Country Garden in talks with 60 buyers who want to cancel Forest City bookings

PETALING JAYA (April 6): Hong Kong-listed Country Garden Holdings Co Ltd has received enquiries from 60 buyers in China who have expressed their intention to cancel their bookings for units at the Forest City development in Johor.

According to a press release by Country Garden today, it is now in discussions with the buyers who intend to exit from the project after being caught in China’s capital controls.

On recent news reports saying Country Garden will refund investors who want to withdrew their investments in Forest City, the company clarified that the cancellation of a purchase after signing of a Sale and Purchase Agreement (SPA) is deemed a breach of contract.

“The penalty clause ranging between 10% and 30% kicks in when a buyer decides to default on the payment or cancels the SPA,” it said in the statement.

Between January and December 2016, Country Garden has sold more than 15,000 residential units in Forest City.

In 2017, the company expects to have more diversified revenue from the sales and rentals of a variety of properties such as offices, shopping malls, a new hotel and a golf course, in addition to residential properties.

The developer added that it expects new announcements in the coming months on possible new investors or joint venture developments as the company is currently in talks with more than 30 companies and investors from the tourism, education and healthcare sectors on the possibility of setting up their business in Forest City.

The company, it added, has also ceased all travel-related support services for mainland China investors travelling to Forest City since March 13, 2017.

This means mainland Chinese who are interested in the Forest City project will have to find their own way to Forest City’s sales gallery in Iskandar Malaysia. The company stressed that its sales galleries in Hong Kong and Singapore are still operating.

“We remain committed to the development of Forest City. This is an ambitious project that will take about 20 years to materialise. As a project targeting international buyers and global market, we are on track to build and deliver the residential and commercial units on schedule to our buyers and investors,” said the statement.

Country Garden is the second-largest developer in China. Aside from Forest City, Country Garden is also developing Central Park and Danga Bay, both in Johor, and Diamond City in Semenyih, Selangor.

Forest City, covering 14 sq km of land on four artificial islands in Johor and with a gross development value of RM444 billion, has been successful in attracting Chinese buyers by offering affordable prices and access to Malaysia’s visa programme for long-term stays.

In early March this year, Country Garden has closed its Forest City sales galleries in China as the government has banned its citizens from converting yuan into other currencies for overseas property purchases.




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