Commercial Property Investment Programme (CPIP) Progress Update
Perth and Kinross Council · 22 April 2026
Back to Economy and Infrastructure Committee — 22 April 2026 and its agenda
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee or Board: Economy & Infrastructure Committee Date of Meeting: 22 April 2026 Report Title: Commercial Property Investment Programme (CPIP) Progress Update Report Number: 26/107 Report Author: Richard Dobson, Physical Infrastructure Project Manager - Estate and Commercial Investment Team Organisational Lead: Serge Merone, Strategic Lead - Economy, Development & Planning ___________________________________________________________________ 1. Purpose 1.1 The purpose of this report is to provide a progress update on the Commercial Property Investment Programme (CPIP), following the decision to allocate an additional £7 million of capital funding to the Programme for the period 2025/26 to 2027/28. This investment is intended to support the delivery of new employment land and buildings in line with the priorities set out in the Council’s Corporate Plan 2022–27. 1.2 Sections 1. Purpose 2. Recommendation 3. Background/Context 4. CPIP Phase I Projects 5. CPIP Phase II Projects 6. CPIP Future Phases Projects 7. CPIP Disposals 8. Financial Position 9. Conclusion 10. Impact Value Assessment 11. Appendices 2. Recommendation It is recommended that the Committee: 2.1 Note the positive progress outlined in this report.
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3. Background/Context 3.1 At its meeting on 27 August 2025, the Committee asked for an update on the Commercial Property Investment Programme (CPIP) to be provided in the Spring 2026 (Report refer 25/211). 3.2 There is a shortage of available serviced employment land and small business units (SBUs) across the Perth & Kinross area. With the private sector currently unable to meet this demand, there is a clear need for the Council to support and promote the development of employment land, attract inward investment, and enable local business growth. 3.3 The Council’s Corporate Plan 2022–27 identifies building a resilient, stronger, and greener economy—driven by business growth and investment—as a key strategic priority. In support of this, the Commercial Property Investment Programme (CPIP) serves as a central delivery mechanism, enabling the development of new Small Business Units (SBUs) and the servicing of employment land (Reports 13/448 and 19/344 refer). Recognising that existing economic development funding was insufficient to deliver the required programme of projects, the Council approved an additional £7 million investment in CPIP for the period 2025/26 to 2027/28 (£3M in 2025/26, £2M in 2026/27 and £2M in 2027/28). As part of this decision, it was also agreed that progress would be reported annually to this Committee to ensure continued oversight of programme delivery, expenditure, and outcomes. 3.4 A dedicated capital funding stream for CPIP is generated through the sale of economic development assets such as serviced employment land. This funding model is cyclical, as many of the assets sold were originally created through earlier CPIP investment. This allows initial capital expenditure to be continually reinvested to support future CPIP projects. 3.5 The Programme has both capital and revenue implications. Borrowing to fund capital works creates an associated revenue commitment, while the sale of income‑generating assets to raise capital receipts reduces future rental income. 3.6 The CPIP Expenditure Programme, provided at Appendix 1, sets out the cost estimates for active projects scheduled for short and medium-term delivery during the period 2026–2034. 3.7 The following sections summarises historic and recent disposals at Northfield Business Park and Kinross West Business Park, detailing CPIP investment to date, the serviced land delivered, and the sales and development agreements progressed. It highlights both the financial returns secured and the wider economic benefits achieved, demonstrating the ongoing effectiveness of CPIP investment in supporting business growth, leveraging private‑sector development, and maintaining a long‑term supply of employment land. Northfield Business Park 3.8 Historic spend of £3.84M on CPIP projects has delivered site infrastructure including internal roads and 6.47 hectares (16 acres) of development land in the area now known as Northfield Business Park, Perth.
