The company responded that it was developing a new construction technology due to the unavoidable engineering defects
China.net finance on March 23 (reporter Liu Xiaofei intern Luo Xiaowei) in recent years, the high turnover of the real estate quality problems have been concerned, Gemdee Group’s many projects are also due to owner rights were pushed into the storm.
Since last year, Chongqing Dadukou Jindi City has encountered many owners’ rights protection, due to quality problems such as water leakage and cracking, and the gap between the demonstration area and the actual delivery situation. In response, the Dadukou District Housing and Urban-Rural Development Committee of Chongqing Municipality, where the project is located, said at the end of 2020 that the leakage phenomenon in the garage and some houses of the project is true, and that “we have asked the construction unit of the project to actively recant and ensure the quality of delivery.”
“Cracks and leaks are unavoidable engineering defects in the construction industry,” China.org.cn financial reporter told Gemdale. The company is actively investing in the research and development and implementation of new construction technology for similar problems that commonly exist in the industry. The new three-piece process of ‘aluminum mold, all-concrete exterior wall and climbing frame’ will replace the traditional methods of wood formwork, brick exterior wall and traditional steel pipe scaffolding, and greatly improve the waterproof performance of the exterior wall of the house.”
Gemdale also said that for leakage problems reported by customers after the delivery of individual projects, the company requires that the rectification be completed within 30 days and the rectification be accepted by customers. During the rectification process, the warranty engineer will participate in the whole process of communication with the customer and provide feedback to the owner at any time. For the defects and common defects reported for repair, the company promises to improve unconditionally. For the fact that there is a big gap between the demonstration area and the delivery area, the main reason for the cognitive difference between individual customers is considered. According to verification, the greening landscape and positioning of the delivery area of the project match, and there is no downgrading or allocation reduction. The delivery has been widely recognized by other owners, and the original customers have also expressed their approval after communication.
In addition to the Chongqing project, the JindiTianRun Free City Garden in Daya Bay District of Huizhou, Guangdong, which was delivered in June 2020, has been exposed by the owner with quality problems, such as severe water leakage and cracking. JinDi Hainan free city has also been exposed to the hardcover room seepage, empty drum problems.
In response to this, Gemdale Group gave the following reply: due to insufficient construction work in the final stage of Gemdale Hainan Freicheng Project and Huizhou Jindi Tianrun Freicheng Project, a small number of owners have house defects in their homes after delivery, among which the leakage, hollow drum and wood floor problems mentioned are only scattered maintenance problems. The warranty office of Gemdi Company also gave timely feedback after receiving the owner’s repair problems, actively provided repair plans for the owner’s relevant needs and quickly carried out the maintenance work. During the warranty process, it also paid attention to communicating with the owner at all times. The relevant problems were corrected within the shortest time and were recognized by the owner.
Gemdale also said that in the process of product development, the company strictly review design drawings, process supervision and inspection of construction quality, in the management of project under construction materials evaluation, quality evaluation flight check, prevent leakage special assessment and destructive testing, establish the quality patrol-recorder and information management tools such as “gold base intelligence check APP” and a series of “dual” system to ensure the project quality control.
In view of the housing hardcover quality problems in a very small number of projects, Gemdale Group said: “Actively urge the relevant units to rectified, and integrate the team to launch a review, constantly improve the internal management system, with reference to the quality control system of the manufacturing industry to improve the quality of the project. In the process of customer service, Gemdale pays great attention to listen to the feedback of the owners. In the future project development process, Gemdale will also be more strict and rigorous to do multiple quality control, and strengthen the sincere communication with the owners.”
On this side of the project quality problems, and on the other side, Gemdale’s scale expansion is still accelerating.
In the first two months of this year, Gemfield Group achieved sales contract amount of 41.62 billion yuan, up 173.22% year on year. Crary previously released data showing that the overall sales growth of the top 100 real estate companies in the same period was 105%. China.org.cn also noted that Gemdale spent more than 5 billion yuan to win five projects in Beijing and Tianjin in the first two months of this year, ranking 17th on the ranking list released by China Finger Research Institute.
Gemfield’s expansion is inseparable from its high turnover pattern of fast land acquisition, rapid construction, rapid sales and rapid carry-over of funds. With this model, Gemfield Group in 2013 set the target of “sales over 100 billion in 5 years”, two years ahead of schedule. In 2016, Gemdale Group’s sales amount was 100.63 billion yuan, and from 2017 to 2020, it was 140.81 billion yuan, 162.33 billion yuan, 210.6 billion yuan and 242.68 billion yuan respectively.
For real estate enterprises, high turnover is a double-edged sword, in the bright performance at the same time, it may also bring some risks. As of September 30, 2020, Gemdale’s total debt was 297.691 billion yuan, while the figure at the end of 2016 was only 100.53 billion yuan.
Gemdale may be forced by soaring debt pressure, the intensive issuance of bonds. So far this year, Gemdale has raised a total of 3 billion yuan by issuing two medium-term notes, all of which have been used to repay maturing bonds. And last year, Gemdale issued four medium-term notes and four ultra-short financial, and a small public offering was passed by the Stock Exchange.
In the process of intensive bond issuance, Gemdale Group also appeared after a bond privately cut interest rate behavior. In April 2020, Gemdale unilaterally cut the interest rate from 5.29% to 1.50%, in violation of the agreement to “raise” the interest rate as stated in the corporate bond prospectus. The move has sparked discontent among many investors. It is calculated that with a debt of 1 billion yuan, Gemdale Group will save more than 37 million yuan in interest according to this change in interest rate. Lower interest rates the next day, the Shanghai Stock Exchange issued a letter of inquiry to question whether the move is compliant. On April 28, Gemdale issued a statement to “maintain interest rates unchanged” and “apologise for the undue market impact caused by these matters”.
China.org.cn Finance continues to pay attention to real estate quality and safety reports. If there is a complaint, consumers can log on to the woodpecker complaint platform (tousu.china.com.cn) to complain.