Sumitomo Mitsui Said in Talks to Lease New London Office

Sumitomo Mitsui Financial Group Inc.’s European banking unit is in talks to lease a new London headquarters from British Land Co. and GIC Pte, according to two people familiar with the plan.

Japan’s third-largest megabank by assets is seeking to rent about 150,000 square feet (13,500 square meters) at the 100 Liverpool Street project, the people said, asking not to be identified because the plan is private. The terms have yet to be finalized and it’s not certain that a deal will be done, they said.

Spokeswomen for Sumitomo Mitsui Banking Corp. and British Land declined to comment. A spokeswoman for GIC didn’t respond to two emailed requests for comment sent outside Asian office hours.

Banks are defying expectations that the Brexit vote would have an immediate chilling effect on demand for London offices. Wells Fargo & Co. and Deutsche Bank AG are among those to have secured new premises in the City of London financial district since the June 23 vote for Britain to leave the European Union.

British Land announced in November that it would redevelop 100 Liverpool Street before it had agreed any tenants for the revamped site, which was previously occupied by UBS Group AG. The development is due to be completed in 2019 and will offer 433,000 square feet of office space.

SMBC is currently based in two City offices and plans to move staff into the new, single headquarters, the people familiar with the matter said. The bank is also considering setting up a unit in continental Europe because of the risk that lenders will lose their passporting rights to sell services freely across the EU, CEO Takeshi Kunibe said in January.

Occupiers agreed to lease 1.62 million square feet of office space in the City of London financial district in the first quarter, 8 percent less than a year earlier, according to data compiled by broker Knight Frank LLP. The amount of space available to lease rose 12 percent in the same period.

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