British HQ for Wells Fargo despite Brexit

Wells Fargo has agreed to buy a new London headquarters building despite the Brexit vote.

Wells Fargo paid about £300 million ($527.4m) for its new headquarters in Britain.

Wells Fargo has agreed to buy a new London headquarters building, completing one of the biggest commercial real-estate deals in Britain since the referendum to leave the European Union.

The San Francisco bank bought the office in London’s main financial district from Slovak developer HB Reavis, which was due to finish construction on the 227,000sq ft (21,000sq m) building in the northern autumn of 2017, the companies said.

Wells Fargo paid about £300 million ($527.4m) for the building.

The British commercial real-estate sector has been among the hardest hit after Britons voted to leave the EU. Major asset managers have halted trading on their British property funds, while analysts widely predict real estate values to fall.

Foreign financial firms that rent London office space have been a point of concern for landlords and property investors in London, where the skyline is dotted with cranes that have sprung up during a construction boom.

At the moment, foreign institutions can sell their services across the EU from London. With Britain outside the EU, they could lose this “financial passport”. If firms decide to move to Frankfurt, Paris or other European capitals, leaving behind empty London office space, property values could drop. About 4 per cent of the total London office occupier market could relocate, according to analysts at Swiss lender UBS.

Wells Fargo said it would move 850 employees currently in four London locations into the new building in 2018. The company said the move didn’t portend job cuts.

A spokeswoman for Wells Fargo, Kathryn Ellis, said consolidating London-based employees was long in the works and would have happened regardless of the Brexit vote.