Jack Ma has made another big move.
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Author | Huang Yu
Editor | Wang Xiaojuan
Alibaba, which is accelerating globalization, has once again invested heavily in the key battleground of Hong Kong.
Alibaba Group and Ant Group recently announced a joint investment of $925 million (about 6.6 billion yuan) to purchase 13 floors of commercial office space at One Island East in Causeway Bay, Hong Kong. This deal will not only be used to establish the Hong Kong headquarters of both companies, but also sets the largest transaction record in Hong Kong’s office market since 2021.
Although Alibaba set foot in Hong Kong as early as 1999 when it was just founded, and has now grown into a tech giant with a market value exceeding 3 trillion yuan, it has always rented office buildings in Hong Kong as its headquarters in the past.
At this crucial turning point where AI is driving new growth, the acquisition of the top 13 floors of One Island East in one go clearly underscores Alibaba's optimism about Hong Kong and its determination to use it as a base for further globalization.
Alibaba Group Chairman Joseph Tsai fully affirmed Hong Kong's strategic significance. He emphasized that this acquisition demonstrates Alibaba’s confidence in Hong Kong’s economy and business environment, and that it will continue to expand its international business with Hong Kong as an “ideal base camp”.
This battle is not just for Alibaba and Ant themselves, but is a key move in their drive for deep global expansion in the AI era.
Big move to buy property
One Island East is owned by Mandarin Oriental Hotel Group. Its predecessor was the Excelsior Hotel in Hong Kong, opened in 1973. After closing in March 2019, Mandarin Oriental rebuilt it into a Grade A office building.
The property is located in the core commercial and entertainment district of Causeway Bay, adjacent to Victoria Harbour, and only about a 5-minute drive from the Hong Kong Convention and Exhibition Centre, offering significant convenience in both transportation and business.
The deal was facilitated by Cushman & Wakefield. Its Capital Markets Department noted that One Island East will be officially completed in 2025 and is a rare new waterfront Grade A office landmark on Hong Kong Island, enjoying an unrivaled location in the core of Causeway Bay and unobstructed sea views.
Alibaba and Ant jointly stated that they will use the establishment of their Hong Kong headquarters as an opportunity to base themselves in Hong Kong and further expand their international business for global development.
Like Alibaba Group, Ant also attaches great importance to its strategic presence in Hong Kong. Eric Jing, Chairman of Ant Group, said: "Ant Group is actively participating in Hong Kong’s innovation hub construction and deeply integrating into the development of the Greater Bay Area. Hong Kong's strong entrepreneurial atmosphere and its role as a bridge linking China and global markets give us great confidence to increase our investment here."
To further fuel its globalization efforts, Eric Jing indicated that in the future, Ant Group will continue to increase its investment in Hong Kong, attract top global talent, and grow its local team.
It is worth mentioning that Alibaba’s property purchase comes at a time when the Hong Kong office market is rebounding.
A report from JLL indicated that, driven by an active IPO market and sustained demand for wealth management, Hong Kong’s overall Grade A office leasing market recorded a positive net absorption of 314,000 square feet in August. By the end of August, the overall vacancy rate for Grade A office space in Hong Kong had only slightly increased to 13.5%.
Cushman & Wakefield’s Capital Markets Department believed that behind this transaction, leading technology enterprises, represented by Alibaba and Ant Group, are adjusting their office strategies in Hong Kong—shifting from leasing to direct acquisition and ownership. "This change is not only an optimization of asset allocation, but also reflects firm confidence in Hong Kong's medium- to long-term development opportunities and regional growth potential."
Another background to Alibaba’s large-scale purchase is that this year, it has shaken off the downturn of the previous two years. With AI reshaping business development, its stock price has shown a sustained upward trend.
Recently, JP Morgan raised Alibaba's target price for US and Hong Kong stocks from $170/165 HKD to $245/240 HKD, respectively.
The bank noted that Alibaba's narrative has shifted from "losing market share in domestic e-commerce" to "top-tier Chinese internet asset." The core logic is that AI services will directly improve merchant operational efficiency and consumer experience, giving Alibaba the opportunity to reprice its advertising and tool services.
Against this backdrop, Alibaba’s decision to invest heavily in acquiring One Island East underscores its readiness to kick off a new round of global expansion.
International Hub
Alibaba now positioning Hong Kong as its "base camp" for global expansion is not a whim, but is rooted in its more than twenty years of deep ties.
As Joseph Tsai said: "Since its establishment in 1999, Alibaba has been deeply engaged in the Hong Kong market."
For Alibaba, a global technology company, Hong Kong's strategic value is multi-dimensional and hard to replace. Tsai condensed this into four major advantages: “Hong Kong provides us with a wealth of professional talent, a robust capital market, an innovative cultural atmosphere, and close connections to the world.”
Looking back over Alibaba’s development history, Hong Kong has played an important role at almost every critical juncture.
In terms of business layout, as early as 1999 when Alibaba was first established, it set up its finance and legal departments in Hong Kong. In 2005, Taobao entered the Hong Kong market and launched services for local retailers and SMEs, opening up the e-commerce link between Hong Kong and the mainland for the first time.
By 2014, Alibaba Cloud launched in Hong Kong with the construction of its first overseas data center. To date, Alibaba's business in Hong Kong has covered all aspects including payments, e-commerce, technology, and more.
In terms of capital operations, Hong Kong is an even more core base for Alibaba.
In 2019, having already been listed on the NYSE, Alibaba completed a secondary listing on the Hong Kong Stock Exchange, raising over $10 billion and becoming one of the biggest IPOs in Hong Kong’s capital markets in recent years. This move marked a deep bond between Alibaba and Hong Kong’s capital markets.
At that time, Jack Ma said frankly: “On Alibaba’s 20th anniversary, we welcomed an important milestone—that is returning home, returning to be listed in Hong Kong.”
By 2024, Alibaba transitioned from "secondary listing" to a dual-primary listing on both New York and Hong Kong, becoming the first Chinese technology company with such status and further consolidating Hong Kong’s role as the core hub of its international capital operations.
As an international business hub and global financial center, Hong Kong is also a significant battlefield for Jack Ma’s Yunfeng Financial.
In September this year, Yunfeng Financial’s securities subsidiary 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 Bitcoin, Ethereum and other digital asset trading services to retail and professional investors, aiming to build its "next-generation Web3 financial ecosystem".
So now, Alibaba’s major investment of 6.6 billion yuan to purchase its headquarters building in Hong Kong undoubtedly further manifests its determination to develop deeply in Hong Kong.
Cushman & Wakefield’s Capital Markets Department pointed out that when companies purchase headquarters-grade properties, it often signals more in-depth local operations and a longer-term market commitment. “We are also observing that more and more companies are showing great interest in commercial properties in Hong Kong’s core districts and other types of real estate projects, which further confirms Hong Kong's lasting appeal as an international financial center and regional hub.”
In fact, in recent years, not only Alibaba, but also many domestic technology newcomers, such as JD.com, Xiaohongshu, ByteDance, and others, have increased their presence in Hong Kong.
Standing at this historic opportunity of globalization and AI, shifting from leasing to purchasing a headquarters, Alibaba’s move is a continuation of its globalization strategy and an upgrade in determination. Deepening its connection with Hong Kong will undoubtedly help Alibaba accelerate its growth into a global tech giant.
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