JOHOR BARU: THE development of the iconic Forest City in Johor’s southernmost tip, which involves land reclamation in shallow waters to create a world-class international city, is reminiscent of Dubai’s rapid rise in recent decades.
From a desert town and trading post, Dubai is today home to more than two million people from all over the world and the world’s tallest building, and its artificial islands are visible from space.
Just as Dubai’s ruler, Sheikh Mohammed Rashid Al Maktoum, wanted to make Dubai “No. 1”, Sultan of Johor Sultan Ibrahim Sultan Iskandar envisioned Forest City as an “eco-smart city of the future”.
The US$100 billion Forest City, built on artificial islands about four times the size of New York’s Central Park, is the grandest real estate development under way in Johor.
When completed, Forest City will boast some 200 buildings, comprising office towers, apartments, hotels, shopping malls and international schools, all draped in greenery in a forest-like environment. It will have a population of about 700,000 people.
Country Garden PacificView Sdn Bhd (CGPV) executive director Datuk Md Othman Yusof said China’s early involvement in Forest City was crucial to attract global investors, but the iconic project had greater potential and implications.
Three years into development, Forest City had created jobs in various sectors for local and foreign workers, increased property prices in the surrounding areas, and attracted more investors to the project.
“We want to put on record that Forest City is for everybody,” Othman said in an exclusive interview with the New Straits Times Press recently.
“We are in talks with a huge corporation from Germany that wants to invest in Forest City. We also have Middle Eastern, Russian and other European investors looking at Forest City.
“We are targeting people and corporations from all over the world, including Malaysia, and there are many parties talking to us,” he added.
Othman, who has helmed CGPV since 2013, said a good kick-start was crucial for a project of Forest City’s scale.
The 20,000 apartment units that were launched so far had all been sold for more than US$3 billion, with two-thirds of the buyers from China.
“China just happened to be the first country to invest heavily in Forest City. We sold apartments first to generate positive cash flow and pump it back for other developments here.”
Othman said construction was likely to accelerate from next year, with new investments coming in from around the world.
Besides China, Americans were setting up an education institution in Forest City, and Hong Kong investors were developing a data centre, he added.
“There is a lot of misconception that Forest City is for Chinese nationals, that we are selling only to China. There are all sorts of allegations. There are parties out there who want to sabotage Forest City and scare investors away.
“If you keep on scaring investors away, then what will happen to our country?
“If you go to the United States, its biggest buyers are from China. I hope people will stop saying things that are incorrect,” said Othman, who was elected Kukup assemblyman in 2008.
The Forest City apartment units were priced from RM600,000 (for 500 sq ft unit) to RM7 million (for the penthouses). The units were sold at an average RM1,200 per sq ft, setting a new benchmark for upper-range property prices in Johor.
“In less than three years, so much has happened in Forest City. We started reclaiming land in 2015 and have completed almost 11 per cent of the development, thanks to investments from China.”
CGPV is a 34:66 joint venture between Esplanade Danga 88 Sdn Bhd and its Guangdong-based developer partner, Country Garden Group. The joint venture has invested close to RM10 billion since the project started. The bulk of this was to reclaim land for Phase 1 — the first of four islands — and to build infrastructure and facilities.
“To have a world-class project here, we need a lot of support from various sectors. We have a lot of support from the Johor government and Federal Government.
“Prime Minister (Datuk Seri Najib Razak) is following the development of Forest City closely and he wants to see the success of this project, not only for Johoreans, but for the whole nation.
“Forest City is progressing and we are getting the numbers. What we are building now is beyond our expectations. There were so many challenges initially, but we have passed all the hurdles.”
'We are helping locals, developers'
Question: Why reclaim land for Forest City when Johor has enough?
Answer: Firstly, we can reclaim the area from zero and build it into an international city. Where in Johor can we obtain 7,500 acres of land to develop into an international city?
Secondly, we are building in shallow waters and there are no fishes there, so we are not endangering any species. The area is wasted if we don’t do anything. We are developing a new city,
an international city for the world. Singapore is currently developing Forest Town, which is similar to Forest City. Looking at what Singapore is doing, if our project is not right then nobody will compete.
Q: Was there ever a plan to build Forest City in Iskandar Malaysia?
A: No. We do not want to compete with other developments there.
Q: Why is Forest City important to Malaysia?
