Thoughts on the future of PCL

Monday, September 21, 2015 by Douglas And Gordon

London's PCL market is teetering and is easy to dismiss as an irrelevance, says Ed Mead

According to our records, despite having one third of our offices in Prime Central London only 13 per cent of our stock is there. Many dismiss PCL as an irrelevance but as in any portfolio having some high end, less risky, low yielding stock is important. But having been in that market for over 35 years thoughts have never been darker about its future.

Politicians were freaking out pre-election about selling London to foreigners (we’re not - they’ve always bought here, lucky us). Stock is low as rich people don’t like being told their property is worth less than the market is offering, and the majority don’t have to sell. The upshot of this, and what gets reported, is pure economics - i.e. that the limited stock sells for high prices.

Dark thoughts of the death of the PCL market have been heralded before and rescued by an unforeseen black swan event, macro-economic priorities or geo-political changes. PCL is a unique play for many, given that a bite-sized chunk of property can easily swallow £5m, you can live in it if the balloon goes up back home, and for many the taxes imposed are worth it. But current evidence suggests they’re not queuing up to take advantage at the moment. We shall see. 

This article was originally published in CityAM on 18/09/2015