Paisley Centre - update - Nov 2025 -final V6
Renfrewshire Council · 4 November 2025
Back to Economy and Regeneration Policy Board — 4 November 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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PUBLIC ___________________________________________________________________ To: Economy and Regeneration Policy Board On: 4 November 2025 ___________________________________________________________________ Report by: Chief Executive ___________________________________________________________________ Heading: Paisley Centre Redevelopment - Update ___________________________________________________________________ 1. Summary 1.1 The purpose of this report is to provide an update on the proposed redevelopment of the Paisley Shopping Centre since grant of planning permission in principle in March 2022 and an update report presented to this Board in November 2023. 1.2 The conclusion drawn by officers, based on the information provided to date by the proposed developer and the analysis of options in terms of the Council’s direct involvement in the currently proposed development, is that it is financially unviable. ___________________________________________________________________ 2. Recommendations 2.1 It is recommended that the Board: i. Notes the content of this report. ___________________________________________________________________ 3. Background 3.1 The Paisley Centre was opened in 1992 and became the second principal shopping mall in Paisley Town Centre, after the Piazza Centre at Gauze Street. Like all shopping malls it has gone through periods of transition as shopping habits and formats have changed. In recent years as footfall has moved away from traditional town centres to other retailing offers, particularly to online purchasing, and the Centre has seen significantly reduced demand for its available units.
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PUBLIC 3.2 In 2020, Beyond Retail purchased the shopping centre with the purpose of exploring repurposing and redevelopment options. They engaged early with Council officers in pre-application discussions which led to the submission of a “masterplan application” in November 2021. This application for a mixed-use redevelopment, including residential, hotel, health centre, offices, retail and leisure was approved by the Council’s Planning Board in March 2022. 3.3 In November 2023 the Council’s Economy and Regeneration Policy Board considered a report from officers and agreed that: • the Council would continue to work with Beyond Retail to develop a full business case for the proposed redevelopment of the Paisley Centre site; • regular update reports will be brought back to board as the business case is progressed; and • in due course Beyond Retail’s business case would be brought to Board for consideration. ________________________________________________________________ 4. What has happened since November 2023 4.1. Over the last 2 years discussions have continued on the proposition being made by Beyond Retail to Renfrewshire Council. A proportion of this period has been spent awaiting a beneficial change in the national economic position regarding interest rates for borrowing the capital cost of the proposed development from the landowner’s perspective. 4.2 In June 2025 Beyond Retail presented a revised proposition to the Council seeking (as with their position at 2023) the local authority taking a long term “income strip” lease of the new development (hotel, residential, retail and other commercial space) at a pre-determined annual rental level. The Council would retain the income derived from the sub-leases to the occupiers / operators of the development and would subsequently take full ownership of the development outright once the lease was concluded. 4.3 The most significant change to the proposal from the earlier position (2023) was to the capital cost of the development and the proposed headlease terms to the Council. The estimated capital costs of the headlease, which is directly linked to the capital cost to deliver the proposed development, had increased substantially by around 40% and this change was consistent with concerns previously expressed by officers (in 2023) that the estimated development costs of the proposal were undersized. 4.4 To seek to mitigate the impact of this increase in capital costs on affordability, the developer proposed a significantly extended lease arrangement (50 years as opposed to previously proposed 35 years) to the Council. This increase in the proposed lease duration is intended to reduce the initial year 1 lease costs (which would be subject to annual indexation over the life of the lease) to improve the affordability assessment, particularly over the initial years.
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PUBLIC 4.5 There has been no material change in the assessed income that the completed development is likely to generate (since 2023 assessment), and such was the shift in estimated capital cost of the lease, the year 1 lease cost under the 50 year proposal was more expensive than the previous 35 year comparable terms. Consequently, the fundamental financial appraisal from the perspective of the Council had weakened significantly between 2023 and 2025. 4.6 The principle of a 50-year lease presents risks and challenges to local authorities, particularly given that part of the proposed development (hotel) is intended to be in a refurbished existing building. This would mean that the hotel building (at the end of the 50 year lease) would be over 80 years old. 4.7 Overall the risks can be summarised as: • the Council would carry all the commercial risk and responsibility for income generation across multiple land uses and over the 50 year duration of the lease; • needing to ensure that best value can be demonstrated in terms of the use of available public funds; • income strip leases of 50 year duration involving local authorities tend to be very much a niche market and limited to high demand and high economic value locations in some of the UK’s largest cities, particularly central London; • such a long lease period would present challenges in terms of the affordability of lifecycle maintenance and the scale of interventions required over this length of time; • with no material change in assessed income potential the significant increase in estimated capital delivery costs has significantly weakened the viability of the project. • for accounting purposes, the property assets and lease would need to be reflected on the Council’s balance sheet which presents difficulties as only exceptional new build assets would be accounted for and written off over a period of circa 50 years (an example would be the new Renfrew Bridge which has a design life of 120 years+). ________________________________________________________________ 5. Viability of the proposed development 5.1 Aside from the length of the lease term being proposed there are several fundamental viability challenges with the proposed redevelopment of the Paisley Centre. 5.2 The Nov 2023 Board report highlighted the “market failure” position sites such as this find themselves in. The private sector will not develop the site independent of public sector support as it will cost more to construct and operate than will be returned through income. In the Council’s analysis, this was the case with a proposed offer of a 35 year lease term and remains, albeit more acutely, the case over a 50 year lease period.
