RBS said to be giving up half its space in HK's Central district

[HONG KONG] Royal Bank of Scotland Group Plc, the UK lender scaling back its investment-banking business, is planning to reduce the office space it rents in Hong Kong's Central business district by half, according to two people with knowledge of the matter.

The bank leases about 60,000 square feet in the AIA Central building, the people said, declining to be named because the information isn't public. It plans to keep half of that for Coutts & Co, its private banking unit, and most of the other employees will move to Lincoln House in the eastern district of Quarry Bay, where RBS already leases space, by the end of the year, they said.

Office rents in Central, where banks such as HSBC Holdings Plc and Goldman Sachs Group Inc have their regional headquarters, are falling as foreign financial firms continue to downsize or relocate to cut costs. Tenants in the city on three-year leases expiring this year may be able to negotiate on average rents that are 20 per cent lower than current leases, according to Cushman & Wakefield Inc.