Hong Kong’s New World to demolish two towers of The Pavilia Farm after construction defects detected

HONG KONG (July 12): Hong Kong-based property developer New World Development’s (NWD) has decided to tear down and rebuild two of the seven blocks of its hottest-selling project –The Pavilia Farm, in Tai Wai after discovering serious construction defects, reported Nikkei Asia.

The Pavilia Farm is a joint venture development between NWD and transit operator MTR Corp. The development which sits atop the Tai Wai train station will be built in three phases, comprising 3,090 apartments spread across seven towers.

The two towers in Phase 3 of the development was originally slated to be completed by end-2023, but the demolition and rebuilding will delay the scheduled delivery date by nine months to 2024.

The two affected towers (block 1 and block 8) in The Pavilia Farm were still under construction. The city building department said that tests found substandard concrete was used in supporting columns and load-bearing walls in the two towers.

A structural engineer Ngai Hok-yan told Radio Television Hong Kong (RTHK) that currently there is insufficient information to conclude what went wrong, but there's a high possibility some human error was involved.

One of the main causes could be the wrong concrete was used for the construction, he said, adding that concrete with a compressive strength of 45MPa was used in the construction process, instead of a higher compressive strength of 80MPa. More than 10 of the 57 floors of the two affected towers had been constructed before the defects were discovered on June 18.

The Pavilia Farm were sold at unit prices ranging from HK$7.9 million (RM4.26 million) to HK$25 million. Some 846 out of the 892 units of these two blocks had already been sold.

According to MingTianDi’s report, a buyer of a HK$15 million unit will be getting up to HK$1.15 million in compensation and subsidies while one cancelling will get HK$310,000.

It remained unsure whether NWD would seek compensation from the contractor Hip Seng Construction, but NikkeiAsia reported NWD had demanded Hip Seng to be investigated on whether there had been negligence or supervisory failures.

Meanwhile, the spokesperson of NWD said the other five towers in the same development were not affected as the construction started earlier and the tower blocks passed construction quality and structural safety requirements.

Earlier in June this year, NWD received over 30,000 registrations of intent from potential buyers for The Pavilia Farm project. It is the highest number of registrations received in Hong Kong history, according to a separate report by MingTianDi. 

Analysts estimated that the cost of tearing down the affected towers, rebuilding them and compensating buyers would cost NWD HK$1.2 billion.

According to South China Morning Post’s report, citing analysts’ reports, the reconstruction expense is around HK$500 million, while the compensation for the 846 affected buyers might cost another HK$600 million.

NWD has sold 3,028 units or 98% of The Pavilia Farm as of June 30, recording a sale of HK$36 billion.

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