Commonwealth Bank of Australia is in final negotiations to lease a large chunk of short-term office space on Pitt Street in the Hilton Sydney Hotel complex to house its swelling Sydney workforce. 

The bank is expected to take 3000 to 4000 square metres of space at the ISPT-owned office building at 255 Pitt Street, industry sources said. The B-Grade office building will shortly be vacated by Apple and Challenger, which presented an opportunity for both the landlord and the bank. 

Both CBA and ISPT declined to comment.  But the bank reported higher operating expenses at its full-year results in August. Full-time or equivalent employees had increased by about 4 per cent year on year.  As most of its presence is in Sydney, it is likely the short-term space is to support its growing regulatory, compliance and remediation programs. 

CBA has executed several short-term leases in the last year close to its existing Darling Harbour headquarters. 

The main reason is that it is waiting for a new additional CBD office to be built. Earlier this month CBA confirmed it would extend its employment hub on the southern fringe of the Sydney CBD in late 2017 on a 12-year lease. Up to 3000 staff will move into the new office building being developed by Lendlease as part of the Darling Harbour Live project.

But it is also in the process of making a decision on its long-term office needs in the greater Sydney area, because the new Darling Harbour lease does not address CBA's needs in the suburbs, which are estimated to be around 100,000 square metres. 

A decision hinges on the sale of the Australian Technology Park in inner Sydney. The bank has joined forces with developer Mirvac, one of the shortlisted parties to buy the precinct. If Mirvac ends up the successful purchaser of the tech park, it is likely it will build a large technology hub for the bank. 

CBA's other options are to move to the $2 billion Parramatta Square project, or stay put at its western Sydney offices in Homebush, Lidcombe and Parramatta.

In the meantime, it has taken short-term space for the next couple of years at a number of CBD buildings in Sydney, including more than 5000 square metres at the Investa-owned 1 Market Street and another 1500 square metres at the Allianz Centre at 2 Market Street.