This is despite question marks hanging over ambitious project amid reclamation issues
The mega Forest City project off Johor Baru seems to be going full steam ahead despite ongoing controversy over its reclamation plans and even as other developers have either shelved scheduled project launches or dropped them altogether.
Forest City's China developer Country Garden has already started work on one of the four islands that will eventually comprise the largest mixed development in Johor Baru. The project has an estimated value of $58.3 billion and is slated to be completed in phases over the next two decades.
Some reclamation of the Johor Strait has started, where the project will be connected to Johor via a two-lane road. Work on at least one other island is under way as well.
Malaysia and Singapore have been discussing the environmental impact assessment report approved by the Malaysian authorities for Forest City, a Ministry of the Environment and Water Resources spokesman told The Straits Times yesterday.
Malaysia provided the report in January last year. "We have been studying the information provided by Malaysia carefully and have sought further clarifications on some of the information that Malaysia provided," the spokesman said.
While talks are ongoing, Country Garden insists that it is reclaiming within Malaysian boundaries and, according to Mr Yu Runze, Country Garden head of business strategy, its plan for the 1,386ha development has been approved.
Even as the reclamation issue is still being discussed, Country Garden has built a huge sales gallery complex, complete with sandy beach and palm trees. Businesses are also being wooed with economic incentives.
At the opening ceremony for the project on Sunday officiated by Malaysian Prime Minister Najib Razak and Johor's Sultan Ibrahim Sultan Iskandar, Mr Najib declared the sprawling Forest City a duty-free zone, along with corporate tax incentives for companies in sectors such as tourism and healthcare.
While Country Garden declined to provide the number of units for the project, its first phase comprises 482 condo units and 132 serviced apartments. It said it has received bookings for nearly all of this first phase. Buyers are mainly from China, with some bulk sales as well.
Average prices are RM1,200 (S$406) per sq ft, or about RM500,000 for a 517 sq ft studio to about RM2.2 million for a 1,862 sq ft four-bedroom apartment.
Mr Yu said: "A lot of Chinese and Middle East citizens are looking for a global asset allocation. They are not short-term speculators but looking at long-term yields, or they just want to keep overseas assets."
Country Garden is understood to have marketed Forest City in China strongly, with newspaper and TV adverts. One reason for the strong response could also partly be that a booking requires only a 10 per cent deposit according to its website.
In China, Country Garden, which has a listing in Hong Kong, is headquartered in Guangzhou. Founder and chairman Yang Guoqiang made his name with the construction of a township in East Guangzhou, which now has about 30,000 homes and 150,000 residents.
Ms Mireille Wan, founder of MDW Consultancy and formerly with CBRE in China, said: "Country Garden is strongly represented in most of the major Chinese cities." Some analysts have put Country Garden in the same league as China property giants Vanke and Evergrande.
Mr Wee Soon Chit, executive director of Malaysian property consultancy Landserve, said some Malaysians were initially sceptical of the commitment Chinese developers have to their Iskandar projects. But he pointed out that Country Garden has been "working round the clock" to complete more blocks at its Danga Bay project and its commercial area with food and beverage outlets is packed at night.
One Malaysian buyer, Mr Sudesh Narayanan, 36, is confident of the prospects. His family bought a four-bedroom unit at Forest City for RM2 million on Sunday. "We felt the development will be Johor's next big thing," he said.
This article was first published on March 8, 2016.
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