'The Heiton' - 1-5 High Street Hotel Development
Perth and Kinross Council · 10 December 2025
Back to Perth and Kinross Council — 10 December 2025 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: Perth and Kinross Council Date of Meeting: 10 December 2025 Report Title: ‘The Heiton’ - 1-5 High Street Hotel Development. Report Number: 25/355 Report Author: Jonathan Janes, Estates and Commercial Investment Team Leader Organisational Lead: Lisa Simpson, Strategic – Lead, Legal and Governance and Serge Merone, Strategic Lead – Economy, Development and Planning ___________________________________________________________________ 1. Purpose 1.1 The purpose of this report is to seek Council approval to nominate Lock Terrace Ltd and its directors as the developer for the proposed ‘Heiton’ hotel at 1–5 High Street, Perth. This recommendation follows a recent due diligence review, prompted by changes in the status of the previously preferred bidder, ahead of the building’s planned redevelopment. 1.2 Sections 1. Purpose 2. Recommendations 3. Background/Context 4. Proposals 5. Conclusion 6. Impact Value Assessment 7. Appendices 2. Recommendations The Council is asked: 2.1 To agree to nominate Lock Terrace Ltd and its directors as the developer and to approve the revised proposed ‘Heiton’ hotel development at 1-5 High Street, Perth.
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2.2 To note the due diligence review in the report. 2.3 To agree that Strategic Lead – Economy, Development and Planning provides a progress update at a future meeting. 3. Background/Context 3.1 The building at 1–5 High Street, Perth, was constructed in 1879 and is category ‘B’ listed. It was previously used as Council offices and was declared surplus to requirements in 2008. The Council has continued to incur costs for the maintenance of the building estimated at 143,000 per annum since then. The building was marketed for disposal and to be transformed into a hotel. 3.2 On 30 July 2020, the Council agreed (Report 20/128 refers) to confirm Henley Homes Group as the preferred bidder for the sale of 1-5 High Street, Perth to allow officers to commence negotiation on the terms of disposal. 3.3 There was an associated offer of a grant of £1.9m to help offset some of the heritage-related costs identified in the viability assessment. The grant funding was deemed essential to making the scheme viable, which was consistent with the opinion of our external experts given the complexity of the building lay-out and its historic and architectural significance. The grant was also conditional on maintaining public access in recognition of the local heritage significance of the building, in addition to covering the extra heritage expenses. The Council proposes to borrow from the Public Works Loan Board to fund the grant, with the loan charges being met from the current operating budget. This approach will still deliver a net reduction in the Council’s annual expenditure on the building. For clarification, it is not intended that the development company be required to repay the grant as the grant funding was considered essential to ensure the scheme’s viability. Upon completion and opening of the hotel, ownership will transfer to the development company, and the Council will have no further responsibility for the building ending its existing liability for the maintenance and repair of the building. 3.4 On 27 April 2022, the Council agreed (Report 22/107) to conclude a development lease with the preferred bidder. 3.5 Henley Homes Group Ltd was a well-regarded organisation with a strong track record in regeneration and design, having received over 50 industry awards. The group comprised a range of businesses involved in manufacturing, design, construction, and development across both mixed-use and hotel sectors. 3.6 Following the Council’s initial decision, significant changes occurred in both the economic environment and the internal structure of the preferred bidder. Early delays were largely due to the uncertainty caused by the Covid-19 pandemic, which affected the economy at both local and global levels. As a result, the developer was unable to enter into a legally binding agreement with the Council.
