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Malaysian state government proposes ownership quota for US$100B Forest City

The Johor state government in Malaysia is proposing to reserve 30% of Country Garden Holdings Co. Ltd.'s US$100 billion Forest City development for domestic buyers, the Malay Mail reported, citing Dzulkefly Ahmad, the state's Housing and Rural Development Committee chairperson.

The proposed ownership quota was based on the state government's initial findings, Dzulkefly told the publication. It will be submitted for review by a special committee that will comprise the state government, the Housing and Local Government Ministry, the Finance Ministry and Country Garden Pacificview Sdn. Bhd., the local arm of Country Garden.

Dzulkefly was further cited in the Sept. 3 report as saying that only 5% of offshore buyers in the integrated development had formally applied for the Malaysia My Second Home program to obtain permanent residency.

SNL Image
Country Garden's planned Forest City development
Source: Country Garden

Foreign ownership at the multi-billion-dollar project made international headlines after Malaysian Prime Minister Mahathir Mohamad told a press conference in August of his government's plan to not issue visas for people planning to live in the development. Since then, the country's federal government unveiled a plan to form a committee that will study and review previously agreed-on terms concerning the project.

Malaysian Housing and Local Government Minister Zuraida Kamaruddin was cited by The Star (Malaysia) as saying that "better guidelines" are also being formulated to ensure investors are not making risky decisions regarding Forest City. Zuraida was further quoted in the Sept. 2 report as saying that her ministry will later submit a report to the Malaysian Cabinet to assist the government with foreign ownership matters related to the development.

Amid the controversy surrounding the development, the 1.8 billion-ringgit golf resort and golf course component of the project was opened Sept. 1, The (Singapore) Business Times reported Sept. 4. Aside from a hotel, the recently-launched portion of the project will also be surrounded by homes and retail shops, according to Arthur Yeo, Forest City Golf Resort and Golf Course's general manager.

As of Sept. 3, US$1 was equivalent to 4.13 ringgit.