Fire safety update: Premier House & Picture Works

Update: 9 May 2019

The Government made an announcement earlier this morning confirming that a fund of £200 million will be made available to building owners who have not yet replaced unsafe ACM cladding on privately owned high rise blocks.  This step has been taken as a result of private building owners having failed to take action to replace ACM cladding and their attempt to offload any costs associated with cladding replacement to leaseholders.

You can read the press release on the Government website here.

The announcement contains few details and raises many questions. For example, a condition of funding would be that the building owner must have taken reasonable steps to recover the costs from those responsible for the presence of unsafe cladding. What would be considered as having taken reasonable steps? Who is responsible for the presence of unsafe cladding?

Building owners will have three months to access the fund, however, they will not be able to register for the fund until early July 2019.  It is assumed that further details as to claiming eligibility for the fund will be released between now and July.

How does this announcement affect Premier House, Edgware and Picture Works, Nottingham?

Premier House, Edgware: It seems that this may be positive news for Premier House, subject to confirmation of eligibility.   Premier House has the same ACM cladding which was found on Grenfell Tower and therefore, at the outset, it would seem the block would fall directly within the remit of the fund.

Picture Works, Nottingham: As detailed in our updates, Picture Works is not fitted with ACM cladding but rather the manner in which the cladding has been installed is faulty and therefore a fire risk.  It is therefore unclear as to whether the remedial works would qualify for the fund, however, as per our recent update, a claim is being pursued against the Building Warranty provider and we await confirmation (anticipated within the next couple of months) as to the success of such claim.

You can view all updates regarding Premier House, Edgware and Picture Works, Nottingham below.

Next Steps

We will update you as soon as possible once further guidance has been released on the matter, and we have received confirmation from the building owners as to the claims they are submitting.

Update: 5 April 2019

Following the revisions to the fire safety regulations as a result of the tragic Grenfell Tower Fire, we were advised that two property investments on our platform no longer met these regulations: Premier House, Edgware and The Picture Works, Nottingham.

Due to the level of uncertainty around the cost of the works required to comply with the new regulations, who will bear these costs, and the potential impact on an investor’s assessment of the value of the property, we decided to suspend trading and dividend payments on both investments in June 2018.

Since the suspensions we have issued regular updates to investors in these properties. You can view each update issued below. Both properties were revalued 31 March 2019, and you can view the recent valuations on the respective property detail pages.

We feel there is now enough information available about the cost of the remedial works required on each of the properties for the trading suspensions to be lifted when the Resale Market opens at 11am on 10 April 2019. Due to the significant changes to the valuations, all historic bids and offers on the properties have been cancelled.

A comprehensive and professional due diligence process is at the heart of every property acquisition we make, and both properties were compliant with fire safety regulations at the time they were acquired. However, ultimately, the best planned and managed property investments are not risk free. Premier House, Edgware and The Picture Works, Nottingham represent less than 2% of the value of properties on our platform. These unexpected events demonstrate why diversification across a portfolio of properties is so important.

Premier House, Edgware:
1) See update 7 June 2018 here
2) See update 28 June 2018 here
3) See update 31 July 2018 here
4) See update 27 September 2018 here
5) See update 20 December 2018 here
6) See most recent update 5 April 2019 here

The Picture Works, Nottingham
1) See update 28 June 2018 here
2) See update 31 July 2018 here
3) See update 27 September 2018 here
4) See update 20 December 2018 here
5) See most recent update 5 April 2019 here

To go back to the CEO update click here.

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