Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2022 Event Calendar
    • APAC Residential Forum 2022
    • Asia Logistics Forum 2022
    • Asia REIT Forum 2022
    • APAC Data Centre Forum 2022
    • Singapore Focus Forum 2022
    • Office Strategies Forum 2022
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

JD Group Buys Beijing Hotel for RMB 2.7B to Create High Tech Complex

2019/02/12 by Jan Kot Leave a Comment

Beijing Jade Palace Hotel

JD Group bought the Beijing Jade Palace Hotel for RMB 2.7 billion

Chinese e-commerce giant JD Group has bought an ageing landmark hotel in Beijing for RMB 2.68 billion ($396 million), with the world’s third-largest Internet firm saying that it plans to convert the facility for business and R&D use.

Beijing-based JD Group this month paid RMB 2.68 billion to purchase 100 percent of the equity in the Beijing Jade Palace Hotel from the Beijing Haidian State-owned Assets Operation & Management Center, as well as agreeing to take on RMB 762 million in debt associated with the 32-year-old project.

Altus - AE Free Trial In-story Banner

The purchase gives JD, which ranked behind only Amazon and Google parent firm Alphabet in terms of revenue among Internet firms in 2017, a new base to expand its business in a location just four kilometres south of its current technological center.

Making a Pricey Purchase in a Familiar Location

“For a rather old and money losing hotel asset, RMB 2.68 billion was quite a hefty price to pay,” Annie Wang, director of hotels at Savills Beijing, told Mingtiandi. “But for JD Group itself, this was a smart move. It’s necessary for the company to have a base in the heart of Beijing’s tech hub,” she added.

A JD Group spokesperson was cited in the local media as saying that the acquisition of the 411-room hotel, located at 76 Zhichun Lu in northwestern Beijing’s Haidian district was based on the company’s long term strategic development. In the future, JD said that the property located around six kilometres west of the capital’s Zhongguancun Science Park will be redeveloped to accommodate the company’s business operations as well as technological research and development. It will also act as a spatial medium for the company’s industrial development in the Haidian district.

Data centre forum 2022_250 ad

“Haidian district has a concentration of resources and talents for innovation. JD Group hopes to count on Haidian’s location advantage, bring into full play JD’s leadership role in technological innovation and assist in building Haidian into a global center for innovation,” said China’s second largest online retailer.

Beijing-based JD currently has a campus in southeastern Beijing’s E-Town, about 42 kilometers from its latest acquisition. “The location of the Jade Palace Hotel, which is not only close to Zhongguancun but also to some of the best high education institutes including the Peking University and the Tsinghua University, gives JD a much easier access to the technological talent pool than its E-Town headquarters. It’s a win-win solution for every party involved,” Wang said.

JD Could Become a Commercial Landlord

JD boss Liu Qiangdong is building a new base in the Zhongguancun area

Wang noted that JD would likely demolish the vintage structure and rebuild a new one from scratch and could also take the opportunity to become a commercial landlord.

“It would not be too much of a surprise if JD decides to let some of the floors out,” Wang said. At the present, the Zhongguancuan area suffers from a shortage of quality office buildings, with office rents in the area averaging as much as RMB 300 per square meter per month, about 67 percent less than the capital’s Financial Street.

Located in the heart of China’s Silicon Valley and 200 meters from metro Line 10 Zhichunli station, the 18-storey Jade Palace Hotel was built in 1987 and opened for business since 1998. The 68,629 square meter (738,716 square foot) property comprised of a once five-star hotel, 9,000 square meter office spaces and retail elements.

Landmark Property Fails to Keep Pace

Thanks to its proximity to Zhongguancun, the hotel was regarded as a breeding ground for some of China’s most well-known tech companies including the smartphone maker Xiaomi and JD itself, who had either taken up office space at the building or regularly used the place for product launches and brainstorming sessions.

