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Country Garden offers refund to Forest City buyers hit by capital regulations

Country Garden Holdings Co. Ltd. offered refunds to Chinese buyers who invested in the Forest City development in Johor, Malaysia, and who are caught in China's intensified curbs on capital outflow, the South China Morning Post reported.

The company said it will waive the forfeit fee for buyers who made a down payment but want to cancel their transaction due to their inability to move capital out of the mainland.

Jianmin Zhu, Country Garden's vice president, said about 5% of buyers are considering canceling their purchase, according to the April 5 report.

In March, Country Garden closed all its Forest City sales centers in China, amid the country's tightened regulations on capital outflow, which were enacted in the second half of 2016. In January, the government restricted individuals from converting the yuan into other currencies for offshore property purchases, a move that hurt Chinese developers, including Country Garden.

In an effort to reduce its dependence on Chinese investors, Country Garden is looking to other foreign markets, like Southeast Asia, India and the Middle East, to diversify its client base for the US$100 billion Forest City project.