Barclays Plc, the second-largest U.K. bank by assets, has given up two stories of prime office space in Singapore’s financial district, which has been leased to LinkedIn Corp., people familiar with the matter said.
Barclays returned about 60,000 square feet (5,575 square meters) at the Tower 2 of Marina Bay Financial Centre to the landlord, one of the people said, asking not to be named because the information is private. Barclays declined to comment in an e-mailed response.
The bank has been shuffling its real estate space in the city-state, where it’s moving employees from suburban offices to the Marina Bay area to cut costs. Monthly rents at the property in the central business district are now S$11 ($8.80) to S$12 a square foot, compared with S$10 to S$11 per square foot when Barclays moved into the building in 2011, said Donald Han, managing director of Chesterton Singapore Pte, a real estate consulting company.
“Social media companies like Facebook, LinkedIn are taking office space in the central business district in Singapore, whereas in other cities you won’t find them in the CBD,” said Chris Archibold, international director and head of markets at Jones Lang LaSalle Inc.’s Singapore unit. “They decided to be within the CBD in Singapore because they want to attract the best talent.”
LinkedIn, the biggest online professional-networking service with more than 300 million members, opened its Asia-Pacific headquarters in Singapore in 2011. The company’s office is currently in the AXA Tower, in an older part of the central business district.
Roger Pua, a spokesman for LinkedIn in Singapore, declined to comment on the move. He said the company has 1 million users in the city-state and 50 million in the Asia-Pacific region.
LinkedIn last week gave a second-quarter sales forecast that missed analysts’ estimates. Second-quarter revenue will be $500 million to $505 million, the Mountain View, California-based company said. Analysts on average had been projecting sales of $505.5 million, according to data compiled by Bloomberg.
The Singapore offices of Facebook Inc., the world’s biggest social-networking service, and Twitter Inc., the microblogging company, are also in the central business district.
Office rents in Singapore, ranked the most affordable of the top five major financial centers, including London, Hong Kong, Tokyo and New York, by Cushman & Wakefield Inc., are rebounding as robust demand amid high occupancy rates reinforce the bargaining power of landlords. Rents in Singapore’s central business district are expected to rise as much as 15 percent this year, broker DTZ Holdings Plc said April 3.
Barclays will terminate its lease on about 15,500 square feet of office space in a building in Tampines, an eastern suburb, and relocate the employees to Marina Bay Financial Centre by July, people familiar with the matter said last month. It follows a similar move by the bank earlier this year when it exited Changi Business Park, another suburban office in the island-state.
Barclays 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 in the southern part of the country as its new financial district. The bank has another 96,000 square feet at One Raffles Quay, according to Barclays.
Barclays Chief Executive Officer Antony Jenkins is reshaping his company’s investment bank amid pressure to cut costs, boost profit and focus on consumer and corporate banking. Jenkins will present a new strategic plan for the company this Thursday, May 8.
Barclays had 4,700 staff in Singapore, according to data provided by the bank in September 2012. In October 2013, it employed 3,500 full-time employees, according to a press release marking 40 years in Singapore.
Lester Lim, a spokesman for Raffles Quay Asset Management, which manages the property, didn’t respond to a phone call to his office or an e-mail. The office project was developed by Keppel Land Ltd., Hongkong Land Holdings Ltd. and Cheung Kong Holdings Ltd., controlled by billionaire Li Ka-shing.