Mandarin Oriental is looking to sell the top 13 floors of One Causeway Bay, totalling 270,000 sq ft.
Hong Kong’s hotelier Mandarin Oriental International said it is considering selling a portion of its prime mixed-use building, One Causeway Bay, situated in one of the city’s retail and business hubs. With 43 assets across the world, the company has maintained ambiguity about the likelihood of this potential sale and what the terms of this impending sale could be.
Local news outlets, however, have speculated that Alibaba Group Holding could be a potential buyer and could make an offer for HK$7 billion ($899 million). The hotel group is looking to sell the top 13 floors, which stretch to 270,000 sq ft of the One Causeway Bay.
Mandarin Oriental’s budget for this project is $650 million, with Hongkong Land serving as its project manager.
While Alibaba has remained tight-lipped about this, sources have confirmed that the Group had discussed buying office space in the building.
If the deal is finalised, it will be Hong Kong’s most expensive commercial property acquisition in 2025, in terms of lump sum payments. Making an offer of HK$7 billion means that Alibaba would be paying nearly HK$26,000 per square foot.
Some of the other big real estate purchases in the city, which took place earlier this year, include the Law Society of Hong Kong’s purchase of the entire 26th floor of The Center, which cost HK$345 million for 24,980 sq ft in July. In April, Hong Kong Exchanges and Clearing (HKEX) spent HK$6.3 billion for office floors and retail space in One Exchange Square. It also purchased other assets from Hongkong Land in Central.
The stock exchange operator announced its decision to purchase the top nine floors of the property, along with some retail space on the podium in the building, in what is one of Hong Kong’s core business districts. HKEX plans to use the 147,025 sq ft property as its headquarters since it has conducted operations at that very location for over forty years.
It also planned to sign a few new long-term leases for several floors, which it was already occupying in the adjacent Two Exchange Square. The Exchange said that it preferred the hybrid buy-and-rent model as it offered more flexibility and remained resilient against the volatile property market.
Hong Kong’s commercial property market is suffering from low demand, with nearly 15 million sq ft of total empty office space. One Causeway Bay is one of many office and retail spaces across the city which will be completed by 2026. Before the building was redeveloped, the Excelsior stood in its place, which was a waterfront hotel. That four-star hotel was closed in March 2019 to be rebuilt as the One Causeway Bay.
In the past couple of years, Hong Kong’s property market has been drying up, and therefore, these deals are being hailed as some of the biggest, offering much-needed hope to investors, property builders and real estate developers.
Stock exchange operators and businesses are now slowly but surely dipping their feet into the real estate pool again, renting out and eventually buying office spaces, as the economy is picking up after the pandemic.
Like the HKEX, the city’s Securities and Futures Commission also bought several floors at the One Island East in Quarry Bay in 2023. The commission acquired this property from Swire Properties and has since made it its permanent address.
Additionally, the HKEX transaction accelerated Hongkong Land’s asset-restructuring plan, which was established after a strategic study in October 2024, to highlight the region’s ‘ultra-premium’ real estate market and generate $10 billion over ten years from its current portfolio. Since then, it has raised $1.2 billion.