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Modular firm behind major BTR scheme collapses into administration
A modular specialist, which has been working on one of the UK’s largest build-to-rent (BTR) schemes, has fallen into administration after 20 years in business.
Modular firm behind major BTR scheme collapses into administration #ukhousingElements Europe, which is backed by a South Korean conglomerate, appointed administrators from advisory firm Interpath yesterday.
A total of 141 staff, out of the Telford-based firm’s 217-strong workforce, has been made redundant. Seventy-six staff have been retained to help the administrators.
Interpath said losses on two projects where Elements Europe was main contractor had resulted in a “significant cash requirement”.
The modular firm’s directors had explored options to sell the firm, as well as seeking investment and refinancing, but a "solvent outcome was not possible", Interpath said in a statement on its website.
One of Elements Europe’s loss-making contracts is the 550-home ‘Smith’s Garden’ project in Birmingham, which is due to be completed in 2026.
The mixed-use project, in Digbeth, had been hailed by the investment firm behind it, Goodstone Living, as the UK’s “largest modular BTR” development in 2023. Tide Construction has since laid claim to this feat as it has delivered 984 modular homes at Greenford Quay in Ealing for Greystar.
Goodstone Living, which is owned by the asset management subsidiary of giant Australian investment bank Macquarie, declined to comment on the collapse of Elements Europe when contacted by Inside Housing.
Elements Europe’s other loss-making scheme was the East Road project in Hackney, East London, which includes a 17-storey modular hotel and a five-storey office block.
Traditionally the firm has specialised in building room modules and bathroom pods for residential schemes from its Telford factory. However, it diversified in 2021 to take on projects as a main contractor.
GS E&C, a global conglomerate based in South Korea, acquired a “significant shareholding” in Elements Europe in 2020.
Sam Birchall, managing director at Interpath and joint administrator, said: “Sadly Elements Europe has not been immune to the headwinds facing the construction sector.
“Our intention is to pause work on the ongoing contracts at East Road and Camp Hill whilst we explore options to rescue all or parts of the Elements business.”
Buyers are also being sought for the company’s assets, the administrators said.
For the past three-and-a-half years, Elements Europe has been led by chief executive David Jones, who previously had spells at two other failed offsite firms, Ilke Homes and Legal & General Modular.
Elements Europe saw its losses widen to £29.5m in its last reported financial to the end of December 2023, according to accounts filed at Companies House. It came despite the firm’s turnover nearly doubling to £42m, as costs dragged down its bottom line.
The category 1 MMC sector has endured a torrid time in the last few years with Homes England-backed House by Urban Splash and Goldman Sachs-backed TopHat among the failures, as well as Ilke Homes and Legal & General Modular.
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