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In response, the Council agreed to pause the process to allow time for market conditions to stabilise and for the developer to reassess their position. 3.7 During this pause, a major development occurred: Henley Homes Group entered administration in April 2023. Consequently, Henley Homes Group and its construction arm, Henley Construct Ltd, were dissolved. 3.8 In February 2023, Lock Terrace Ltd was established by two former shareholders of Henley Homes Group—Tariq Usmani MBE and Kashif Usmani. 3.9 Lock Terrace Ltd and its directors remain fully committed to delivering the proposed 74-key hotel in Perth, to be named The Heiton in honour of the original architect. The business model has evolved from the original concept which included restaurants and bar on-site. The proposed business model is designed around good quality serviced accommodation with limited on-site provision. It will allow guests to spend more outside the hotel and support local restaurants, bars and other leisure and wellbeing services. The design and concept of The Heiton Hotel (see Appendix 1 & 2) will closely mirror the style of the recently completed Wellington Hotel in Glasgow and Hobson in Cambridge. As part of the design, Lock Terrace Ltd has requested the use of the single storey garage located at the rear (see Appendix 7) and it is proposed to investigate the feasibility of accommodating this request. This would be dependent upon a Perth Common Good Fund consultation and approval process. 3.10 The directors are keen to ensure that the challenges faced by Henley Homes Group do not hinder progress on this exciting new project. They have shown their commitment to the Perth development by taking forward the planning application which was approved by the Planning and Placemaking Committee meeting held on 5 November 2025 (Refers 24/01613/FLL). As there was an objection from SEPA, the decision was referred to Scottish Ministers for consideration. A separate Listed Buildings Consent application is also being progressed. For information, planning condition 24 states that prior to completion or occupation of the development hereby approved, whichever is the earlier, details of managed tours of the building to facilitate public access to the historic interior should be submitted to and agreed by the Council as Planning Authority. The details as agreed shall be implemented in full. 4. Proposals 4.1 Considering the history, a due diligence review was carried out on Lock Terrace Ltd and its directors. The review was structured around reputational, financial, and project governance and operational delivery risks to the Council and the project. The review and risks are detailed below.
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Reputational risks 4.2 We asked a series of questions in relation to reputational risks and the responses have been reviewed. Q- Who are the Directors of Lock Terrace Ltd, what are their backgrounds and core areas of expertise? A-The Directors of Lock Terrace Ltd are Tariq Usmani MBE and Kashif Usmani. Lock Terrace corporate brochures (See Appendix 3 and 4) provide useful context for their experience in hospitality and mixed-use developments. Tariq Usmani leads on investment, planning, and acquisitions, while Kashif Usmani oversees construction and project delivery. In 2011, they were co- founders of the Better Community Business Network (BCBN), a grant-giving charity which also acts as a networking forum for government, business professionals and charities. BCBN has raised over £1.3M in funds for UK community causes, and both directors remain active Trustees. Tariq Usmani is also Chair of the Feltham Community Chaplaincy Trust (a registered charity working out of Feltham Young Offenders’ Institution providing mentoring and support towards reducing re-offending rates), and Vice-Chair of West London Islamic Centre, Ealing. He is a lay person on the Ministry of Justice strategic interview panel. Tariq Usmain awarded an MBE in the 2017 New Year’s Honours list for his services in community cohesion. Q-Can you provide an overview of companies that the Directors of Lock Terrace Ltd are or have been involved with and the circumstances surrounding the dissolution of Henly Homes Group and related companies? A- A full list of companies has been provided which provides a clear understanding of the past and current positions of the directors of Lock Terrace Ltd. Legal and Finance have reviewed the circumstances surrounding the dissolution of Henley Homes Group and are satisfied with their version of events leading to the inception of Lock Terrace Ltd. Q-What are the most recent and relevant completed projects by the directors of Lock Terrace Ltd? A- The directors of Lock Terrace Ltd have successfully delivered a number of projects. These completed developments reflect the directors’ continued commitment to quality and delivery. The directors have demonstrated the expertise required to refurbish and complete complex hotel and residential schemes. These include: • The Hobson, Cambridge (by Hobson Cambridge Ltd): a 56-key hotel, completed and sold. • The Wellington, Glasgow (by RC3P Ltd): a 98-key hotel, completed and sold. • The Gilbert, Kensington (by Essential Kensington Ltd): an 84-key hotel, completed and sublet to Sonder, a Marriott Hotels company. • Rembrandt House, Watford (by Cameron West Ltd): seven residential flats, completed and sold. • 106 Grove Vale, East Dulwich, London (by OBH2 Ltd): three residential flats, completed and sold.
