Forest City is an integrated residential development and private town located on the slopes of Gelang Patah, Johor Bahru District, Johor, Malaysia on 1,370 hectares. Announced in 2006 as a twenty-year project, the project was pitched under China’s Belt and Road Initiative. It was opened by then Prime Minister of Malaysia Najib Razak in 2016, with the approval of the Sultan of Johor, Sultan Ibrahim Ismail. Forest City in Johor is in partnership with Esplanade Danga 88, an affiliate of the Johor People’s Infrastructure Group (KPRJ), through a joint venture, Country Garden Holding Ltd (CGPV), with CGPV holding 60 percent of shares, while KPRJ holds the other 40 percent. Forest City is under the management of the Iskandar Puteri City Council and the Iskandar Regional Development Authority.
The development of Forest City is contentious. The project was largely not targeted at local Malaysians but rather at upper-middle-class citizens from China who were looking to park their wealth abroad, by offering relatively affordable seafront properties compared to expensive coastal cities within their country such as Shanghai. However, initial strong sales from China collapsed after its leader Xi Jinping implemented currency controls, including a $50,000 annual cap on how much buyers could spend outside the country.Such lackluster sales were exacerbated by the 2020–2022 Malaysian political crisis and the COVID-19 pandemic, with the project now being described as a “ghost town”. The project, which is located on reclaimed land, has also been criticised for causing large amounts of habitat destruction in the vicinity.
As a group of four man-made islands, Forest CIty is first and foremost, visually distinct from the other developments and townships in Iskandar. It also distinguishes itself in other ways; in building Forest City as independent islands from the ground up, Country Garden Pacificview has the freedom to create an urban landscape and key elements that foster an ideal living environment. These unique features will also enhance the security and privacy of Forest City.
The area within which Forest City lies is protected as an Environmentally Sensitive Area (ESA) Rank 1 area, where no development is allowed except for low-impact nature tourism, research and education.Chief to this designation are two areas of international ecological significance, the Tanjung Kupang intertidal seagrass meadow, the largest of its kind in Malaysia, and the Pulai River Mangrove Forest Reserve, designated as a wetland of international importance under the Ramsar Convention.
Reclamation began in January 2014 without the legally required Detailed Environmental Impact Assessment (DEIA).Residents from Kampung Tanjung Kupang, a traditional fishing village, complained of reduced catches and other issues to the local and Johor State authorities to no avail.
Malaysia had also not informed Singapore as required under their 2005 International Tribunal for the Law of the Sea-mediated agreement on reclamation works and other treaties.Singapore subsequently sent a diplomatic note in May 2014 to the Malaysian Federal government requesting clarification on issues including: potential changes in water current speeds and the subsequent impact on navigational safety; possible erosion that might affect shoreline and Second Link infrastructure; and changes in water quality and morphology that might affect the coastal and marine environment and local fish farms. Following this and an accompanying outcry by international environmental watchdogs, the Environment Ministry sent a request for the DEIA to Country Garden on 6 June 2014, and issued a stop-work order on 17 June 2014, although it was reported that work continued despite the stop-work order.
The DEIA was issued in January 2015, confirming that the regulations had been side-stepped and contained 81 directives, including a reduction in size from 1,600 hectares to less than 405 hectares. It acknowledged that the seagrass ecosystem had been split into two and “will be heavily impacted by the proposed development” despite these measures. Country Garden subsequently announced that it was downsizing the project by a third and dividing it into four islands, although there was subsequent evidence that some of these measures were not implemented, including photographs where silt curtains were absent and of buffer zones that were less than 100m (as opposed to the agreed 300m). Concerns also remained about the permanent impact on the seagrass, water hydrology, and loss of traditional fishing grounds, which these measures will not fully alleviate.
Other environmental concerns include claims that sand from local hills was being used at the project site and fears of stress on local water sources and sewage discharge.
Following the 2018 change in Malaysian government and subsequent political uncertainty, the worsening geopolitical environment between Malaysia and China, and suspension of the Malaysia My Second Home long term visa scheme, some Chinese nationals (who formed the majority of buyers) decided to leave the development and sold their units at steep losses, further adding to the supply overhang.
While Country Garden employed some locals, most of Forest City’s workforce comprised low-wage labourers from South Asia or white-collar workers from China.
In 2018, Mahathir Mohamed, campaigning on a platform which included criticism of Chinese investment and corruption, defeated the incumbent Malaysian Prime Minister Najib Razak who had originally approved the project, and issued a “ban” on foreigners buying property. This was subsequently re-structured as changes to the long term visa program in order to mitigate objections and potential legal challenges raised by the developer.
In 2020, the COVID-19 pandemic led to increasing economic uncertainty and travel restrictions, severely affecting sales which dropped by more than 90% after March 2020. Following implementation of Malaysia’s Movement Control Order, some residents returned to their home countries. COVID-19 restrictions on travel between Malaysia and Singapore presented difficulties for the remaining residents, especially those working in or with children schooling in Singapore. Some tenants also suspended operations or pulled out, citing restrictions due to the Movement Control Order or commercial non-viability.
Forest City has been described as one of the world’s “most useless” megaprojects.
Who started Forest City?
FOREST CITY ENTERPRISES, INC., which grew to own some $2 billion in real estate in 1993, was founded in 1922 by Jewish Polish immigrant Charles Ratner who opened the Forest City Materials Co. to sell lumber and building materials at E. 93rd St.
Forest City, a luxury estate in southern Malaysia, is one of the most controversial developments in the country’s history. Six years into development, the $100 billion estate is already a ghost town. The development is in Johor Bahru, Malaysia, just north of Singapore.
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