New | Multiple headwinds for Chinese property developers in Malaysia

Crossing the border into Malaysia from Singapore, new buildings sprout along the frontier dividing the two countries came into view. Interestingly, most of them are made in China.

Mainland developers who had flocked to build homes in mainland China’s third or fourth tier cities years ago resulting in a glut have turned their sights to the overseas market.

Malaysia’s Johor state, just across the border from Singapore, has emerged as their target but developers are now facing the same challenge they face back home - an oversupplied market.

Guangdong-based Country Garden was the first to invest in Malaysia’s Iskandar development zone in southern Johor. The hot spot has soon attracted China’s leading developers like R&F Properties and Greenland Group where the firms invested nearly 50 billion yuan (HK$59 billion).

But three years after its presale in 2013, Country Garden’s first project of Danga Bay offering 45 high-rise condominiums with a total of 9,500 units has only sold 70 per cent.

R&F’s Princess Cove, a 30,000 unit project, is in worst shape. According to two local agents, it has sold less than half of the 3,000 units that went on pre-sale since 2014. R&F has declined to comment.