Citigroup, Singapore's top bank by staff numbers, on Thursday announced plans to spend $220 million (US$152 million) to move its Singapore-based back office to the country's edge amid soaring rents in central areas.The move comes as office rents in the business district, where all of the local and most of the foreign banks are based, have surged on the back of fast growth in Singapore's financial industry and a booming economy.
Citigroup said in a statement that around 3,000 of its 8,500 staff in Singapore would transfer to the 37,160 sq m building close to the airport in two phases beginning in 2009.
The new building, owned by Singapore's Ascendas Real Estate Investment Trust , will have room for up to 4,000 people and will house Citi's International Technology Office, Citi Markets & Banking Operations & Technology for Asia Pacific, as well as Citi Asia Pacific Technology Infrastructure.
Citigroup's Country Officer Piyush Gupta said that paying rents of $15 per square foot in Singapore's central business district 'doesn't make sense'.
Office rentals in central Singapore jumped 41 per cent in the first nine months of 2007 after climbing 30 per cent in 2006, following an average increase of just 1.9 per cent in the three years before that, according to Singapore's central bank.
Mr Gupta said Citi's exposure to such increases was limited because most of its lease contracts ran for another five to seven years. -- REUTERS
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