COMMERCIAL PROPERTY | Staff Reporter, Hong Kong

Societe Generale pars a floor in Hong Kong office space

The French bank joins DBS in relinquishing office spaces due to growing prices in Hong Kong.

Societe Generale is releasing one of its spaces in Swire Properties’ Three Pacific Place after its lease expires this year.

According to local news, Societe Generale has decided to renew only six out of its leased seven floors.

The bank said it has assessed different options since 2019 and has decided to adjust due to changing working conditions.

"We have assessed as early as 2019 different options to the renewal of the lease, factoring in our staff's increasing expectations to work from home, convenience of the current location, and costs of moving," the bank said.

"We have done a specific assessment of the occupancy rate of our offices, which demonstrates that we could release a floor," the bank added.

Cushman & Wakefield said multinational firms constituted 75% of the surrendered office stock last year, whilst Colliers International reports that rents are expected to fall by 7% in 2021 as tenants continue to cut costs.

Foreign banks have been making similar moves in the past few months.

DBS Group Holdings vacated some floors in Swire Properties’ One Island East Tower, whilst BP Paribas and Standard Chartered relinquished some of their floors in their Hong Kong offices.

Similarly, UBS Group reduced its office space in Seung Wan’s Li Po Chun Chambers by a floor last year.

Based on data released by Jones Lang LaSalle, rental rates for Hong Kong’s Grade A offices fell for 21 months, resulting to an overall vacancy of 9.3%. In total, the surrendered space as of February is at 164,439 sq. m.

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