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Standard Chartered to give up eight floors in Hong Kong headquarters amid work from home arrangements and cost cuts

  • The reduction of office space could help the bank save about US$770,000 a month
  • It could generate HK$1.5 million a month by leasing three floors it owns in Kwun Tong

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The Standard Chartered Bank Building in Hong Kong’s Central district. Photo: Bloomberg
Sandy Li

Standard Chartered will not renew the leases for eight floors at its Hong Kong headquarters in Central, according to local media reports, as it adopts work from home arrangements and cuts costs amid the Covid-19 pandemic.

The bank, one of the city’s three note-issuing lenders, will also offer for lease three floors it owns at Millennium City in Kwun Tong, according to Hong Kong Economic Times. Standard Chartered declined requests for comment.

“It is a common tenancy renewal process. We are not in a position to discuss individual tenant’s arrangement,” Hang Lung Properties, which owns the Standard Chartered Bank Building, said in a written reply to the Post. The building always draws interest from financial and legal firms, which have a good presence in Central, it added.

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The news comes amid a rise in vacancies in the Central grade A office market, the world’s most expensive commercial market. Vacancies rose to 7.3 per cent in December last year, surpassing 7 per cent for the first time since 2004, according to commercial real estate services company JLL.
“The vacancy rate will continue to increase, as there is a sizeable amount of marketable and surrendered space anticipated to come back to the market in the coming months. Leasing activity was limited towards the end of the year, with only a handful of small transactions recorded,” it said, adding that it expected overall grade A office rents to drop as well, by as much as 10 per cent, this year.

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The lease for four floors leased by Standard Chartered expires in October this year, while the contract for another four expires in April 2022. Combined, the eight floors equal 60,000 sq ft. The three floors it plans to lease out in Kwun Tong will also yield 60,000 sq ft.

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