“Johor’s housing needs could still outstrip supply over time, given recent forecasts for the Malaysian state’s population growth”, said Su Baiyuan, Executive Director of Country Garden Holdings Company, responsible for overseas operations, to Oxford Business Group (OBG).
An oversupply of residential units has slightly driven down property prices in Johor recently and prompted the government to put a freeze on new applications for high-rise developments. Su told the global research and consultancy firm that in longer term, with the population on course to more than double from its current level of 1.3m, the picture would likely change.
According to Chief Executive Datuk Ismail Ibrahim of Iskandar Regional Development Authority, the Iskandar region alone needs 700,000 new residential units to meet a growing population, which is expected to reach 3m by 2025.
“While it’s true that many large residential projects are being developed, one should also look at demand and ask whether the existing pipeline of supply is enough to meet future requirements,” said Datuk Ismail.
Country Garden, one of China’s largest property developers, is playing a key role in the development under way in Johor, specifically the vast, $100bn Forest City project, which will be rolled out across four man-made islands. The smart city venture will incorporate 700,000 new residential units, together with retail, commercial, leisure, business and corporate elements.
Given the current dip in activity and slight decline in prices across the residential segment of Johor’s property market, Country Garden, like several other key developers operating in the state, has opted to focus on attracting businesses and targeting foreign buyers for now.
Su told OBG that three decades of double-digit growth in China had created prime conditions for local companies looking to develop their operations, expand their business portfolios, accumulate know-how and build up their capital bases.
“In this context, going overseas was a natural step for Chinese companies to diversify their operations, reduce risk and transform their large capital bases into productive assets world-wide,” he explained.
OBG’s coverage of Johor will chart its efforts to attract investment for the Iskandar growth corridor, which is expected to top the target of RM27bn ($6.3bn) in 2017. There will be in-depth analysis of China’s role in galvanising the corridor’s development as part of its “One Belt, One Road” initiative, which aims to overhaul the region’s trading routes.
The chapter will look in detail at Johor’s property market which, while not without controversy, has been a key driver of growth in recent years. The oil and gas industry, another major contributor to the economy, will also be given wide-ranging coverage, alongside sectors that are seen as ripe for growth, such as education, transport and logistics.
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