Chinese developer constructing $100 billion city beside Singapore
What's the story
Chinese property development company Country Garden Holdings Co. is building a massive $100 billion city in the sea bordering Singapore. The city, called Forest City, is being built in the Iskander Malaysia special economic zone around the Malaysian city of Johor Bahru, and the size of the plot is three times the size of Singapore.
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What is the Iskander Malaysia zone?
The Iskander special economic zone was built a decade ago by the Malaysian government, on and around the causeway which connects Singapore and Malaysia. It was modelled on the successful city of Shenzhen, Hong Kong's neighbour.
Forest City
Details about Forest City
Country Garden Holdings Co.'s Forest City is being built on four artificial islands. The area, which is around four times the area of New York's Central Park, is expected to house around 700,000 people. Construction of Forest City began in February 2016, and, according to the company, 8,000 homes have already been sold. It's one of the biggest projects in the Iskandar Malaysia zone.
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Chinese players scaring "the hell out of everybody"
"These Chinese players build by the thousands at one go, and they scare the hell out of everybody. God only knows who is going to buy all these units, and who is going to stay in them?," said Siva Shanker, the head of Axis-REIT investments.
Real estate
Real estate prices in the Iskandar Malaysia region
Forest City is just one of the 60 odd housing projects under development in the Iskandar Malaysia zone. The projects are expected to add over half a million houses to the region, and real estate prices have already dropped by a third of what it was last year. Prices are expected to drop further, with many developers offering discounts of 20% and above.
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Country Garden's other project
In 2013, Country Garden Holdings, in partnership with the investment arm of the state of Johor in Malaysia, constructed another waterfront project near Johor Bahru called Danga Bay. Reportedly, the company constructed 9,539 apartments, all of which have been sold.
Local companies
Effect of Chinese developers on local companies
The influx of Chinese property developers like the state-owned Greenland Group, and companies like Country Garden Holdings, Guangzhou R&F Properties, etc. has affected local companies like UEM Sunrise, Sunway, SP Setia etc. UEM, the largest indigenous landowner in the Johor Bahru region, reported a drop of 58% in their profits for the first half of the year.