LONDON (Reuters) – Wells Fargo has agreed to buy an 11-storey office development project in London’s City financial district from HB Reavis, the U.S. bank said on Monday, one of the largest UK real estate deals since Britain voted to leave the European Union.
The purchase of the building at 33 Central, King William Street — close to the Bank of England and the River Thames — will allow Wells Fargo to consolidate all of its London-based staff in a single location when construction completes in the third quarter of 2017.
Financial terms of the transaction, which shows confidence in London remaining a global financial centre following the Brexit vote on June 23, were undisclosed but a source close to the deal said the price was around 300 million pounds ($400 million).
“With this new building in London, we are able to bring our team members together in one location in order to more efficiently and effectively manage our operations,” Frank Pizzo, Wells Fargo regional president for Europe Middle East & Africa said in a statement.
Wells Fargo has 850 London-based staff.
Property company HB Reavis originally hoped to retain and lease the development but later agreed to sell the shares in the subsidiary which owns 33 Central to Wells Fargo after initial leasing discussions.
Senior executives at the U.S. bank, one of the world’s biggest by assets, have publicly stated its ambitions to grow organically outside its domestic U.S. market, where it drives more than 90 percent of its revenues.
“Many have doubted what will happen to the real estate market after the Brexit vote,” said Marian Herman, Chief Financial Officer of HB Reavis Group, describing the deal as a strong endorsement of its business model and the resilience of the market.
Knight Frank and Gerald Eve were agents for the 227,000 square foot office development at 33 Central, and CBRE advised Wells Fargo.
(Reporting By Sinead Cruise; Editing by Keith Weir)