One Causeway Bay is being launched into Hong Kong’s worst office market in decades (Image: Kohn Pedersen Fox)
Alibaba Group is in talks to buy the top 13 floors of the Mandarin Oriental Hotel Group’s soon to be completed Causeway Bay commercial tower in a HK$7 billion ($900 million) deal which would rank as Hong Kong’s largest of 2025, if completed.
“The Company confirms that it is in discussions about a possible sale of certain office space within One Causeway Bay,” Mandarin Oriental International said in a statement today. Market sources confirmed the terms of the discussions between Alibaba and the unit of Jardine Matheson Group on Tuesday with the talks having first been reported by the Hong Kong Economic Times.
The mainland e-commerce giant, which currently has its Hong Kong offices in the Times Square complex in Causeway Bay, is said to be eyeing the project being developed on the site of the former Excelsior Hotel as its next headquarters in the city, with the deal valuing the space at just under HK$26,000 per square foot,
Should the deal be completed under the terms currently being discussed, it would place units of Jardine Matheson as sellers in Hong Kong’s two largest office transactions of 2025, after Hongkong Land sold a set of floors in the Exchange Square complex in Central for HK$6.3 million during April.
E-Commerce Player Loves Bricks and Mortar
The office purchase would see Alibaba take possession of around 270,000 square feet of office space in the harbourfront building, with the company also expected to receive car parking, naming rights and signage rights as part of the transaction, market sources told Mingtiandi.
Jack Ma made his money online, but his company likes to buy buildings (Getty Images)
Alibaba is currently leading a joint venture developing its Southeast Asia headquarters as Singapore’s tallest tower after its Lazada unit acquired what is now Lazada One in Singapore for the equivalent of $409 million in 2019.
With the Kohn Pedersen Fox-designed tower said to be approximately 95 percent completed, Mandarin Oriental has reportedly paused leasing of space in the building at 281 Gloucester Road.
Alibaba declined to comment in response to an inquiry from Mingtiandi.
Plunging Values
Once the sole four-star property in Mandarin Oriental’s portfolio, the hotel firm had put the Excelsior Hotel on the market in mid-2017 before abandoning that effort in favour of redeveloping the site for office use when offers said to reach as high as HK$30 billion failed to meet its expectations.
Situated about a two-minute walk from the Causeway Bay MTR station, the property comprises 24 office floors spanning 500,000 square feet of Grade A space and five retail floors totalling 55,000 square feet.
The reported 2017 offers for the Excelsior equate to around HK$44,000 per square foot, or around 41 percent more than the price currently under discussion for the nearly completed property.
Despite the fall in price, market analysts see the potential deal as aligned with current market conditions.
Bobby Mak, real estate valuer at Hong Kong-based CHFT Advisory and Appraisal, whose team has valued the mid to low zones of One Causeway Bay at HK$19,000 per square foot said, “Considering some upward adjustments for the upper floors as well as the naming right of the building, the reported price of HK$26,000 per square foot still looks quite good.”
The valuation of One Causeway Bay declined by 3 percent in the first six months of 2025 due to “changes in assumptions for office and retail rental”, said Mandarin Oriental International in its interim report.
Alibaba and its affiliates are currently leasing ten floors at Times Square, with their tenancy set to expire in 2028, according to the Economic Times’ account.
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