China curbs impact Forest City's homes sales

KUALA LUMPUR (Aug 4): Country Garden Holdings will find it hard to match last year’s home sales at its Forest City development in Johor following China’s curbs on outbound investment, a top executive told Reuters today.

The developer has upped promotion of the Johor project beyond China with more showrooms and hiring more Malay and English-speaking sales staff, said Yu Runze, chief strategy officer of Country Garden Pacificview, Reuters reported.

The developer is concentrating on new Forest City sales galleries in Thailand, Taiwan and the Philippines this year, and will boost showrooms in Malaysia to 20 from 15 by year end, Yu told Reuters.

"I think this year will be very challenging to surpass (last year's sales)," Yu said. "It is very clear that with a slowing down China market, it will be quite challenging to achieve the same number like last year."

Yu also clarified that there had been no reduction in the scope of the project, which will take place over 20 years.

According to a Bloomberg report in June, subsidised junkets that once flew in prospective buyers to development sites in Johor have dwindled, while some Chinese buyers who have put down money for deposits are mulling cancelling their purchases.

The developer also told Bloomberg it has opened Forest City showrooms in Singapore, Kuala Lumpur and Jakarta, and plans to open more this year in Vietnam, Myanmar, Taiwan, Thailand, Japan, Dubai, the Philippines and Laos.

Singapore’s TODAYonline also reported today that Country Garden inked deals with 21 companies to transform the development into a healthcare and recreation tourism hub. The developer said the plan is to develop eight key industries, including tourism, healthcare, education and training, and e-commerce services to serve the region.

“By attracting and partnering with companies that are aligned to our eight core industry verticals, we will be better able to create specialist hubs that deliver a range of services to residents and visitors alike … We are also looking at partnering Singapore companies, particularly in the area of healthcare and vocational training. Singapore presents opportunities we just cannot miss,” Yu told TODAYonline.

The South China Morning Post reported that the developer plans to build a traditional Chinese medicine hub to serve its estimated future population, many of whom will be from China, of 700,000 people.

Country Garden Pacificview said in a statement today that it had inked a deal with the Foshan Hospital of Traditional Chinese Medicine to set up satellite facility within the development, the Hong Kong daily reported.

Country Garden Pacificview is also pushing ahead with the stage 2 development of Forest City, which will add eight sq km to the development, see the completion of tourism, healthcare and education facilities. These include three 18-hole golf courses, a five-star 306-room hotel and a medical centre operated by Taiwanese healthcare management provider MJ Group.

Another Stage 2 project is Shattuck-St Mary’s Forest City, an international school for Grade 6 to 12 students. The school is likely to break ground in July, start enrolment for its inaugural batch of students in September and begin its academic year in August 2018.

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’s Iskandar Malaysia and with a gross development value of RM444 billion, had been successful in attracting Chinese buyers by offering affordable prices and access to Malaysia’s visa programme for long-term stays.