Daily Management Review

‘$100 Billion’ Forest City Project In Malaysia To Undergo Review


08/28/2018


A reviewing committee to find the “best way forward” for the Forest City project, while the announcement from the Malaysian Prime Minister leaves the Chinese Developer’s share tumbling down.



On Tuesday, 28 August 2018, Malaysia informed that a review committee will look into the “Forest City” project of real estate worth “$100 billion”. This announcement came one day later, followed by the Prime Minister, Mahathir Mohamad’s statement of no foreigners would allowed to get visas for living there.
 
The comments of Mahathir proved to be a setback for “Country Garden Holdings Co Ltd”, a Chinese developer, which attempts to boost uncertain demand for the Malaysian project located in the southern tip of the country. In the words of the “Housing and Local Government Minister”, Zuraida Kamaruddin:
“We will form a committee to study and review whatever terms that were agreed to previously”.
“We will engage with all the agencies involved and also the developer. Then we see what is the best way forward”.
 
Country Garden is the “largest” developer of properties when seen by sales. However, the company saw a drop of 3.5% in its share early on Tuesday due to the announcement made by Mahathir. The project of Forest City is targeted to shelter “700,000 people” on the “reclaimed land near Singapore”. However, the project has seen uncertainty since the coalition of Mahathir garnered “a shock victory at a May general election”.
 
The above mentioned projects along with its like ones, wherein Chinese money formed the backbone of the mega projects’ infrastructure, turned into fodder for the election campaign of Mahathir, as he leveraged his position by appealing to a “public displeasure over a perceived over-dependence on Chinese capital”.
 
While, Reuters reported:
“Country Garden Pacificview Sdn Bhd, a joint venture between Country Garden and the Johor state government to develop Forest City, said in a statement on Monday that Mahathir’s comments ‘may have been taken out of context’”.
 
According to the company, Mahathir’s response was positive during a meeting with the Country Garden Chairman, Yeung Kwok Keung, which took place about “two weeks ago”. Further, the company added it has not failed to comply with any “necessary regulations in developing the project”.
 
 
References:
reuters.com







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