Staggering RM290bn projected profit for Forest City land reclamation in Johor

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The site of the Forest City project - Graphic: liewchintong.com
The site of the Forest City project – Graphic: liewchintong.com

It is the biggest land reclamation project in the country with a density that is similar to Mont’ Kiara in KL. When completed the reclaimed land will cover an area equivalent to five Pulau Jerejaks. It will have a massive impact on the livelihood of fisherfolk as the area has the largest bed of sea grass in the country.

The developer: Country Garden Pacific View Sdn Bhd (a 60:40 joint venture between Country Garden Holdings Ltd of China and Kumpulan Prasarana Rakyat Johor, owned by Johor state government). Has strong connections.

Gross development value: RM600bn (RM750psf, assuming 80 per cent utilisation)

Land and construction cost: RM310bn (estimated by The Edge) (RM380psf, including reclamation cost of RM100psf)

Projected proft: RM290bn (RM370psf net or RM290psf gross).

Area covered:
877 acres (existing land near Second Link)
4011 acres to be reclaimed (including four artificial islands)
4888 acres in total

Gross floor area: 1.0bn square feet (80 times the size of Mid-Valley!)

Average plot ratio: 4.7 (high density)

Land premium (paid by Country Garden Pacific to Johor state government): RM225m (for 877 acres) or RM5.90psf only.

There are concerns over the impact of the project/reclamation on:
– the future viability of the Port of Tanjung Pelepas
– the impact on Singapore
– the fisher folk and food security especially with the loss of a patch of sea grass. Development for whom?
– the flow of water between Johor and Singapore
– the massive ongoing property development at the Iskandar Region (What happens if/when there is a glut in high-end property?)

The Johor Department of Environment had given the project the green light in January 2014. But the federal DOE put a stop work order in June 2014, and the developer was asked to carry out a detailed Environmental Impact Assessment. (How did it start without a DEIA, in the first place?)

A 21 September public meeting in Johor with 200 residents turned out to be a fiery and stormy affair. Read all about it here.

The other issue is that from the north to the south – from Pulau Langkawi to Penang (not just Sri Tanjung Pinang Phase 2 but also mainland Penang – think of the talk about the possible relocation of the RMAF base in Butterworth) to Malacca (Melaka Gateway, etc) all the way down to Johor – will we eventually see much of the west coast taken over for land reclamation for the high-end property market?

Figures and some info gleaned from an Edge report in the 15-21 September 2014 edition

 

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danial1
7 Oct 2014 10.16am

Yes many lifelyhood have been the Pantai Lido was sacrifies for the sake of development . The big company for high-end people not for ordinary Johor people came from outside. No more place for the local to have free air and breathtaking view like before.

Pantai Lido is now vanish, Telok Danga where there was mangrove trees and mudskipper fish which contribute to nature, absorbs the rain water, protect the beach from erosion etc

lazlo
lazlo
30 Sep 2014 10.46am

The flood of homes being launched by China developers in the Iskandar region in the past year has raised concerns of a looming household glut that could hit rental yields, the Business Times reported today.

Houses could be left empty across the 2,000-square kilometre region as developers from China, including Country Garden and Guangzhou R&F Properties, launch a few thousand units at a time, the Real Estate and Housing Developers Association (Rehda) told the Singapore paper.

Wee Chin
Wee Chin
5 Oct 2014 11.51am
Reply to  lazlo

The looming housing glut is real. It is a no go situation as the Malaysian Government and the State Government keep shifting the “goalpost” as and when it wants. This has definitely dampened the investment spirit and the hype that the Middle Eastern Investors would be bringing huge investments has not happened Too property launches by Chinese developers in the region over the past year have caused concern that there would be oversupply of homes, which could hit rental yields. Malaysia’s spat with the republic over the Causeway toll charges and vehicle entry permit fees, and the slowing down of… Read more »

Norman
Norman
14 May 2018 12.27pm

Middle-class PRC Chinese who have bought Forest City properties over the past few years are wondering how the surprise election of an opposition coalition led by Mahathir Mohamad will affect their investment.

Mahathir has been a fierce critic of a US$100 billion project in Johor called Forest City, a special economic zone about the size of Hong Kong.

http://www.scmp.com/news/china/money-wealth/article/2145916/should-mahathir-mohamads-win-worry-chinese-investors#oSHJQkZic4sCxFwa.99

kleesant
kleesant
26 Sep 2014 1.10pm

Bolehland project hits 3-digit billions. This is a milestone. Maybe we can hit a trillion soon. Maybe we can show the world how to reach the expected atmospheric temperature of +5 degrees C faster.

lazlo
lazlo
30 Sep 2014 10.49am
Reply to  kleesant

All are eager to enter Bolehland Book of Irrelevant but Syiok Sendiri Records?

lazlo
lazlo
24 Sep 2014 1.45pm

Oversupply is looming in Iskandar as Capital Land is now delaying its property development project at Danga Bay, for fear that bubble is about to burst?

tunglang
26 Sep 2014 7.58am
Reply to  lazlo

Let it burst.
Better pray, pray to your Niao Kong to ward off surprises like the Selangor MB fiasco of the arrogance.

owc
owc
5 Oct 2014 11.53am
Reply to  lazlo

This is what activist Kim Quek has to say: The present paucity of economic activities to support the mushrooming of housing projects is the best illustration of the failure of the Iskandar Project. Originally intended as the new economic and financial hub at Malaysia’s southern gateway akin to Shenzen in China, this project has now morphed into nothing but a property play. Not a trace of financial centre being evolved, neither is there a hi-tech industry in the making, despite this project being launched a decade ago. Even the sudden rush of housing projects being launched in the region is… Read more »

