Urbanizing a Mangrove Coastline in Malaysia

Sarah Moser, Associate Professor of Geography, McGill University

Emma Avery, MA, Department of Geography, McGill University
DOI: 10.21690/foge/2024.67.2p

Over the past decade, Chinese real estate investment has transformed the Malaysian coastline. In southern Johor, directly across international boundary waters from Singapore, Chinese developers financed and built 10 major waterfront mega-developments between 2012 and 2017—each worth several billion MYR (nearly half a million USD). These speculative projects, lured by Malaysian tax incentives and the promise of real estate riches, were marketed primarily to foreign and Chinese buyers as luxurious, exclusive, green enclaves. But many projects are now stalled or abandoned, having faced a drop in foreign buyers—firstly, due to China imposing stricter capital controls in 2017, and secondly, the global COVID-19 pandemic, which closed Malaysia’s borders for two years. More significantly, many large Chinese property developers that made unprecedented profits in the 2010s, catering to demand among Chinese nationals for investment properties, are close to collapse due to poor corporate oversight and being deeply overleveraged. The Chinese property developer crisis continues to deepen as China’s top property developers continue to default on hundreds of billions (USD) of loans, significantly reducing the chances that stalled projects in Malaysia (or in China) will ever be completed. The costs of this irreversible landscape change—brought about by an intense boom and bust period of real estate speculation and urban mega-development—are felt most acutely by locals.

Figure 1 Photo credit: Sarah Moser, October 2015

Crossing overland by bus from Singapore to Malaysia in 2015 gave visitors a front row seat to the frenzy of construction along the southern coast of Johor. After passing through Malaysian immigration, there was a huge hall filled with posters, 3D models, and sales staff, all promoting real estate investment opportunities in the Iskandar Malaysia Special Economic Zone.

Figure 2a: Early days of construction on Danga Bay.
Figure 2b: Medini, a new city within Iskandar Malaysia.
Photo credit: Sarah Moser, October 2015

The massive foreign Chinese investment in urban mega-developments transformed Johor’s coastline, turning once-public waterfronts into saleable land for real estate. This transformation was evident in the endless construction sites and billboards in English and Chinese advertising new condo developments. Project slogans sold dreams of “An urban oasis redefined,” “An international metropolis in the making,” “The foreign investors’ darling,” and “The model city of the future.”

Figure 3: Local residents visit the privately owned, publicly accessible beach at Danga Bay.
Photo credit: Sarah Moser, October 2015

The developments—with names like Princess Cove, Jade Palace, and Forest City—are characterized by their large scale and luxurious, green branding. Country Garden, China’s largest property developer, entered the Malaysian market in 2012 with its Danga Bay project—a MYR 18 billion (nearly 4 billion USD) mixed-use development built on existing and reclaimed land on 57 acres of waterfront.

Figure 4: A sign communicating rules of using Country Garden’s beach at Danga Bay, written only in English and Chinese.
Photo credit: Emma Avery, October 2022

The site occupies what was once called Lido Beach, a public park where families used to picnic, play sports, buy food from vendors, and enjoy the beach. Now, Country Garden owns all the land. Although the developer allows the public into shops and the beach, visitors must follow particular terms of use and must pass through a sales show room to reach the beach area.

Figure 5: The Princess Cove sales gallery, featuring a 3D model of the project.
Photo credit: Emma Avery, October 2022

Princess Cove was announced in 2013, soon after the redesignation of 116 acres of waterfront state land opposite Singapore to sultanate land, which the Sultan of Johor sold to R&F Properties, a developer from Guangzhou, China, for about USD $1.4 billion.

Figure 6 Photo credit: Sarah Moser, October 2022

The most ambitious project is Forest City, announced by Country Garden in 2014. It was planned to be a private city, consisting of high-rise towers and luxury villas, on four man-made islands for a population of 700,000. The first of the four islands is about two thirds complete.

Figure 7: Investor tourists at the Forest City sales gallery.
Photo credit: Sarah Moser, May 2017

From around 2016 to 2019, Chinese investor tourists flocked to view condos in these developments, with bus tours taking people to visit projects and outlet malls. Futuristic 3D models—as seen in the Forest City sales gallery—are a common feature across many new urban mega-developments, designed to seduce potential investors.

Figure 8 Video credit: Sarah Moser, October 2018

At the peak of the project’s sales activity, visitors to Forest City were treated to a V.I.P. experience: a red carpet upon arrival, free drinks and snacks in the sales gallery, and a flash mob dance by sales staff at 2 p.m. each day. Investor tourists step out of their tour buses onto a red carpet lined with Forest City sales staff, who clap while a Nepali security guard salutes each visitor.

Figure 9 Photo credit: Sarah Moser, October 2018

Forest City’s sales gallery has an abundance of tables and chairs for investors to meet with sales agents. If a property is sold, the gong on the far left is rung. The buyer then gets to smash one of the colourful eggs with a hammer, revealing a card that lists a prize such as a coffee maker, a bag of rice, a thermos, or a stuffed toy.

Figure 10 Photo credit: Sarah Moser, October 2018

Forest City is promoted as an eco-city and ‘model city of the future’ with a multi-layered transportation system and car-free surface, and features lush decorative gardens and vines growing on the condo towers.

Figure 11a Photo credit: Sarah Moser, October 2018
Figure 11b Photo credit: Emma Avery, October 2022

But the ‘model city of the future’ lacks sidewalks, and has abandoned plans to create light-rail transit. Pedestrians are forced to walk on a narrow shoulder next to cars.