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PUBLIC 5.3 This viability dilemma is accentuated in towns such as Paisley where the achievable income from hotel accommodation or rental income for a residential apartment is significantly lower than that which could be achieved in, for instance, central Edinburgh or Glasgow City Centre. This means that although the capital development costs are similar predicted income is much lower. This results in development proposals of this type in locations like Paisley being extremely marginal at best, and more often commercially unviable. 5.4 Analysis of the development’s financial appraisal by Council officers would indicate that the proposed Paisley Centre redevelopment would need to be cross-subsidised with up-front pump prime grant funding of between £10m and £15m to achieve a potentially viable 35 year proposition for the Council to consider (it should be noted that such a proposition would still expose the Council to significant commercial risk over the life of the project). 5.5 Early discussions have taken place with Scottish and UK Governments in terms of potential funding sources that may become available to support the current Paisley Centre proposals. To date no confirmation of such funding or potential funding routes at this scale being available to the Council has been made. These discussions have included exploring other funding options (eg. growth accelerator model or similar) with Scottish Government. These conversations are only at a preliminary stage and may yet identify future opportunities that could emerge for example from UK and Scottish Government comprehensive spending review announcements . 5.6 Even if a pump-prime funding source were to be made available and secured for the regeneration proposals, there would still require to be a full commercial business case developed for what would remain a complex commercial operation that would carry a wide range of long term financial risks. This would include fully costed detailed designs for the proposed floorspace and all the associated elements along with fully updated commercial due diligence appraisals of the range of commercial elements of the development from the hotel, commercial, retail & food and drink floorspace and build to rent residential development. Reference was made to this requirement in the November 2023 report. To date Beyond Retail have not been willing to fund detailed designs without having an in-principle agreement from Renfrewshire Council to agree to the proposed 50 year lease. 5.7 Given the level of uncertainty involved in the development’s viability, combined with the risks associated with agreeing to the proposed lease duration and the identified need for some form of significant pump-prime grant support to support a 35 year lease term, the Council have not been able to offer this level of assurance to Beyond Retail. 5.8 Section 5 of the November 2023 Economy and Regeneration Board report highlighted a number of fundamental and challenging issues for the business case process. Due to the lack of additional detail provided since this date and no route or source yet identified for a significant regeneration grant it has not been possible to offer the Council assurances in terms of how these can be overcome. ___________________________________________________________________
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PUBLIC 6. Next steps 6.1 These are not particularly clear currently. Beyond Retail owns the site and they continue to operate the shopping centre on a day to day basis. 6.2 Based on what has been provided to the Council to date, officers are unable to meaningfully progress any partnership approach with Beyond Retail to develop a viable business case for the current proposed redevelopment for the Council to consider. At present the proposal’s financial fundamentals represent a significant risk and unviable proposition. It is recognised at this stage that to overcome such financial deficiencies, a source of significant national regeneration grant funding would need to be introduced into the funding mix to move the proposal into a position that could offer the Council a viable, but not risk free, long term commercial proposal to consider. 6.3 Council officers will continue to maintain a dialogue with Scottish and UK Government officials in terms of alternative options and funding sources to assist the deliverability of the proposals. 6.4 Further update reports will be brought back to the appropriate Council Board should the above circumstances change. ___________________________________________________________________ Implications of the Report 1. Financial – None at this stage. The Council commitment of up to an estimated £0.1 million funding from existing regeneration resources to support the commissioning of relevant expertise and advice for the Council remains in place. 2. HR & Organisational Development – None. 3. Community/Council Planning – Jobs and the Economy - the scheme has the potential to secure additional income for Renfrewshire based businesses, which in turn could support more investment and jobs within the local economy. 4. Legal – None at present. Any changes to this would be the subject of subsequent reports to Board. 5. Property/Assets – None at present. Any changes to this would be the subject of subsequent reports to Board. 6. Information Technology - None.
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PUBLIC 7. Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. 8. Health & Safety – None. 9. Procurement – None. 10. Risk – There are a number of potentially unacceptable commercial risks which the Council would face as are outlined in the report. 11. Privacy Impact – None. 12. COSLA Policy Position – Not applicable. 13. Climate Risk – Not applicable. 14. Children’s Rights – Not applicable _________________________________________________________ List of Background Papers • Paisley Centre redevelopment – update; Economy and Regeneration Policy Board; 7 November 2023 Author: Alasdair Morrison; Head of Economy and Development; Email: alasdair.morrison@renfrewshire.gov.uk