KPMG Rationalizes Costs; Scouts for Cheaper Office Space
The global economic downturn is not sparing any sector and the recent casualties are the accounting firms who are already feeling the heat. KPMG, the behemoth professional services firm providing audit, tax and advisory services has plans to cut its office rental costs to combat the credit crunch.
The company is planning to take up a brand new property with a total area of about 80,000 sq ft at a lower rent, even though its existing lease contract of the St. James Square property is far from getting over with another 6 years to go.
Property analysts of the commercial real estate sector are of the opinion that more and more companies are making use of the exit clause of their current contracts and pulling out of the old properties, as these properties were leased at exorbitant rates during the market boom period. Now, these properties are becoming a burden for the companies reeling under market pressures.
In this scenario, it makes business sense for the companies to shift base to new properties, which are offering lucrative rent rates, much lower than the existing ones. KPMG for example is going for a new, cheaper and more spacious shared office space property, which can accommodate about hundred employees more than the current office space.
Commercial law firm of international repute, Hill Dickinson is also contemplating to back out from a long-term property deal, which will lapse after twelve years. However, all these are market speculations and might not actually materialize, such as those of companies like PWC (Price Waterhouse Coopers), who has deferred any imminent plans of a pullout.