Alibaba reportedly in talks to buy HK office for HK$7bn

Alibaba Group is reportedly in talks to buy the top 13 floors of One Causeway Bay (港島壹號中心) in Hong Kong for around HK$7 billion to use as its headquarters.

The asking price is nearly HK$26,000 per square foot, with each floor covering around 20,000 square feet, totaling about 270,000 square feet, according to HKET.

On the other hand, One Causeway Bay’s owner, Mandarin Oriental International, confirmed in a statement that it is in discussions about a possible sale of certain office space within the building. “There can be no certainty that any sale will proceed, nor as to the terms on which such sale might be made. A further announcement will be made if and when appropriate,” the statement reads.

Alibaba has been renting space at Times Square in Causeway Bay as its headquarters. Its affiliates, such as Ant Group and media operations, currently occupy a total of 10 floors due to business expansion, with the lease set to expire in 2028, according to the report.

One Causeway Bay was originally a hotel known as The Excelsior, Hong Kong (怡東酒店). Mandarin Oriental invested HK$5 billion in its redevelopment, and the property is nearing completion, according to report. The owner initially planned to lease out all 24 floors, totalling around 500,000 square feet, but has currently rented only two floors. Recently, the owner suspended leasing activities for the project. Given that the building is a new Grade A development in Causeway Bay, offering high quality and full harbor views, its price is higher compared to other commercial buildings in the area.

The report has also cited industry insiders who expect that Alibaba is looking for a new Grade A office building in the area for its own use as a headquarters in the long term. If it purchases half of the building's space, it is anticipated that the company could obtain naming rights and rooftop advertising space, which is why it is negotiating for multiple floors.

MARKETING-INTERACTIVE has reached out to Alibaba for a statement. 

Don’t miss: Alibaba to raise US$3.2bn for cloud and eCommerce expansion

Recently, Alibaba Group has intended to raise US$3.2 billion by issuing zero-coupon convertible senior notes as part of its strategy to strengthen its cloud and international eCommerce initiatives.

In a stock exchange filing on 11 September, Alibaba Group said that it will use the net proceeds from the notes offering for general corporate purposes, primarily aimed at enhancing its cloud infrastructure and international commerce operations.

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