Sunday, January 14, 2018
Forest City: some facts:
Here are some facts:
Fact 1: The number one attraction marketed by the Forest City in Johor is the close proximity to Singapore. The project is minutes to the bridge to Singapore, will have special immigration facilities to speed up border crossings and will be 40 mins to the middle of the Singapore's Central Business District.
Fect 2: This is the closest land in Malaysia to Singapore. The Forest City project will be nowhere near as ambitious or as large or as attractive to foreigners if it is situated anywhere else in Malaysia.
In fact, a project like Forest City would not be viable anywhere else in Malaysia.
Fect 3: The top two foreign buyers of residential property in Singapore are from China (about 30% to 40% of all transactions) and from Malaysia (20% to 30%).
The buyers of Forest City would have bought units in Singapore instead of Forest City. Given Singapore's aggressive land reclamation in the past, if Malaysia did not reclaim and build Forest, the Singaporeans would have done this project.
If Singapore had done this instead of us, all the money would have gone to Singapore. Malaysia would get nothing.
Fact 4: The land is reclaimed. It was never an existing Johor land. This is not existing land at all - so no question of our existing land being "sold" to foreigners. After reclamation, the total size is only 0.01% of the land mass of Johor.
The foreigners do not buy landed properties there. They buy strata-titled condominiums.
Fact 5: The Forest City project is a 60-40 joint venture between a China company and locals comprising of the Johor State Govt and the Sultan of Johor. The China company will be the one providing most of the huge funding required for the project as well as bear most of the responsibility to market the units.
Fact 6:. Once fully reclaimed the entire forest city project is just 3,000 acres - more than 18 times smaller than the 54,000 acres of land that Tun Mahathir gadai to Singapore for 71 years in his 1990 agreement in return for RM700mil upfront payment and a rental of just 3sen per square feet per year.
These are existing land that Tun Mahathir signed away not reclaimed land.
No one ever accused him of jual negara then but he now accuses us for jual negara when the land size is much smaller, is not actually sold away and was not even land in the first place.
Fact 7: Unlike the sale of Singapore centuries ago, there is no sovereignty rights ceded to Forest City. The entire Forest City is still under the state govt and its laws - including the land acquisition act which allows the Johor Govt to seize back the land at any time is needed.
Those who attack Forest City do not understand the immediate economic impact and the impact on revenues on the long run.
If we did not do this project and the buyers go to Singapore as usual, we will get zero revenues while there will be more capital outflows to Singapore - especially from Malaysians who are the second biggest buyers of Singapore residential properties.
There will be no revenue for the locals to supply materials for the project nor will there be jobs for the locals during construction.
There will also not be any revenue such as quit rent or assessments for the Johor Govt to collect every year from Forest City - a figure than can easily reach hundreds of millions per year.
There will also be no profit for the Johor Govt and the Sultan of Johor if this project does not exist.
And when Forest City is populated, the demand and purchasing power from the richer population there will be flow to the local merchants on a daily basis.
Those who attack the Forest City project seems to have the best interest of our southern neighbors in mind instead of the interest of the Johor state Govt or Malaysia.