This US bank is ignoring Brexit warning signs and buying a HUGE London HQ
Wells Fargo, the world’s biggest bank by capitalization, has given a huge vote of confidence in London’s future as a financial hub even after the expected British exit from the European Union, signing on for a new £300 million ($396 million) headquarters in the UK capital.
The Financial Times reports that the US lender is buying an 11-story building being developed near London Bridge called 33 Central.
Wells Fargo will move into its new London offices in 2018. The move will bring its 850 London workers, now spread across four buildings, into one location. Wells Fargo has 269,000 employees globally and a market cap of $242.4 billion (£183.3 billion). Most of its business is done in the US, but its London offices help American clients looking to do business here.
The office-block sale is one of the biggest property deals since the UK’s shock June 23 vote to leave the EU. Since then there have been concerns about both Britain’s property market and London’s status as a financial hub.
On the property front, multiple commercial property investment funds, which own at least £15 billion worth of UK buildings, were forced to freeze withdrawals after being overwhelmed by people trying to pull money out of UK property.
But the collapse in the pound to a 31-year-low against the dollar is making British assets more attractive to some buyers. The US property fund Madison International Realty says it is planning to spend as much as £1 billion buying bargain London buildings.
As for finance, multiple banks have warned that they may have to relocate thousands of jobs away from Britain if the UK fails to negotiate passporting rights that allow them to operate across the EU from London. JPMorgan,Goldman Sachs, and UBS have all floated the idea, despite pleas from the Treasury to play down the risk to jobs and a joint letter from the government and investment banks pledging the help London “retain its position as the leading international financial center.”
Marian Herman, the CFO of HB Reavis Group, the developer that sold the building to Wells Fargo, said in an emailed statement: “Many have doubted what will happen to the real estate market after the Brexit vote. We see the successful signing of this deal as 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.”