Goldman Said to Plan Paring Tokyo Office Space to Cut Costs
The Wall Street firm, which rents six floors of the Mori Tower in the Roppongi Hills office complex, is in discussions with Mori Building Co. to vacate two levels, the people said, asking not to be named as the talks are private.
Goldman Sachs joins investment banks including Nomura Holdings Inc. (8604) in reducing costs in Japan after companies shunned the stock market for fundraising amid a recession that may be ending. The plan to trim office space comes even as rents in Tokyo decline to a record low.
The U.S. bank plans to leave the 43rd and 44th floors, which house its asset management unit and sports facilities, and remain in the 45th to 48th, the people said. It will transfer staff to other floors of the 54-story building, one of the people said.
“This is part of a planning process to optimize our space,” Goldman Sachs said in a statement e-mailed to Bloomberg News, declining to comment further. Hideki Nomura, general manager of public relations at Mori Building, Japan’s biggest closely held developer, declined to comment.
Goldman Sachs has about 1,200 employees in Japan as of this month, almost unchanged from a year earlier, said Hiroko Matsumoto, a Tokyo-based spokeswoman.
Signs of a recovery in the country’s equity capital markets are emerging as stocks rally and the yen weakens. Goldman Sachs and Daiwa Securities Group Inc. were picked to manage the government’s sale of a stake in Japan Tobacco Inc. (2914), according to a regulatory filing today. The stake is valued at about 967 billion yen ($10.3 billion), based on today’s closing price, making it the nation’s largest share offering since 2010.
Japanese companies sold 3.9 trillion yen of shares in 2011 and 2012 combined, less than 2010’s 5 trillion yen, according to data compiled by Bloomberg. The world’s third-largest economy, which contracted in each of the past three quarters, will expand 1.75 percent this quarter, according to the median estimate of economists.
Goldman Sachs isn’t the only foreign bank adjusting its office space in the Japanese capital. Citigroup Inc. will move its local retail banking unit’s headquarters to the city’s Shinjuku district from Shinagawa in 2014 to increase floor space and cut costs, according to an internal memo obtained by Bloomberg News in August.
Morgan Stanley will move to the Otemachi financial district from Ebisu in early 2014, the bank said in December, taking advantage of declining rents and rising office vacancies.
Rents for offices in Tokyo’s five central wards have been dropping since the global financial crisis in 2008, according to Miki Shoji Co., an office brokerage company. They fell to a record low in January.
Roppongi Hills is known for its information technology companies, with Google Inc. (GOOG) and Gree Inc. (3632) among the tenants at Mori Tower. Apple Inc. plans to move to Roppongi Hills from Shinjuku as early as April, according to two people familiar with the iPhone maker’s plan.
Apple plans to take one or two floors in the office tower at Roppongi Hills, a $2.2 billion development owned by Mori Building, the people said in January.
To contact the reporter on this story: Takahiko Hyuga in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Chitra Somayaji at email@example.com