Scams, illegal businesses pose new setback for Johor’s Forest City revival
Forest City is courting investors and trying to shed its “ghost town” label, but recent controversies are testing efforts to revive the development and its property market.
An aerial view of Forest City on Sep 14, 2026. (Photo: CNA/Zamzahuri Abas)
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ISKANDAR PUTERI, Johor: Behind the unmarked door of a shoplot along a quiet commercial stretch of Forest City, four customers sat tapping away, playing slot-style games on tablets.
A stern-looking man stood guard at the entrance, his eyes darting around.
The customers could place bets starting from around RM20 (US$4.89). Instead of handing over cash, they paid for gambling credits using Malaysia’s Touch ’n Go e-wallet. They were then issued tablets from behind the counter with pre-installed slot games.
“Most of our customers are foreigners. Many play for hours and usually top up their credits a few times,” said the woman manning the counter. Many of them are workers living in Forest City, she said.
The apparent gambling operation that CNA observed on a recent visit is among several questionable or controversial activities that have emerged at the sprawling development as it tries to leave its “ghost town” reputation behind.
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A US$100 billion mega project on the southwestern edge of Peninsular Malaysia, Forest City comprises high-rise apartments, landed homes and villas interspersed with commercial shoplots.
In July, Johor police arrested 335 people in raids on alleged online scam operations there.
The police seized computers and mobile phones and said the syndicates were involved in schemes including fraudulent cryptocurrency investments and romance scams targeting victims overseas.
That same month, the authorities ordered Network School, a community catering to technology entrepreneurs and digital nomads, to cease operations after finding breaches of licensing conditions and the approved use of its premises.
Residents, property owners and experts told CNA the episodes are a fresh setback for Forest City as it tries to rehabilitate its image and attract investments.
The development has been trying to reinvent itself as an investment destination, anchored by its status as a Special Financial Zone (SFZ).
The SFZ is expected to surpass its RM2 billion investment target this year, after attracting more than 250 enquiries from prospective investors including financial institutions, family offices and business services firms.
Criminologist P Sundramoorthy told CNA the scam operations and episodes like Network School have “reputational consequences” for the development.
“It can affect property values, business confidence, tourism, investment decisions and the willingness of people to live and work there,” added Sundramoorthy, who is with Universiti Sains Malaysia.
WHY FOREST CITY MAY BE VULNERABLE
For some residents, the recent police raids have raised concerns about crime.
Muhammad Aidi Rashid, who rents a two-bedroom apartment at Ataraxia Park on the southwestern part of the development, installed closed-circuit television (CCTV) cameras outside his door and additional locks after hearing of alleged scam operations in neighbouring blocks.
“I worry for the safety of my wife because she is alone at home when I’m at work,” said Aidi, 33, a technician at nearby Tanjung Pelepas port.
Property agent Aqil Amran, who manages Forest City apartments through local firm Ceiloz Realty, said his company has encountered suspected scam operations involving tenants even after the police crackdown.
In one case, an apartment owner became suspicious after a tenant’s electricity bill exceeded RM1,000 a month.
“When we went down to the unit to do checks, we saw many tech devices for (alleged) scam activity and we terminated the rental contract and chased the tenant out,” Aqil said, adding that the case was referred to the police.
Sundramoorthy said Forest City’s sizeable number of vacant residential and commercial properties could make it vulnerable to such operations. Based on figures provided by Country Garden in 2023, 9,000 people were living in the development across 28,000 residential units.
“It can provide opportunities for illicit operators to rent premises without immediately attracting attention,” Sundramoorthy said.
Forest City’s location about 10km from the Tuas Second Link and proximity to Singapore could also be attractive to transnational criminal networks, he added, given that the Lion City is a global air hub.
The July raids underscored the cross-border nature of such operations: Police said 332 of the 335 people arrested were foreigners, the majority of them Chinese nationals, and their targets included people beyond Malaysia’s borders.
Not all of Forest City’s recent controversies have involved alleged criminal activity.
Network School was closed over licensing and premises-use breaches, but Johor-based property consultant Samuel Tan said the episode nevertheless “dealt a blow to Forest City’s public image”.
“In the short term, (both Network School and the scam raids) have naturally heightened buyer and tenant circumspection,” said Tan, chief executive of Olive Tree Property Consultants.
“Retail investors and prospective occupiers are understandably cautious, leading to a temporary chilling effect on casual enquiries and rental momentum.”
