Standard Chartered Bank yesterday announced plans to set up its biggest office anywhere in the world at the new Marina Bay Financial Centre to help run its global banking business. The bank intends to build up its staff strength in Singapore from the present 3,800 to about 6,000 by 2010.
Including the cost of renovation and relocation as well as rent, the bank says it will be spending about $800 million on the new premises it is leasing at Marina Bay Financial Centre.
In what is thought to be Singapore’s biggest office leasing deal so far, the bank has taken on a lease for up to 500,000 sq ft of space in Tower 1 of the centre’s first phase, which is expected to be ready in the early months of 2010. The bank will be taking about 30 per cent of the total commercial space in the initial phase of the centre.
These will be the biggest premises Stanchart has in any one location worldwide, Stanchart group executive director (Asia) Kai Nargolwala told reporters at a news briefing yesterday. The bank’s initial 12-year lease runs from Q3 2010, with an option to renew for a further eight years. The leasing deal was brokered by Jones Lang LaSalle.
Stanchart, whose headquarters are in London but which has most of its business in Asia, employs 60,000 people in 56 countries and territories around the world. Its 2006 annual report values its assets at US$266 billion.
‘The move to Marina Bay Financial Centre will help centralise our front office staff from our various locations in Singapore under one roof and will provide us with a long-term occupancy solution,’ Mr Nargolwala said.
Not everyone will be moving there, though, as the group plans to keep some of its present offices, probably including Six Battery Road.
‘We are currently in eight locations in Singapore. We won’t end up with just one location. We’ll continue to have at least two or three, for our business continuity planning purposes and for a variety of other issues,’ Mr Nargolwala said. ‘At the moment, we have expanded way out of Battery Road. We have taken premises in a number of different buildings. So we could consolidate some of that back.’
Stanchart also occupies space in CPF Tampines Building, for backroom offices, as well as UOB Plaza 1, OUB Centre, and Plaza by the Park. Market watchers reckon that Stanchart will most likely keep the Tampines location along with Six Battery Road.
Stanchart officials estimate the bank could potentially occupy up to one million sq ft of space in Singapore by 2012, depending on market conditions and growth prospects. By some market estimates, the bank currently occupies about 400,000 sq ft across locations in Singapore.
Stanchart’s business in Singapore is among the top five contributors to group revenue and profit. For 2006, Stanchart Singapore’s income of US$622 million accounted for 7.2 per cent of the group total of US$8.62 billion. Operating profit here of US$289 million constituted 9.1 per cent of the group pretax figure of US$3.18 billion.
‘But what a lot of people don’t realise is that apart from Singapore itself being a very important contributor to Standard Chartered, we actually run a large part of the bank globally out of Singapore,’ Mr Nargolwala said. Singapore is the global HQ for most of Stanchart’s businesses, including consumer banking, rates and FX, corporate finance, debt capital markets, commodity corporates, client relationships, transaction banking and private banking.
Mr Nargolwala said the bank will be ‘investing a lot’ to relaunch its private banking business in Asia and the Middle East, after a non-compete clause with UBS ended some years ago.
The bank says it is not worried about the shortage of experienced private banking personnel. ‘We have a very, very thriving priority banking segment. Many of our relationship managers that are at the top end of priority banking can move into private banking. So we will have a natural pipeline there,’ Mr Nargolwala said. But Stanchart will still be looking for a lot of new staff. Mr Nargolwala said virtually all the 2,200 additional people the group will employ in Singapore by 2010 will be new hires. ‘They will be across the board, because the bank’s business across the board is growing,’ he said.
Yesterday’s deal will see Stanchart taking up 24 floors in the 33-storey Tower 1 of the Marina Bay Financial Centre. This tower will have about 620,000 sq ft of net lettable area. The 50-storey Tower 2 will have about one million sq ft of offices. The centre’s first phase also includes the 428-unit Marina Bay Residences.
MBFC’s second phase - slated to finish by late 2011 - will have an office tower and a residential tower. Nearly three-quarters of the total 4.7 million sq ft gross floor area in the entire project could be for offices.
Source: The Business Times, 19 April 2007
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