In 2013, Citigroup began looking for a comprehensive, cost-effective real estate solution in Hong Kong, a market that accounts for more than $1 billion in annual revenue. The bank sought to consolidate its portfolio of multiple sites and the majority of its nearly 5,000 employees under one roof. The supply of suitable buildings was scarce, and few corporate occupiers had purchased assets in Hong Kong, making the project more challenging. Citi also faced office lease expirations.
Citi appointed CBRE as the sole advisor on the planning and execution of the bank’s long-term strategy. In June 2014, Citi acquired the East Tower of One Bay East, a 21-story, 512,000-square-foot office tower, from Wheelock Properties for $700 million. The transaction set a benchmark in the market as the largest single office purchase ever undertaken in Hong Kong and a milestone in Citi’s 112-year history there.
CBRE worked closely with Citi’s internal financing and accounting teams to navigate what was unchartered territory for the bank, providing regular and rapid market updates. Citi also faced fierce competition from two other prospective buyers. Despite this, the deal closed in 60 days.
The CBRE deal team included Hong Kong Office Services, Global Workplace Solutions, Research, and Valuation & Advisory Services. After the acquisition, CBRE’s Project Management team was appointed to oversee and manage space planning and buildout.
Located in the heart of the Kowloon financial district with a panoramic view of Victoria Harbor, the new offices will enable Citi to reduce its occupancy footprint by 25% and its annual operating costs by 30%. The move also allows Citi to support expansion plans and to provide staff with a world-class work environment.