No solution in sight for Chinese buyers of Forest City

KUALA LUMPUR (March 23): There seems to be still no solution in sight for Chinese clients who have put down payments for Country Garden’s Forest City development in Johor.

They are now caught in a limbo as they are unable to send money to Malaysia to continue paying for their properties owing to the Chinese Beijing’s tightening of capital controls.

According to the South China Morning Post (SCMP), Country Garden founder and chairman Yeung Kwok-keung refused to comment on what solutions might be available to the Chinese clients trapped in the grim situation.

“We are selling the project to buyers from all over the world,” Yeung was reported by the Hong Kong daily as saying at the company’s result briefing in Hong Kong yesterday.

Country Garden earlier this month shut sales offices across China for the Forest City development, which SCMP reported Yeung as saying was caused by the Chinese government’s tightening of capital controls since the beginning of this year.

The SCMP earlier reported that to curb capital outflows, the Chinese authorities in January banned its citizens from converting yuan into other currencies for overseas property purchases.

Country Garden is the second-largest developer in China. Aside from Forest City, Country Garden has three other developments in Malaysia, namely Central Park and Danga Bay, which like Forest City are also in Johor, and Diamond City in Semenyih, Selangor.

Forest City, covering 14 sq km of land on four artificial islands in Johor and with a gross development value of RM444 billion, has been successful in attracting Chinese buyers by offering affordable prices and access to Malaysia’s visa programme for long-term stays.