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3.9 To date, six sites at Northfield have been disposed of for a total income of £910K. 3.10 Drainage infrastructure capacity issues hindered further disposals, but the servicing of employment land sites was fully completed in 2024 and Graham + Sibbald were appointed as external marketing agents. Sites 9 and 12 went to closing dates in 2025, and the Property Sub-Committee approved the acceptance of offers (Reports 25/125 and 25/220 refer) for an anticipated total of £2.240m Both disposals will be by way of development agreements to ensure that the sites are developed prior to transfer of ownership. 3.11 £2.4M of CPIP funds were spent on the development of five SBUs at Site 5, which are now known as the Perth Food and Drink Park units. These units were completed in 2014. At the time of writing, four of the units are let to tenants that are active in the food and drink sector, with the fifth unit being under offer of let. 3.12 Site 7 and part of Site 6 are earmarked for a Gypsy Traveller Transient Site (Reports 25/220 refer), subject to community engagement and all necessary consents and approvals being secured. Kinross West Business Park 3.13 In 2015, £1.1m of CPIP funding delivered the site infrastructure, internal roads and 10 acres of development land at Kinross West which comprises five sites (see appendix 5). Three of these sites (sites 1, 2 and 3) have been sold Site 5 is at completion development stage for a total of £986,385. Site 4 will be developed as a Council-led scheme for SBUs. 3.14 A development lease for Site 1 at Kinross West has been completed with HGV auto mechanics firm AJ Spence, who were due to receive title transfer and commence operations in October 2025 (see Appendices 9 and 10). The family run business will create two additional skilled fulltime positions, along with one office role and one apprenticeship. 3.15 A development lease for Site 5 at Kinross, progressed by AM AGRI Limited, has received an amendment to the building warrant and is now awaiting a completion certificate from Building Standards. Additional time has been granted to allow the development to be finalised, reflecting the progress made to date (see Appendices 11 and 12). 3.16 Together, these historic CPIP projects demonstrate the sustained effectiveness of the programme in delivering serviced employment land, supporting business expansion, and enabling private sector development that might not otherwise have taken place. This strong foundation provides the context for the sections that follow, which outline the current Phase I and Phase II projects, longer term future phases, and the associated programme of planned disposals. 4. CPIP Phase I Projects 4.1 Section 4 provides an overview of the Phase I projects that are enhancing the quality, performance, and market competitiveness of the Council’s commercial estate. Refurbishment works at Mercian and Crioch, alongside new SBU
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developments at Northfield and Kinross West, are progressing on schedule and are already generating increased market interest and higher rental values. Collectively, these projects strengthen the Council’s commercial offer and position the portfolio for continued economic growth and long-term revenue improvement. 4.2 All Phase I projects were procured through the SCAPE framework, which offers a compliant public-sector procurement route designed to accelerate and streamline the delivery of construction and consultancy projects. As a not-for- profit framework focused on social value and sustainability, SCAPE ensures access to high-quality contractors while supporting net zero objectives and delivering broader community benefits. Mercian Buildings Refurbishment 4.3 Nine business units are located at Mercian Buildings (see Appendix 11). Three units have undergone internal refurbishment, while the entire business centre— originally constructed in the 1980s—has benefited from wider improvement works. These included reinstating the original three unit layout and replacing key components such as external doors, roller shutters, and sections of external cladding (see Appendix 12). 4.4 £451,000 of funding delivered the refurbishment of Mercian small business units using the SCAPE framework. 4.5 One new lease agreement has been secured, with entry scheduled for February 2026. Strong market interest indicates that full occupancy is likely to be achieved shortly, with significantly higher rental levels across the portfolio. Prior to refurbishment, the average rent at Mercian Buildings was £5.90 per sq. ft; the refurbished units are now achieving lease agreements at £8.19 per sq. ft. Crioch Business Centre Refurbishment 4.6 At Crioch Business Centre (see Appendix 13), two units underwent significant refurbishment to reinstate the original two separate business units and upgrade them to an appropriate, modern, and tenantable standard. 4.7 £316,000 of funding delivered the refurbishment of Crioch small business units using the SCAPE framework. 4.8 Two lease agreements are in the final stages of concluding missives and securing occupancy. Current tenant interest indicates that the refurbished units will achieve higher rental rates than previous agreements. Before refurbishment, a typical rental rate at Crioch Business Centre was £6.38 per sq ft; the upgraded units are now securing lease agreements at £10.10 per sq. ft. Northfield Business Centre SBUs 4.9 The CPIP is progressing an active project at Northfield Business Park to deliver eight new SBUs on Site 8, forming the Northfield Business Centre (Phase I). A site plan is provided at Appendix 4. The design team—appointed through the SCAPE framework—includes Perth based mechanical and electrical engineers
