The malaise begins when you enter the landfill wedge of Johor state. There, cars have to negotiate a partially collapsed highway built several years ago, while dense tropical undergrowth has reclaimed buildings and boulevards lined with closed stores.
“JB people don’t go there,” said Darren Lim, a surveyor from Johor Bahru, a short drive away. “There’s really nothing to do.”
‘Unprecedented’: Malaysia and Singapore promote special economic zones
‘Unprecedented’: Malaysia and Singapore promote special economic zones
In many ways, Forest City is a victim of forces outside Malaysia’s control. It was built as Chinese banks poured money into expansion plans for the country’s biggest developers.
Now, as China’s economy slows, banks are demanding their cash back, echoing the debt-funded gamble that once seemed intertwined with the irresistible rise of China’s vast middle class. Developers are struggling to make repayments.
However, the Malaysian government has not given up on Forest City.
The government hopes new tax and visa benefits for foreign workers and strong support from Malaysia’s next king, Johor monarch Sultan Ibrahim Iskandar, will revive the mega project’s sluggish fortunes. I hope that it may be possible.
But there is still much work to be done, and it will require new investment.
The basic plan for the project envisions four artificial islands scattered in the sea between Malaysia and Singapore, where the narrow Strait of Johor, which separates the two countries, intersects with the busy Strait of Malacca, an important international shipping route. was.
Is a high-speed rail link between Malaysia and Singapore too expensive or too slow?
Is a high-speed rail link between Malaysia and Singapore too expensive or too slow?
But so far, only one island has been built on sand dredged from Lamunia Reef off the east coast of Johor by a sand mining operation linked to the Sultanate of Johor, according to a study by Johor Marcel R. Williams. It is said that only one appeared from the sea. at Massachusetts Institute of Technology.
“The king appears to be involved at every step of the value chain,” Williams said in a 2016 report on the project.
Meanwhile, a new pool of non-Chinese investors may be needed.
Initially, developers bypassed the Malaysian market and aimed squarely at China’s upper middle class citizens who wanted to keep some of their wealth overseas.
After he returned to the post of prime minister in the same year’s election, Mahathir said that Malaysia did not want to grant visas to people who came and resided in Malaysia just to buy property, and that the Forest City property was closed to foreigners. Sales were immediately prohibited.
“We object because this building was built for foreigners, not for Malaysians. Most Malaysians cannot afford to buy those apartments. We can’t,” Mahathir said.
Real estate agents remain bullish about the prospects for the site.
On some websites, four-bedroom condos are being sold off-plan for more than $1.6 million, with a prominent “negotiable” tag next to the property information, and an expected completion date of January 2026. It becomes.
Approximately 28,000 apartments have been built in the first phase of the project so far. However, only about 9,000 people currently call Forest City home, a fraction of the project’s total population goal of 700,000.
In September, Forest City developers claimed that more than 100,000 people visited the water park and international golf course in the last month alone.
But when This Week in Asia visited on a recent Sunday, the water park and beaches overlooking Singapore’s Tuas Industrial District were deserted, save for a few wild dogs weaving among dozens of sea lion sculptures. There was no.
Ramesh, a Nepali security guard at one of the condominiums, admitted that there are few residents in between.
“The people walking here are the workers who take care of this place,” he said, citing one name who feared his job would be in jeopardy if he revealed his identity. .
For new buyers, this includes making the entire area a duty-free zone.
Unregulated medicines are also openly trafficked there, and one doctor told X to buy azithromycin (an antibiotic not available over the counter), a drug used to treat bronchitis, pneumonia and some sexually transmitted diseases, from a pharmacy there. I posted that I found it.
Coming back from the dead?
In the absence of Chinese expatriates, the few occupied units in Forest City appear to be filled by Malaysian workers from the nearby Tanjung Pelepas port. Tanjung Pelepas Port is the only major industrial container port in this part of the province.
One dock worker said he chose to live in Forest City because the rent was as low as 800 ringgit (approximately US$172) for a studio unit with a retail price of 300,000 to 1.3 million ringgit.
“It’s a new property and it’s cheap,” said Ahmad Razif, a dockworker. “The only problem is food. Choices are very limited.”
It is also close to the Malaysia-Singapore 2nd Link Bridge, making it a convenient location for some Malaysians working in Singapore.
The synergies that exist in Johor are different from other states and can leverage the achievements of Singapore.
“I work in Tuas, which is opposite Forest City. Second Link is much more convenient to get to work,” said Arjun Nair, another worker.
But Nair is not where Country Garden and its partners started their business.
This came in the form of a new Special Financial Zone for Forest City and the Iskandar Malaysia Economic Zone in the southern state of Johor, with low income tax bands and multiple entry visas for Singaporeans. .
‘Ghost town’: Malaysia’s country garden forest city struggles to sell units
‘Ghost town’: Malaysia’s country garden forest city struggles to sell units
“The synergies that exist in Johor are different from other states and we can leverage on the achievements of Singapore,” Mr Anwar said.
At the same time, the government has increased the entry price to qualify for the Malaysia My Second Home program to US$539,000 in the hope of sparking increased interest from potential foreigners, including from China. The price was lowered from a high price to just 100,000 USD.
The Sultan, who owns a stake in the Malaysian joint venture that built Forest City, will become the next head of state in February under Malaysia’s unique rotating constitutional monarchy.
But experts are skeptical of this package of incentives, saying Chinese buyers are more concerned about the domestic economy than homeownership overseas.
Angeline Tan, an analyst at the Malaysian Center for Strategic and International Studies, said Chinese citizens in difficult times “will not make large-scale investments like real estate.” “This has more to do with the China issue than any incentives Malaysia can offer.”
Changes in Malaysian domestic politics could also weigh on the project, as the government faces increasing pressure to feed the country’s middle class after years of harsh experiences with the pandemic and cost-of-living crisis.
“There will be little interest in focusing solely on the needs of Chinese property investors,” University of Malaya analyst Collins Chong said in Asia this week.
Malaysia cracks down on ‘inhumane’ Hong Kong-style coffin houses
Malaysia cracks down on ‘inhumane’ Hong Kong-style coffin houses
“There will be increased pressure and policy on developers and industry players to focus primarily on local needs.”
For now, buyers of any kind are welcome, as long as they have pillars planted at regular intervals in the ground that say “Land for Development.”
“There used to be a popular Chinese restaurant there,” said Darren Lim, a Johor Bahru local, capturing the positive aspects of Forest City. “But it didn’t survive the pandemic.”