“Foam walls” uncovered at New World China luxury housing development in Guangzhou

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20th April 2024 – (Guangzhou) In Guangzhou’s Baiyun District, significant structural concerns have emerged at a high-end New World China residential project named ‘Glory of Legend’, after owners discovered alarming defects in their multimillion-yuan properties. Among the defects reported were “foam walls” and collapsed ceilings in the lobby areas, raising serious safety concerns among residents.

Glory of Legend
Residents discovered that some walls were filled with foam instead of proper building materials.
Ceiling panels fell and a fire sprinkler pipe burst in the lobby of Block E1.

The earliest reports of these “foam walls” came from Ms. Tai, who resides on the 24th floor. During a routine check in November 2023, Ms. Tai pressed against what she believed to be a solid wall in her child’s room, only to find it hollow and filled with foam. At least five other households have reported similar issues, according to local sources. “Living in one’s own home should provide a basic sense of security, which is now lacking,” Ms. Tai expressed, disclosing that her child is now too frightened to sleep in the room.

Ms. Xu, a representative of the property owners, highlighted additional problems including severe water leakage and the collapse of the entire lobby ceiling on 16th April. Residents are pressing for the developer to undertake comprehensive reforms and have demanded that an independent third party be enlisted to conduct thorough inspections. “The concerns for safety are profound, especially with the recent typhoon and heavy rains adding to our worries,” stated Ms. Xu.

Despite these pressing issues, the response from the property management and the developer has been minimal. At a recent meeting, a Block E4 property manager promised repairs to the walls and foam, but this assurance has done little to satisfy the worried residents. “With an average price of ten million yuan and 68,000 yuan per square meter, it is unacceptable for such critical issues to be overlooked,” Ms. Xu argued.

Local authorities are currently investigating these complaints. Preliminary findings suggest that while the foam walls are non-load-bearing, the extent and implications of such construction choices require further examination.

In addition, residents have called for an urgent and thorough investigation into a string of construction and maintenance issues that have plagued their homes since the first blocks, E1 and E2, were handed over on 21st June, 2023. Despite being less than a year since the properties were completed, a multitude of problems have emerged, culminating in a severe incident on 16th April, 2024, where ceiling panels fell and a fire sprinkler pipe burst in the lobby of Block E1.

This incident, occurring just days after a fire drill on 12th April, 2024, highlights the apparent disregard for resident safety, prompting an outcry over the developers’ handling of the situation. Residents have reported numerous defects, including improper waterproofing in the bathrooms leading to leaks between dry and wet areas, mould on staircases, and persistent dampness in walls and underground parking spaces.

Elevator malfunctions have been a frequent hazard, posing significant risks to residents, and issues with the wind noise inside the elevators during autumn and winter further indicate poor construction standards. Additionally, the use of galvanised pipes instead of standard gas pipes has led to rust and perforations, raising serious safety concerns.

Kitchen and bathroom odours, along with the need for constant repairs, have become a daily struggle for the homeowners, who have discovered that some walls were filled with foam instead of proper building materials. The parking situation is also problematic, with exorbitant fees and insufficient spaces not meeting the local standards set in 2021.

Additionally, residents have expressed dissatisfaction with the property management fees, which do not reflect the level of service provided. The lack of basic cleaning, security, and maintenance services has caused considerable distress and health concerns among the community.

In light of these numerous issues, the residents are demanding that relevant authorities conduct a comprehensive investigation. They seek accountability and assurance of a safe and secure living environment, restoring trust and peace of mind to all affected homeowners.

New World China, the principal property subsidiary in Mainland China of the Hong Kong-listed New World Development Company Limited (“NWD”; Hong Kong Stock Code: 00017), was among the first Hong Kong pioneers to venture into the Mainland China property market.

New World Development Limited has reported that its residential projects in mainland China have continued to perform strongly, achieving notable sales growth despite a general market slowdown. In July and August alone in 2023, the total contracted sales surpassed RMB 4.1 billion, marking a 138.5% increase compared to the same period in 2022. For the first eight months of 2023, sales exceeded RMB 10 billion. These results have placed New World China Land (“NWCL”) among the top 100 developers in mainland China as ranked by the CRIC Research Centre, the China Index Academy, and EH Consulting. 91% of NWCL’s sales revenue has come from the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta market. High-profile projects like the Guangzhou NEW METROPOLIS MANSION and Guangzhou PARK PARADISE have performed exceptionally well. For instance, THE CO-CENTRAL MANSION in Zengcheng, Guangzhou, recorded an average transaction price of RMB 36,000 per square meter, a record for the area. Similarly, the CITY GATHER’s second phase in Shanghai sold out immediately, and THE PARKSVILLE led residential sales in Shenyang from July to August in 2023. NWCL claimed it has maintained a robust profitability with a gross margin of about 60% for projects in the Greater Bay Area.