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and architects. The estimated project cost is £3.654M. Planning permission (25/01083/FLL) was granted on 23 December 2025, and building warrant approval (25/01007/NDOM8) was issued on 13 January 2026. Construction is scheduled to begin in the second quarter of 2026, with completion expected in the first quarter of 2027 Kinross West Business Centre SBUs 4.10 £2.863 million of CPIP funding has been allocated to the development of Site 4 at Kinross West. This capital project covers the costs of servicing employment land and delivering six SBUs of 7500 sqft (see Appendix 10). The design team— appointed through the SCAPE framework—includes Perth based architects and mechanical and electrical engineers, along with a Dundee based structural and civil engineer. 4.11 Full planning permission (25/01082/FLL) was granted on 21 January 2026. The building warrant application (25/01009/NDOM8) was submitted on 10 September 2025 and is currently awaiting approval. The RIBA Stage 4 budget cost has been completed, and contractor proposals under the SCAPE framework are due to be submitted and reviewed prior to awarding the construction contract. 4.12 Construction is scheduled to begin in the second quarter of 2026, with completion anticipated in the first quarter of 2027. 5. CPIP Phase II Projects 5.1 Section 5 sets out the next pipeline of SBU developments, which are currently at early design or feasibility stages. While these projects carry a lower degree of cost and programme certainty, they represent an important part of the Council’s longer-term investment strategy to expand commercial accommodation and support local economic growth. Each proposal will progress subject to detailed design work, statutory approvals, and confirmation of funding. New SBUs – Northfield Business Centre (Phase 2) 5.2 The Northfield Business Centre has been intentionally structured as a two-phase development. All enabling infrastructure required for Phase II—including roads, parking, and utilities—has already been delivered through Phase I, ensuring the site is fully serviced and ready for construction when needed. Delivering the project in phases allowed CPIP funding to be distributed more evenly across Perth & Kinross in the initial programme, while also providing time for market testing and for refining the design and delivery approach based on lessons learned from Phase I. This phased strategy also provides flexibility to respond to any potential oversupply of small business units in the area and to tailor the Phase II buildout to changing market conditions. 5.3 An additional four SBUs are proposed at Site 8 as Phase II of the Northfield Business Centre. A total of £1.34 million of CPIP funding has been allocated to this phase, which is projected for completion in 2029.
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New SBUs - Welton Road, Blairgowrie 5.4 The site to the south of the Welton Road Industrial Estate has been safeguarded for employment use for several years, and Blairgowrie has consistently been identified as an area with strong demand for modern light industrial accommodation. This capital project proposes servicing the land and delivering associated infrastructure works to create six SBUs of 1,250 sq. ft each, at an estimated cost of £2.6 million funded through CPIP (see Appendix 14). 5.5 A design team will be appointed and instructed to begin work in 2026. An architectural concept—integrating key engineering requirements and aligned with the cost plan, project strategies, and outline specification—will be developed, with project completion anticipated in 2028. Inveralmond Small Business Centre 5.6 The closure of several ATS Euromaster branches across the UK has resulted in the ground lease for the site on Ruthvenfield Road reverting to Council’s Estates. Inveralmond is one of Perth’s prime industrial areas, with consistently strong occupier demand. Although the building could be relet to a similar operator, the existing structure requires significant repairs and mechanical upgrades, and automotive workshop uses are not considered desirable within the Council’s Estates portfolio. This capital project therefore proposes converting and upgrading the former ATS Euromaster building (see Appendix 15), along with associated works, to create four modern, energy efficient SBUs with a total lettable area of 4843 sqft. The estimated cost of the project is £1.2 million, funded through CPIP. 5.7 A design team will be appointed and instructed to begin work in 2026. An architectural concept—incorporating key engineering requirements and aligned with the cost plan, project strategy, and outline specification—will be developed, with completion anticipated by the end of 2028. New SBUs - Burnside Road, Pitlochry 5.8 The disused Burnside Toilets building on Burnside Road, Pitlochry, along with the surrounding land, had previously been marketed for disposal. However, site constraints and areas of contaminated land significantly reduced market interest, and earlier options for residential redevelopment proved unviable. Consequently, concept designs (see Appendix 16) have been prepared proposing the site’s regeneration through CPIP, bringing the land back into productive economic use. 5.9 This capital project covers the costs of demolishing the former Burnside Toilets, servicing the land, and delivering associated works to develop two SBUs of 2500sqft each. The estimated project cost is £600,000, funded through the CPIP. 5.10 Early pre-application discussions with Planning have been positive. A design team will be appointed and instructed to begin work in 2026 to develop an architectural concept that incorporates key engineering requirements and aligns with the cost plan, project strategy, and outline specification. Completion is anticipated in 2028.
