Forest City, a housing complex in Malaysia, built by China’s largest property developer, Country Garden, under the Belt and Road Initiative, is facing major challenges. Originally intended to house one million people, the project has only completed 15% of its development, with just over 1% of the units occupied. The isolated location of Forest City on reclaimed islands, far from any major city, has resulted in its infamous nickname as the “Ghost City.”
One of the main reasons for the low occupancy rate is the high prices, which have put the development out of reach for most Malaysians. Many Chinese buyers initially invested in Forest City, seeking a second home or investment property to lease to locals. However, the situation changed when Malaysia’s former prime minister restricted visas for Chinese buyers in 2018. This move significantly impacted the influx of investors and worsened the already struggling project.
Additionally, the current property crisis in China and the government’s stringent borrowing restrictions have left developers like Country Garden short on cash to complete major projects such as Forest City. The COVID-19 pandemic has further compounded the issues, as travel restrictions and financial controls on Chinese citizens have hindered overseas projects launched by companies like Country Garden.
Forest City now stands deserted and eerie, with empty shops, restaurants, abandoned facilities, and a lack of signs of life. The project’s future hinges on the support of the Chinese government, which reportedly includes financial assistance for selected developers. However, the uncertainty surrounding China’s property market and the limited access to cash raise doubts about how projects like Forest City can be completed and attract residents.
For now, Forest City serves as a stark reminder of the challenges faced by ambitious real estate developments. Its fate is intertwined with the actions and decisions of both the Chinese and Malaysian governments, and the future remains uncertain. As stakeholders wait for a resolution, Forest City stands as a cautionary tale of the potential pitfalls that can arise with large-scale projects under the Belt and Road Initiative.
