Hi Kemal,
No errors with build.
All the assets showing the artifacts were originally BSP assets which were later converted to SM.
The artifacts appear only when the level is loaded / rebuilt.
When the assets are viewed closer through the viewport they disappear and do not appear again irrespective of the the distance they are viewed from. It would seem that a lower res is initially loaded and the higher res is streamed on demand.
Im currently looking into texture streaming to investigate if it has anything to do with it.