Credit Suisse Said to Seek to Sublet at Hong Kong SkyscraperKelvin Wong
Credit Suisse Group AG is seeking to sublet as much as 64,000 square feet of office space in Hong Kong’s tallest skyscraper, as prime office vacancies rise in the city amid job cuts by global financial services companies.
The Zurich-based bank is looking for tenants to take up two floors, or about a fifth of the space it currently occupies at the International Commerce Centre in West Kowloon, according to two people with knowledge of the matter, who declined to be identified because the information isn’t public.
Global banks, including Morgan Stanley and UBS AG, are trimming jobs in Asia as an economic slowdown reduces demand from companies for investment banking services. Barclays Plc, Britain’s second-largest bank, plans to eliminate at least 15 percent of its investment banking positions in the region, people with knowledge of the matter said last week.
Companies raised $8 billion through initial public offerings in Hong Kong last year, the lowest amount since 2003 and down 63 percent from 2011, according to data compiled by Bloomberg.
Rental of prime offices in Hong Kong’s Central business district will extend last year’s decline, the biggest since the global credit crisis in 2008, until at least the end of the first half, property broker CBRE Group Inc. has said. Vacancies in prime buildings are nearing a three-year high amid job losses in the financial services industry, according to broker Colliers International.
Josephine Lee, a Hong Kong-based spokeswoman for Credit Suisse, declined to comment on the bank’s occupancy plan.
The 118-floor ICC was built and is being managed by Sun Hung Kai Properties Ltd., the world’s biggest developer by market value. Since 2007, Morgan Stanley, Credit Suisse and Deutsche Bank AG are among banks that have relocated to the tower on the Kowloon peninsula, about a 10-minute subway ride across the harbor from the Central business district on Hong Kong Island.
Margaret Ng, a spokeswoman for Sun Hung Kai, declined to comment on plans by the building’s tenants.
Central is the world’s most expensive place to lease office space, with an annual occupancy cost of $246.3 per square foot, CBRE said in a report in December. West Kowloon is seventh in the ranking at $174.13.
London-based DTZ Holdings Plc said this month that London’s West End has replaced Hong Kong as the world’s most expensive office location. The report measured the amount companies spent on office space for each employee.
The second-biggest Swiss bank announced plans in October to trim a further 1 billion francs ($1.08 billion) in annual costs by the end of 2015, increasing a target for cost reductions. The bank is eliminating jobs in businesses including equities and advisory.