STILL A BUYERS’ MARKET
Before the controversies, Forest City was already seeing weakening prices and thin transaction volumes.
According to property transaction service Datanah, Forest City’s median transaction price between June 2025 and June 2026 was RM547 per sq ft , down 12 per cent from the preceding 12 months.
It recorded only 13 sales between June 2025 and June 2026 in a development with at least 28,000 residential units.
Its latest recorded transaction was on Jun 18, before the scam raids and Network School saga.
However, experts cautioned that transaction data can lag and there is not enough evidence to attribute the subsequent absence of recorded sales to the controversies.
Forest City’s property market has already struggled for years.
According to Tan, its residential and commercial properties have historically traded at a discount to the wider Johor Bahru market. A three-bedroom Forest City apartment is currently valued for around RM550,000, compared with upwards of RM1 million in Johor Bahru, according to Aqil.
“Because much of its organic residential demand was already subdued, the reputational hit has manifested more as headline noise than a catastrophic collapse in core asset values,” Tan said.
But expectations had been growing that the SFZ and wider Johor-Singapore Special Economic Zone (JS-SEZ) could improve Forest City’s fortunes this year, he added.
The development remains firmly a buyer’s market. “On sales especially, demand has been low because there are many owners looking to sell, but there are not many buyers,” Aqil said.
Commercial property owners are feeling another consequence of the recent controversies: Greater scrutiny.
Singaporean Justin Ong, 59 , who owns a Forest City shoplot for investment, said the management and local authorities have been asking businesses for permits, documentation and proper tenancy agreements following the Network School episode.
Ong is currently renting his shoplot out to a food stall operator on an informal basis, and now needs to draw up legal paperwork for submission.
“It makes things cumbersome, and businesses will be more wary (of moving operations to Forest City),” he said. “It also adds a layer of administrative work that was previously not required.”
Tan, however, said tighter checks could ultimately benefit Forest City.
“Legitimate financial institutions, family offices and corporate tenants require a well-regulated, clean jurisdiction,” he said.
“Enforcing strict permit protocols signals to the market that the authorities are serious about governance.”
CNA has asked master developer Country Garden about Forest City’s current occupancy rate and whether it has seen recent changes in residential or commercial demand.
CNA has also asked Country Garden and the Johor police about measures to detect and deter illegal activity, and the latter for statistics on crimes reported in Forest City.
WHAT WILL IT TAKE TO REVIVE FOREST CITY?
Despite the recent bad press, some property owners remain optimistic.
Singaporean investor Tan Kin Lian, who owns two Forest City apartments, said the recent episodes have had little impact on residents’ everyday lives.
“Even if these (operations) occupy some of the residential units, they don’t bother the other residents. Now that they are gone, I think life will continue as before,” he said.
He acknowledged that his Forest City properties have declined in value over the years, but believes their relatively low prices and the opportunities created by the SFZ and the JS-SEZ leave room for growth.
“The prices of property in Forest City as compared to that in Singapore is roughly eight times (less), so for Singaporeans, if you’re keen on purchasing a second home and don’t want to pay too much money … it’s an inexpensive option,” he said.
Country Garden has publicly backed the police crackdown and called for a permanent police presence in Forest City.
Residential areas in Forest City can be accessed by registered owners and tenants using access cards, and there are security guards at every entrance. However, Munira noted that this protocol has not been sufficient in deterring scam operations.
The authorities and developers should also improve control of its access and surveillance, engage the community and find legitimate uses for vacant spaces, said Munira.
Sundramoorthy suggested a broader framework involving the police, immigration and customs authorities, the local council and Forest City’s management.
Property owners and agents could also flag warning signs such as unusually high electricity consumption, frequent short-term occupancy or excessive numbers of occupants, he said.
Amid the negative publicity, there have been some promising signs.
Besides the hundreds of investor enquiries about the SFZ through the Invest Malaysia Facilitation Centre Johor, Malaysian entrepreneur Jeff Yew in August reportedly proposed reviving the former Network School site as a technology campus with a “Malaysia first” approach.
“These are indeed substantive reasons for cautious optimism,” Tan said.
Shedding the “ghost town” label will ultimately require legitimate businesses, jobs and people willing to live and work in Forest City for the long term, he added.
For residents such as Aidi, a sense of security is the starting point.
“Hopefully if people feel safe, the right businesses will open and the community will be more vibrant,” he said.
Source: CNA/am
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