Chinese tech giants are expanding in Singapore as they face increasing regulatory pressures at home and sanctions in other key markets. Messaging-and-gaming behemoth Tencent is opening a hub and TikTok owner ByteDance is establishing a regional HQ, while e-commerce giant Alibaba is investing in property.
According to Dr Chen Guoli, professor of strategy at the Singapore campus of business school INSEAD, Singapore is considered as a more neutral country under the current climate of geopolitical uncertainty. Singapore has always maintained good ties with Beijing and the West, and tech firms have come to regard it as a safe option to expand their operations without upsetting either side.
Locally, some major banks have scaled back their physical footprints in prime office areas amidst new norms evolving from the pandemic. DBS is reportedly giving up 75,000 sq feet in MBFC Tower 3 in December, according to Bloomberg. It was also reported that Standard Chartered is thinking of letting go of space in MBFC when its lease is up.
In the larger scheme of things, this shrinking and shuffling of office space has been going on since the Global Financial Crisis (GFC) in 2009, said one market observer, as the banks rationalise operations due to changes in strategy and the need to be more cost-efficient. In Singapore, banks with scale have gradually moved back- and middle-office positions from the CBD to Changi Business Park and Mapletree Business City, or even out of Singapore.
With Covid-19 and the growing acceptance of hybrid work models, it is likely that banks will continue to evaluate their office space. Nevertheless, a mass exodus is unlikely. For instance, OCBC and UOB will stay put since they own the buildings in Raffles Place that serve as their headquarters. Citi has indicated no further changes to its physical footprint since it gave up several floors in 2020 to Amazon.