Deutsche Bank weighs giving up HK office space

HONG KONG • Deutsche Bank AG, the struggling German lender that’s in talks about a merger with Commerzbank AG, is weighing giving up as many as three of the 10 floors it occupies in Hong Kong’s tallest skyscraper, people with knowledge of the matter said.

Deutsche Bank signed the 10-year lease in the 484m (1,588ft) International Commerce Centre (ICC) in 2010 and hasn’t been using all the space, said two of the people, who asked not to be named discussing private information. Landlord Sun Hung Kai Properties Ltd has asked at least one real estate agency to start looking for new tenants for the floors starting July 2020, another person said.

The lender hasn’t made a final decision on how much space in ICC it will vacate and is in negotiations with Sun Hung Kai, one of the people said. Deutsche Bank may also rent space in cheaper office buildings to house staff including back-office personnel, this person said. A representative for Deutsche Bank declined to comment.

“We are positive about the outlook for the office market, and are discussing with some tenants on their lease agreements,” Sun Hung Kai said in an emailed response to questions, without mentioning Deutsche Bank. “We are confident of reaching an agreement with the tenants.” ICC has a 99% occupancy rate, it said.

By giving up three floors, Deutsche Bank would save about US$12.7 million (RM51.79 million) a year, data compiled by Bloomberg using the current market price showed. — Bloomberg