Developer faces bill up to £15m on student hall cladding fixes:
Bangor developer will take action on eight student halls
DEVELOPER Watkin Jones is working to replace or remediate cladding on eight student hall developments – and the final bill could hit £15m.
The Bangor-based builder has responded to revised Government guidance issued in January 2020 on cladding, following the Grenfell fire in 2017.
This will see it work with the owners of eight properties – which it hasn’t named – around the UK – although they have not named the locations.
The developer also said it had set aside £1m after a decision to waive the 2019/20 final rent instalments for students who left their accommodation prior to March 23 as the coronavirus pandemic closed down university campuses.
They are also providing accommodation after the end of term for those who need to stay longer as a result of the disruption.
It did announce strong first half results for the six months to March 31 2020.
Pre-tax profit was up to £26.6m from £22.4m last year as revenue rose to £185.7m from £159.1m.
Most sites have now been remobilised following lockdown with jobs operating at around 75% capacity.
On the issue of cladding, the company said: “In response to the revised Government guidance, issued in January 2020, on the suitability of certain cladding solutions used on high-rise residential buildings, the group is working with the owners of eight of its previously developed PBSA schemes to remediate/replace cladding. The majority of the cladding is high pressure laminate (HPL), which has been under more recent scrutiny and is covered by the revised guidance.
“The group is taking proactive and responsible steps to ensure the safety of tenants, working with building owners, even though the buildings concerned were developed in accordance with all building regulations at the time of construction and no liability is accepted for the works.
“Discussions with the property owners remain ongoing, but the board currently expects that this may result in a sharing of the costs of certain remedial works with them.
“The gross cost to the group could be in the range of £12 million to £15 million, over the next two years.
“A one-off non-underlying provision for this cost is likely to be made at the year end, once the outcome of those discussions has been established.
“The group will look to recover some of this cost from the sub-contractors and consultants engaged on implementing the particular cladding systems at the time. This is likely to take an extended period of time to achieve and the extent of any recovery is currently uncertain.”