Barclays Plc (BARC), the U.K.’s second-largest bank by assets, is moving its employees from an eastern Singapore suburb to its offices in the city’s central business district to cut costs.
Barclays will exit Changi Business Park and move its staff to the space it already occupies at Marina Bay Financial Centre in the city’s downtown, the bank said in an e-mailed statement. About 200 people will be relocated, according to two people with direct knowledge of the move, declining to be identified because the information isn’t public.
“Consolidating our corporate real estate footprint will help us run our businesses with greater efficiency and cost discipline,” Barclays said in the e-mail, declining to elaborate on the number of people affected by the move. The employee relocation in Singapore “consolidates many technology teams in one location.”
Barclays Chief Executive Officer Antony Jenkins, who took office in August 2012, said a year ago that he’s seeking to remove 1.7 billion pounds ($2.8 billion) of annual expenses by 2015, eliminating 3,700 positions. The lender is cutting commodities jobs from London and New York, while eight managing directors from Asia are departing, people familiar with the matter said last month.
After the move to Marina Bay, the bank, which has been in Singapore for 40 years, will have a total of three offices in the island-state, including One Raffles Quay, also in the Marina Bay area, and the eastern suburb of Tampines, according to Barclays.
The bank occupies about 290,000 square feet at Marina Bay Financial Centre, part of the 360-hectare (890-acre) Marina Bay development that Singapore started building in 2005 on reclaimed land located at the southern part of the country. The lender occupies another 96,000 square feet at One Raffles Quay, also part of the same area, according to Barclays.
Monthly rents in these two buildings were about S$10 ($7.88) a square foot at the end of last year, according to Chesterton Singapore Pte, a real estate consultancy. That compares with S$4 at Changi Business Park, where Barclays now occupies 29,000 square feet and S$5 at Tampines, where it leases 15,500 square feet, based on Chesterton’s rental data.
While the move is aimed at reducing costs in the island-state where Barclays has businesses including corporate banking and wealth management, signs of a recovery in the country’s commercial property may weigh on such relocations, according to Donald Han, managing director of Chesterton.
“If you’re looking at moving operations back into the central business district, the risk and danger is that rents have bottomed out anecdotally in the fourth quarter of last year, and there is a propensity for rents to start increasing again,” Han said.
In 2007 and the early part of 2008, before the global financial crisis, monthly rents at Raffles Place, a part of the central business district which sits at the mouth of the Singapore river, were S$18 a square foot, Han said.
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