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Malaysia
AsiaSoutheast Asia

Malaysia’s Country Garden Forest City, the US$100-billion ‘ghost town’ caught up in China property giant’s woes

  • The future of the megaproject in Malaysia is in doubt again because of Country Garden’s US$196 billion debt
  • Despite the Malaysian government unveiling new measures to support Forest City, analysts say the project faces an uphill battle to lure buyers

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Condominiums at Forest City, a development project launched under China’s Belt and Road Initiative in Malaysia’s Johor state Photo: AFP
Agence France-Presse
On the approach to Malaysia’s US$100-billion island megaproject backed by Chinese investment, a collapsed bridge forces drivers to detour before they reach an artificial city emerging from palm oil trees where condos, roads and shops lay empty.
Aimed at middle-class Chinese buyers, Forest City has weathered scant sales, Chinese currency controls, a pandemic shutdown and public anger at China’s growing influence in Malaysia.
But its future is in doubt again because of the financial woes of Chinese property giant Country Garden. The project developer rose from a farmer’s idea to Beijing’s largest private real estate firm, but is now saddled with US$196 billion of debt.

It posted a record loss for the first half of 2023 this week but won creditor approval to extend a key bond repayment deadline, narrowly avoiding a potential default that imperilled thousands of developments in and outside the world’s second-largest economy.

Another deadline looms next week over an unpaid multimillion dollar interest payment that again leaves it at risk of default.

“I hope Country Garden can overcome their financial difficulties,” said 29-year-old Zhao Bojian from Chinese province Henan, who bought one of 26,000 Forest City units for around US$430,000 five years ago.

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Malaysia’s China-linked multibillion-dollar ghost town project stalled by Covid and capital curbs

Malaysia’s China-linked multibillion-dollar ghost town project stalled by Covid and capital curbs

“If nobody comes to Forest City, we cannot do business here.”

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