto has instructed Danantara to lead the multi-billion-dollar megaproject of building a “Hajj village” that has Masjid al-Haram, or the Grand Mosque, within reach.
This year, Indonesia sent around 221,000 pilgrims to perform Hajj, which is mandatory for able Muslims at least once in their lives. Years-long wait times have forced the elderly to make up a large part of Indonesian Hajj pilgrims, hence making comfortable accommodation and easy access an imperative. Roughly 2 million Indonesians also perform the minor pilgrimage or Umrah each year.
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