<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ba4261ae-3113-4b6e-9779-3f10257489f7.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ba4261ae-3113-4b6e-9779-3f10257489f7.png"/> Author | Huang Yu
Editor | Wang Xiaojun
Alibaba, which is accelerating its globalization, is once again investing heavily in Hong Kong, an important stronghold.
Alibaba Group and Ant Group recently announced a joint investment of $925 million (approximately 6.6 billion RMB) to acquire 13 floors of commercial office space at One Island East in Causeway Bay. This transaction will not only be used to establish the Hong Kong headquarters for both companies but also sets a record for the largest office market transaction in Hong Kong since 2021.
Although Alibaba set foot in Hong Kong as early as 1999 when it was founded and has now grown into a technology giant with a market value exceeding 3 trillion RMB, it has previously rented office buildings as its headquarters in Hong Kong.
Standing at a critical turning point driven by AI for new growth, the acquisition of the top 13 floors of One Island East undoubtedly demonstrates Alibaba's optimism about Hong Kong and its determination to use it as a base for further global development.
Joseph Tsai, Chairman of Alibaba Group, fully affirmed the strategic significance of Hong Kong. He emphasized that this acquisition reflects Alibaba's confidence in Hong Kong's economy and business environment, and that Hong Kong will serve as an &#34;ideal base&#34; for the continuous expansion of international business.
This move is not only for Alibaba and Ant themselves but is also a key step in their pursuit of deep global expansion in the AI era.
Major Investment in Real Estate
One Island East is owned by the Mandarin Oriental Hotel Group and was formerly known as the Hong Kong East Hotel, which opened in 1973. After ceasing operations in March 2019, it was rebuilt by the Mandarin Oriental Hotel Group into a Grade A office building.
The property is located in the core commercial and entertainment area of Causeway Bay, adjacent to Victoria Harbour, and is only about a 5-minute drive from the Hong Kong Convention and Exhibition Centre, offering significant transportation and commercial convenience.
The transaction was facilitated by Cushman &amp; Wakefield. The Capital Markets Department of Cushman &amp; Wakefield pointed out that One Island East is set to be completed in 2025 and is a rare new landmark of coastal Grade A office buildings in Causeway Bay and the entire island, boasting an irreplaceable prime location in the heart of Causeway Bay with unobstructed sea views.
Both Alibaba and Ant stated that they will take the establishment of their Hong Kong headquarters as an opportunity to base themselves in Hong Kong and further expand their international business globally.
Like Alibaba Group, Ant also places great importance on the strategic significance of establishing a presence in Hong Kong. Ant Group Chairman Jing Xiandong stated, &#34;Ant Group is actively participating in the construction of Hong Kong as an innovation hub and deeply integrating into the development of the Greater Bay Area. The strong entrepreneurial atmosphere in Hong Kong, along with its role as a bridge connecting China and global markets, gives us confidence in increasing our investment in Hong Kong.&#34;
To further promote global development, Jing Xiandong pointed out that in the future, Ant Group will continue to increase its investment in Hong Kong, attract top global talent, and strengthen the local team.
It is worth mentioning that Alibaba's real estate purchase coincides with the recovery of the Hong Kong office market.
A report by Jones Lang LaSalle indicated that benefiting from an active IPO market and the ongoing growth in wealth management demand, Hong Kong's overall Grade A office leasing market recorded a positive net absorption of 314,000 square feet in August
As of the end of August, the overall vacancy rate of Grade A office buildings in Hong Kong has only slightly increased to 13.5%.
Cushman &amp; Wakefield's Capital Markets Department believes that behind this transaction reflects that technology-leading enterprises represented by Alibaba and Ant Group are adjusting their office strategies in Hong Kong—from leasing to direct purchase and ownership. &#34;This shift not only optimizes asset allocation but also represents their firm confidence in Hong Kong's medium to long-term development opportunities and regional growth potential.&#34;
Another background to Alibaba's significant property purchase is that this year it has swept away the downturn of the previous two years, with AI reshaping business development and its stock price showing a continuous upward momentum.
Recently, JP Morgan raised Alibaba's target prices for its U.S. and Hong Kong stocks from $170/165 HKD to $245/240 HKD.