Figure 12 Photo credit: Sarah Moser, June 2019

Lush gardens, green lawns, white sand beaches, and fibreglass animals are sprinkled around the new city, projecting an image of a placeless tropical oasis, rather than creating actual habitat for local wildlife or integrating local mangrove ecosystems.

Figure 13: Kampung Sungai Melayu, a coastal Malay fishing village.
Photo credit: Sarah Moser, October 2022

There are stark contrasts between these luxury tower enclaves and the daily lives of local residents—particularly the Malay and Indigenous fishing villages that have stewarded the coastline for generations. The mangrove ecosystem supports thousands of villagers along the coast, whose livelihoods are tied to maritime activities.

Figure 14: A fisherman catches prawns in the Johor Strait, with the high rises of Danga Bay in the background.
Photo credit: Emma Avery, October 2022

Johor’s coasts were once rich with mangroves and marine life. But the massive land reclamation has caused drastic declines in fish, mussels, and other marine species. According to one local, a mangrove area near his village once yielded over 10 kilograms of prawns per week. Now, the weekly yield is less than two kilograms.

Figure 15: Kampung Sungai Temon.
Photo credit: Sarah Moser, October 2018

The livelihoods and cultures of several Indigenous villages are threatened by this building frenzy. Kampung Sungai Temon is a small village home to around 400 Orang Seletar people. The mangrove area in which they live was once considered wild and peripheral.

Figure 16: Kampung Sungai Temon, with the sand pile for land reclamation at Danga Bay in the background.
Photo credit: Emma Avery, October 2022

But now, the villagers live in the shadow of a massive sand pile—intended to create reclaimed land for Country Garden’s Danga Bay project—which has sat idle for years. Kampung Sungai Temon residents are being evicted by the state to an inland area to make way for the luxury development.

Figure 17: The village chief’s eldest son on the sand pile.
Photo credit: Sarah Moser, May 2019

The villagers only learned about Country Garden’s development plans when they stumbled upon construction workers clearing the land on which their ancestors’ graves were located. The residents at Kampung Sungai Temon engaged lawyers to secure a stop work order on the project in 2013, while they undertook a legal battle against the state. The village won the court case in 2017, proving that the Orang Seletar, as a distinct Indigenous community, have legal, customary rights to their lands. But they are still being evicted, as the state sold the land to the developer prior to official recognition of the Orang Selatar’s land rights. As one person told us, “We proved around eight generations for the court. It’s not easy. Who keeps records for that long? The Court recognized the evidence so we get compensation. But the land cannot be given back to us because, under the law, [the developer] was determined to be innocent.” The sand pile and towers in the background are a daily reminder of the corruption and speed of urban development.

Figure 18a: Empty parking lot at Helios Cove mall. Emma Avery, October 2022.
Figure 18b: The Helios Cove Mall sits empty with the exception of two businesses. Sarah Moser, October 2022.
Figure 18c: Flags to indicate Chinese-Malaysian cooperation on tables in the abandoned Helios Cove Sales Gallery. Emma Avery, October 2022.

The sand pile is just one example of how—less than a decade after beginning construction, and at enormous cost to local ecosystems and residents—many projects are now stalled or abandoned, due to faltering sales and the growing Chinese property developer crisis. At Helios Cove, a mixed-use development by Greenland Holdings, a large mall sits abandoned, the sales gallery closed and covered in dust. Greenland defaulted on over USD $400 million of bond payments in July 2023.

Figure 19 Photo credits: Emma Avery, October 2022

Security guards claim that these empty megaprojects are haunted by ghosts, which they often see at night when working alone. Another Greenland project, Jade Palace, has sat unfinished for at least five years. When we visited in 2022, crews were dismantling the construction cranes that flank the incomplete towers and faded advertisements.

Figure 20: Shuttered storefronts and ceiling leaks in the mall at Forest City.
Photo credit: Emma Avery, October 2022

Even the developments that have not gone under are showing cracks. Forest City, the jewel in the crown of Chinese speculative urban development along the Johor coast, is largely empty, with only several hundred residents out of the targeted 700,000. There are almost no visitors to the Sales Gallery. The streets and sidewalks are devoid of human life.

Figure 21 Photo credit: Anonymous

The investor tourists who flocked to visit are gone. There are signs everywhere of poor maintenance and shoddy construction. In 2023, Forest City’s private highway collapsed, less than 10 years after its construction.

The major Chinese coastal mega-developments in Johor were announced within a five-year period. No major projects have subsequently been announced.

Figure 23 Photo credit: Sarah Moser, June 2023

Despite the many failed megaprojects in Johor, Malaysian state actors are continuing in the attempt to attract global real estate and investment capital by turning formerly public waterfronts into financialized assets. Along the west coast of Johor, the Sultan—a key shareholder in Forest City—has announced a land reclamation project at Muar, along the Strait of Malacca. And in Penang, the state government is pushing ahead with plans to create three artificial islands along the island’s south coast, despite protests from local fishing villages about how the construction will decimate marine life—and their livelihoods.

The unchecked rise and fall of luxury real estate in Johor—driven by the financialization and privatization of vast stretches of waterfront, and targeted exclusively at foreign investors—has left scars on the land. Local marine ecosystems are being depleted and villages evicted, while the water in the Straits of Johor has turned a muddy brown that locals liken to ‘teh tarik’ (milk tea). The vacant and abandoned projects offer a cautionary tale about speculative urban mega-development, greenwashing, and coastal urbanization.