Prime Offices Could Be Hit

Prime Offices Could Be Hit As More Bank Employees Work From Home

HONG KONG – Experts believe that prime office leasing activity in the special administrative region (SAR) could decline as some of Hong Kong’s largest financial institutions plan to ramp up their flexible work set-ups, reported the South China Morning Post (SCMP) on Friday morning (13 November, SGT).

This comes as office vacancy levels in the city’s core zones could surpass 10 percent by the end of 2020, forecasted Centaline Commercial.

Based on Q3 statistics from property consultancy Knight Frank, financial institutions like banks are some of the biggest office tenants in the city, leasing about 73 percent of Grade A office space in Hong Kong’s Central district.

For instance, HSBC and Standard Chartered occupy a total of about 440,000 sq ft (40,800 sq m) of office premises (excluding their office buildings) in the city, market sources revealed.

Starting next year, Standard Chartered plans to give its staff across 9 markets the option of working flexibly. This includes dividing time between the bank’s offices, at home, or another workplace like a coworking facility.

The 9 markets consist of the United States, the United Kingdom, UAE, Poland, India, China, Malaysia, Hong Kong and Singapore.

“While we have been thinking through the issues around future workplaces for some time, it’s inevitable that recent events provided a catalyst,” said the bank’s Group Head of Human Resources, Tanuj Kapilashrami.

Standard Chartered’s CEO Bill Winters shared that based on a survey of its staff across the globe, only 10 to 15 percent said they need to work in the office every day, while the majority want a more flexible work set-up or to avoid going to the office.

“What does that mean in terms of the amount of real estate we need? Possibly, we need half of what we have today,” Winters remarked on 4 November.

Meanwhile, HSBC intends to digitise more of its operations and allow more staff to work remotely from home, said the financial institution’s Chief Financial Officer Ewen Stevenson.

“I’d like to think the balance we could get to is 2 or 3 days at home, 2 or 3 days at the office,” Stevenson informed Bloomberg on 27 October.

Usually, a single employee needs approximately 200 to 250 sq ft of office space, including conference rooms, shared an expert.

If you consider the banks’ total number of workers, a lot of office premises could become disused. Standard Chartered employs around 6,000 people in Hong Kong, while HSBC has roughly 22,000 workers, but it’s unclear how many of them can perform their jobs while working from home.

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