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Q-Have any directors been involved in failed developments or insolvencies? A-No failed developments in past or insolvencies prior to 2023/24. Q-Are any directors disqualified or under investigation by regulatory bodies? A–No Q-Are there any ongoing or past legal disputes involving the company or Directors of Lock Terrace Ltd? A-No 4.3 Based on the review of the information provided, we consider that the reputational risks to the Council and the project are medium. There are still reputational risks due to the circumstances surrounding the dissolution of Henley Homes Group. It is proposed to mitigate the risks by the due diligence process leading to the inclusion of various conditions in the development agreement which will be kept under close review. Financial risks 4.4 We asked a series of questions in relation to financial risks and the responses have been reviewed. Q-Please provide a statement on the reasons for the liquidation of Henley (and the various group) and the status of the debtors/unpaid debt? A-A statement has been provided, and liquidators reports have been reviewed. Finance is content with the contents of these reports. Q-Can you provide recent Lock Terrace Ltd annual accounts even if not audited? Please provide recent annual accounts for the other companies involved in the development. A-Annual accounts for the companies have been provided and have been reviewed by Finance. The information is limited due to the infancy of the company. The accounts that have been provided are acceptable. Q- Are there any contingent liabilities or legal claims against the companies? A-No Q- What are the key financial threats to the project and what measures are in place / planned to mitigate these? A-All elements have been properly costed, based on real-time cost information and factoring in inflationary allowances and contingency. The biggest threat is planning. Planning consent has been approved by Planning and Placemaking Committee on 5 November 2025. As there was an objection from SEPA, the decision was referred to Scottish Ministers for consideration with 28 days from the referral. When planning has been completed, the lender details include financing could be progressed. Q-Can you please provide an updated independently assessed Development Appraisal for the full scheme? This will require measurement in terms of gross development value, construction costs and your profit on cost return.
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A- A viability report has been provided by the Company, but will need to be independently assessed prior to the development agreement being signed. Q-How is this project being financed (equity, loans, joint ventures)? What is your current debt-to-equity ratio? A-Finance has not been arranged yet until planning process is completed. Q- Are you planning to seek a buyer after a few years of operations? A- The company strategy is to continue the building of its hotel portfolio. As such, they have no intention of selling any of their assets in the near or the mid-term. 4.5 Based on the review of the information provided, we consider that the financial risks to the Council and the project are medium. It is proposed to mitigate the risks by requesting a full independent viability assessment by a third party, including market analysis of gross development value, development cost breakdown, professional fee review, and profit margin evaluation. Other measures to mitigate the financial risk will include the submission of evidence confirming full project funding, including proof of equity aligned with the proposed debt-to-equity ratio and the establishment of a stage payment agreement to ensure £1.9m grant funding is released only upon verified expenditure by the developer. This will include proof of payment to subcontractors as part of the audit process. Project Governance and Operational Delivery risks 4.6 We asked a series of questions in relation to project governance and operational delivery risks, and the responses have been reviewed. Q-Please advise which companies will be involved in redevelopment of 1 to 5 High Street and their role in the development and provide details of Directors and key officers for each company involved. Please provide details of the company that will be operating the hotel. A-The following information has been provided: Property Company: ‘Heiton Hotel Ltd’ – Directors: Tariq Usmani and Kashif Usmani. Operating Company: ‘Essential Hotel Management Ltd’ - Directors Tariq Usmani and Kashif Usman. The ‘Rogue City Hotel’ Brand will be used. Q- How does the director set up differ from that of Henley Homes Ltd prior to their insolvency? A-Lock Terrace is agile and efficient, leveraging Artificial Intelligence and other technology. It has retained key members of the Henley Group team, who have been with the directors for between 12 and 25 years, thus retaining its intellectual capital.
