In a global downsizing involving some 3,200 employees at the US bank Goldman Sachs, a dozen jobs related to its real estate operations in Singapore were lost in early November. The cut of 3,200 jobs was part of a previously reported plan to slash 10 per cent of the firm’s global workforce amid an economic downturn.

It was reported that most of the positions cut were from the real estate principal investment team, which is responsible for property investments by the bank and its managed property funds in Southeast Asia, principally in Singapore.

Some of the employees were offered positions elsewhere within the group, but the team has been downsized to just one or two persons; the team has also been moved out of Singapore. Others in Singapore also retrenched include a banker who used to help out with the real estate investment banking team, as well as an analyst with the equity research team.

The Singapore property market, particularly offices, has been badly affected by the global financial crisis and fears of oversupply. On top of that, the Singapore real estate investment trust (S-Reit) sector has been badly hit due to a slump in equity markets and refinancing fears amidst current tight liquidity. Several planned Reit IPOs have also been postponed indefinitely.

Goldman Sachs-linked property funds own three office buildings in Singapore namely, DBS Building at Shenton Way, Hitachi Tower and Chevron House. Market watchers noted that Hitachi Tower and Chevron House were at near-peak prices, but the bank failed to offload DBS Building in a timely manner.

The fund had bought DBS Building late 2005 for S$690 million or S$789 psf of net lettable area. Chevron House, formerly Caltex House, was acquired for S$730 million or S$2,780 psf in August last year. Located at Raffles Place, the building stands on a site with a remaining lease of about 81 years at the time of the deal.

Meanwhile, the 999-year leasehold Hitachi Tower at Collyer Quay was bought for S$811 million or about S$2,900 psf early this year.