Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

Country Garden Closes Sales Offices for $100 Bil Malaysia Project Amid Capital Clampdown

2017/03/11 by Michael Cole Leave a Comment

Forest City Country Garden

Forest City involves four reclaimed islands just 2 km from Singapore

China’s third largest developer has closed mainland sales offices for its largest overseas project as authorities in Beijing keep a tight grip on the country’s capital account.

Country Garden Holdings has shut the doors to sales offices in Shanghai and other Chinese cities for its 1400-hectare Forest City development in Malaysia’s Iskandar region. The Guangdong-based developer had been selling as much as 90 percent of the units at the project to clients from mainland China, before capital controls apparently struck the latest blow to the planned city next to Singapore.

A visit by Mingtiandi to a sales office in central Shanghai for the $100 billion project on Saturday found the doors locked and the showroom vacant of staff. A statement from Country Garden indicated that the sales offices were closed for renovation, and also noted that the closure was done “to better fit with current foreign exchange policies and regulations.” Showrooms in other Chinese cities were also said to be closed, and the company has not given a date for reopening the sales effort.

The shutdown comes as developers in other locations dependent on mainland sales have reported a rash of mainland buyers struggling to fulfill purchase contracts for overseas homes.

Building New Islands to House 700,000 People

Najib yang guoqiang

Malaysian PM Najib (L) could offer Country Garden founder Yang Guoqiang (R) some tips on offshore money transfers

Country Garden, which has teamed with the sultanate of Johor State to begin reclaiming land for a set of four islands just 2 kilometres from Singapore, envisions Forest City as the future home of 700,000 people, and many of these potential inhabitants seem to have been from mainland China.

Malaysia-based Air Asia had set up direct flights from Guangzhou to Johor Bahru to ferry potential customers eager to look at tropical homes. At around RMB 20,000 per square metre, one-bedroom units were available for a modest (by mainland standards) rate of RMB 1 million. Chinese customers bussed in from Singapore, as well as buyers at showrooms in Shanghai and other major cities, had helped Country Garden to notch approximately RMB 18 billion ($2.61 billion) in sales at Forest City last year, with a report in the South China Morning Post quoting a company sales manager who said 90 percent of buyers came from mainland China.

Forest City had earlier been stalled by protests from both local fishermen and from the Singaporean government, with the project only recommencing in 2015 after Country Garden scaled back the original plan by 25 percent in scope.

Bringing the World to Iskandar

Forest City sign

A Shanghai real estate agent offering Forest City homes last year

In response to the mainland setback Country Garden’s Malaysian subsidiary issued a statement on Friday indicating that the company would be promoting its Iskandar homes to buyers across Asia, as well as from the Middle East, Europe and the US.

Country Garden Pacificview Sdn Bhd said it has partnerships in place with property agencies globally, and “We also intend to set up sales galleries in Vietnam, Myanmar, Taiwan, Dubai and Japan in coming months.”

“We initially targeted buyers from mainland China because of our strong reputation in the market as we have successfully delivered 500 township projects in China as well as a residential project in Australia,” Country Garden Pacificview’s chief strategist Yu Runze said in a statement.

Forest City the Latest Victim of Capital Clampdown

Country Garden Showroom

Country Garden had been promoting Malaysia as an exotic destination for Chinese homebuyers

As challenging as it may be for Country Garden to push Malaysian homes to Japanese housewives, the alternative appears to be waiting for a major change of heart by some of the mainland’s top officials.

On Friday, China’s central bank governor Zhou Xiaochuan defended the crackdown on outbound capital at China’s annual legislative gathering.

“Some people [invested offshore] blindly and were in a rush to do so,” Zhou was quoted as saying in the Financial Times. “Some of this outbound investment was not in line with our own policies and had no real gain for China.” The central bank has been actively propping up the renminbi and the regime has been strictly enforcing rules on outbound money transfers in an effort to keep mainland investors from fleeing the Chinese currency.

The new level of controls include a rule put in place by China’s State Administration of Foreign Exchange on December 31st that requires applicants for foreign exchange to give a detailed account of how the funds will be used – and to pledge that the monies won’t be used to buy overseas real estate.

Capital Controls Felt in Sydney, Melbourne and Shanghai

Now, in addition to Country Garden’s Malaysia struggles, nearly 80 percent of Chinese buyers who bought Australian apartments off the plan are unable to settle on their purchase agreements, according to the head of a Beijing-based real estate agency specialising in Australian property, who was quoted in The Australian last week.

Besides Country Garden, a number of other Chinese developers have bet on projects in Iskandar, with Malaysian developments by Greenland Group and Guangzhou R&F also likely to be feeling the impact of China’s capital controls.

Related Stories

  • $100B Country Garden Malaysia Project in Doubt on Mahathir Warning$100B Country Garden Malaysia Project in Doubt on Mahathir Warning
  • Country Garden Expects $3 Bil in 2016 Sales From Malaysian MegaprojectCountry Garden Expects $3 Bil in 2016 Sales From Malaysian Megaproject
  • Country Garden Denies Bribing Politicians to Help Secure Sydney Area SitesCountry Garden Denies Bribing Politicians to Help Secure Sydney Area Sites
  • Country Garden Buys $562M East London Housing Project in First UK ForayCountry Garden Buys $562M East London Housing Project in First UK Foray

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Outbound Investment Tagged With: Country Garden Holdings, daily-sp, Featured, Forest City, highlight, Iskandar, Johor Bahru, Malaysia

MTD Proptech Report Download

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Knight Frank 390-396 Pitt St

Get Mingtiandi Delivered

Sustainability Forum

MTD TV

Warburg Pincus, Princeton Digital Foretell Asia’s Data Centre Future

Proptech Forum: Logistics Tech

Logistics Experts Reveal How Tech Is Reshaping Asia’s Distribution Centres

More MTD TV Videos

Latest Stories

goodwin gaw

Gaw Capital Said Planning US SPAC and More Asia Real Estate Headlines

quayside hong kong

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location

JLL Alex Barnes

Hong Kong Office Vacancy Hits 9.3% as Deutsche Bank, AIA Surrender Space

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork LocationIWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location

Hong Kong Office Vacancy Hits 9.3% as Deutsche Bank, AIA Surrender SpaceHong Kong Office Vacancy Hits 9.3% as Deutsche Bank, AIA Surrender Space

Hines Ramps Up APAC Presence With New Hires in Japan, South KoreaHines Ramps Up APAC Presence With New Hires in Japan, South Korea


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team