Shares of Country Garden Holdings, developer of the largest private residential community in southern Malaysia, were mired on Monday's confusion over the Prime Minister's comments on leasing real estate to foreigners in the Forest City project.
"One thing is certain, that the city to be built can not be sold to foreigners," said Malaysian Prime Minister Mahathir Mohamad at a press conference in Kuala Lumpur, according to a Reuters report. "We will not give visas so people can live here."
The stock, which had risen 3.9 percent on Monday, returned almost all profits for the day in Hong Kong. Exchange after Mahathir's comments were released. The Malaysian Prime Minister's office in Putrajaya, outside of Kuala Lumpur, did not immediately respond to requests for clarification.
The confusion may have been caused by a ten-year multiple-entry visa granted by the Malaysian government as part of their "My Second Home" program, designed to trick retirees and investors into buying high-end real estate temporary residence in the country.
In the first eight months of 2017, 1,439 Chinese citizens received such a visa program, and five times more than South Korea in second place, according to the Malaysian Ministry of Tourism, which houses the program. However, Mahathir himself seems to have endorsed both the long-stay visa and the Forest City project during his visit to China on August 16, according to Country Garden.
Prime Minister and Country Garden founder Yeung Kwok Keung "had a 40-minute closed door session," while Mahathir affirmed that he welcomes foreign investment that could create employment opportunities, promote technology transfer and innovation, boost Malaysia's economic growth and growth Job creation, "said the company's strategy director, Ng Zhu Hann.
were taken out of context, "Country Garden said in a statement after the Reuters report, adding that it was seeking clarification with the Malaysian Prime Minister's office.
This is a small consolation for Patricia Li from the Thousands of other medium-sized Chinese real estate buyers have applied to settle in Malaysia in Forest City, where Li bought a 48-square-meter unfinished apartment last year in Forest City and moved to Johor with her son earlier this year.
We all know the project was very popular with Chinese investors because it was. Make our dream of a second home abroad come true by buying an apartment here, "Li said." We think the new government is rude us Chinese buyers is. Even China-sponsored infrastructure projects have been canceled, let alone our private investments. "
Country Garden has two real estate projects in Malaysia: the Forest City Project in Johor State near Singapore and the Diamond City Project in Selangor State near Kuala Lumpur, which the company estimates to have been run by Raymond Cheng, head of. , Nearly 10,000 real estate units sold for a total sale value of 25 billion yuan (US $ 28.8 billion) or at an average cost of between 15,000 yuan and 20,000 yuan per square meter. Hong Kong and China conduct research at CGS-CIMB Securities, more than double that Square meter price in other similar projects, even in the capital.
"Nearly 90 percent of buyers are mainlanders who bought because the property in Malaysia has a right of residence," Cheng said. "Residents can hardly afford to buy there. If it shifts to Malaysians, the price must be "reduced to a fraction of the prevailing quote," he said.
Forest City will house 700,000 residents on an area four times the size of New York Central Park will be 14 square kilometers in size upon completion. According to CGS-CIMB Securities & # 39; Cheng, the project is expected to generate 6 billion yuan in revenue for Country Garden this year, less than 3 percent of the company's 2017 sales and less than 1 percent of its forecast sales this year. 19659016] "Undoubtedly, this is extremely bad news for the company," said analyst Alan Jin of Mizuho Securities Asia. "It's no surprise that the Malaysian government has criticized the project since the new prime minister came to power."
<p class = "Canvas Atom Canvas Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " With additional coverage by He Huifeng in Guangzhou "data-reactid =" 58 "> With additional coverage of He Huifeng in Guangzhou
This article Land-Garden shares seesaw amid confusion over Mahathir's ban on foreign ownership first appeared on South China Morning Post
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