2023-09-13 16:20:56
Wednesday September 13, 2023
Malaysia
In Malaysia, the Forest City real estate complex will ultimately accommodate 700,000 residents. A titanic project, worth 100 billion dollars. But only 9,000 residents settled in what is now a veritable ghost town. This is what it looks like.
A series of tall residential towers rises vertically toward the sky. The buildings are perfectly aligned in rows, and overlook the sea. Welcome to Forest City, a new city project which is emerging in Malaysia, not far from the city-state of Singapore. It is a titanic project, a project worth 100 billion dollars, or 93 billion euros, which aims to accommodate 700,000 inhabitants in the long term. At least that was the objective set by its promoters on paper. But today, Forest City is a true ghost town. And its promoter, the Chinese giant Country Garden, is in great difficulty.
“Disturbing silence”
In a deserted mall in Forest City. (Photo: Mohd Rasfan / AFP) Forest City is often referred to as a ghost town. (Photo: Mohd Rasfan / AFP)
A journalist from Agence France-Presse (AFP) who visited the site gave an unappealing description of the place: deserted streets, empty stores and apartments, “disturbing silence” which fell over the city at dusk. day, once the workers working on the site have left, rows of closed shops, and only a few lit windows in the gigantic towers, at night…
In all, 9,000 inhabitants live here, on this artificial island built in the Strait of Johor, opposite Singapore – the project plans to build four of these islands in total, reports the American daily The Wall Street Journal. The project started in 2015 and is approximately 15% complete, according to the same newspaper.
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How did we get there? Initially, sales were good: buyers, rich Chinese, wanted to buy a second home, or invest in real estate. But then, the difficulties accumulated: measures from Beijing aimed at limiting property purchases abroad for Chinese nationals, reproaches from the Malaysian government criticizing the fact that the project was intended for Chinese buyers, and then the pandemic of Covid-19, among other elements, explains the agency Bloomberg.
“Everyone comes here for the alcohol”
An aerial photo showing part of Forest City’s buildings. (Photo: Mohd Rasfan / AFP) Ultimately, Forest City was to accommodate 700,000 inhabitants, in the minds of its promoters. (Photo: Mohd Rasfan / AFP)
The developers assure that more than 80% of the 26,000 housing units built so far have been sold – most of the owners having bought apartments to invest anyway, as a security guard tells AFP. “Our company’s projects in Malaysia are operating normally, sales are good,” said a Country Garden press release cited by the Malaysian daily. The Straits Times at the end of August.
But other observers are more skeptical. Indeed, in August, Country Garden, the largest private real estate group in China, announced record losses: 6.1 billion euros in the first half of 2023. The company, which collapsed on the stock market, is also heavily in debt: 150 billion euros according to it, 176 billion euros according to Bloomberg.
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This situation might have an impact on Forest City: pressure on Country Garden to repay its creditors “might have an impact on its ability to complete real estate projects abroad”, estimates Bernard Aw, chief economist of the Coface, credit insurance company for Asia-Pacific, interviewed by AFP.
In the meantime, Forest City is attracting visitors. They come to observe skyscrapers or buy alcohol, which benefits from a tax refund. “Everyone comes here for the alcohol,” says Denish Raj, a 32-year-old Singaporean. I wouldn’t want to live here, it’s a ghost town. The streets are dark and dangerous and there are no street lights. »
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