The chairman of the fund which owns Beetham Tower has said it is set to cost £4m to replace faulty sealant on the 47-storey building’s façade, following a High Court ruling which said urgent work needed to be carried out and damages were owed to occupier Hilton Hotel.
Blue Manchester, trading as Hilton Manchester Deansgate, brought the claim against North West Ground Rents, a fund owned by Ground Rents Income Fund and managed by Brooks Macdonald.
The claim related to the failure of sealant around some of the 1,350 shadow box units which form part of the tower’s façade, and a question of whether remediation work has kept the building in good repair.
In a statement to the stock market on 1 February, Ground Rents Income Fund revealed that the court had found in favour of the Hilton, and ruled “the building is in disrepair”.
The court ruled that a permanent solution needed to be found within 18 months and ordered the fund to pay the Hilton £250,000 in costs, with the final amount to be determined at a later date.
Hilton was also awarded damages in relation to the hoardings which have been in place for 31 months while investigations into the façade took place.
Malcolm Naish, chairman of Ground Rents Income Fund, made a statement to the company’s AGM: “The court ordered the temporary hoardings which had been erected by Carillion outside the hotel as an exclusion zone to be removed by 28 February 2019. It is expected that the completion of their removal will be finished within days.
“The cost of the permanent remedial works to the façade of Beetham Tower has been estimated by NWGR’s advisers, based on their recommended solution, to be approximately £4m, excluding VAT, any professional advisory costs and damages yet to be determined.
“Carillion was the contractor which constructed the building and from the date the faults in the façade were discovered in the summer of 2014, with its subcontractor BUG, began investigating the solution to the faults and how repairs could be put into place. These investigations and remedial work proposals were in the final phases of planning when Carillion went into compulsory liquidation in January 2018.
“NWGR is pursuing the proceedings it has already issued against Carillion through its insurers and the sub-contractor BUG, through existing warranties and indemnities, which, if successful, would greatly limit any potential liabilities or irrecoverable losses for NWGR.”
Naish told the AGM that NWGR would need to fund the works and litigation costs, while pursuing the case against Carillion’s insurers and BUG. He said he had received legal advice suggesting “the case is strong”.
At the time of Carillion’s collapse, it left a debt of £1.6bn. According to Naish “if NWGR is unsuccessful in its action against the original contractor’s insurers or the sub-contractor, it may be able to recover some of the remedial works costs from other parties.”
Beetham Tower was designed by SimpsonHaugh, then Ian Simpson Architects, and completed in 2006.