Banks Get Flexible With Property Needs

Source : Weekend TODAY, 25 Aug 2007

The short supply of available office space in the central business district is driving financial institutions to be more flexible when planning their real estate needs.

“Currently, banking and finance tenants occupy 36 per cent of all Grade A stock in Singapore, or close to 500,000 sq m,” said Justin Kean, associate director of Asia Pacific occupier research at consultancy Jones Lang LaSalle (JLL).

“This figure has increased by approximately half since the beginning of 2006.”

Added Mr Kean: “This implies that much of the recent rental movements in this market can be attributed to the banking and finance sector.”

A JLL white paper on real estate trends in the banking and finance sector showed financial institutions are exploring ways to create a better work environment, besides just looking at physical locations for expansion.

Advancements in data storage and communication technology have enabled the separation of front and back-end operations. The latter are then moved to cheaper locations.

To optimise office space, some banks here are considering the possibility of hot-desking, or allowing staff to work off-site or from home.

Such arrangements, together with the adoption of flexible work hours, would give the banks the flexibility to absorb minor shocks in the market, which might result in the reduction of staff numbers, without downsizing their real-estate portfolio.

JLL said, in line with the rise in corporate social responsibility within the sector, more real estate managers are making it an important part of their portfolio management strategy, including selecting eco-friendly buildings.