Banks downsize to boost competitiveness in weak market

Societe Generale and Barclays Capital are prime examples.

A number of international banks are tightening their belts to stay profitable in lean times. According to Colliers, volatile financial markets and tougher financial regulations are pushing banks to rationalise their use of space to stay competitive.

An example is French bank Societe Generale, which is expected to give up their office space at One Raffles Quay in the Raffles Place/New Downtown micro-market to consolidate their operations at Marina Bay Financial Tower 1 in the same micro-market. Societe Generale sold its Asian private banking arm to DBS in early 2014.

Barclays Capital is also reported to be exploring the option of consolidating operations at the Marina Bay Financial Centre Tower 2 to stay lean.

“While the common knowledge is that rents in 2015 are expected to climb due to demand and supply fundamentals, we are certain of a dampening impact on the buoyancy of the leasing market, as banks continue to rationalise usage of space to stay competitive. More importantly, the current collapse in world oil prices has set off a contagious fear among investors, affecting global markets and we expect this apprehension to perpetuate throughout the rest of the year,” said Marcus Loo, Executive Director of Office Services at Colliers International.