China Developers Target Johor Bahru

The face of Johor Bahru, the capital city of the Malaysian state of Johor, is undergoing a major transformation.   This is certainly true for its face to Singapore, over a 55 acres (22 hectares) strip of land on the coastline along the Johor Strait across the neighboring country.

At the end of 2012, Country Garden Holdings Co. Ltd., one of the top 10 developers in China, acquired the prime waterfront land for an integrated development that promises over 9,000 apartment units in 45 blocks.    This was a first and biggest investment in Johor by a China investor, and a significant development for the city that currently only has a population of around 1.7 million.


This is a story of China’s rise and success coming to a quiet city that has, before now, been slow in development.    At the doorstep of Peninsula Malaysia to Singapore, the people and economy of Johor Bahru have been closely connected with Singapore.  However, while Singapore is an international financial center, the Johor Bahru economy has for a long time been mostly dependent on manufacturing and agriculture industries.

Country Garden Danga Bay is expected for completion by the end of 2017.  This project and a handful of others in Johor Bahru are driving a property boom that has taken off in the past couple of years.   Sentiments are upbeat as property prices stagnated for a good part of a decade are suddenly up by leaps and bounds.   The economy is also abuzz due to a growing tourism industry, with resorts such as Legoland, Hello Kitty Town and other upcoming attractions.

“Property prices have more than doubled.  Bungalow homes used to be around Ringgit One to Two Million, but you can’t get them at this price now.  In some places, they could be as high as Ringgit Five Million or more”, said Mr Soh Lip Meng, a city resident and businessman.

At Danga Bay, a 2-bedroom apartment with sea view has a price-tag of One Million Ringgit – the Malaysia currency, while a superb sea view 3-bedroom sells for Ringgit 1.7 million.  A large chunk of the development also offers single bedroom apartments for less.   These prices are high at unprecedented per square foot rate, but the project is marketing five-star facilities and lifestyle, the first of such kind in Johor.  It also boasts a potential yacht club with docking facilities.


Country Garden sells with a track record of more than a hundred projects in China equipped with private clubs, integrated residential and commercial facilities.   The project launched with a purpose-built commercial complex including a high-end Chinese restaurant and other eateries already operating.IMG_9484

“Our premises are fully built and designed by Country Garden.  We were invited to just come and operate the restaurant, on a rent-free profit-sharing basis.”   Mr William Ma, Manager of the Chinese restaurant at Country Garden, explained.  IMG_9493



Not only that, as the developer also organises daily loads of China tourists who would arrive for a meal at the restaurant and a potential property purchase.

With big posters promoting the benefits of having a home or education in Malaysia and the “Malaysia – A Second Home” scheme, the project clearly targets the Chinese.   Malaysia is also attractive, with ethnic Chinese diaspora accounting for around one-fifth of its population.


Roy Ch’ng, a Country Garden sales executive, indicated the project is also well received by locals and Singaporeans.  “As of now, around 6,500 units have been booked for sale; around 30% of the purchasers are Malaysians, and the rest are buyers from Singapore and China who are looking to have a second home or retirement home”, he said.

Roy was quick to put up a sales pitch – within a few minutes he outlined the payment terms and financing options, including a discount and rebate.  With effectively just a 2% first payment to secure a unit, plus waiver of legal fees and stamp duties, it seems too good to be true.   Is there a property bubble looming?

“Country Garden is a very strong developer who will be able to sustain the selling prices of its units.  This project is also attractive to Singaporeans, as we hope that the mass rapid transit system will be connected to Johor Bahru in the future with a stop right here”, Roy said as he sought to address such concern, although the Singapore connection may only be a distant possibility according to Mr Soh.

Another China developer, Guangzhou R&F Properties Co., listed on the Hong Kong Stock Exchange, announced in December last year that it is acquiring six development sites totalling 116 acres (47 hectares) in Johor Bahru for a price of US$1.4 billion, from a Malaysia royal family.    The plan is to build a commercial and residential development including a hotel.

Things are certainly set to change for the city.   The residents can only hope that China is exporting its economic boom and its people’s love of high end luxurious lifestyle, and not an economic bubble.IMG_9473_2


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