Don Anamalai
Don Anamalai
24 Sep 2014 1.02pm

Amid growing anxiety over a glut of high-rise residences in Malaysia’s Iskandar, a mega waterfront township project there appears to have hit a snag. CapitaLand, South-east Asia’s largest real estate developer, recently sought a 6-month extension on the launch of its 900-unit high rise condominium, which is the first phase of a S$3.2 billion Danga Bay project, which spans some 28 ha on a man-made island.

http://www.businesstimes.com.sg/premium/top-stories/capitalands-iskandar-township-project-hits-snag-20140923

A bad omen for Iskandar?

sugar n spice
sugar n spice
25 Sep 2014 4.16pm
Reply to  Don Anamalai

Prominent and visible condo development at Danga Bay right now : 1) Country Garden – China developer – >30 blocks condo priced min RM480K (400+sq ft) to RM4 million plus 2) Tropicana Danga Bay – by Tropicana formerly Dijaya group – one block almost ready now. Very visible next to Tune Hotel Danga Bay. 3) Just happening. Billboards are up. Greenland or something like that. Condo pics very very modern skycrappers even Penang supercondo cannot match in terms of sophistication. Penangites stop blaming CAT. It happens in JB at a phase and size surpasses your imagination. Blame Msia’s Genie-coefficient/ Rich… Read more »

owc
owc
27 Sep 2014 10.02am
Reply to  Don Anamalai

The recent 4x toll hike by BN (to pay for EDL) at the JB-Spore causeway has made Singaporeans/PRs rethinking the option of buying/staying in JB condos. So oversupply is looming.

Don Anamalai
Don Anamalai
29 Sep 2014 12.33pm
Reply to  owc

JB traders (hawkers, foot massagers, car wash etc) have suffered business drop of 20-30% since the causeway toll hike by Malaysian authority. More business loss is expected when Singapore started to impose hew causeway toll from Oct 1.

While this is happening, Johor MB said the toll hike would be good as Johoreans working in Singapore can come back to work in Iskandar. Ha Ha!

charleskiwi
24 Sep 2014 8.45am

Unfortunately all the projected profit is aim at the Singaporean investors and Penang is too far away from Singapore, regardless of how beautiful and pristine Penang is….

lazlo
lazlo
23 Sep 2014 4.53pm

The developers include Singapore billionaire Peter Lim who has intimate business dealing with Johor royalty. JDT is also building its football stadium there.

Don Anamalai
Don Anamalai
24 Sep 2014 11.55am
Reply to  lazlo

Iskandar Zone has got no choice but to attract Singaporean investors when those from middle-east have gave it a bye. Country Garden, R&F and Greenland are 3 developers from China building high-end condos (price outside the affordability of most Malaysians, despite household income of RM5900) in Iskandar to lure Singaporeans and mainland Chinese. YB Shahril Samad should be concerned when the influx of Singaporeans and Mainland Chinese to JB will change the demographic in time to come. While Forest City is changing the landscape around the 2nd link, R&F’s Pricess Cove will transformed the land around the JB side of… Read more »

Michael Phung
23 Sep 2014 4.34pm

(Does this sound) like blatant corruption, especially from the projected profit figures(?) Someone’s gonna pay to beef up those profit figures (15% seems more likely), and more than likely it will be paid by the ordinary people who don’t profit from it.

yumie
yumie
23 Sep 2014 3.44pm

….Better not criticize or Umno may say you derhaka and let polis charge you with sedition.

Tc Koh
23 Sep 2014 3.00pm

GREED! Period.

james ong
james ong
23 Sep 2014 2.47pm

Anil,

Will you be putting up the article on the 1MDB Penang land purchase for discussion?

Thanks,
James

Don Anamalai
Don Anamalai
24 Sep 2014 12.17pm
Reply to  james ong

Major global investors from Qatar and Abu Dhabi are said to be considering pulling billions of ringgit out of two of 1Malaysia Development Bhd’s (1MDB) mega projects, namely the Tun Razak Exchange (TRX) and Bandar Malaysia here, due to the lack of transparency and slow progress.

http://www.themalaysianinsider.com/malaysia/article/1mdb-may-face-loss-of-global-investors-in-tun-razak-exchange-and-bandar-mal

When you are deeply in debt, you will have to continuously digging for soil to cover up the earlier holes.

Wilfred
Wilfred
23 Sep 2014 2.09pm

Penang folks like tunglang and yang can see that worst development is taking shape in Johor. So they should be thankful with what is happening in Penang which is more sustainable.

tunglang
23 Sep 2014 10.10pm
Reply to  Wilfred

Won’t be surprise one fine day, Pulau Jerejak will no longer be pulau but land-joined east & west ward with mainland & Penang Island respectively. And if more land reclamation AOK-ed in the coming years, Penang’s small hills will be botak-ed first & then levelled to supply unlimited source of sand & rocks.
Btw, look around & see more environmental damages instead of comparing & foolhardy being thankful for the alarming state of environmental degradation here.
Botak-ed Relau Hill is sustainable?
Coast-Mud-Politan Gurney Drive is sustainable?
Sore Thumb @ Tanjung Bungah is sustainable?
Black beach @ Batu Ferringhi is sustainable?