Country Garden Says Malaysia Project On Track

The trouble Chinese property developer is building its largest overseas development, the Forest City project, in the state of Johor

Embattled Chinese developer Country Garden said on Monday its $100-billion project in Malaysia was proceeding as planned and it had sufficient assets, amid concerns over its financial strength. The comment by China's largest private developer came after it missed two dollar coupon payments this month totalling $22.5 million, fuelling fears that the country's growing property debt crisis could hamper a broader economic recovery.

“Our company's projects in Malaysia are operating normally and the sales performance is strong,” the developer's Singapore and Malaysia unit said in a statement, adding that its overall operation in the region was “safe and stable”. It said, “Various debt management measures are considered to actively resolve the pressure of periodic liquidity, to ensure the company's long-term future development.” It did not elaborate further.

Country Garden is building its largest overseas development, the massive Forest City project, across four reclaimed islands in the southern Malaysian state of Johor bordering Singapore. Its statement comes after Malaysian Prime Minister Anwar Ibrahim said the project would be designated a “special financial zone” to attract investment. Among the new incentives offered are a special income tax rate of 15% for skilled workers and multiple entry visas, Anwar said in a statement. The special financial zone planned for the near future will also cut the cost of doing business there, state news agency Bernama said, citing the premier.

Forest City is a joint venture with Esplanade Danga 88, a private Malaysian company backed by the Johor government and the sultan of the state. Aimed to house 700,000 people by 2035, the finished project will also include office towers, malls and schools in addition to residential buildings. Shares of Country Garden were up more than 8% on Monday.