One Causeway Bay will be getting some Alibaba-flavoured rooftop signage (Image: Kohn Pedersen Fox)
Chinese e-commerce giant Alibaba Group and its Ant financial affiliate have agreed to buy the top 13 floors of Mandarin Oriental Hotel Group’s nearly completed Causeway Bay commercial tower for $925 million in Hong Kong’s biggest real estate deal of 2025.
The mainland companies contracted to acquire levels 21-35 of One Causeway Bay as their headquarters in Hong Kong, as well as the building’s rooftop signage and 50 parking spaces, Singapore-listed Mandarin Oriental said Friday in a release. Mingtiandi reported last month that the hospitality unit of Jardine Matheson had held talks on a potential deal with Alibaba, which currently has its Hong Kong offices in the Times Square complex in Causeway Bay.
“The sale marks a further advancement in Mandarin Oriental’s asset-light strategy and will enable a significant return of capital to shareholders,” the company said. “We will continue to focus on the rapid growth of the Mandarin Oriental management business and the strengthening of the brand.” The deal is said to have been facilitated by the capital markets team at Cushman & Wakefield in Hong Kong.
Also Friday, Mandarin Oriental announced that it had agreed to a proposal by Jardines to acquire the 11.96 percent of equity in the hotel group not already held by the parent company, citing the low volume and liquidity of its SGX-traded shares.
Strata Mega-Deal
The strata title buy will give Alibaba and Ant possession of 301,555 square feet (28,015 square metres) of total floor area at One Causeway Bay — translating to $3,067 per square foot of space at the agreed price — with Mandarin Oriental retaining ownership of 286,984 square feet of office space and 82,550 square feet of retail space.
Jack Ma made his money online, but his company likes to buy buildings (Getty Images)
The disposal property represented 36 percent of the total value of Mandarin Oriental’s tangible fixed assets and investment properties as of the end of June, according to the company.
With the proceeds from the sale, Mandarin Oriental plans to repay borrowings of $96 million drawn for construction of the property and retain up to 3 percent of the gross proceeds to fund the remaining construction cost of One Causeway Bay. It will also provide Alibaba and Ant with a fixed sum of $37 million towards planned enhancements to the property.
The deal is expected to close on 31 December and would place Jardines units 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.
$4.2B Group to Delist
Jardines’ buyout offer for Mandarin Oriental values the company at $4.2 billion on an equity basis and is to be financed through cash on the balance sheet and committed facilities from lenders, according to the Friday announcement.
The offer price of $3.35 per share represents a more than 52 percent premium to the stock’s closing price of $2.20 on 29 September, the day before Mandarin Oriental disclosed that it was considering the sale of its interest in One Causeway Bay.
Jardines said it plans to delist Mandarin Oriental from the Singapore Exchange and will pursue other means to do so if the offer fails to gain acceptance. Mandarin Oriental shares closed at $2.40 on Friday ahead of the announcements.
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