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 referendum.

“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 this year.

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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