Banks and bankers are on the move in Hong Kong, searching for less expensive corporate and personal digs as the city's rents head ever higher.
Royal Bank of Scotland (RBS) recently moved more of its people from the Cheung Kong Center in Central - a towering symbol of power in the city - and dispersed them to cheaper rental premises in places such as Quarry Bay in the Eastern District of Hong Kong Island.
As of August, net rentals in Central averaged HK$104 per square foot, compared with HK$56 to HK$57 per sqft in Causeway Bay, and HK$40.50 per sqft in Quarry Bay.
Rents in Central have slipped 10 per cent on average below last year's levels, but financial institutions around the world still are feeling the squeeze as their business outlook remains weak to bleak.
Loss-making RBS, now controlled by the British government, is no longer among the top 20 financial industry tenants in Hong Kong, having vacated a total of seven floors at Cheung Kong Center, according to a recent research report by Credit Suisse.
UBS, too, is shopping for lower-cost space. The Swiss bank sprawls over several floors at Two IFC in Central, the second-tallest building in Hong Kong behind the International Commerce Centre (ICC) in West Kowloon. But its lease expires in the middle of next year. My contacts at UBS say the bank considered relocating to ICC, where the likes of global banks Morgan Stanley and Credit Suisse decided in 2007 to move their regional head offices. But sufficient space wasn't available.
In a domino effect, some bankers who have survived this year's rounds of layoffs also are busy house-hunting.
Traditionally, many senior and mid-rank financial executives preferred to ensconce themselves on The Peak or in Repulse Bay. But faced with the prospect of lower salaries, bonuses and other non-cash benefits including the increasingly rare housing allowance, they are slicing personal overheads.
Before the 2008 financial crisis, some managing director-level bankers in Hong Kong were still getting monthly housing allowances of HK$150,000 or more on top of their multi-million dollar annual base salaries. Such housing benefits now are either gone or partly integrated into their salaries.
"It basically means a pay cut because you won't get the full amount of your housing after it is counted into your salary," explains an expatriate banker, adding that some of his friends now get only half or less of their original housing allowances.
That may explain why those who used to live in the Mid-Levels district are now exploring places in North Point. And Discovery Bay, where there is more space for the spend, is looking good as a kind of poor-man's Repulse Bay, some property agents suggest.
When Morgan Stanley and others first decided to move their offices to ICC, I heard that some staff disliked the commute to Kowloon so much they quit.
Then again, the job market was not as bad then as it is today.
Wonder if all of those Central lovers will dare to quit if the bosses says they are moving your office to Kowloon or a more remote place? I doubt it.
George Chen is the Post's financial services editor. Mr. Shangkong appears every Monday in the print version of The SCMP.