Ticon Plc, a SET-listed developer of ready-made factories and warehouses, has formed a joint venture with two real estate developers from Indonesia and Japan to build warehouses and factories for rent in Indonesia.
The investment is to serve Japanese companies that want to move or expand their investment abroad and also accommodate the growing Indonesian economy, said Ticon managing director Virapan Pulges.
In the three-way venture, Ticon and Japan's Mitsui & Co Ltd each hold 25% and Indonesia's PT Surya Semesta Internusa Tbk (SSIA) owns 50%.
The new company, called PT SLP Surya Ticon Internusa (SLP), has registered capital of $US46.4 million.
"SLP will start developing industrial estates for industry, including warehouses and facilities for factories, to serve rising domestic investment in Indonesia, which is a large market with more than 250 million people," Mr Virapan said.
The company also expects to capitalise on the broader market after the Asean Economic Community (AEC) takes effect later this year.
The first phase of the industrial estate has been completely developed. It has 81% occupancy with total rental space of 34,560 square metres.
There are also 16 warehouses with rental space of 2,160 square metres in each building.
The company plans to begin developing the second phase in the third quarter of this year.
The project is likely to be completed within the next two years, with 150 rai of land estimated to be ready for industrial development.
Johannes Suriadjaja, SSIA's president and director, said the newly launched SLP began its first phase of development with 22 hectares (9,000 rai) of land at the Suryacipta Technopark project, located at the entrance of the Suryacipta industrial city in Karawang, West Java, some 55 kilometres east of Jakarta.
"This project will serve several industries in Indonesia, where the economy is expected to keep growing," Mr Suriadjaja said.
The Indonesian government has forecast the economy to grow by 5.1-5.2% this year.
Eiichi Tanabe, general manager of Mitsui's overseas business development department, urban development division, said Indonesia has become one of the more interesting countries in the eyes of foreign investors.
The major foreign investors in the archipelago are Japanese, mostly small and medium-sized enterprises (SMEs) that want to expand into Asean.
Many of the Japanese SMEs are makers of consumer products and food. Larger Japanese companies have already invested vast amounts in Indonesia's automotive sector.
"Most of the companies are those that have never invested abroad and have just seen a good opportunity to grow quickly after the planned implementation of the Asean Economic Community," Mr Tanabe said.