Big Tech firms such as Tencent and Alibaba snap up land on the mainland amid slumping real estate sector

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Chinese Big Tech firms, including Tencent Holdings and Alibaba Group Holding, have become major buyers of land on the mainland at a time when both the technology and real estate sectors are battling economic and policy headwinds.

Social media and video gaming giant Tencent has shelled out 6.42 billion yuan (US$905 million) to acquire land spanning over 70,601 square metres in the Haidian district of Beijing, according to a notice published this week by the Beijing Municipal Commission of Planning and Natural Resources.

The acquired land is intended to “meet the company’s demand for office space that can provide a stable and centralised working space,” a company representative told the Post last week.

The Shenzhen-based technology behemoth employed more than 12,000 employees in Beijing as of the end of 2023.

Tencent’s land grab comes as the domestic technology sector continues to recover from several years of regulatory upheaval, which has seen many firms scale back their operations and shed jobs. Although a stock rout has wiped billions of dollars in market value from the country’s leading tech firms, authorities see the sector playing a key role in the future digital growth of China’s economy.

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Earlier this month, Alibaba completed the construction of its new Beijing campus, covering a floor area of 470,000 square metres and situated in the business-oriented Chaoyang District, according to a report by Beijing Daily. Alibaba owns the Post.

Last October, video gaming powerhouse miHoYo, and Alibaba’s fintech arm Ant Group, both splurged on land plots in Shanghai and Hangzhou respectively, where they are headquartered.

miHoYo, the developer behind global hit Genshin Impact, bought a land plot for over 1 billion yuan through a subsidiary in the Caohejing district in Shanghai, where a raft of Shanghai-based video gaming firms are congregated.

Ant Group in the same month spent 1.5 billion yuan for a plot in the Xixigu fintech cluster situated in the Xihu district of Hangzhou, eastern Zhejiang province.

Separately, last year spent over 3 billion yuan to acquire land in Beijing’s Yizhuang area, where the e-commerce giant is located.

Office vacancy rates are on the rise in China’s first-tier cities – Shanghai, Beijing, Guangzhou and Shenzhen – according to property consultancy CBRE, meaning cheaper rental prices.

The consultancy expects the vacancy rate of grade-A office space to have grown by up to 21 per cent by the end of 2023, compared with 18.7 per cent in June 2023.

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