A: Forest City will bring income for Johor, the rakyat and the nation. The income generated will go back to building infrastructure, facilities and schools. We will also be create hundreds of thousands of new jobs for the locals.
Q: What were the challenges faced initially by Forest City?
A: There were a lot of objections from the locals. They misunderstood what we were planning to do. We are not taking over land in Johor and developing it. We are reclaiming land and developing an international city. We are bringing in foreign expertise and giving jobs to locals. We want to have more Malaysians from all states coming here to live and work.
Q: What benefits will Forest City bring to Johor?
A: Previously, if you were to buy land in Johor, it would cost RM100,000 to RM200,000 per acre. Today, we are talking about RM2 million to RM3 million per acre. This is what we mean by the locals benefiting. We are helping the locals and the developers.
Q: In terms of job creation, what are you looking at?
A: Aftert the end of the 30 years, there will be no fewer than 200,000 new jobs created. Currently, more than 70 per cent of the people working in Forest City are Malaysians. This includes professionals and non-professionals, and they come from different states.
By the end of 2018, we target more than 90 per cent of the people employed here will be locals from various backgrounds.
The sultan of Johor wants to see local participation in the job creation here. Because we are using IBS (the Industrialised Building System construction method), we will have more than 90 per cent of the workforce here comprising locals.
Q: What do you have now in Forest City?
A: We have the Phoenix Hotel, which opened last year, apartments, a business strip with duty-free shops, retail, a lakeside park and the Forest City sales gallery and show units.
Q: What will come up over the next three years?
A: We are constructing several residential buildings. In total, there will be 20,000 apartment units. We will also have at least two IBS factories and two international schools. There will also be a data centre and a shopping mall, each with a built-up area of more than one million sq ft, and one or two more hotels.
Q: What percentage of the 20,000 apartment units has been sold?
A: All the units have beenare fully sold, and the handing over of keys for these apartments will start from the middle of next year right up to 2020.
Q: Who are the buyers?
A: Up to 75 per cent of the total number of units were bought by people from mainland China. At least 10
per cent were purchased by Malaysians and Singaporeans. The rest of the buyers came from 22 countries around the world.
Q: Why are there so many Chinese buyers?
A: We have a strong Chinese partner, which is internationally recognised. They have been marketing the project very well. Out of the 75 per cent who purchased the apartments in Forest City, half of them bought it as an investment. The other half bought it for their own stay under the Malaysia My Second Home (MM2H) programme.
Q: Who are you targeting now?
A: We are targeting people and corporations from all over the world, including Malaysia. We are currently talking to a huge corporation in Germany to invest in Forest City. We also have Middle Eastern and Russian property buyers.
Q: Are there tourists coming in already?
A: Last year, we brought in around 160,000 tourists to Malaysia because of Forest City. Per capita, each person spent RM3,000 to RM5,000. This year, too, we are seeing positive numbers.
Q: How are you marketing Forest City?
A: We have 20 sales galleries outside of China and Malaysia. The aim is to attract foreigners from around the world and the response has been good. Hopefully, we can bring in new customers here every year.
Q: Looking at the current market conditions, when do you expect the Forest City development to be fully completed?
A: We are targeting the next 20 to 30 years, maybe sooner, depending on the market. Right now, we are on track.
The IBS method that we are using will accelerate developments in Forest City.
Q: Since the start in 2015 until now, what percentage of Forest City has been developed?
A: If you talk about the entire 5,000 acres, involving just the four islands, then we have developed close to 11 per cent. It is just the tip of the iceberg. The development of the entire 5,000 acres will depend on demand and supply.
Q: How much has been invested in Forest City?
A: Since the middle of 2015 up to the end of 2016, we have invested RM4.5 billion. This year, we have added another RM5 billion. The investment will increase next year as we build more things.
Q: What was the investment mostly for?
A: The bulk of the investment was to reclaim land for Phase 1, which is the first island, and to develop infrastructure and facilities. We built a highway from Forest City to Port of Tanjung Pelepas (PTP) and we are expanding it now.
Q: There is a lot of concern on water supply. Where will the supply come from to serve the residents and businesses in Forest City?
A: Until today, we have never faced any water issues. SAJ (Syarikat Air Johor) has given us its assurance that there will be no problem with water supply. If the need arises, we can always do water sanitation as we are surrounded by water. Building an underground water pipe is also one of the possibilities.