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Malaysia Weighs Adding a Casino to Ghost Town Forest City

Malaysia Weighs Adding a Casino to Ghost Town Forest City
  • Malaysia could add a casino to Forest City, a mega-development turned ghost town.
  • The casino, which would be the second in the country, could rejuvenate an establishment in difficulty.
  • The move could attract Singaporean tourists, who pay a daily fee to play at home.

Malaysia’s Forest City mega-development started with big ambitions and big money.

Announced in 2006, this luxury housing project in the south – easily accessible from Singapore – would house 700,000 people and include a water park and hotels. The entire project cost its developers $100 billion.

But eight years after work began, only a few thousand people live there. The project has become a ghost town – and a major liability for its developer, who faces significant financial problems elsewhere.

Now Malaysia is in talks with several high-profile investors to add a casino to Forest City, people familiar with the matter told Bloomberg on Wednesday.

Southeast Prime Minister Anwar Ibrahim met executives of a Malaysian property development company and a resort company in Forest City last week. A representative of Malaysia’s billionaire king, Ibrahim Iskandar, was also in attendance, the people told Bloomberg.

King Ibrahim owns more than 20% of Forest City in a joint venture with Chinese real estate developer Country Garden, Bloomberg reported. The king ascended the throne in January for his five-year term and said last month he was ready to “start my real way of ruling.” The other partner, Country Garden, is facing significant financial difficulties linked to the struggling Chinese real estate market and has had to 200 billion dollars in liabilities at the end of last June.

The two tycoons who met with the Prime Minister last week own part of The most important companies in Malaysia. One of the companies is Genting Group, a resort and theme park operator that owns Malaysia’s only casino, located in a hilltop town in central Malaysia. Genting operates other casinos in Singapore, the United States and the United Kingdom. The other, Berjaya Corp., manages hotels and develops properties, among other businesses.

The casino talks are in their early stages and it is unclear whether Prime Minister Anwar will authorize such a venture. Malaysia has a majority Muslim population and those who follow Islam are prohibited from gambling.

Forest City did not immediately respond to BI’s request for comment.

Expensive and empty apartments

A casino – which would be only the second in Malaysia – could help struggling Forest City.

Despite being billed as a “popular short-distance tourist destination,” the complex, which includes apartments, hotels, a water park and a shopping center, sees only a few dozen visitors each day, Business Insider reported in April. Those who come usually have a limited budget and don’t spend much.

Last year, only about 15 percent of the planned land had been completed, local media reported.


The hallway in one of Forest City’s condominiums.

Marielle Descalsota/Business Insider



Most of the apartments appear to have been never inhabited, observed a BI journalist who visited earlier this year. They are almost twice as expensive as other apartments in the city. and the wealthy prefer to buy single-family homes, BI reported in April.

A new casino could attract tourists from Singapore. The Singapore government discourages gambling by charging residents 150 Singapore dollars, or $110, to enter local casinos. Singapore is connected by a one-kilometer bridge to the state of Johor, where Forest City is located.

Cities around the world are also looking to add casinos to boost tourism.

The United Arab Emirates, another predominantly Muslim country, bet big on gambling. Earlier this year it launched a federal gaming authority and plans are in place to create an “Arabian Strip”, an Emirati version of the Las Vegas Strip of hotels and casinos on Al Marjan Island.

New York City is also looking to benefit. In April of last year, the state government authorized up to three casino licenses for upstate New York, which includes the city and surrounding counties.

businessinsider

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