GS Engineering & Construction (GS E&C), a major South Korean construction company, has taken over part of an unfinished hotel development previously managed by its bankrupt UK subsidiary, Elements Europe. The project is valued at approximately $51.1 million.
Interpath, the administrator overseeing Elements Europe’s insolvency, announced on June 19 (local time) that it had sold the East Road Project, located in Hackney, East London, to GS E&C.
The East Road Project involves constructing a 23-story building comprising two basement levels, five floors of office space, and a 17-story hotel. Construction began in 2022 and was initially slated for completion in late 2023.
Elements Europe had secured the contract for about $51.1 million, overseeing modular construction and installation. However, financial difficulties halted progress on the project.
Originally a subcontractor, Elements Europe was acquired by GS E&C in 2019 as part of the Korean firm’s expansion into eco-friendly modular construction. The aggressive growth strategy, combined with the recent UK construction slowdown, labor shortages, and rising material costs, led to mounting financial strain and eventual insolvency.
Despite doubling its revenue to $54 million in 2023, Elements Europe posted a $53.2 million loss. The company had also recorded a $7.6 million loss in 2022.
Additional projects under Elements Europe are now expected to be sold off. Notably, the $146 million Camp Hill Project in Birmingham-a 550-unit rental housing and commercial complex built using steel-frame modular techniques-is also likely to be placed on the market.
