Forest City to seek buyers elsewhere

KUALA LUMPUR (March 31): In an effort to rely less on mainland Chinese buyers, Country Garden Holdings is planning to attract potential purchasers from Southeast Asia, South Asia and the Middle East for its mega project in Malaysia, Forest City.  

"The capital controls will have an impact on Forest City," Yu Runze, chief strategy officer of Country Garden Pacificview, told Reuters, adding it was an "opportunity to shift our sales strategy to be more international".

He also told Reuters Country Garden will recruit local staff in the targeted markets and boost its advertising budget there.

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 many Chinese buyers by offering affordable prices and access to Malaysia’s visa programme for long-term stays.

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.

The South China Morning Post reported that to curb capital outflows, the Chinese government in January banned its citizens from converting yuan into other currencies for overseas property purchases.

And that has left many Chinese buyers in the lurch. After making payments for their Forest City properties, these mainland investors are now faced with the grim prospect that they cannot send money out of China to continue making payments or even get their money back, the South China Morning Post reported.  

On March 10, the Hong Kong daily also reported that Country Garden has closed all sales centres in mainland China for its Forest City Malaysian housing project amid Beijing’s intensified crackdown on capital flight.