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CNA
5 days ago
- Business
- CNA
What will it take to revive Forest City, Malaysia's US$100 billion ‘ghost town'?
JOHOR BAHRU, Malaysia: Insurance executive Wafa Aina Wahid's daily commute to Johor Bahru used to take nearly two hours from the town of Kluang. Her husband was based even further away from her — he was working, and renting a place, in Singapore. But just recently, the couple made a move that would cut her commuting time by more than half and bring them together again. They signed a lease for a three-room apartment in Forest City, the US$100 billion mega housing project at the southern tip of Johor, just across from Singapore. And Wafa was 'so excited to move'. 'Finally, I'm not going to do a long-distance relationship with my husband,' said the 27-year-old. 'He can commute daily (from) here.' Convenience was not the only reason they seized this opportunity. They were also attracted by the rental. 'Here, I can easily get, (for) below RM2,000 (US$465) per month, … an apartment with two bathrooms, but (in) other places, maybe just a studio (at) the same price,' said Wafa. 'It's more, I'd say, affordable compared to other places.' Forest City has a notorious reputation, however, having gained international attention in the last few years as Malaysia's ghost town. It was once billed as a 'living paradise' — a luxurious, eco-friendly and smart city development with a mix of apartments, commercial spaces, malls and hotels. Jointly developed by Chinese developer Country Garden and Esplanade Danga 88, a Malaysian company backed by the Johor state government and Johor's sultan, the project is linked to the Belt and Road Initiative, China's mega infrastructure and trade network. Forest City is meant to accommodate around 700,000 people on four man-made islands by 2035, with a total land area of nearly 14 sq km — about three times the size of Sentosa — once the reclamation is complete. But since the project launch in 2014, only one of the islands has been reclaimed, with about 20,000 people currently living there. The project started stalling in 2017 when the Chinese government introduced capital controls on money leaving the country. This affected Chinese buyers seeking properties abroad, the primary target for Forest City's developers. Malaysian politics also had an impact on sales when former Prime Minister Mahathir Mohamad declared that overseas buyers would not easily receive residency visas. He had initially threatened to ban foreign purchases in Forest City altogether. Then the pandemic hit, and travel restrictions led to a significant decline in demand. At the same time, China's property sector downturn left Country Garden battling a liquidity crisis, with total liabilities of US$164 billion at the end of 2023, including US$16.4 billion in offshore debt. Plans are now underway to revive and transform the Forest City project. And with a new cross-border development realised in January — when the agreement to establish the Johor-Singapore Special Economic Zone (SEZ) was signed — the question arises as to how much of a boost this will be for Forest City. With its growing residential community, is it not even a ghost town any longer, the programme Insight also asks. BREATHING NEW LIFE INTO THE PROJECT The proposal to integrate Forest City into the Johor-Singapore SEZ was made last August by the Johor state government. Extending across Iskandar Malaysia and Pengerang in Johor, the SEZ — at 3,571 sq km — is close to five times the size of Singapore and is aimed at improving trade and business ties between the two neighbouring countries. If the SEZ succeeds, more people could be working and living in southern Johor, said Adib Zalkapli, managing director of political risk consultancy Viewfinder Global Affairs. 'So Forest City, being a ready-made township, could attract some of these people.' And one important key to the SEZ's potential success is the financial centre that is Singapore. 'What Singapore has is advanced logistics … (and an) international trade hub,' cited Lee Ting Han, chairman of Johor's investment, trade, consumer affairs and human resources committee. 'In Johor, what we can offer is a talent pool, infrastructure, land, resources, et cetera. 