SINGAPORE – DBS Group Holdings is poised to trim office space in Singapore, the latest bank to pare its footprint in the city-state during the coronavirus pandemic.
South-east Asia’s largest bank plans to surrender about two and half floors, or 75,000 square feet, in Tower 3 of the Marina Bay Financial Centre, according to people with knowledge of the matter. The lender occupies more than a dozen floors in the building, located in the central business district near the iconic Marina Bay Sands hotel and casino.
DBS is set to give up the floors in December, the people said, asking not to be identified because the plans are private. A representative for the company declined to comment.
The move comes on top of the lender’s plans to cut space in the pricey Hong Kong market. Banks around the world are rethinking their use of offices after the Covid-19 pandemic showed that they can still operate effectively with many employees at home. HSBC Holdings is allowing more than 1,200 staff at its UK call centers to permanently work remotely.
In Singapore, DBS is following in the footsteps of Citigroup and Mizuho Financial Group. Citigroup is giving up three floors in Asia Square Tower 1 as it aims to better optimize its real estate, while Mizuho is cutting space equivalent to less than one floor in Asia Square Tower 2 on the back of work from home success.
DBS is the anchor tenant at MBFC Tower 3, which is part of a three-tower complex managed by Raffles Quay Asset Management. Other tenants include Rio Tinto. It’s the headquarters for DBS, which also has space in Changi Business Park.
Singapore’s largest bank has been promoting work flexibility while also espousing the benefits of office life. In November, it said employees would be allowed to work remotely as much as 40 per cent of the time. Chief executive officer Piyush Gupta said last month that staff sometimes need to be in the office to “build the soul of the company.”
The downsizing by financial firms may not necessarily be a huge setback for the Singapore office market, given that tech behemoths are expanding their presence in the South-east Asian hub. Amazon.com is taking up the three floors that Citigroup is relinquishing, while ByteDance agreed to lease three floors in a building in the financial district.
Singapore’s office market has shown recent signs of a recovery. The vacancy rate eased to 3.3% last quarter from 3.9 per cent in the last three months of 2020, according to preliminary estimates by CBRE Research. The rebound was led by Grade A office buildings, with rents for those properties remaining stable in the quarter.