Country Garden Holdings (CGH), the developer of Forest City in Johor, insists that China’s restrictions on capital outflows has a limited impact on the project’s sales, despite the fact that 70 percent of its unit buyers last year were Chinese, reported The Star.
This is because some have secured funding, while other have purchased in cold cash, said CGH Chief Strategy Officer Yu Runze, adding that only “very few buyers” are finding it hard to pay for their home purchases.
Located on four man-made islands in the Johor Straits, Forest City will feature apartment blocks, schools, malls, offices and many other amenities. Jointly developed with Kumpulan Prasarana Rakyat Johor, it is expected to take over 20 years to complete.
Asked about the closure of their Forest City sales offices in China, Yu admitted that Country Garden has no choice but to comply with the central government.
“In China, for a period of time, we have stopped (sales and marketing) because we cannot go against the Chinese government’s tighter (monetary) policies in order to preserve China’s depleting foreign reserves.”
“We cannot ask the people in China to buy properties (overseas) because this will be going against the government policies.”
As such, CGH plans to woo other buyers from other countries by opening more than 10 sales galleries across the globe. While they are still selling to Chinese nationals, the company is focusing on those with money or assets stashed outside of China.
“We are seeking other target markets and this year, we are opening or planning to open sales galleries in South-East Asia and East Asian markets in Taipei and Tokyo. We are seeking new markets in the Middle East like Dubai.”
Moreover, Yu highlighted that Forest City is exempt from the Malaysia’s minimum price of RM1 million for property purchases by foreigners. As such, CGH can sell their units at around RM500,000 to this group.
“Forest City is on Malaysian territory but it is being promoted as a special area to attract international buyers and they can buy properties less than RM1 million,” he noted, adding that around 300 acres of the 3,425-acre project has been completed.
According to VPC Realtors (JB) Property Consultant Bruce Lee, CGH disposed around 200 units per day at Forest City during the heydays, with up to 20 buses of Chines tourists and other nationalities visiting its sales gallery in Johor.
Although business has slowed down after Beijing implemented its capital controls, about 16,000 units have already been sold mostly to foreigners. In comparison, the average take-up for this group in Malaysia previously hovered at 2,000 units per annum.
“Chinese buyers in Malaysia not only prefer to buy from Chinese developers, but they also prefer to buy off-plan. Down payment is low and they have about four years to pay for the project,” he claimed.
Image sourced from The Star
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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