'Therefore, we think that with Forest City being included … (in) the Johor-Singapore SEZ, Forest City itself may be able to complement part of the existing ecosystem within Singapore.' Forest City's value proposition does not only lie in its housing. It was declared a duty-free zone last year to support tourism and bolster the local economy. The Malaysian government has also designated it as a special financial zone, to breathe new life into the project by transforming it into a hub for international capital. One plan is to turn Forest City into a destination for global family offices — companies that manage a family's wealth and investments. The goal is to attract high net-worth individuals to the island. In Malaysia, a single-family office can be set up with a minimum of RM30 million in assets under management, which is lower than the minimum of S$20 million required in Singapore. Noting that the Asia Pacific is one of the world's high-growth areas, PricewaterhouseCoopers Malaysia tax partner Fung Mei Lin said: 'There are a lot of wealth movements, and I don't think it's unreasonable for Malaysia to (be) trying to attract a part of that.' To this end, Malaysia has offered a zero per cent tax rate for family offices located in Forest City, which Fung said would be 'a no-brainer' for these offices, compared to the standard corporate tax rate of 24 per cent. This is part of a tax incentive package for the special financial zone that the government announced last September to stimulate financial services such as fintech. And in April, two family offices got the ball rolling as the first to set up in Forest City. COMPLICATIONS REMAIN Things are not necessarily going to be straightforward for Forest City, however. According to the finance ministry, 70 per cent of the properties sold have been bought by Chinese investors. The project is still largely marketed to this group, even as their appetite for investment has waned following China's property sector troubles. While Chinese overseas investment in real estate has seen a 'slow recovery' to about US$10 billion last year, said National University of Singapore Business School dean's chair professor of real estate Qin Yu, about US$40 billion was invested in 2017 by comparison. Can investment levels recover to the peaks in 2016 and 2017? 'Probably not,' she said. But Danny Wong, chief executive officer of private wealth management company Areca Capital, is confident that the Chinese will 'come back' 'China's population is so huge, and internal demand itself can make them vibrant,' he said. 'What they need to do is stabilise the whole situation. … It's just a matter of time.' Having lost as much as 97 per cent of its market value from its peak in 2018, however, it is unclear whether Country Garden can continue to develop Forest City. The company, which is still mired in debt, declined comment. 'It might be challenging for (Country Garden),' said Qin, 'because (it) even has trouble … finishing some of the projects within mainland China.' Last November, Country Garden said its Malaysian projects were 'operating normally'. The developer is now in talks with creditors to restructure its offshore debt to avoid liquidation. But should it fail, who will complete the Forest City project? Johor's government, for one, is 'not in that position at the moment', said Lee. 'The government isn't directly involved in the project itself, so we don't have any equity participation.' Nor should there be a government bailout because of the scale of the project, said economist Geoffrey Williams, the founder and director of Williams Business Consultancy. 'The best way for the government to support (it) is to provide a deregulated, liberal environment where people can get access to the licence to operate,' he said. 'Nobody in Malaysia would be happy to see government money taken from health, education and social protection in order to bail out a failed Chinese property development.' The burden could fall on Forest City's co-developer, Esplanade Danga 88, whose controlling stake is owned by Johor's sultan and which has a 40 per cent share in the project. 'Esplanade Danga 88 can become the master developer,' suggested Samuel Tan, CEO of Olive Tree Property Consultants. But it would 'have to find other developers or a joint venture partner' for the remaining islands. New developers, however, may not wish to undertake the original plan. 'It's best if the market decides whether the area should be expanded or it should remain as it is,' said Adib. 'It'll have to depend on the demand.' Without the Chinese, where this demand will come from is unclear. Although prices in Forest City have come down since launch, its cheapest homes are typically priced at more than RM520 per square foot, compared to the median price of around RM400 in Johor Bahru. With the Chinese not buying and prices 'too high for locals', there is a 'huge supply and no demand', said Williams. 'When you're so highly leveraged and have spent so much money, you can't really bring down the price of the units because then you're going to lose not just on individual units but across tens of thousands … of units.' Recent revisions to the Malaysia My Second Home (MM2H) programme — a long-stay visa programme — could expand the foreign buyer pool, however, beyond the Chinese. Under the previous government, principal applicants had to park RM1 million, for example, in a fixed deposit to attain a five-year multiple-entry visa. The current administration has reduced this to US$150,000. Lee is hopeful the current policy will help. 