Wells Fargo Said Near Deal to Lease City of London Offices

Updated on
  • 225,000 square-foot building scheduled for completion in 2017
  • Workspace under construction in district rose 80% last year

Wells Fargo & Co., the world’s largest bank by market value, is close to a deal to lease an office building being constructed near the Bank of England in the City of London financial district, a person with knowledge of the matter said, asking not to be identified because the talks are private.

The 33 Central building will have a rooftop garden with views of the River Thames when it’s completed by Slovak developer HB Reavis Group. The property, due to be finished in the first quarter of next year, will have 225,000 square feet (20,900 square meters) of space, according to the property’s website. HB Reavis declined to comment.

“As a normal course of business, we regularly evaluate our real estate portfolio to ensure we are efficiently utilizing space requirements for our businesses,” Kathryn Ellis, a spokeswoman for San Francisco-based Wells Fargo, said by e-mail.

Wells Fargo has been growing its European commercial real estate lending business since 2013, when it bought 4 billion pounds ($5.7 billion) of U.K. commercial property loans from a unit of Germany’s Commerzbank AG. Earlier this month, the bank denied a report that it was in discussions with Credit Suisse Group AG to buy a large part of the Swiss firm’s investment-banking and capital-markets business.

The supply of offices in the City of London is at the lowest level in 15 years as finance companies compete with technology firms to lease space, according to broker Knight Frank LLP. Rents for the best spaces rose 12 percent last year to 70 pounds a square foot, according to the broker.

Developers are building new property to meet the demand. The amount of office space under construction in the district rose more than 80 percent last year, Knight Frank said.

While Wells Fargo is leasing new space in London, other banks including HSBC Holdings Plc plan to move workers out of the city. HSBC Chief Executive Officer Stuart Gulliver said on Monday that the lender would probably move about 1,000 investment bankers to Paris if Britain withdraws from the European Union. The bank last year leased workspace in Birmingham and plans to start moving 1,000 jobs there from the U.K. capital in 2017.