More banks and insurers are setting up shop here for the first time, in a market where suitable office space is costing a premium - if any can be found.
While small boutique outfits are still able to find prime office space to rent, larger banks looking for a place big enough to house its entire operations are finding it much harder.
‘It’s almost impossible to find space at Raffles Place or nearby,’ a senior banker at Nomura Singapore told BT. Earlier this year, the bank, which wants to double its wealth management staff strength here from its current 100, had been looking for an office space that could accommodate all its employees but gave up after a fruitless search.
He said the bank is now converting meeting rooms into offices and reorganising the space in the five floors it occupies in the Six Battery Road building at Raffles Place to accommodate more people.
There are now 111 commercial banks and 164 insurance companies operating here, according to data from the Monetary Authority of Singapore’s (MAS) website, compared with 108 banks and 144 insurers as at end-March last year. The number of firms licensed for broad fund management activities has also increased, from 92 to 100.
An MAS spokesman said: ‘We have seen good growth in the Singapore financial sector in the last few months, with expansion in the areas of investment banking, fund management and regional business processing operations. The demand for office space from the financial sector has thus increased and MAS is working with relevant authorities such as URA (the Urban Redevelopment Authority), to address the increased demand.’
On Monday, URA said it would stop allowing the conversion of office space in central areas including the Central Business District, Raffles Place and Marina Bay for other uses until end-2009, to ease the shortage.
Last week, Bank Hapoalim Switzerland, the Zurich-based private banking arm of Israel’s largest bank opened its first branch in Asia here, occupying half of the 49th floor of Republic Plaza in Raffles Place.
‘We did actually bid for another site in the Raffles Place area, but another organisation came and took the whole floor,’ said Rami Lador, the bank’s Singapore chief executive. Because the bank started as a limited boutique outfit, with less than a dozen staff, ‘perhaps it was easier’ to find suitable office space, he said. Larger banks like Nomura looking for a place big enough to house its entire operations are finding it much harder.
About three-quarters of the space at the new One Raffles Quay (ORQ) building has been rented out to financial sector firms. Swiss banking giant UBS recently took up 12 floors and will begin moving staff there in the second half of the year. It already occupies a dozen floors at Suntec Tower Five.
Barclays Wealth, the private banking arm of UK banking group Barclays plc, recently moved its Singapore office from Capital Square on Church Street to ORQ, where it occupies three floors together with Barclays Capital, the group’s investment banking arm.
Citigroup - recently rebranded as Citi - now occupies some 900,000 sq ft of space in Singapore, including retail, middle and back-office space. This is an increase of about 10 per cent from last year, said Adam Rahman, its country corporate affairs director.
And last month, Standard Chartered Bank said it would lease up to 500,000 sq ft of space at the first phase of the upcoming Marina Bay Financial Centre, which is expected to be ready in early 2010. It already occupies an estimated 400,000 sq ft across eight locations here, including its main Six Battery Road office.
A report published earlier this month by Jones Lang LaSalle said rents for prime Grade A office space rose 25.9 per cent over the first quarter and more than doubled over the year. The vacancy of Grade A office space halved to 0.4 per cent in the first quarter, from 0.8 per cent in the fourth quarter of last year, according to CB Richard Ellis. Knight Frank projects Grade A office rents to rise by 50-60 per cent this year.
Source: The Business Times, 23 May 2007
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