Japanese bank cuts leases after merger
Bank of Tokyo-Mitsubishi has terminated leasing contracts on 10 units at various upmarket residential developments as part of a streamlining plan following its merger, according to sources.
The move brought to 40 the number of terminated contracts since the Bank of Tokyo and the Bank of Mitsubishi merged in April last year to form the world's largest bank.
Sources said the leases on the units - used to house Japanese executives - were signed at the peak of the market two years ago at rents from $40,000 to $60,000 a month.
The contracts were terminated once the bank confirmed no replacements would be sent to Hong Kong after the executives returned to Japan, sources said.
Most of the units were in North Point, Taikoo Shing and Kornhill.
The sources said the bank would not renew some leases if landlords refused to cut rents.
They said some leases had been reduced by up to 30 per cent. The bank still holds leases on 50 other units.
Property agents said many Japanese firms affected by a depressed economy at home had been cutting staff in Hong Kong.
Agents said rents at Braemar Hill - a favoured location for Japanese tenants - had dropped 28 per cent to $23 per square foot from $32 per square foot two years ago.