Perth hotel developer Henley Homes collapsed with £67m debts

A hotel developer, chosen by Perth and Kinross Council to buy its former offices for £1, collapsed with debts of more than £67 million.

The council named Henley Homes its preferred bidder to convert the empty building at 1-5 High Street into a luxury hotel five years ago.

But the London firm is now in liquidation.

And The Courier can reveal its debts amounted to an eye-watering £67m.

The sum included £36m linked to the crash of its construction wing, £9m for cladding remedial works and a court-ordered pay-out of £2.38m to a former director following his “acrimonious departure from the company”.

1-5 High Street exterior, showing turrets and tall windows — The former council building, 1-5 High Street, Perth. Image: Steve MacDougall/DC Thomson

A different firm, Lock Terrace Ltd, has now submitted a planning application to convert 1-5 High Street.

It is fronted by two of Henley Homes’ former officers.

Until now it had been reported that the venue – to be known as The Capital – would operate as part of the Rogue City Hotel Group, another Henley company.

But on Wednesday we revealed Rogue City Hotel Group is also being wound up.

And another of its properties, the five-star Dunalastair Hotel Suites at Kinloch Rannoch, is now in administration.

Henley Homes in line for £1.6m heritage funding for Perth project

Henley Homes’ financial woes are laid bare in a report by the official liquidator at Companies House.

Dunalastair Hotel Suites in Kinloch Rannoch, a large, traditional stone-built two storey building — Dunalastair Hotel Suites at Kinloch Rannoch. Image: Graham + Sibbald

It reveals the company went into administration in 2023.

The Dunalastair Hotel Suites is listed as one of its main assets.

The Highland Perthshire landmark went on the market for £3.25m last year, but failed to sell.

Henley Homes also owed HMRC more than £350,000, and former staff more than £294,000 in redundancy payments.

Unsecured creditors have been told they can expect a little over 5p for every £1 they’re owed.

Perth and Kinross councillors voted to offload 1-5 High Street in October 2020.

Questions were asked over Perth and Kinross Council’s deal with Henley Homes. Image: Steve MacDougall/DC Thomson

The authority came under fire for the decision to sell the B-listed landmark to Henley Homes for £1, while renting office space at Pullar House.

It is also supposed to be footing the bill for £1.9m in heritage funding.

At the time it was said the £7m project would create around 200 jobs and pump £1.12m into the local economy each year.

Council quizzed on collapse of Henley Homes deal

David Littlejohn, the council’s then head of planning and development, declared the Henley Homes deal a coup for Perth.

David Littlejohn standing on rooftop with city skyline behind — David Littlejohn praised the calibre of Henley Homes. Image: DC Thomson

Speaking in 2020, he said: “Private property developers have been very reluctant to invest in many places in Scotland outwith Edinburgh and Glasgow.

“As such, it is encouraging that Perth has attracted an investor of the calibre of the preferred bidder.”

Last September, the council confirmed it had granted a development lease to Rogue City Hotels, as part of the Henley group, in 2022.

The deal means the £1 sale would go through after work is completed.

Perth and Kinross Council says it has been kept informed of the upheaval at Henley Homes.

Earlier this week it told The Courier: “Our planning and placemaking committee is expected to determine the planning application submitted by Lock Terrace later this year.”