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There is strong suspicion that China's clampdown on capital outflows may have forced Forest City's developer to close down all their showrooms in mainland China – and in the process, halting sales to local buyers.
The South Morning China Post said a spokesperson from Country Garden Holdings Co. Ltd. had confirmed that all their showrooms have been shuttered after its reporter found the company's flagship showroom in Shanghai locked and closed during a visit on Thursday.
But the spokesperson insisted the shut down was for renovation and not due to Beijing's capital policy.
The closedown came amid the Chinese government's ban on its citizens from converting yuan into other currencies for overseas property purchases. The prohibition order was issued in January.
In the same month, the general manager of Country Garden’s finance center, Wu Bijun, told SCMP that their projects in Malaysia had been affected by the government’s embargo on capital outflows.
The paper also quoted Raymond Cheng, a Hong Kong-based property analyst at CIMB Securities, as saying that Beijing's tightened measures on capital flows will gravely affect sales in China.
The Forest City project covering 14 square kilometers on four artificial islands is the biggest of about 60 projects in the Iskandar Malaysia zone around Johor Bahru in Johor – that was supposed to add more than half a million homes.
It is said that the development venture is one of the best-known overseas properties among mainland Chinese residents due to Country Garden’s widespread promotion, including heavy advertising on state-owned television.
The scheme has been successful in attracting Chinese buyers by offering affordable prices and access to Malaysia’s visa program for long-term stays, the paper added.
I guess that’s the price you pay when you put all your eggs in one basket.
I was in Jalan Imbi, KL today, I was at Bankers Club to participate in the Area P5 International Speech contest as well as the Table Topics contest. Just four contestants from two Toastmasters clubs.