Goldman said to plan paring Tokyo office space to cut costs

, Bloomberg

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Mori Tower Tokyo

Goldman Sachs Group Inc. is in talks with its Tokyo landlord to cut office space as it seeks to reduce expenses, said two people with knowledge of the matter.

The Wall Street firm, which rents six floors of the Mori Tower in the Roppongi Hills office complex, is in discussions with Mori Building Co. to vacate two levels, the people said, asking not to be named as the talks are private.

Goldman Sachs joins investment banks including Nomura Holdings Inc. in reducing costs in Japan after companies shunned the stock market for fundraising amid a recession that may be ending. The plan to trim office space comes even as rents in Tokyo decline to a record low.

The U.S. bank plans to leave the 43rd and 44th floors, which house its asset management unit and sports facilities, and remain in the 45th to 48th, the people said. It will transfer staff to other floors of the 54-story building, one of the people said.

"This is part of a planning process to optimize our space," Goldman Sachs said in a statement emailed to Bloomberg News, declining to comment further. Hideki Nomura, general manager of public relations at Mori Building, Japan's biggest closely held developer, declined to comment.

Goldman Sachs has about 1,200 employees in Japan as of this month, almost unchanged from a year earlier, said Hiroko Matsumoto, a Tokyo-based spokeswoman.

Recovery Signs

Signs of a recovery in the country's equity capital markets are emerging as stocks rally and the yen weakens. Goldman Sachs and Daiwa Securities Group Inc. were picked to manage the government's sale of a stake in Japan Tobacco Inc. (2914), according to a regulatory filing Monday. The stake is valued at about $10.3 billion, based on Monday's closing price, making it the nation's largest share offering since 2010.

Japanese companies sold $4.1 trillion in shares in 2011 and 2012 combined, less than 2010's 5 trillion yen, according to data compiled by Bloomberg. The world's third-largest economy, which contracted in each of the past three quarters, will expand 1.75 percent this quarter, according to the median estimate of economists.

Goldman Sachs isn't the only foreign bank adjusting its office space in the Japanese capital. Citigroup Inc. will move its local retail banking unit's headquarters to the city's Shinjuku district from Shinagawa in 2014 to increase floor space and cut costs, according to an internal memo obtained by Bloomberg News in August.

Morgan Stanley

Morgan Stanley will move to the Otemachi financial district from Ebisu in early 2014, the bank said in December, taking advantage of declining rents and rising office vacancies.

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