diff --git a/common/changes/@itwin/appui-react/ui-models-tree-optimize-creating-subjects-hierarchy_2022-05-24-12-58.json b/common/changes/@itwin/appui-react/ui-models-tree-optimize-creating-subjects-hierarchy_2022-05-24-12-58.json
new file mode 100644
index 000000000000..0c61a3730d6b
--- /dev/null
+++ b/common/changes/@itwin/appui-react/ui-models-tree-optimize-creating-subjects-hierarchy_2022-05-24-12-58.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@itwin/appui-react",
+      "comment": "Models Tree: Optimize creating subjects hierarchy",
+      "type": "none"
+    }
+  ],
+  "packageName": "@itwin/appui-react"
+}
\ No newline at end of file
diff --git a/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree-GroupedByClass.PresentationRuleSet.json b/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree-GroupedByClass.PresentationRuleSet.json
index 0c5d4e0c022d..978c40331523 100644
--- a/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree-GroupedByClass.PresentationRuleSet.json
+++ b/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree-GroupedByClass.PresentationRuleSet.json
@@ -121,6 +121,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") = NULL AND json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") = NULL AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideIfNoChildren": true,
           "groupByClass": false,
           "groupByLabel": false
@@ -152,6 +153,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND (json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") <> NULL OR json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") <> NULL) AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideNodesInHierarchy": true,
           "groupByClass": false,
           "groupByLabel": false
diff --git a/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree.PresentationRuleSet.json b/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree.PresentationRuleSet.json
index 8724aa0a10e2..675ea21d31fa 100644
--- a/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree.PresentationRuleSet.json
+++ b/test-apps/presentation-test-app/assets/presentation_rules/VisibilityWidget.ModelsTree.PresentationRuleSet.json
@@ -121,6 +121,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") = NULL AND json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") = NULL AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideIfNoChildren": true,
           "groupByClass": false,
           "groupByLabel": false
@@ -152,6 +153,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND (json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") <> NULL OR json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") <> NULL) AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideNodesInHierarchy": true,
           "groupByClass": false,
           "groupByLabel": false
diff --git a/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.GroupedByClass.json b/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.GroupedByClass.json
index 9b2631dc9149..8e58e748bc97 100644
--- a/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.GroupedByClass.json
+++ b/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.GroupedByClass.json
@@ -121,6 +121,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") = NULL AND json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") = NULL AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideIfNoChildren": true,
           "groupByClass": false,
           "groupByLabel": false
@@ -152,6 +153,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND (json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") <> NULL OR json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") <> NULL) AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideNodesInHierarchy": true,
           "groupByClass": false,
           "groupByLabel": false
diff --git a/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.json b/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.json
index a206562d44a1..5f1ea477b5a0 100644
--- a/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.json
+++ b/ui/appui-react/src/appui-react/imodel-components/models-tree/Hierarchy.json
@@ -121,6 +121,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") = NULL AND json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") = NULL AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideIfNoChildren": true,
           "groupByClass": false,
           "groupByLabel": false
@@ -152,6 +153,7 @@
             }
           ],
           "instanceFilter": "(parent.ECInstanceId = partition.Parent.Id OR json_extract(parent.JsonProperties, \"$.Subject.Model.TargetPartition\") = printf(\"0x%x\", partition.ECInstanceId)) AND NOT this.IsPrivate AND (json_extract(partition.JsonProperties, \"$.PhysicalPartition.Model.Content\") <> NULL OR json_extract(partition.JsonProperties, \"$.GraphicalPartition3d.Model.Content\") <> NULL) AND this.HasRelatedInstance(\"BisCore:ModelContainsElements\", \"Forward\", \"BisCore:GeometricElement3d\")",
+          "hasChildren": "Always",
           "hideNodesInHierarchy": true,
           "groupByClass": false,
           "groupByLabel": false