Many thanks for the prompt reply. Issue has been solved.
here's what i did :
1. Replaced all the Catel.* WPF/Silverlight templates installed in %VSInstallDir%\Common7\IDE\ProjectTemplates\Catel
with the one from the download link you provided.
2. Created new project and resolved assembly references using NuGet.
3. Templates compiled fine, no errors.
so perhaps the templates that came along with Catel 3.1 Setup installer weren't updated.