Despite all this love from the tech heavyweights, in 2013, the state-owned property, which had been losing out to a more competitive hotel industry, was stripped off its five-stars and since 2016, its operation has been suspended in the name of property renovation.

According to public records, as of September 30, 2018, the Jade Palace Hotel achieved annual sales revenue of RMB 18 million and suffered a net loss of RMB 47 million. The hotel had total assets of RMB 731 million and RMB 784 million in debt.

2022 Event Calendar House Ad1

On November 26, 2018, the Beijing Haidian State-owned Assets Operation & Management Center listed the Jade Palace Hotel for sale on the Beijing Equity Exchange. The asset’s reserve price of RMB 2.68 billion included 100 percent equity for RMB 1.9 billion and RMB 762 million debt. The then owner of the hotel specified that interested parties must be of a high-tech nature with net assets in 2017 of no less than RMB 5 billion. The Beijing Haidian State-owned Assets Operation & Management Center had taken over the hotel property from the government-backed Beijing Capital Group in January 2018.

In 2017 JD Group beat out China Resources Land to win two commercial land parcels in Beijing E-Town, where its headquarters is located, for RMB 3.85 billion. The online retailer has also been expanding its dominance of China’s e-commerce into the country’s offline retail market. The company announced last September that it plans to open 1,000 app-enabled grocery showrooms in the next three to five years, stepping up its competition with Alibaba and Tencent for the mainland’s grocery business.

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: Beijing, cm-ml, daily-sp, Hotels, JD.com, Zhongguancun

https://vimeo.com/722412109

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

Data centre forum 2022 Web banner

MTD TV

mtd tv aussie panel thumbnail
SC Capital, JLL, RCA, Perri Predict Office Upswing as Australia Opens Up: MTD TV
MTD TV proptech show
COVID-19 Accelerates Proptech Adoption in Asia: Watch on MTD TV

More MTD TV Videos>>

People in the News

Wu Jianxin Kaisa
Asia Real Estate People in the News 2022-06-20
Graham Mackie Tishman
Tishman Speyer Appoints Graham Mackie to Lead APAC Push Beyond China and India
Antoine Mesnage
AXA IM Alts Appoints Antoine Mesnage as Head of Australia, Promotes 2 Other Execs
Carolin Fong Suet-yuen
Asia Real Estate People in the News 2022-06-13

More Industry Professionals>>

People in the News

Asia Real Estate People in the News 2022-06-20

Wu Jianxin Kaisa

Top level executive changes at a pair of major mainland real estate companies lead this week’s round-up of personnel … Read More>>

Tishman Speyer Appoints Graham Mackie to Lead APAC Push Beyond China and India

Graham Mackie Tishman

US developer Tishman Speyer has hired industry veteran Graham Mackie as a managing director to lead the firm’s Asia … Read More>>

AXA IM Alts Appoints Antoine Mesnage as Head of Australia, Promotes 2 Other Execs

Antoine Mesnage

AXA IM Alts is shaking up its leadership team Down Under with the appointment of Antoine Mesnage as the French firm’s … Read More>>

Asia Real Estate People in the News 2022-06-13

Carolin Fong Suet-yuen

Top level moves in Hong Kong lead this week’s roundup of personnel moves from around Asia with the SAR appointing a new … Read More>>

More Industry Professionals>>

Latest Stories

Boustead chairman John Lim Kok-Min
Boustead Projects JV Picks Up Sin Capital’s Orchard Road Tower for $371M
Country Garden Chairman Yang Guoqiang
Country Garden Downplays Moody’s Downgrade, Announces $411M Bond Buyback
Guo Ziwen Aoyuan
China Aoyuan to Sell 49% of Australia Unit at $170M Loss

Sponsored Features

Should Proptech Give Us Sleepless Nights?
Hong Kong’s Evolving Commercial Real Estate Landscape
Opportunities in the Greater Bay Area

More Sponsored Features>>

MTD-QR-Code-320

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2022 China Advertising Media Ltd (Samoa). All rights reserved.