Chinese media outlet Xin Tang Ren reported on July 10 that the building No.14 of a real estate project named Country Garden Longyue, constructed and developed by Country Garden Group in Xi’an of Shaanxi, is showing signs of subsidence and tilt after 3 months of delivery.
The report also noted that some netizens have recently posted their complaints on the “Leadership Message Board” of People’s Daily Online, reflecting their experiences about the serious quality problems of the building.
According to a netizen, he bought his apartment back in October 2019. But when he received his home in March this year, he discovered that the whole building gradually started sinking and also tilting to a side at the same time after just moving in for 3 months.
He added that after learning about the issue, he immediately reported his findings to the developer and construction authority. However, they did not reply back with instructions on how to solve the problems, but instead blamed each other.
The home owner’s post drew much attention from online public opinion. Therefore, on June 29, Xi’an Chanba Ecological Zone officially replied that some workers of relevant departments have already verified the situation and confirmed what the netizens reported was basically true.
In addition, the project developer has also entrusted a qualified third party to identify the real cause of uneven settlement of the building.
This incident is not the first time that the Country Garden Longyue project got into trouble with its customers. As reported by Sohu.com, back in 2020, the company held a promotion campaign called “Old and New” to gain new customers.
It required the old customers to bring in new customers and promised to give them 3 years of property commission in return. However, when the transactions were completed, the company allegedly argued that the customers did not fulfill the company’s policy and refused to give them the agreed commission.
According to Xin Tang Ren, Country Garden is a large-scale enterprise headquartered in Guangdong and focuses mainly on real estate development. In 2019, the business won double national awards in sales volume and area, about 25.7 billion yuan (3.8 billion dollars) and 3.35 million square meters (36 million square feet) respectively, ranking first in the real estate industry.
Nevertheless, Country Garden’s performance started declining so rapidly over the past 2 years. Data from the company’s 2021 performance report shows that the developer’s debt has reached 1.65 trillion yuan (246 billion dollars) by the end of last year. This is second only to Evergrande’s total debt of 1.95 trillion yuan (291 billion dollars)
As a result, Moody’s has downgraded Country Garden’s senior unsecured rating from Baa3 to Ba1. The credit rating firm has also adjusted its rating outlook on Country Garden from “under review” to “negative”
Kaven Tsang, a Senior Vice President at Moody’s said, “The rating downgrade reflects Country Garden’s declining property sales and deteriorating financial metrics amidst the challenging operating conditions of the China property sector, as well as its weakened access to long-term funding,”