HONG KONG (BLOOMBERG) - The list of foreign banks relinquishing pricey office space in Hong Kong is growing, with Societe Generale confirming it is vacating one floor in the Admiralty business district.
The French bank is releasing space in Swire Properties' Three Pacific Place, according to an e-mailed statement from the lender. Societe Generale's lease expires this year and it decided to renew for six floors instead of seven, the bank said.
"We have assessed as early as 2019 different options to the renewal of the lease, factoring in our staff's increasing expectations to work from home, convenience of the current location and costs of moving," the bank said. "We have done a specific assessment of the occupancy rate of our offices, which demonstrates that we could release a floor."
Multinational firms, which are more likely to allow employees to work from home than their local peers, constituted 75 per cent of the surrendered office stock last year, according to Cushman & Wakefield.
DBS Group Holdings also surrendered some floors in Swire Properties' One Island East tower on the other side of Hong Kong Island. In the past few months, BNP Paribas and Standard Chartered Bank gave up floors in their Hong Kong headquarters, while UBS Group relinquished a floor in Sheung Wan's Li Po Chun Chambers late last year.
Rental rates for Hong Kong's grade A office space have fallen for 21 straight months, with overall vacancy at 9.3 per cent, data from Jones Lang LaSalle (JLL) show. Total surrendered space last month rose to a record 1.77 million sq ft, JLL said.
Rents are expected to fall by 7 per cent this year as tenants seek to reduce costs, according to Colliers International.