High rents force banks to quit street-level space
With income growth slowing and operating costs rising, banks are shifting to upper floors
Banks hard hit by lofty rentals are abandoning prime street-level locations and relocating to first or second-floor premises to squeeze out returns from their branches.
The relocation away from the street seems to be taking hold in the banking industry, which is seeing slowing growth in income and soaring operating costs for staff and rents.
"The rents at ground level may cost several hundred dollars per square foot, but for the upper floors, it's just a couple of dollars," said Weber Lo, the country officer and chief executive of Citi for Hong Kong and Macau. "So which floor would you want your staff to be on?"
Some banks still look for street-level space … to build their brand
Prime locations in areas such as Central, Causeway Bay and Tsim Sha Tsui are still the favourite points for banks to capture the flow of people.
But Citi moved its staff in Central to the upper floors so as to double its customer servicing space in the ground-floor branch at Wheelock House in November last year.
China Minsheng Bank moved its office to Sheung Wan from its tiny location in Central in July. Fubon Bank also moved its ground-level branch in Taikoo Shing to the upper floor of a commercial building in April.
Such relocations are often viewed as an effective way to reduce costs.