Tech Giants Concentrate On Property Acquisitions As Hong Kong Office Market Reaches A Bottoming Opportunity

On December 9, an investment vehicle controlled by JD.com acquired a 50 percent stake in the China Construction Bank Tower in Central from Lai Sun Development for approximately HKD 3.5 billion.

Earlier in October, Alibaba Group and Ant Group purchased 13 floors of office space at One Island East in Causeway Bay from Mandarin Oriental International for HKD 7.2 billion, a transaction that included rooftop signage rights and 50 parking spaces and is intended to support the establishment of dual headquarters.

The two sizeable mainland technology‑sector property investments within a two‑month span have prompted market participants to reassess the valuation outlook for Hong Kong’s office sector. Savills Shenzhen Managing Director Wu Rui told Jiemian News that, on balance, Hong Kong’s office market appears to have reached a trough; while a short‑term rebound cannot be guaranteed, the timing is attractive for medium‑ to long‑term investors, particularly for core office assets.

The China Construction Bank Tower, whose half‑stake was acquired by JD.com’s investment arm, stands at 3 Connaught Road Central. The site was redeveloped from the former Ritz Hotel into a 27‑storey Grade A office building with a gross floor area of about 229,000 square feet, of which 18 office floors and a banking hall are leased to China Construction Bank for its Hong Kong operations. The building occupies a prime Central location adjacent to landmarks such as AIA Financial Centre and The Henderson, and benefits from direct underground access to Central MTR station. JD.com described the purchase as primarily for self‑use and reiterated its long‑term commitment to Hong Kong, noting plans to continue investing in supply‑chain integration and to expand retail, logistics and technology R&D activities that serve the city.

Alibaba’s October acquisition was larger in scale. The group and Ant Group paid HKD 7.2 billion for roughly 301,600 square feet of office space at One Island East, together with rooftop signage rights and 50 dedicated parking spaces. The property at 281 Gloucester Road occupies a historically significant site that previously housed the Excelsior Hotel and is known as one of Hong Kong’s landmark land parcels. Alibaba’s existing lease at Times Square runs until 2028, and the decision to invest heavily in advance of that expiry has been widely interpreted as a clear signal of long‑term confidence in Hong Kong’s market. Alibaba Chairman Joe Tsai publicly framed the acquisition as an expression of faith in Hong Kong’s economy and business environment and as part of the company’s international expansion strategy.

These transactions stand in stark contrast to the subdued activity that has characterized Hong Kong’s office market in recent years. CBRE data show that large Grade A office transactions in 2024 fell to a 20‑year low, with only 98 deals totaling HKD 41 billion, the second‑lowest annual total in two decades. By comparison, the combined value of Alibaba’s and JD.com’s deals in the second half of 2025 alone has already exceeded HKD 10 billion, reflecting material shifts on both the supply and demand sides and a reassessment of commercial real‑estate value by corporate occupiers.

Market participants point to several reasons for entering now. After multiple years of price declines, core office values have adjusted substantially from 2019 peaks, with typical declines exceeding 25 percent and some assets down nearly 40 percent, a correction that has materially reduced downside risk. In 2025 the market showed signs of stabilization and structural differentiation, creating a window for large investors. Leasing indicators have strengthened: CBRE reports that net absorption of Grade A office space in Hong Kong reached 691,800 square feet in the third quarter of 2025, the highest quarterly figure since Q3 2018, and for the first time since Q2 2015 all major business districts—Central, Island East, Kowloon East and Tsim Sha Tsui—recorded positive net absorption.

The leasing recovery has been supported by a robust rebound in Hong Kong’s capital markets. KPMG estimates that IPO fundraising in Hong Kong reached HKD 272.1 billion in 2025, up 210 percent year‑on‑year and ranking first globally; seventeen “A+H” listings were completed, accounting for half of total proceeds. Savills’ Wu Rui noted that the surge in mainland listings has generated incremental office demand. Lower local interest rates under the linked exchange‑rate system following the U.S. easing cycle have reduced corporate financing costs, while tourism recovery, stronger consumption and renewed financial activity have helped stabilize the economy and underpin longer‑term corporate commitments.

Strategic considerations also favor Hong Kong. For large mainland enterprises navigating geopolitical uncertainty and uneven global growth, Hong Kong’s role as a global asset‑allocation hub has become more prominent. Alibaba has secured key financial licenses across securities, insurance and banking, making core office space an important operational platform. JD.com has accelerated its Hong Kong presence through local acquisitions and strategic partnerships and plans to open a JD Mall store in Wan Chai in 2026. Hong Kong’s developed financial infrastructure, open trade environment and internationally aligned legal and tax framework continue to support multinational corporate strategies.

The influx of technology firms is reshaping the buyer base for core office assets. Historically dominated by foreign corporates and established local property families, the market is now seeing “new money” and technology‑sector buyers emerge as significant participants. Examples this year include Xiaohongshu’s establishment of its first office outside mainland China in Hong Kong and Jane Street’s lease of six floors at the New Harbourfront project in Central for approximately HKD 1.83 billion, a record single‑transaction lease in the core district. Savills has observed this buyer diversification in its market interactions, and expects the trend to broaden the commercial ecosystem by attracting upstream and downstream industry participants and by accelerating demand for smart, sustainable office space.

Looking ahead to 2026, market observers are broadly optimistic. Wu Rui expects gradual stabilization and further recovery, with additional large‑scale office transactions likely. CBRE projects that sustained IPO activity and accelerated globalization among mainland enterprises will lift demand for core office assets and support a transition from localized improvement to broader market revival. UBS notes that declining office supply in 2026–2027 should help Central’s Grade A market approach a trough, positioning owners of prime office assets to benefit from the recovery.