US banking giant Citigroup is spending S$220 million to move into new premises at Changi.
It plans to shift some of its operations to the new facility, as part of efforts to keep costs down, and to create a friendlier office environment. Called Changi Business Park, the 400,000-square feet facility will be built by Ascendas Real Estate Investment Trust.
Citigroup currently has offices at six different buildings in Singapore.
With more than 8,000 employees, it is Singapore's top bank - in terms of staff numbers - and still growing.
Citigroup plans to move half of its employees to Changi Business Park by 2010, but it will keep its downtown offices especially for staff who need to be nearer their clients.
"Prices of real estate in downtown central Singapore had been increasing rapidly and a large part of our operations, particularly our technology operations as well as support and back office operations, don't necessarily have to be located in the most expensive parts of the city," said Piyush Gupta, Country Officer, Citi Singapore.
Citi said it is not affected by the spike in rents in the prime district yet as it still has leases for the next 5-7 years. However, its expansion plans mean it will have to pay market prices for additional office space.
But Citi said the new premises are not just about costs.
It is seeking to keep and draw talent by creating a campus-like, eco-friendly work environment, with amenities like a childcare centre and gymnasium. The business park will also have a podium with a variety of shops.
The lender said it has so far been successful with similar moves elsewhere in major cities such as New York and London.
"We did that in New York several years ago when we moved from downtown to midtown... Typically, we've found that when a big core player like us makes the move, the infrastructure starts developing around it, and slowly a large centre of activity starts to move around it as well. So, we're hopeful we can lead the charge again," said Gupta.
Property consultants had anticipated that banks will start to move their back offices away from the city to reduce costs amid soaring rents.
Office rents at the financial district have shot up by 60% to 70% in the last 12 months. - CNA /ls
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