by WANG Yuhan

Big-ticket purchases by mainland technology groups are prompting a reassessment of Hong Kong's prime office valuations, after years of falling prices pushed assets in core districts sharply lower.

On Dec. 9, an investment vehicle controlled by JD.com agreed to acquire a 50% stake in the China Construction Bank Tower in Central for about HK$3.5 billion from Lai Sun Development. Earlier, in October, Alibaba Group and Ant Group paid HK$7.2 billion to Mandarin Oriental International for 13 office floors at One Causeway Bay, securing rooftop signage rights and 50 parking spaces for a planned dual headquarters.

Within a two-month span, the two deals mark a rare burst of large-ticket buying by mainland technology groups at a time when the broader office market remains weak.

"Overall, Hong Kong offices are at the bottom of the cycle," WU Rui, managing director of Savills Shenzhen, told Jiemian News. "Core assets are becoming attractive for medium- to long-term investors, even if a near-term rebound remains uncertain."

JD's purchase targets a Grade A, transit-linked office tower at 3 Connaught Road Central, with most of its roughly 229,000 sq ft leased to China Construction Bank for Hong Kong operations. Market sources said Lai Sun Development explored a sale as early as July, including talks with China Construction Bank, which held but did not exercise a right of first refusal, while JD's bid emerged as the highest.

Alibaba's earlier deal was larger. The purchase at 281 Gloucester Road covers about 301,600 sq ft of office space at One Causeway Bay. Joseph Tsai, chairman of Alibaba Group, said the deal reflected confidence in Hong Kong's economy and its role as a base for international expansion, even though Alibaba's lease at Times Square runs until 2028.

The timing is notable. CBRE data show Hong Kong recorded just 98 large office transactions in 2024, the lowest level in two decades, with total deal value at HK$41 billion. By contrast, the Alibaba and JD purchases alone pushed transaction value in the second half of 2025 beyond HK$10 billion.

Savills' Wu said prices in core districts have fallen more than 25% from the 2019 peak, with some projects down close to 40%, a correction that has largely priced in risk. In 2025, the market has begun to stabilize, with leasing activity showing early signs of improvement.

According to CBRE, net absorption of Grade A office space reached 691,800 sq ft in the third quarter of 2025, the highest since 2018, with all major business districts posting positive absorption for the first time in a decade.

The leasing rebound has been reinforced by a recovery in capital markets. KPMG estimates Hong Kong's IPO fundraising will reach HK$272.1 billion in 2025, up 210% year on year, with 17 A+H listings completed so far, accounting for about half of total funds raised.

Lower interest rates have eased financing costs as the U.S. Federal Reserve enters a rate-cut cycle. Hong Kong's economy has also stabilized, supported by a tourism recovery and firmer consumption.

Beyond cyclical factors, Wu said Hong Kong's role in global asset allocation is becoming more prominent for large mainland companies. Alibaba's expanding portfolio of financial licenses strengthens its demand for core offices, while JD has stepped up its local presence, including the acquisition of Kai Bo Food Supermarket and plans to open its first JD Mall in Wan Chai by 2026.

Technology firms are also reshaping the buyer mix. In June, social media platform Xiaohongshu opened its first office outside mainland China in Hong Kong, while U.S. trading firm Jane Street agreed to lease six floors at the Central Harbourfront for about HK$1.83 billion, a record for a single office lease in the core district.

Looking ahead, CBRE and UBS expect tightening supply in 2026–2027 and sustained IPO activity to support a gradual recovery in Hong Kong's prime office market.