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New SBUs - Aberfeldy Industrial Estate 5.11 This capital project covers the costs of developing vacant serviced land, along with associated infrastructure works, to deliver two SBUs of 1250 sqft each. The estimated project cost is £700,000, funded through the CPIP. The project is expected to be completed in 2028. 6. CPIP Future Phases Projects 6.1 Beyond 2028, further phases across various sites in Perth & Kinross will require additional feasibility assessment due to several factors that must be fully understood before any firm commitments can be made. These projects remain part of the long-term development pipeline; however, their progression is likely to depend on potential joint venture arrangements with private sector partners or on decisions made by other Council services. As such, the scope, timing, and funding requirements for these projects are expected to evolve as feasibility work advances and partnership options are explored. 7. CPIP Disposals 7.1 Section 7 sets out the programme of disposals as currently agreed under the CPIP, including assets affected by compulsory purchase, SBUs that have become increasingly resource intensive to manage, ground lease sites identified through the options appraisal, and serviced land suitable for private sector development. In line with the Council’s disposal strategy, income generated from these disposals will be reinvested directly into the CPIP, ensuring that capital receipts continue to support the delivery of new industrial and commercial developments. Compulsory Purchases 7.2 The A9 dualling programme affects existing business units and employment land at both Birnam and Pitlochry. The small business units at Station Road, Birnam, located adjacent to the A9, are subject to compulsory purchase as part of the Birnam–Tay Crossing works scheduled to begin in autumn 2028. Likewise, the 1.02 acres of previously allocated employment land at Fonab Business Park, Pitlochry, will no longer be available for CPIP development. All five marketed plots at Fonab are expected to be acquired through compulsory purchase as part of the Pitlochry–Killiecrankie dualling works, with acquisitions anticipated to commence in autumn 2026. Small Business Units 7.3 Within the Council’s Estates portfolio, several small business centres are becoming increasingly challenging to manage due to rising repair requirements and falling below the energy efficiency standards set out in the strategic plan. While disposal of these centres would reduce the rental income currently generated, the resulting capital receipts can be reinvested into the CPIP to fund modern, energy efficient units that offer higher long-term rental values and significantly lower maintenance liabilities. This approach ensures that short-term revenue reductions are offset by long-term improvements in asset performance and financial sustainability. Modernising the commercial employment portfolio
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also helps prevent future management burdens from exceeding the Council’s operational capacity. Ground Lease Disposals 7.4 The Council approved the sale of five industrial ground lease sites to a private landowner (report 25/126 refers). While this approach places some pressure on the revenue budget, it increases the capital available for economic development, supports the delivery of the proposed Inveralmond South development, and strengthens the overall supply and market potential for serviced employment land and small business units across the region. No additional Ground lease disposals are planned in line with Council’s Property Investment Strategy. Serviced Land Disposals 7.5 The CPIP originally enabled the development of the Northfield and Kinross West industrial estates, creating fully serviced employment land for small and medium sized businesses expanding beyond traditional small business units. These plots offer opportunities for companies to design and construct bespoke premises tailored to their long-term operational needs, making them more suited to private sector development than Council led construction. Accordingly, these plots could be considered for disposal, with the resulting capital receipts reinvested into the CPIP to support future projects and maintain a pipeline of modern, fit for purpose commercial accommodation. Asset Revenue Anticipated income baseline for Disposal Target Date for disposal CPOs Birnam CPO £5,001 £130,000 2029 Fonab CPO £0 £243,000 2028 Existing SBUs *Fonab SBUs £16,000 £160,000 2028 *Mercian Buildings £73,000 £550,000 2030 *Crioch Business Centre £50,250 £400,000 2028 *Food and Drink Park £69,250 £645,000 2029 Ground Leased Land Inveralmond & Whitefriars £78,580 £1,445,000 2028 Serviced Land Disposals £0 £2,848,000 2029 Total £292,081 £6,421,000 * Subject to Property Sub-Committee consideration in terms of preferred offers. 