David Pearl (businessman)

Early life

Pearl was born in Luton in October 1945. In the late 1940s his family moved to London’s Stamford Hill, where his father Harry worked in a millinery factory. Pearl’s family struggled financially; in later life Pearl has referred to this through vignettes, such as his mother keeping gifts to re-gift on other occasions.^1a Pearl left school at the age of 15, with no qualifications, to work as a packer for a clothing company and a part-time casino croupier.

Ventures

In 1965, at the age of 19, he set up Pearl and Coutts, a property management and letting agency.^1b with a partner, beginning by managing other owners' properties. Within three years, Pearl had gone solo and began to buy property to let. The first property had an interest-free mortgage at £7 a week, and was let for £10.^2a For the third property, banks were unwilling to help and his mother provided collateral using her own home.^1c In the early years, Pearl and Coutts operations were characterised by Pearl personally bidding for properties at auctions.

Pearl continued personally acquiring and letting properties for ten years from offices in Clarence Road, in London’s East End borough of Hackney. Initial properties were residential properties in London’s Hackney and Islington, followed by diversification into commercial property in London’s central zones and the West End.^3a

In 1978 Pearl & Coutts engaged its first permanent employee, Pat Colvin, who had previously worked for NatWest.

In late 1978, Pearl set up a limited company, Structadene Limited, encompassing Pearl & Coutts.

Structadene traded throughout the recession at the beginning of the 1980s making some sporadic purchases. During the recession the acquisitions strategy included purchasing properties in areas of London not considered of focal interest for property investment. In 1980, Structadene acquired the Jesus Hospital Estate in east London’s Bethnal Green, with 350 houses purchased for £1.2m. Similar acquisitions included various properties on the North side of London’s famous central shopping street, Oxford Street, as well as many on the South side.^3b Local property values increased over time and the area became known as Noho in property circles, encompassing the desirable areas of Fitzrovia and many listed buildings. Notable purchases included many buildings along Great Portland Street and Great Titchfield Street.

Much of the groups approach has since consisted of joint venture companies. In 2010, there were a reported 200 joint venture style "entities" comprising the Structadene Group. Gross assets under management have been reported at £2bn "at its peak", although it is not clear which date this relates to.^4a

In 2006, Structadene was ranked no. 65 in The Sunday Times 'Profit Track' list of top 100 companies, with an estimated increase in profits during the period from 2001 to 2004 of 63%.^5a The increase was reported as due to diversifying risk across commercial sectors and spending on IT systems to improve management operations.^5b

By late 2007, Structadene’s annual report listed 68% portfolio value located in London, with a further 12% in the South East of England. The company had continued to buy properties in London’s City areas (EC1, EC2, EC4), Camden and Westminster. Whilst some of the portfolio included buildings for leisure and residential property, the majority was office spaces (40%) and retail units (24%). Properties outside London were geographically diverse across the UK (South West, Midlands, East Anglia, & the North in England; Scotland, Wales and Northern Ireland).^6a

Structadene’s annual report to September 2008 listed financing with 20 banks/building societies. The Group and share of joint venture turnover was reported at £102,519,735 with Net Assets at £152,020,063 and Reserves of £102,329,048.^2b

In February 2010, Pearl was interviewed by Property Week magazine, due to selling some of the group’s properties, a move which went against a longstanding reputation of retaining rather than reselling.^{7a 4b} Pearl is noted for retaining some of the original properties purchased in the later 1960s. Between October 2009 and February 2010, Structadene sold a reported £50m worth of its portfolio at auction, with a further sale planned that month for 15 more properties.^4c The sales were depicted as part of a strategy to reduce the size of Structadene Ltd by as much as one quarter to one third gradually over five years. The exact level of gearing was not disclosed, with debts estimated at £800m. Auctions were apparently chosen for the method of selling to maximise the sales value.^4d Pearl had not purchased property for over 2 years by January 2010.^{8a 4e}

Business style

Pearl’s personal approach to business has been documented in various media as keeping as much as possible in-house and a hands-on approach to acquiring property.