'We do receive some inquiries, and it seems to be generating positive feedback,' he said. 'And banks are looking to set up their office within Forest City.' DOES IT STILL DESERVE ITS MONIKER? For all the portrayals of Forest City as a ghost town before this, entrepreneur Her Kai, who owns two units in the development and lives there, does not think it deserves to be depicted as such. 'After the pandemic, there was a lot of negative news, of which about 60 to 70 per was false, in my opinion,' said the 40-year-old, who was born and raised in Shanghai but has made Malaysia his home since 2019. 'There are plenty of people, including tenants and owners. … I know the real situation. If it were truly a ghost town, we'd all have left.' Certainly, there are more occupants now, said Mohd Nizamuddin Zainuddin, 35, who moved to Forest City with his wife just before the pandemic struck and is still renting a unit there. This is also the case compared to 2023, when 9,000 people were living there. And its landscape has been well maintained, the businessman added. 'If I can afford to own a house here, I'll continue living here.' Some 30 condominium blocks have been completed, along with dozens of landed homes. With the uptick in occupancy, businesses have followed suit. Felix Lam used to work in Kuala Lumpur, offering internet services to consumers. But he decided to relocate to Forest City to meet the demand for connectivity on the island. 'Many people here still have a wait-and-see attitude, wondering whether it can grow and help their business thrive,' said Lam, who also rents one of the apartments for his staff, paying RM1,500 a month. 'My perspective is different. I believe that even though Forest City had a slow start, there's a high demand and very high requirements. As long as we provide good services, it shouldn't be a problem.' More supermarkets and food outlets are opening in the area, according to Lee. And locals are patronising places there for recreational purposes, 'so it isn't really a ghost town', said Olive Tree's Tan. 'But the management hasn't addressed this issue very well by putting up a more positive narrative (of) the development and attraction of Forest City,' Tan added. From the outside, Faezatul Khatimah did wonder whether people would want to rent in Forest City because 'it didn't seem to have that many occupants' three years ago, when she ventured into real estate to earn some side income. That was when she saw an opportunity. 'I found out that many people came here every day to view the houses,' she recounted, 'so I started uploading posts on social media platforms like Facebook and TikTok.' Demand was high enough that she eventually became a full-time real estate agent, and she finds herself a lot busier these days. One of her clients is Wafa. 'Looking at the facilities, looking at the environment, looking at everything here,' said Wafa, 'I think it's not the ghost town that people have been talking about.'
Straits Times
28-04-2025
- Business
- Straits Times
Resort living reimagined: Waterfront homes in JB's Special Economic Zone minutes from Singapore
View of Forest City's waterfront development along the Johor Strait, located a 15-minute drive from Singapore via the Second Link. PHOTO: COUNTRY GARDEN BRANDED CONTENT Resort living reimagined: Waterfront homes in JB's Special Economic Zone minutes from Singapore Located near the Second Link, Forest City combines championship golf courses with luxury seaside properties, allowing residents to enjoy a relaxed lifestyle with easy access to business hubs Picture yourself waking up to expansive views of the Johor Strait, where calm waters reflect the morning light. Breakfast is served at a breezy waterfront cafe, just steps from your door. Afterward, you head to the greens for a morning round on a Jack Nicklaus-designed golf course. Later in the day, you might stroll along tree-lined promenades or simply unwind on your private rooftop terrace. This is not a holiday fantasy – it could be your typical weekend reality at Forest City, a one-of-a-kind international waterfront development just across the border in Iskandar Puteri, Johor. Located 5km from the Malaysia-Singapore Second Link, about a 15-minute drive, Forest City blends luxury residences with a full suite of resort-style amenities. Developed by Country Garden in partnership with the state government-backed Esplanade Danga 88, the ambitious project represents a new vision for contemporary urban living in South-east Asia. A gateway to the region's growth corridor Strategically located within the Johor-Singapore Special Economic Zone (JSSEZ), Forest City sits at the heart of an emerging cross-border economic corridor. Its proximity to Johor Bahru and Singapore