Singapore sovereign wealth fund GIC is set to invest 5.2 trillion rupiah (S$546 million) in Indonesia's PT Trans Retail, which operates hypermarkets, supermarkets and cash and carry stores, under the Carrefour and TranSmart brands.
Known previously as Carrefour Indonesia, the firm was established in 1998 and is the main retail arm of Indonesian conglomerate CT Corp.
GIC and CT Corp, in a joint release yesterday, said that the collaboration will allow Trans Retail to "capture the full potential of Indonesia's modern retail market".
"Given Trans Retail's strong reputation and brand equity, combined with its strategic focus on the Indonesia modern retail format, it is uniquely positioned to take advantage of the rapidly expanding consumer class and the secular shift from traditional trade formats to modern trade formats."
Mr Amit Kunal, GIC head of direct investments group for South-east Asia, said the investment reflects GIC's "confidence in Indonesia's long-term growth potential".
"We are keen to build lasting partnerships with reputable local partners and look forward to a deep relationship with CT Corp, which also has a strong track record for making good investments and shares our investment values."
CT Corp chairman Chairul Tanjung said that the retail sector has "strategic importance" to the country's economic development moving forward. "Apart from providing numerous employment opportunities, it also ensures the availability of consumer goods at affordable prices and supports local business enterprises."
He also noted that the partnership marks a "significant step forward" in enabling Trans Retail to expand its store footprint and realise its vision of becoming a leading multi-format retailer. "It will strengthen Trans Retail's leadership position in the industry and enhance the Indonesian consumer experience positively," he added.
GIC's investments in Indonesia in recent years have predominantly been in real estate, such as the US$500 million (S$704 million) joint venture with Indonesian investment firm Rajawali Group, which focuses on property projects in the country.
Barclays Capital economist Leong Wai Ho believes that GIC's latest move into Indonesia is "well-timed".
"Indonesia is on the move - the emerging middle class in urban cities, increasingly upward mobility and aspirations, greater infrastructure spending.
"This investment will capitalise on the blooming urban population," he told The Straits Times, adding that more of the same type and scale could follow.