Citi in $220m move to Changi Business Park

Source : The Business Times, November 2, 2007

New premises will house back-office operations; can take up to 4,000 staff

SOARING rents downtown are pushing multinationals to house their back-office support operations away from central areas.

Stomping ground: The two office blocks will have 400,000 sq ft of space

And Citi is spending $220 million to consolidate its back-office operations at Changi Business Park - the first bank to do so at this location.

Previously the bank's support functions were spread over its locations at Tampines, downtown Millennia and Centennial towers and Capital Square.

Citi said it is giving up its space at Tampines and consolidating all support services at Changi. Without divulging the rent, it said the investment includes capital, relocation, rental and operating costs.

'We're scaling out,' Citi's Singapore country officer and head of Asean markets & banking Piyush Gupta said yesterday.

'Instead of paying $15 per sq ft in the central area, we build scale without having to pay costs in the Central Business District.'

Office rents have surged 40.7 per cent so far this year, rising 14.8 per cent in the third quarter alone.

In the Urban Redevelopment Authority's prime office category - which includes Raffles Place and Marina Centre and Orchard Planning Area - the median rent for new leases was $11.89 per sq ft (psf) per month in Q3, up from $10.33 in Q2. In the general category, which makes up 80 per cent of office space, the median rent for Q3 was $5.29 psf a month, up from $4.60 in Q2.

The support units of the local banks are also located out of town. OCBC and United Overseas Bank are at Tampines and DBS is at Chai Chee.

Citi's new premises at Changi - two built-to-suit office buildings with a total of 400,000 sq feet - can house 4,000 employees, representing almost half of Citi's total staff strength of 8,500 in Singapore. About 1,100 staff will move to Changi in Q1 2009 and 2,000 more in Q4 2010.

Citi will locate its International Technology Office, Markets & Banking Asia-Pacific Operations & Technology and Asia Pacific Technology Infrastructure divisions at Changi.

These divisions are responsible for activities like transaction services, funds administration and technology functions. These divisions support not just Citi's Singapore business but that in the region and globally, Mr Gupta said.

For example, the technology division supports international consumer business in more than 40 countries, with Singapore serving as global headquarters.

The transaction services processing division serves corporate clients in 16 countries. And the technology infrastructure division provides desktop, voice and network services to the region.

'The move will allow us to consolidate our operations, technology and support services under one roof, providing for greater synergies, as well as catering for future business growth,' Mr Gupta said.