JAKARTA. The widely diversified Lippo Group announced on Wednesday the signing of a joint venture between Lippo Cikarang and the Mitsubishi Corporation to develop two luxury residential towers in Orange County in Lippo Cikarang, West Java, at a total cost of US$100 million.

Lippo Group CEO James Riady said the joint venture agreement would be the first of several proposed collaborations. "This collaboration is a platform for sustained investment, not just a property investment but infrastructure projects that could accommodate foreign investment," said James after the signing ceremony for the joint venture in Jakarta on Wednesday.

The largest share of the project's foreign investment, he said, came from Japan, explaining that Japan’s aging population and shrinking domestic market meant it was inevitable that they must invest abroad. He expects the project to capture this potential, attracting Japanese investors to invest in Indonesia.

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"It is expected that this project will be like a Little Tokyo, because we know there are about 2,500 plants belonging to Japanese companies along the Cikampek corridor and it is predicted they will continue to grow. This platform will be the start of a partnership for other projects that have been discussed, such as the construction of a hospital in Cikarang," James said.

The joint venture company will be 51 percent owned by a subsidiary of Lippo Cikarang and 49 percent by PT Diamond Realty Investment, a subsidiary of the Mitsubishi Corporation.

Lippo Cikarang CEO Meow Chong Loh said the first phase of the joint venture was the development of two luxury condominiums in Orange County's “masterpiece integrated development”, being developed by Lippo Cikarang.

"This bodes well for Orange County development as this project will not only attract the attention of Japanese property clients and brokers but also other foreigners and Indonesian buyers," said Meow.

The first tower to be developed will be called Glendale Park and will contain 556 apartments in four sizes to cater to the increasing need for quality, affordable residences east of Jakarta. The selling prices are predicted to be from Rp 600 million ($43,900) to Rp 2 billion per apartment.

Meow also stated that both companies were leading business groups with reputations and track records that had been recognized globally in the property industry.

"The ability to put together the resources of two groups to develop quality and relevant projects will contribute significantly to the development of the property industry and related business in Indonesia," he said.

Mitsubishi senior vice president Nobuya Ichiki hoped in the near future the collaboration between the two companies would expand to other sectors to cover residential and commercial buildings, private hospitals and hotels as well as joint asset management programs between the two groups. "Not only property but asset management and not only in Indonesia but also in Japan and [other parts of] Asia," Nobuya said. (Ayomi Amindoni)