8. Financial Position 8.1 Section 8 presents the financial assessment for Phases 1 and 2 of the CPIP, incorporating capital costs, projected rental income, and the revenue impact of planned disposals. Projects Rental income Project Costs Phase 1 Mercian Refurbishment £24,450* £451,000 Crioch Refurbishment £13,900* £316,000
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Northfield Business Park £100,000 £3,654,000 Plot 4 Kinross West £75,000 £2,683,000 Phase 2 Welton Road SBUs £75,000 £2,600,000 Northfield Business Park (Phase 2) £50,000 £1,340,000 Burnside Street SBUs £25,000 £600,000 Inveralmond SBUs Road £50,000 £1,200,000 Aberfeldy SBUs £25,000 £700,000 Total £438,350 £13,544,000 *Rental uplift for refurbished industrial units 8.2 Current borrowing rates are 3.5%, which equates to a revenue cost of £35,000 per £1 million borrowed. Total CPIP expenditure across Phases 1 and 2 is estimated at £13,544,000, of which £6,421,000 is expected to be met through planned disposals, resulting in revenue implications of £292,081 over the period. While this introduces some financial pressure, the CPIP remains a critical mechanism for enabling development that would not be delivered by the private sector alone. 8.3 By providing modern commercial space, servicing employment land, and unlocking constrained sites, the programme supports business expansion and stimulates further private sector investment. Although borrowing costs are not fully offset by direct financial returns, the wider economic, social, and regeneration benefits—including job creation, improved business infrastructure, and enhanced conditions for local growth—demonstrate the programme’s strategic value and justify continued investment. 9. Conclusion 9.1 The CPIP continues to make strong progress in delivering new and improved commercial assets that address the shortage of serviced employment land across Perth & Kinross. Phase 1 projects are already strengthening the Council’s commercial estate, while Phase 2 and future phases will further expand opportunities for business growth and investment. 9.2 The programme remains a key mechanism for tackling market failure and supporting sustainable economic development across the region. The additional borrowing approved for CPIP has significantly enhanced the Council’s capacity to deliver development at scale, enabling projects that would not have been achievable under previous funding levels. This investment has accelerated the delivery of modern commercial space and unlocked sites that the private sector could not viably develop alone. 9.3 Continued commitment to the programme will ensure the Council is well placed to meet future demand and maintain a competitive, high-quality commercial property portfolio that supports sustained business growth and contributes to wider regional prosperity.
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10. Impact and Value Assessment 10.1 This report has been classified as being an operational report and as such does not require a full Impact and Value Assessment. 11. Appendices Appendix 1 - CPIP Expenditure Programme Appendix 2 - Site Plan - Northfield Business Park Appendix 3 - Site Plan - Food & Drink Park SBUs Appendix 4 - Site Plan - Northfield Business Centre (Phase I) Appendix 5 - Site Plan - Kinross West Appendix 6 - Site Plan - Site 1, Kinross West Appendix 7 - Photographs - Site 1, Kinross West Appendix 8 - Site Plan - Site 5, Kinross West Appendix 9 - Photographs - Site 5, Kinross West Appendix 10 - Site Plan - Kinross West Business Centre Appendix 11 - Site Plan - Mercian Buildings Appendix 12 - Photographs - Mercian Buildings Appendix 13 - Site Plan - Crioch Business Centre Appendix 14 - Site Plan - Welton Road Business Centre Appendix 15 - Site Plan - Inveralmond Business Centre Appendix 16 - Site Plan - Burnside SBUs