KUALA LUMPUR (May 13): The Edge weekly in its latest edition said that “Invest in the next Shenzhen” and “Right next to Singapore” are some of the taglines used by China-based developers to promote their property projects in Johor Baru and Iskandar Malaysia.

In its cover story, The Edge’s Tan Siew Mung and Yimie Yong wrote that banking on the scarcity of land in Singapore and the prospect of improved connectivity with Johor, Chinese developers with deep pockets started pouring billions of ringgit into the southern state in 2013, building homes at a rapid pace.

The weekly said their entry into the Johor property market in a big way was hailed as a move that would give the decade-old Iskandar Malaysia — which aspired to be, for Singapore, what Shenzhen’s manufacturing and industrial base is to Hong Kong — a new lease of life.

It said some of the mega property projects undertaken by Chinese developers there include Country Garden Holdings Co Ltd’s Forest City, which has an estimated gross development value (GDV) of RM450 billion; R&F Properties Co’s Princess Cove (GDV: RM24.5 billion); and Greenland Group’s property projects in Tebrau and Danga Bay (GDV: RM20 billion).

But the magazine pointed that unfortunately, it had not always been plain sailing.

It said Singapore’s reluctance to open its borders to allow greater ease of travel and a housing glut are some of the speed bumps faced by the Chinese companies.

Now, China’s move to curb capital outflows since the second half of last year has cast a pall over some of these projects, it said.

The Edge explained that China allows its citizens an annual foreign exchange quota of US$50,000 (RM222,100). It said an official with a Chinese bank in Malaysia had said earlier that the Chinese government has stepped up scrutiny of foreign exchange purchases, and might bar remittances intended for buying properties abroad.

Property agents The Edge spoke to say Chinese investors generally had ample funds, with some even paying cash when they bought properties in Johor.

The weekly said the closure of Forest City sales galleries in China by Country Garden has sounded the alarm and raised the question as to whether capital controls have forced the developer’s hand.

In Tanjung Puteri, construction work on the Princess Cove mixed-use development by Guangzhou-based R&F is said to have slowed, while that on Shanghai-based Greenland’s RM2.2 billion residential project in Danga Bay seems to have stalled altogether.

The termination of the Bandar Malaysia share sale agreement, signed between TRX City Sdn Bhd (a former unit of 1 Malaysia Development Bhd, which is now under the Ministry of Finance) and Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp, has further cast doubt on Chinese investments here.

For a better insight into Chinese investments in Johor as well as the property market at Iskandar Malaysia, get a copy of The Edge for the week of May 15 – May 21 available at newsstands now.

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