Wells Fargo to expand investment push into UK

Wells Fargo, the lender that gets just 3 per cent of its revenue from non-US markets, plans to build out its real estate investment-banking business as part of a push into the UK.

The bank will rely on subsidiary Eastdil Secured, one of the biggest brokers of US commercial property sales, to advise British customers on deals and help them find financing, said Mark Myers, head of San Francisco-based Wells Fargo's commercial real estate business. The firm had already announced plans to expand lending backed by UK commercial properties.

"In the near term we see opportunities to leverage some of our capabilities using the Eastdil Secured platform," Myers said.

Wells Fargo chief executive officer John Stumpf is looking beyond the US after the bank became the nation's leading home-lender, biggest commercial-property servicer and owner of the largest retail branch network. The UK expansion began in late 2011 with a focus on loans for properties in London's central business district and has since spread outwards.

The bank agreed to buy the Eurohypo UK real estate lending unit, which includes about £4 billion (HK$47 billion) of "high-quality" assets, from Frankfurt-based Commerzbank.

Dallas-based Loan Star Funds will buy part of the portfolio, consisting of about £1.3 billion of non-performing loans, with financing from Wells Fargo. Eastdil Secured was the top US commercial real estate broker last year, representing sellers on US$30.4 billion in transactions for 24.8 per cent of the market, according to a report in the trade publication Real Estate Alert.

Wells Fargo will offer other banking products to UK commercial real estate clients, including derivatives such as interest-rate swaps and options.

"We work very closely with other parts of the bank and the expansion in the UK won't be any different," Myers said.