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Q-Who are your key contractors, consultants, and suppliers? A-The appointed main contractor for the redevelopment is Reach CM Ltd, owned by Aaron Usmani. He was previously the construction director at Henley Construct Ltd prior to its dissolution alongside Henley Homes Group. Reach CM is an experienced contractor, having specialised both in hotels and listed buildings. Reach CM holds the following accreditations: ISO9001, ISO14001, ISO45001, CHAS Elite, Constructionline Gold, and are members of the Considerate Contractors Scheme. They are registered with ICW as their new homes warranty provider. Reach is also registered on numerous public sector procurement frameworks. They have recently been awarded Commercial Project of the Year by the London Construction Awards 2025 for their delivery of The Hobson. They were also a finalist for The Wellington in the same category. The judges “…were highly impressed by Reach CM’s sensitive and thoughtful conversion of a listed building, which beautifully restores its historic features while introducing bold, contemporary elements. Every design choice adds value, celebrating the building’s heritage while modernising it with incredible attention to detail.” Reach CM has a strong supply chain in Scotland. Other than specialist/bespoke items, Reach CM is responsible for procuring all other sub-contractors and materials (See Appendix 5). 4.7 The proposed primary consultants are: • Architect: Convery Prenty Shields, Glasgow • Structural Engineers: Harley Haddow, Edinburgh • Mechanical & Electrical Consultant: Butler Consulting, Glasgow Q-What is the detailed project timeline with key milestones and dependencies? A- A master programme and a critical path programme were provided. These assume a start on site date of 2 February 2026, with a practical completion date of June 2027. Q-What is your contingency plan for cost overruns or delays? A-The programme is based on extensive knowledge and experience of large- scale mixed-use developments, with specific understanding of listed buildings and the complexities inherent within hotel infrastructure. Cost over-run: a contingency is included within the programme. Programme delays: a two-month contingency has been built in the master programme. The development is managed by the master programme, which cannot be extended without prior approval. The contractor is heavily incentivised to deliver in accordance with budget and programme. To manage programme delivery, a further three look-ahead programmes: three months, 6 weeks and 1 week have been included to gives visibility. A competent and reliable supply chain in Scotland has been identified to assist in delivery with a very tight control over the procurement programme.
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Q-How do you manage community engagement and planning risk? A-The developers have managed several complex major applications. These include large-scale developments, listed buildings, and change of use applications, all of which involved stakeholders with complex and competing needs, along with political and press interest. The community engagement would be managed by a PR team. However, in sensitive situations, directors would manage stakeholder engagement to fully understand the importance and sensitivities. This is managed by running community outreach events to explain plans in detail, to answer any questions, and to address any concerns before they turn into objections. Q-How do you ensure compliance with building regulations and environmental standards? A-To ensure compliance with building regulations and environmental standards, the directors engage at an early stage with the design team (including architect, building control, M&E consultants, structural engineers and fire consultants) to set the performance standards required, and incorporate these standards into the final design. This enables the design to be compliant with the relevant legislation, ensuring the safety and structural integrity of the building. A building control tracker is created and maintained with the building control consultant monitoring progress against key tasks. Sustainable practices are embedded into specification, procurement and construction methods. Low-impact materials are favoured, as well as off-site manufacture, and energy-efficient equipment. Habitat disruption will be minimised. A project-specific waste management plan will be developed enabling site waste to be separated into channels for recycling or correct disposal. Performance will be monitored regularly to promote transparency and accountability. Materials will be chosen that are fit for purpose, which have robust characteristics suitable for the building, and longevity. The project at Perth will discreetly integrate high levels of technology to prioritise low energy use, such as those offered by Nonius Technology. This would be sensor-based to enable heating and lighting to automatically shut off in unused spaces, for example. This holistic strategy ensures that construction progresses responsibly, with minimal environmental footprint. Q-What types of insurance are in place for the project (e.g. professional indemnity, construction risk)? A-Reach CM holds Employers Liability, Public Liability, Products Liability, Professional Indemnity, and Contractors All Risks policies. These are then reviewed and further tailored for each project, to ensure that there are no gaps in cover. Q- What governance structures do you have in place for project oversight, including board composition, frequency of meetings, and reporting mechanisms? A-The following information has been provided: Design & specification: this element is substantially complete and includes furniture specification.
