Three of China’s biggest property developers are changing the face of Johor, just across across the Causeway from Singapore. Chinese construction giants such as R & F Properties, Greenland Group, and Country Garden are undertaking ambitious residential and commercial projects in the fast-growing Iskandar economic region. Initial skepticism that the developers could actually pull off their grand plans is giving way to enthusiasm from investors, locals and the Malaysian government as the projects rapidly take shape.
Within a year of reclamation work starting, Phoenix Hotel, which has 50 establishments throughout China, has already opened its doors in Forest City. The artificial island is a joint venture between Guangdong’s Country Garden, and the Sultan of Johor. The plan is to create four artificial islands spanning 20 square kilometres over the next 20 years.
Chief strategy officer of Country Garden Pacificview, Yu Runze said, “When I first came to Johor, the Forest City project was a piece of water back at that time; we definitely can see a lot of suspicion on the feasibility of this mega project. We use our delivery to prove that Forest City is not a dream. It is actually very tangible.”
In the state capital, Johor Bahru, Country Garden is creating another city within a city. Never before has Malaysia seen a cluster of high rise developments on this scale taking place at one time – not in the capital Kuala Lumpur, let alone the southern state of Johor. The Danga Bay project is already 80% sold, with most buyers coming from China and Singapore. Forest City is also attracting foreign interest.
The Iskandar economic region, with its new industry, universities and amusement parks, is expected to double its population by 2025, easing concerns of a possible property glut. Chief executive of the Iskandar Regional Development Authority (IRDA), Ismail Ibrahim, said that rapid economic development translates into more jobs, and more people would be coming in to seek opportunities not only for business but also for employment. This in turn would create demand for housing.
The developers say Forest City will generate tens of billions of dollars of economic activity and create some 220,000 jobs, hugely benefitting the local economy and not just the well-to-do people who will buy there. The state is confident of achieving its annual target of RM25 billion investments this year, with new investments worth RM10.85 billion secured in the third quarter of 2016. This brought the total cumulative committed investments secured to RM218.84 billion from 2006 until Sept 30 this year.
China remains the top five countries with highest investments into Iskandar Malaysia from January to September 2016 , after Singapore, USA, Japan and Spain. Iskandar Malaysia is set to shine as one of the fastest growing economic corridors in South-East Asia (maybe even Asia), so it’s no wonder that investors are eyeing a piece of the Iskandar pie.