Developer behind 33 Central turns away from regional cities after Brexit

Helen Cahill
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General Election - Economy
HB Reavis said London will remain a global city (Source: Getty)

HB Reavis, the developer behind Wells Fargo's European headquarters, has turned away from investing in the UK's regional cities due to the Brexit vote.

Last July, HB Reavis' sale of 33 Central was widely-feted as a coup for London following the EU referendum, and while the developer is confident about the capital's prospects in the future, it is less certain about regional cities such as Manchester.

Read more: Wells Fargo pounces on property slowdown to snap up new London offices

Speaking to City A.M. at global property conference Mipim, Tomas Jurdak, UK chief executive of HB Reavis, said: "Brexit will have a bigger impact on regional cities. We were looking at some before, but now we are waiting for the skies to clear."

In particular, HB Reavis will be waiting to see if big firms will still be setting up satellite operations in regional cities in the coming months.

Several accountancy firms have been looking beyond the capital in recent years. In Autumn last year, PwC set up offices in Leeds, but Jurdak said he would wait to see if the trend continues before committing to developments outside the capital.

Read more: The first sign Brexit could have seriously damaged commercial real estate

"We believe in the fundamentals of the London market," he said. "It has been a global capital for 300 years."

Currently, HB Reavis has four sites in London under offer, and Jurdak said the company was looking for more opportunities.

The developer faced "tough" negotiations with Wells Fargo over 33 Central, but entered into discussions with the US bank around March last year because it said it was not concerned about the outcome of the EU referendum. The 227,000 square feet of office space near London Bridge went for £300m, and the deal closed last July.

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