MALAYSIA: Malaysia is once again stretching its borders out into the sea—quite literally. Off the coast of Penang, a brand-new multi-billion-dollar island is rising from the waves. It’s called Andaman Island, and although it’s only been in the works for a few years, it’s already taking shape at impressive speed.
However, there’s a familiar shadow hanging over the project: Forest City, the colossal Johor development that was once hailed as a futuristic paradise and now often gets described as a ghost town, so naturally, people are asking—is Malaysia about to repeat the same mistake?
A country that’s literally growing
Squeezed between Thailand and Indonesia, Malaysia has been quietly expanding its footprint for decades. Since 1991, more than 80 square kilometres of new land have been reclaimed from the sea—especially around bustling Penang Island.
Things really changed in 2008, when George Town was awarded UNESCO World Heritage status. Almost overnight, tourists poured in, investors followed, and Penang found itself transforming into a hotspot for boutique hotels, cafés, and high-end waterfront homes, but the island is, well… an island. There’s only so much flat land to build on, and much of what remains is steep, forested, and tricky to develop. Eventually, Penang hit a ceiling.
The answer? Build outward.
And that’s how Andaman, a US$14 billion (S$18.1 billion) reclaimed island, was born—designed to ease the pressure by creating space for new offices, malls and, of course, luxury homes.
How do you build an entire island?
If you stood in this spot back in 2016, you’d just see water. Nothing else. Fast-forward nearly a decade, and the area has been transformed through engineering on a mind-boggling scale.
Here’s the short version of how to build a billion-dollar island:
- Massive dredgers suck sand from offshore and pump it into place.
- Steel pipelines deliver that sand to form the foundations.
- Vertical drain rigs drill deep into the layers below to release trapped water.
- A surcharge layer—basically a giant blanket of heavy earth—presses everything down so the ground compacts properly.
Around the entire perimeter, engineers build a rock bund, a giant rock wall that absorbs incoming waves, even the huge ones created during tsunamis.
This isn’t a “dump sand and build skyscrapers” kind of project. The land has to settle for months. Engineers monitor the sand and clay constantly. Only then do buildings start popping up—anchored by deep, reinforced concrete piles.
Two bridges will eventually tie Andaman back to Penang Island: one leading to Straits Quay and another connecting to the new Gurney Bay development.
Luxury living but with familiar worries
Waterfront homes in Penang have always sold at a premium—often 50% more than properties just a few streets inland. Andaman aims to meet that demand with 5,000 homes designed for roughly 16,000 people.
Prices vary, from around US$120,000 up to US$1.6 million, and while the lower end sounds somewhat manageable, most units are expected to cater to the upper-class, not the average Malaysian family.
Which raises the inevitable question: Are we building another exclusive island that only the wealthy can afford?
After all, the country has been burned before.
Forest City vs. Andaman: Why this time might be different
Forest City, located 600 km south, was supposed to be a shining US$100 billion eco-metropolis spread across four man-made islands. It had everything: high-tech transit, golf resorts, hotels, luxury condos, international buyers waiting in line.
But then reality happened:
- China’s property market crashed.
- Country Garden—the main developer—became buried in debt.
- China capped how much its citizens could spend overseas.
- Malaysia restricted long-term visas for foreigners.
- And then the pandemic slammed the door on travel.
By 2023, reports suggested only 1% of 28,000 units were occupied, turning Forest City into one of Asia’s most infamous planning disasters.
However, Andaman isn’t a supersized international dream city. It’s smaller, locally funded, and built as an extension of a place Malaysians already love and live in. It’s being developed by E&O Berhad, a Malaysian company far less vulnerable to China’s property issues. And unlike Forest City, which depended heavily on foreign buyers, demand for Andaman seems very real—several condo towers reportedly sold out last year.
That doesn’t mean success is guaranteed. It just means the project isn’t built on the same shaky foundations.
So, will Andaman become a thriving new extension of Penang—or a cautionary tale rising from the sea?
For now, construction continues, the second phase is underway, and optimism is cautiously high, but only time will reveal whether this glittering new island becomes a vibrant neighbourhood or the next reminder that not all land reclaimed from the ocean finds a purpose.