The bank pointed out that Alibaba's narrative has shifted from &#34;losing market share in the domestic e-commerce market&#34; to &#34;first-tier assets in China's internet.&#34; The core logic is that AI services will directly enhance operational efficiency for merchants and consumer experience, providing Alibaba with room for repricing in advertising and tool services.
Against this backdrop, Alibaba's substantial purchase of One Island East in Hong Kong also highlights its intention to seize the opportunity to initiate a new round of global expansion.
International Hub
Alibaba now positions Hong Kong as its &#34;base camp&#34; for global expansion, which is not a spur-of-the-moment decision but rooted in its more than twenty years of deep connections.
As Joseph Tsai stated: &#34;Since its establishment in 1999, Alibaba has been deeply engaged in the Hong Kong market.&#34;
For Alibaba, a global technology enterprise, the strategic value of Hong Kong is complex and irreplaceable. Joseph Tsai summarizes it into four major advantages: &#34;Hong Kong provides us with a large pool of professional talent, a robust capital market, an innovative cultural atmosphere, and advantages closely connected to the global market.&#34;
Looking back at Alibaba's development history, Hong Kong has played an important role at almost every key juncture.
In terms of business layout, as early as 1999 when Alibaba was just established, it took the lead in setting up financial and legal departments in Hong Kong. In 2005, Taobao entered the Hong Kong market, launching services aimed at local retailers and SMEs, and for the first time opened up the e-commerce circulation link between Hong Kong and the mainland.
By 2014, Alibaba Cloud's business landed in Hong Kong, establishing its first overseas data center. To date, Alibaba's business layout in Hong Kong has covered payment, e-commerce, technology, and other full scenarios.
In terms of capital operations, Hong Kong is also Alibaba's core battleground.
In 2019, Alibaba, which was already listed on the New York Stock Exchange, completed its secondary listing on the Hong Kong Stock Exchange, raising over $10 billion at that time, becoming one of the largest IPOs in Hong Kong's capital market in recent years. This move marked a deep binding of Alibaba with the Hong Kong capital market.
At that time, Jack Ma stated: &#34;On the occasion of Alibaba's 20th anniversary, we have reached an important milestone—coming home, listing in Hong Kong.&#34;
By 2024, Alibaba will transition from &#34;secondary listing&#34; to dual primary listings in New York and Hong Kong, becoming the first Chinese technology enterprise to achieve this status, further consolidating Hong Kong's role as its core hub for international capital operations.
As an international business hub and global financial center, Hong Kong is also an important battleground for Jack Ma's Yunfeng Financial
In September of this year, the securities subsidiary of Yunfeng Financial successfully obtained approval from the Hong Kong Securities and Futures Commission to upgrade its license to provide virtual asset trading services. This enables it to offer trading services for digital assets such as Bitcoin and Ethereum to retail and professional investors, aiming to build its &#34;next-generation Web3 financial ecosystem.&#34;
To date, Alibaba has spent HKD 6.6 billion to purchase a headquarters building in Hong Kong, undoubtedly further demonstrating its commitment to deepening its presence in the region.
Cushman &amp; Wakefield's Capital Markets Department pointed out that companies acquiring headquarters-level properties often signify deeper local operations and a longer-term market commitment. &#34;We have also observed that an increasing number of companies are showing strong interest in commercial properties in Hong Kong's core areas as well as other types of real estate projects, further confirming Hong Kong's ongoing appeal as an international financial center and regional hub.&#34;
In fact, in recent years, not only Alibaba but also many new tech giants from the mainland, such as JD.com, Xiaohongshu, and ByteDance, have increased their investments in Hong Kong.
Standing at this historical opportunity of globalization and AI, Alibaba's move from leasing to purchasing a headquarters is a continuation of its globalization strategy and an upgrade of its commitment. Deepening its connection with Hong Kong will undoubtedly help Alibaba accelerate its growth into a global tech giant

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Alibaba spends 6.6 billion to buy buildings

- Alibaba Group and Ant Group have announced a joint investment of $925 million to acquire the top 13 floors of the One Island East office building in Hong Kong.  
- This acquisition marks the largest office transaction in Hong Kong since 2021 and reflects Alibaba's commitment to establishing a strong base for global expansion.  
- The move is seen as a strategic shift from leasing to ownership, emphasizing confidence in Hong Kong's economic environment and the potential for long-term growth in the region.

Jack Ma has made another big move