An interview in The Lawyer in 2003 painted Pearl as an "old school" businessman favouring a "gentleman’s agreement" over routine legal outsourcing. ‘"I have 27 joint venture partners and I don't have [legal] joint venture agreements with any of them," he says. "We buy properties together. We shake hands, do a deal and that's the way it is"’.^9a

Property industry auctioneer Duncan Moir has stated Pearl operates by buying property he genuinely likes, "as though he were a collector, rather than an investor".^4f

Most press coverage of Pearl appears within the property industry media. Notably, Pearl’s choice of business attire has been described as "perennially dressed down",^10a favouring trainers, rugby-style shirts and baggy trousers.^11a A 2006 magazine make-over feature made capital of this, claiming he was "famously scruffy", spent around £91 a year on clothing and needed the featured sprucing up to attend a charity event at Buckingham Palace.^11b

Personal wealth

The Sunday Times Rich List 2009 ranked David Pearl at no. 241, up from 308 the previous year. The entry listed the source of 'wealth' as 'Property', estimated at £233m, down by £36m on the previous year.^12b

Controversies: legal action and acquisition from local councils

In 2007, Structadene Ltd placed a bid for a portfolio of 277 properties with a North London, Islington Council. The properties included many commercial units, such as shops and premises for trades-people providing services. Islington’s local press reported that the original value of £45m had been increased by the Structadene bid to £70m, establishing the right to buy 159 of the properties. Many of the traders were worried their businesses may be in jeopardy.^13a Traders were reported to be in fear of rent increases which they felt may put their business at risk, forcing them to either borrow larger sums of money to outbid Structadene to buy or to simply risk losing everything by continuing to rent.^14a There were also complaints that at least 2 traders lost the right to buy as they were unable to meet the deadlines by 2 hours, losing their right to buy due to the need to raise extra finance.^15a Structadene responded with characteristic caution, with a quote from Daniel Parnes, a Structadene director for the local press that "for properties where tenants are paying below market rents, we will discuss that with each tenant - we plan to keep the unique nature of the borough".^13b

In November 2000, Structadene controversially sued inner London local council Hackney Council under the Local Government Act 1972 (123,128).^16a A high court judge found the council had acted illegally in the sale of 12 commercial industrial units to existing tenants at £40,000.^17b Pearl’s involvement centred on legal arguments that the council’s sale followed refusal to accept an offer of £100,000 from Structadene and thereby contravened the authority’s duty to sell to the highest bidder. Mr Justice Elias found in favour and declared the sale void. Pearl was quoted in the national press as "furious" at the council’s failure to accept the higher bid, against a reported background of £40m debt on the part of the local council.^17c

Television appearances

Pearl appeared in an instalment of Channel Four’s Secret Millionaire, aired on 12 December 2007.^18a The series featured millionaire-level business people going incognito as volunteers in community organisations within deprived areas, living on very limited budgets. The subterfuge involved pretending to be making a 'regular' documentary within the chosen organisation. At the end of filming, typically one week or so, the millionaire involved gave away tens of thousands of pounds to individuals or organisations they had encountered in their role. The series places an emphasis on both the emotionally compelling stories of the recipients and the psychological impact on the millionaire.

Pearl successfully posed as a newly retired volunteer at Portsmouth’s Queen Alexandra Hospital, which was served by approximately 700 such volunteers. The episode culminated in personal donations totalling £50,000. One recipient was a 'fellow volunteer', to pay for her honeymoon. Others included stroke rehabilitation and cancer care organisations. The subterfuge was probably successful in part due to Pearl’s typical dress style, in avoiding arousing suspicions of his actual means.^20a

Charitable activities

During the 1980s and 1990s, Pearl and Coutts financially supported The Duke of Edinburgh's Award, becoming a Charter Founder member.^20b The Award scheme allows young people aged 18–25 personal development opportunities through volunteering, physical fitness activities, practical & social skills and expeditions.^21a

Pearl has supported the National Youth Theatre charity on both a corporate level through Pearl and Coutts and an individual basis as a Friend of the charity.^22a In 2010, Pearl and Coutts were listed as providing donations ranging between £10,000 and £49,000.^22b

Crisis at Christmas charity provides temporary services and accommodation to homeless people in London during the Christmas period. In 2007, Pearl and Coutts donated the use of a building in Duncan Terrace, Islington, London. The 16,000-square-foot (1,500 m²) former county court house was used rent free for their operations over the festive season, whilst otherwise vacant pending planning permissions.^23a

Leisure interests

Pearl is Vice-President of premier league football club Tottenham Hotspur. The club was ranked 8th in the premier league 2008-2009.