Country Garden Disputes Reports It Can't Sell Forest City Homes to Foreigners
Yicai Global
/SOURCE : Yicai
Country Garden Disputes Reports It Can't Sell Forest City Homes to Foreigners

(Yicai Global) Aug. 27 -- Country Garden Holdings, a Chinese real estate giant whose latest development in Malaysia has come under fire, has denied reports that the Malaysian prime minister said he would ban foreigners from buying homes at the project.

"One thing is certain, that city that is going to be built cannot be sold to foreigners," Reuters quoted Malaysian Prime Minister Mahathir Mohamad as saying at a press briefing in Kuala Lumpur today. But Country Garden says the quote is a fake.

Mahathir never said residential units at the development cannot be sold to foreigners, a company executive told Yicai Global, saying the Malaysian government told him this. Malaysian authorities will make an announcement to clarify the matter, he added.

Shares in the firm [HKG:2007] dipped after the report, but rallied to close up 2.53 percent at HKD12.14 (USD1.55).

Country Garden began planning the USD100 billion development in 2016 and has built on just a fraction of the 20 square kilometre plot in Johor Baru, the Reuters report said. The company expects construction to take around 20 years.

As of the end of 2017, the firm had racked up sales worth CNY18 billion (USD2.6 billion) at the development, with Chinese buyers making up about 70 percent of the total. The project supposedly hit a snag in March last year when reports surfaced suggesting that Chinese buyers would not be able to purchase the homes, but this was worked around by having them pay within Chinese territory.

Forest City is one of the company's five developments in Malaysia, its largest overseas market. It also owns compounds named Danga Bay, Diamond City, Serendah and Central Park. 

Country Garden Pacificview, which was set up by the property titan and the Johor state government, said it has complied with all required regulations, Reuters reported, saying the unit believes Mahathir's words may have been taken out of context and did not align with what he said during a meeting with Country Garden Chairman Yang Guoqiang on Aug. 16.

"During the meeting, Tun Mahathir reiterated that he welcomes foreign investment which could create employment opportunities, promote technology transfer and innovations that could benefit Malaysia's economic growth and job creation," the joint venture said in a statement. 

"I believe that Malaysia will continue to keep an open mind and a welcome attitude toward foreign investors," Yang said during the meeting. He also pledged to invest more money in the country and to focus on modern agriculture and smart machine manufacturing.

Follow Yicai Global on
Keywords: Country Garden , Malaysia , Forest City