Wells Fargo purchase defies London fears
21st July 2016
US banking giant Wells Fargo
completed the £300m purchase of a new headquarters building in the City this
week in a deal that flies in the face of warnings that foreign banks would not
commit to new space after the Brexit vote.
The bank has bought HB Reavis’s first London development, 33 Central, on King
William Street, and will move all its London employees there when
construction completes in Q3 2017.
The deal will breathe confidence
into the banking and financial services sector on both the investment and
occupational front, following stark warnings in recent weeks about potential job losses
and falling demand for office space in the City in the wake of the EU
“In the scheme of things, this
deal is hugely significant, not just in investment terms but perhaps more
significantly leasing terms,” a City agent told Property Week.
“With all the talk that the financial
sector would be hardest hit after Brexit, a bank the size of Wells Fargo
committing to this scheme is massively positive.”
HB Reavis had been in discussions
with a number of firms about leasing the new 227,000 sq ft building before
Wells Fargo approached it about the owner-occupation investment deal earlier
The US bank, currently based in
One Plantation Place, will move its 850 London-based staff to the John
Robertson Architects-designed building. Following the sale, 33 Central will continue
to be developed by HB Reavis, which is also developing 83,000 sq ft of office
space at 20 Farringdon Street and 77,000 sq ft at 61 Southwark.
HB Reavis’s chief financial
officer Marian Herman said the deal underscored the resilience of the market.
“Many have doubted what would happen to the real estate market after the Brexit
vote,” he said. “
We see the successful signing of
this deal as a strong endorsement of the quality of our real estate solutions,
as well as the resilience of the HB Reavis business even under seemingly
challenging market conditions.”
Knight Frank and Gerald Eve
represented HB Reavis and CBRE advised Wells Fargo.
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