SHANGHAI/HONG KONG, April 6 (Reuters) - Chinese property
developer Country Garden said on Thursday a small
number of apartment buyers at its $100 billion Malaysia project
want to cancel their purchases, after Beijing's recent moves to
tighten capital controls on overseas property investments.
China's third-largest builder said in a statement it has
received cancellation requests from fewer than 60 buyers. It
said the buyers would be charged a penalty of 10 percent to 30
percent of deposits if they cancelled the purchase or defaulted
Chinese buyers of overseas homes are in a quandary as
Beijing imposed curbs on funds moving out of the country after
the yuan plummeted to more than eight-year lows in December.
That has squeezed their ability to pay property instalments in
foreign currencies, forcing some homebuyers to forfeit their
Developers are also being hurt. Country Garden has halted
selling the development - a mixed-use project called Forest City
in Iskandar - inside China and said that it no longer will
accept Chinese yuan as payment for the project.
And after selling over 15,000 residential units last year,
the developer has said it now aims to have more diversified
revenue from the project through sales and rental of offices,
shopping malls, a hotel and a golf course.
On Thursday, the developer said in a statement it has ceased
all travel-related support services for mainland Chinese
travelling to Forest City.
Visits by Reuters to sales offices in Shanghai, including
those of Country Garden and state-backed Greenland Holdings
, showed the developers have more broadly stopped
actively selling overseas projects to customers, instead
referring potential buyers to travel agencies or to visit their
own local offices overseas.
"We don't do much marketing for overseas projects anymore,
and we're very careful with our advertisements; we don't
encourage consumers (to buy them)," said a sales person at the
Greenland overseas showroom for projects in Australia, Britain,
the United States, South Korea and Malaysia.
Overseas projects account for around 3 percent of
Greenland's sales, so the overall impact of capital controls on
its revenues is limited, but it's creating uncertainty over
their longer-term business plans, industry executives said.
A source from a subsidiary of Greenland who saw a 2017 work
plan said the group has no plans for new property projects
overseas this year.
A second source said the group will focus on building
existing developments this year and shift its marketing focus
away from China to regions such as the Middle East and Japan.
The developer entered new markets including Tokyo and San
Francisco last year.
Greenland was not immediately available for comment.
On cancellations, the property firms face other headaches.
Country Garden's stance on penalties for cancellations has led
to the formation of at least two online groups consisting of
around 80 buyers in total, who are demanding refunds without
(Reporting by Shanghai newsroom and Clare Jim in Hong Kong;
Additional reporting by Engen Tham in Shanghai, Raffaele Huang
in Hong Kong and Aradhana Aravindan in Singapore; Editing by