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Project oversight: this is delivered by monthly diarised project review meetings, which look critically at construction progress against programme, cost to date, and cost to complete. Procurement programme and any risks or liabilities that have become apparent in the last month will also be monitored. The meetings will be attended by board directors and senior site-based staff. The business conducts a weekly all-hands meeting as an information share platform. A software programme called Asana is used throughout the business and is also integrated into Reach CM as the contractor. Asana enables daily task and project management, offers top-down oversight, and generates project reports. Asana manages tasks that may be overdue but is also used to identify risk and how that risk is managed and mitigated on a daily and weekly basis. Q-How do you ensure transparency and accountability in decision-making? How are key stakeholders (e.g. investors) engaged in governance and oversight? A-Transparency and accountability are managed through the reporting structures and effective oversight of the business using the appropriate tools. The operations will be with a ‘single point of responsibility’ mindset, which offers autonomy, accountability, and a strong focus on delivery. The business is focussed on measuring what matters, and it uses the Objectives and Key Results (OKR) model, which provides objective transparency. Generally, the lenders are the major stakeholders, and a strong positive relationship is maintained throughout. Depending on the project, there may also be other statutory authorities who would also adopt this position. The developers have worked extensively with local authorities, and with listed and heritage building organisations. They indicated that they are a details-oriented business with effective communication, trusted by stakeholders and that trust is based on transparency, with high quality data delivered in anticipation of their needs. 4.8 Based on the review of the information provided, we consider that the project governance and operational delivery risks to the Council and the project are low. It is proposed mitigate the risks by requesting that full planning permission, building warrant and all necessary consents be secured. In addition, clear communication and monitoring mechanisms will be established to ensure transparency in relation to costs, investment, and supply chain during the construction delivery phase. Overall assessment 4.9 Based on the information provided by Lock Terrace Ltd and its directors, the overall risk to the Council and the proposed development is assessed as medium. To address and manage these risks effectively, a series of mitigation measures will be embedded within the development agreement. These measures will be tied to key milestones that must be achieved prior to the granting of a development lease for construction works and which development lease will provide for the transfer of title on successful completion.
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The required milestones include: - Securing full planning permission. - Obtaining a Building Warrant. - Acquiring all other necessary statutory consents. - Completion of a full independent viability assessment by a third party, including market analysis of gross development value, development cost breakdown, professional fee review, and profit margin evaluation. - Submission of evidence confirming full project funding, including proof of equity aligned with the proposed debt-to-equity ratio. - Establishment of a stage payment agreement to ensure £1.9m grant funding is released only upon verified expenditure by the developer. This will include proof of payment to subcontractors as part of the audit process. - Establishment of communication and monitoring mechanisms to ensure transparency in relation to costs, investment, and supply chain during the construction delivery phase. 4.10 Based on Lock Terrace Ltd and its directors’ experience in this sector allied with their commitment and willingness to proceed, we believe that they are capable of delivering this project to its conclusion. 4.11 Based on the due diligence review and the proposed mitigation measures, it is recommended that the Council agree to nominate Lock Terrace Ltd and its directors as the developer for the proposed ‘Heiton’ hotel development at 1-5 High Street, Perth. 5. Conclusion 5.1 The building at 1–5 High Street, Perth, previously used as Council offices, has been declared surplus to requirements. Its proposed transformation into a hotel represents a strategic opportunity to enhance Perth’s tourism infrastructure, stimulate local economic growth, and preserve a historically significant asset within the city centre. The redevelopment is expected to generate new employment opportunities, increase visitor footfall, and support surrounding businesses. Although initial progress was delayed due to the Covid-19 pandemic and changes in the status of the original preferred bidder, a comprehensive due diligence review has now been completed. It is therefore recommended that the Council nominate Lock Terrace Ltd and its directors to take forward the ‘Heiton’ hotel development, unlocking the site’s full economic potential. 6. Impact Value Assessment Appendix 6
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7. Appendices Appendix 1: Brochure of ‘The Heiton’ Appendix 2: Floor Plans of ‘The Heiton’ Appendix 3: Brochure Lock Terrace Appendix 4: Brochure Lock Terrace Listed Buildings Appendix 5: Brochure Reach CM Appendix 6: Impact Value Assessment Appendix 7: Committee Report (20/128) Revised Plan