If the walls of Hangzhou’s Euro America Financial City Tower 6 could talk, they would probably confess to be eagerly awaiting the arrival of its new owner, which plans to fill its empty floors with high-tech machines and complex algorithms, writes Eugenia Jiménez.
On June 5, the Hong Kong-based manager Gaw Capital Partners completed its acquisition of the 46-story, Grade A office building, which has been anchor tenanted by the Chinese digital marketplace giant Alibaba. The deal to buy the office, struck on behalf of a separate account, was completed at an undisclosed price.
Gaw Capital bought the office tower from local developer Jiangong Real Estate in a deal agreed at the end of 2019. While the price was not revealed, the manager told PERE the deal’s terms did not change despite the economic impacts of the coronavirus pandemic.
Designed by Foster & Partners, the 220-meter-high EFC Tower 6 is considered a premium office building in institutional investment terms. It offers approximately 1 million square feet of gross floor area, approximately one-tenth of the space offered by the broader Euro America Financial City complex. Jiangong’s mixed-use development encompasses office, retail, hotel and residential buildings.
Gaw Capital has acquired a building currently 70 percent occupied thanks to a pre-lease agreed to with Alibaba’s cloud computing division AliCloud in 2019. In addition to securing one of the fastest-growing cloud service providers in China, Humbert Pang, managing principal and head of China for Gaw Capital Partners says “the clustering effect of Alibaba’s ecosystem and high-tech institutions in the neighborhood will further help boost office demand.”
The acquisition, Gaw’s first in Hangzhou, highlights the firm’s confidence in China’s rising tech and e-commerce industries, especially as covid-19 has given a further boost to online shopping amid lockdowns.
The deal’s announcement came just two weeks after Alibaba reported better than expected fourth-quarter revenues, despite the coronavirus pandemic. The company’s overall revenue rose to 114.31 billion yuan ($16.02 billion; €14.24 billion) in the quarter ending March 31 from about 93.50 billion yuan a year earlier.
EFC Tower 6, and the wider Euro America Financial City, is located in the heart of the Future Sci-Tech City central business district, an increasingly high-profile area in close proximity to Alibaba’s global headquarters. It is considered to be strategically important to China’s e-commerce infrastructure and a hub for scientific and technological innovation and development.
Future Sci-Tech City is considered well placed in Hangzhou, attracting numerous start-ups and entrepreneurs as it benefits from state support. The Chinese government has launched a series of favorable policies to encourage technology and innovation-led companies to register in the area. Notable corporates and institutions besides Alibaba Group include ByteDance, Vivo, Oppo, DAMO Academy and Hupan University.
Pang says this makes the city a microcosm of China’s new economy. “We believe that Hangzhou has strong economic foundations with great potential to grow further as an increasing number of talented professionals and companies choose the city as their home.”