positions it as a natural hub for regional growth, drawing both investors and residents. An efficient transportation network allows you to seamlessly switch between the vibrancy of Singapore and the tranquility of Forest City, effortlessly capitalising on the business opportunities and lifestyle conveniences brought by this twin-city development. In a Facebook post, the Malaysian King Sultan Ibrahim Sultan Iskandar shared in Malay that during Chinese President Xi Jinping's recent visit to Malaysia, he delivered remarks stating that with its strategic incentives and favourable location, the Forest City Special Financial Zone has emerged as one of the key regional investment destinations within the JSSEZ. Forest City serves as a gateway between Singapore and Johor Bahru, housing 20,000 residents and attracting millions of visitors annually. PHOTO: COUNTRY GARDEN Today, Forest City is home to around 20,000 residents and has emerged as an international community in its own right. In 2024 alone, the development welcomed over seven million visits, with more than three million tourists drawn to its picturesque 4km coastline. Forest City presents a compelling option for those who work in Singapore but prefer to reside in Malaysia. The nearby Second Link allows for an easy commute, enabling residents to maintain careers in the city-state while enjoying spacious homes at more affordable prices and relaxed surroundings in Johor complete with high-quality lifestyle facilities. Golf villas at Forest City offer spacious, luxury living with private terraces and landscaped gardens, ideal for those seeking a relaxed lifestyle while remaining close to the commercial hubs in Johor Bahru and Singapore. PHOTO: COUNTRY GARDEN Through the Malaysia My Second Home (MM2H) programme – specifically its Special Zone version – foreign buyers can obtain a renewable 10-year visa with a minimum property purchase of RM500,000 (approximately S$150,000) and a fixed deposit of US$65,000 (S$86,000) for applicants under 50 years old, or US$32,000 for those above. The visa permits unrestricted travel in and out of Malaysia and covers dependents, including spouses, children under 34 and parents over 60. While enjoying Malaysia's beautiful environment and abundant resources, residents can balance life and career between Malaysia and Singapore, providing more educational options for their children, while creating a comfortable retirement environment for their parents, Forest City is a hallmark of modern urban planning. Spanning approximately 2,000ha of reclaimed land across four man-made islands, the project also includes a 200ha industrial park and 800ha dedicated to a world-class golf resort not far from the reclaimed islands – making it one of South-east Asia's most ambitious mixed-use developments. Forest City's integrated design places championship golf courses just steps from homes, bringing resort-style amenities directly to residents. PHOTO: COUNTRY GARDEN With multiple federal-level incentives, including Special Financial Zone (SFZ) designation, duty-free island status, and Malaysia Digital status, Forest City is poised to become a financial and commercial hub that complements Singapore's own financial ecosystem. The establishment of the JSSEZ further strengthens this dual-core growth model. For investors, this presents an opportunity to leverage the policy advantages of the SFZ for business opportunities, benefit from tax incentives of the duty-free status and connect with Malaysia's digital ecosystem. As a complement to Singapore's financial landscape, this emerging financial and commercial hub provides additional options for business growth. In line with this vision, the International Malaysia Facilitation Centre (IMFC) has set up operations within Forest City, alongside key government bodies such as the Malaysia Industrial Development Authority (MIDA), Immigration Department, and the MM2H Programme Office – streamlining business processes for investors and residents. Premium golf villas and waterfront apartments Forest City offers three distinct residential clusters, ranging from leisure-focused golf villas to high-rise waterfront apartments. Each caters to different lifestyle preferences. At the pinnacle of this offering are the exclusive golf villas. Designed with privacy and recreation in mind, these garden-style homes range from 2,034 sq ft to 2,917 sq ft. The three-bedroom V160 layout features three spacious bedrooms, three designer bathrooms, and a rooftop terrace that seamlessly connects indoor living to the outdoors. With a Z-shaped design, the spatial flow is maximised . Whether it is the first ray of dawn in the morning or the evening's glow, sunlight evenly fills every room, creating a bright, warm and pleasant living environment. The two-bedroom V120 golf villas are designed with floor-to-ceiling windows overlooking