KUALA LUMPUR, Sept 1 — Country Garden Holdings Co Ltd, the Chinese company in a joint venture with the Johor government to develop Forest City in the state, has reportedly cut its staff in Malaysia to a third of what it was in 2019.

Quoting anonymous sources that included employees, Hong Kong-based news organisation South China Morning Post (SCMP) reported today that after three rounds of retrenchments in the past 18 months, just 500 employees remained in Country Garden’s Malaysian branch as of June, compared to 1,700 people in 2019.

SCMP also reported Country Garden sales staff as saying the "largest foreign real estate developer in Malaysia” has only sold fewer than 10 of Forest City’s residential and strata properties in the same period.

The report added that another round of reassignments will likely happen, with offshore employees to be recalled to China either to fill vacancies in Country Garden’s home branch or leave the company altogether.

SCMP said Country Garden's spokesperson in Hong Kong has not responded to its queries.

SCMP attributed the retrenchments to a "triple whammy”, which included Beijing’ reduction of offshore remittances of funds by Chinese citizens, and deteriorating relations between China and Malaysia during former prime minister Tun Dr Mahathir Mohamad’s tenure in 2019.

The final was the Covid-19 pandemic, which prompted local lockdowns and travel bans that contributed to the low sales involving Forest City.

This was exacerbated in August last year, when the Tourism, Arts and Culture Ministry announced the suspension of the Malaysia My Second Home Program (MM2H).

The ministry was also yet to reinstate the programme that offered 10-year visas to foreigners buying mid to high-end residential properties in Malaysia.

According to SCMP, Country Garden previously reported that 10,953 Forest City home owners had received their keys at the end of July.

Forest City was first announced in 2006, and initiated by former prime minister Datuk Seri Najib Razak in a move purportedly to fuel Johor’s growth.

The city, which was to cost more than US$100 billion (RM414.65 billion today), is being built on four reclaimed islands close to Johor and Singapore, in a collaboration between Country Garden and Esplanade Danga 88 Sdn Bhd — a subsidiary of the Johor state government.

After eight years of development, only one of the four islands has been completed with condominiums, the five-star Forest City Marina Hotel, an international school, a plant for industrialised building systems (IBS) and a commercial area.