One of the things on my mind at the moment is what’s happening with building materials. If you want bricks you currently have to wait nine months, it’s like having a baby. There aren’t many available - bricks, that is, not babies.
It’s all down to the recession, when demand was flat and kilns were mothballed. The recession has now flown out the window, the government is pushing development and there’s a resurgence of activity - but no bricks. There’s also a shortage of fences because of storms and bad weather. Not a good situation.
When I cast my mind back to 2008 I remember how clever I thought some people had been. They had sensed the top of the market, sold at the right time and were sitting on a load of cash while the rest of us were left shivering in a corner, thinking about what to do next. I wondered whether I should have done the same and now I’m wondering whether we’re in that place again. Should I be selling while prices are high?
The London market is boiling hot but if you sell stock in London you can’t replace it and I’m not sure I could bear that. Is it a bubble? Maybe, but it might not burst. It might just sort of deflate slowly.
We got through the bad times because we had good stock that we could sell to repay debt. In the last six years we’ve sold around £1bn worth of property and we’re in good shape so I really don’t want to be selling any more. It goes against the grain. The sales campaign has pretty much stopped and the emphasis is now on working the portfolio and adding value through permitted development, using cash resources. We’ll still sell occasionally but only to special purchasers at an exceptional price.
We’re not really buying either, although I did buy a bingo club in Ayr recently, which didn’t go down well with Michael, my managing director. Every company should own a bingo club, I thought.
Our biggest disposal was of an island site opposite Selfridges in Oxford Street for £127m which was bought by an Irishman, one of the nicest, easy-going people you could ever hope to do business with. A top man. I’m looking forward to seeing what he does with it.
History and London are two of my passions, which is why I’m involved with the Museum of London. As a sponsor I get invited to visit interesting buildings, so off I trundled last week to the Mile End Road to see a Georgian house that had been restored by the Spitalfields Trust. Looks familiar, I thought. So it should. I had sold it to them.
On the subject of London, which I talk about a lot, did you know that there’s no such place as Petticoat Lane? Going ‘down the Lane’ on a Sunday morning means Petticoat Lane to Londoners but the truth is that it hasn’t been called that since 1830 when the Victorians changed it ‘for reasons of modesty’. It’s now Middlesex Street, which you might think would have offended them even more.
I’ve heard that some foreign investors are looking for better yields than you can achieve in central London these days so they are buying off-plan further out. I saw a programme on TV the other week which showed businessmen sitting in their high-rise office in Hong Kong, looking at their screens and talking about buying along the route that Crossrail will take.
Forest Gate has got to be in the running.
David Pearl is chairman and chief executive of Structadene