Forest City project: Fewer than 60 buyers from China want to cancel bookings, says developer

Country Garden has said that "cancellation after a sales and purchase agreement has been signed is deemed as a breach of contract".
Country Garden has said that "cancellation after a sales and purchase agreement has been signed is deemed as a breach of contract".ST PHOTO: ONG WEE JIN

SINGAPORE - Fewer than 60 buyers from China want to cancel their bookings of apartments in the mega Forest City project in Malaysia, according to its Chinese developer Country Garden.

Country Garden said in a press statement on Thursday morning (April 6)that they are in discussion with this these buyers.

Chinese buyers of properties at the US$100 billion (S$140 billion) Iskandar Malaysia development have been caught out by China's introduction of tighter rules to stem capital flight from the country, with many being unable to service payments after placing deposits.

Two statements from the company issued on Wednesday and Thursday morning clarified earlier news reports, which said that Country Garden had reportedly agreed to refund Chinese buyers caught out by the new capital controls.

In the issued statements, Country Garden emphasised that "cancellation after a sales and purchase agreement has been signed is deemed as a breach of contract."

 
 
 

"A penalty clause ranging between 10 per cent and 30 per cent only kicks in when a buyer decides to default on the payment or cancels the sales and purchase agreement," it added.

It also clarified that it had ceased travel-related support services for mainland Chinese travelling to Forest City since March 13.

Buyers have told the media that the developer had been offering travel subsidies to visit the development's mega showroom.

The Forest City project is the biggest of 60 developments in Iskandar Malaysia, and comprises four man-made islands in the Strait of Johor facing Tuas in Singapore.

It had RM11.54 billion (S$3.6 billion) in sales last year and sold 15,000 units, with Chinese nationals accounting for 70 per cent of the buyers.

Country Garden emphasised that they "remain committed" to the development of Forest City, which is a project that will take "about 20 years to materialise."

"In 2017, we expect more diversified revenue from sales and rental from a variety of properties such as offices, shopping malls, a new hotel and a golf course, in addition to residential properties," it said in Thursday's press statement.