BANGKOK (Reuters) – Thailand’s Central Group, the country’s largest retail conglomorate, has confirmed it will invest $200 million in a local entity of Singapore-based ride-hailing application Grab.
Central Group, which owns department stores, restaurants, and hotel chains in Thailand, said in a statement it will “acquire a significant non-controlling stake” in the Thai entity.
Reuters first reported in September that the two companies were in talks over the sale.
The two companies will work together on transport, food and grocery delivery, and logistics, the retailer’s executive chairman and chief executive, Tos Chirathivat, said.
“We look forward to collaborating together to revolutionise the retail and service industry,” he said.
It is the first time a partner has invested in Grab’s local business, Grab Chief Executive Anthony Tan told reporters at a news conference on Thursday.
“Central’s $200 million investment is a significant local joint venture,” Tan said, adding that Grab’s operation in Thailand will expand beyond ride-hailing and food delivery.
“We are moving forward with e-commerce and logistics…We are going to enter online travel, (with) Booking and Agoda.”
Travel giant Booking invested $200 million in Grab last year.
Tourism is a major contributor to Thailand’s economy, which has lagged behind Southeast Asian peers.
Thailand saw a record 38.27 million tourists in 2018.
The deal came soon after Grab’s Indonesian rival, Go-Jek, launched ride-hailing and food delivery operations in Thailand.
Central in 2017 launched a joint venture with China’s second-largest e-commerce platform, JD.com, which backs Go-Jek.
Ride-sharing is not fully regulated in Thailand, with police occasionally fining drivers.
The market for ride-hailing services in Southeast Asia is expected to surge to almost $30 billion by 2025 from $7.7 billion in 2018, according to a Google-Temasek report.
Grab also announced it has signed a deal with business park landlord Ascendas Real Estate Investment Trust for a new Singapore headquarters to accommodate the start-up’s growing team under one roof.
The S$181.2 million ($134.5 million) headquarters will be built by Ascendas REIT and will be ready by the fourth quarter of 2020. The building will house all Grab employees based in Singapore and consolidate its current offices. Its largest research and development centre will also be based in the location.
“With the new building, we will be able to bring our growing Grab family in Singapore under one roof,” Ong Chin Yin, head of people at Grab, said in a statement. The company plans to create and hire a thousand more roles globally over the next 12 months, she added.
Grab has committed to an 11-year lease, with a renewal option of five years for the building, which will have an estimated gross floor area of 42,310 square metres, Ascendas and Grab said in their statement late on Wednesday.
(Reporting by Chayut Setboonsarng and Patpicha Tanakasempipat; Aradhana Aravindan in Singapore; Writing by Patpicha Tanakasempipat; Editing by Rashmi Aich and Subhranshu Sahu)