lush gardens, creating bright, airy living spaces that blend indoor comfort with outdoor calm. PHOTO: COUNTRY GARDEN Floor-to-ceiling windows frame uninterrupted views of the manicured golf course, bringing nature right into the heart of the home. Additionally, the two-bedroom V120 layout is also available, with both configurations thoughtfully designed to incorporate generous garden spaces that offer a seamless blend of nature and refined living. Buyers of these villas will also receive the Forest City Golf Resort Premier Card, granting them privileged access to elite golfing facilities and resort services. For those who prefer vertical living, Forest City's waterfront apartments offer a fresh take on high-rise luxury. Units range from 517 sq ft to 4,542 sq ft and are designed to maximise natural light and coastal views. Vertical greenery integrated into the building facades enhances air quality while adding a lush landscape. With units facing the coast, apartments like the 1,378 sq ft waterfront residences offer elegant living with contemporary interiors and abundant natural light. PHOTO: COUNTRY GARDEN Within the development, amenities include swimming pools that overlook the Johor Strait, fully equipped fitness centres, saunas and communal barbecue pavilions, creating a resort atmosphere for everyday living. Play on a course designed by Jack Nicklaus Forest City is already a destination of choice for golf enthusiasts across Asia. The Forest City Golf Club features two championship-level courses: The Legacy Course by Jack Nicklaus, known for its desert-inspired layout and sweeping waterfront views; and the Classic Course by Liang Guokun, which offers a more technical challenge with narrower fairways and multi-tiered greens. Both courses recently received GEO Certification, making Forest City Golf Club the second in Malaysia to earn this prestigious environmental recognition. In 2024, more than 100,000 golfers from countries including South Korea, Singapore and Malaysia have teed off here. Complementing the golf lifestyle are two premium hotels. The Forest City Marina Hotel features 286 rooms, a lobby bar, restaurants and wellness facilities – perfectly complementing the residential development's lifestyle offerings. Amenities at Forest City include landscaped pools with waterfront views, fitness centres and social spaes designed for everyday resort-style living. PHOTO: COUNTRY GARDEN Meanwhile, the centrally located Forest City Golf Hotel offers 298 rooms and is tailored for MICE (Meetings, Incentives, Conferences, and Exhibitions) events, complete with spa, pool and golf clubhouse access. Both hotels offer ideal accommodations for hosting business clients or welcoming visiting family members and friends. Shops and an international school within reach Adding to Forest City's appeal is a growing ecosystem of infrastructure and community services. Healthcare, retail and dining options continue to expand, with the development's duty-free status promising to turn Forest City into a shopping and lifestyle destination in its own right. Forest City's vibrant retail hub offers shopping, dining and essential services, making it a complete lifestyle destination for residents and visitors. PHOTOS: COUNTRY GARDEN The Forest City International School is the only K-12 boarding institution in the Johor Bahru area offering a continuous 15-year education pathway and providing students with the opportunity to apply to both British and American universities simultaneously. Students benefit from dual-track university application opportunities, with the school's Advanced Placement programme facilitating entry to top American institutions and foundation programmes paving the way to British universities. Children of Forest City property owners are also eligible for tuition discounts if they enrol in the Forest City International School. With its combination of housing, schools and amenities, the development serves as a comprehensive cross-border residential hub in Malaysia's southern region. Backed by strong government support, integrated infrastructure, and international appeal, Forest City is a transformative vision of what living well in South-east Asia can look like. For prospective buyers, Forest City has introduced a special gift package for site visits. You can enjoy a stay at the Forest City Golf Hotel for just S$10 when viewing the property, offering a comfortable and convenient way to experience the community firsthand. Limited slots available on a first-come, first-served basis. WhatsApp +60197144287 or visit this link to find out more. Disclaimer: This is an overseas investment. As overseas investments carry additional financial, regulatory and legal risks, investors are advised to do the necessary checks and research on the investment beforehand. 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