Wells Fargo’s expanded lending to UK commercial property will concentrate on “top-tier” UK borrowers and existing US customers who want to borrow in pounds, its new London boss told EG.
Mike Marino, who in mid-February will be swapping the California sun for London drizzle, said the size of the London office would be a limiting factor, so loans would be large and few rather than small and many.
The bank, which is the fourth-largest in the US, will boost its lending staff in London from five to eight when Marino and two others join. The London office lends £500m a year now, and although speculation has been that this figure will increase to £1bn, Marino said no figure had been settled upon.
“We are not sure when the tap will be turned off, but the size will be limited by the deals that meet our criteria,” he added.
Marino, who has been posted to London for three years, said his bank had two targets.
He said: “The first is our US customers who have come over to London and the other is top-tier UK customers. Initially our loans are likely to be London-focused but we will consider opportunities outside London involving high-quality leases over the long term.”
He added that the bank would be willing to lend in most sectors. Recent UK deals in which Wells Fargo has taken part include the £150m financing of 99 Bishopsgate, London, for Brookfield, where Wells Fargo teamed up with Santander and Aareal Bank; and with Barclays for the £535m loan facility for the Maybourne hotel group, which includes Claridge’s and the Connaught.
Marino confirmed that one reason Wells Fargo had committed more staff to London was the UK’s “shortage of capital”.
“We do think we can provide some liquidity,” he added.
Wells Fargo’s money may be cheaper than that of some UK lenders, because the US bank’s deposit base is larger. But Marino said: “It’s not our strategy to undercut the market in the UK, although it is a fact that spreads are wider in the US.”
