Foreign Property News | Posted by Hnin Ei Khin
Chinese e-commerce giant JD Group has bought an aging 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.
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.
“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.
“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.
Ref: Property Report
