Zhi Tong Cai Jing·2025-10-02 07:41Group 1 - UBS reports that Alibaba is considering acquiring the "One Island East" center in Causeway Bay, which consists of 13 floors and naming rights [1] - Currently, Alibaba leases 170,000 square feet at Times Square, with the lease expiring in 2028 [1] - If Alibaba relocates, Times Square's vacancy rate could increase by 16 percentage points, with a current occupancy rate of 90% as of June this year [1] Group 2 - UBS estimates that the annual rental income loss for Wharf Real Estate Investment Company (01997) could reach HKD 110 million, equivalent to 1% of last year's profit, based on a rental rate of HKD 54 per square foot [1] - The report anticipates continued pressure on both retail and office sectors at Times Square due to asset enhancement works at Hysan Development's (00014) Causeway Bay properties, expected to be completed between 2026 and 2027 [1] - If the acquisition is successful, it could positively impact the local office market, as the exit yield for the transaction is only 2.5%, lower than the level achieved by Link REIT in April for a similar transaction [1] - Reports indicate that Alibaba may acquire 270,000 square feet, increasing its current office space by 100,000 square feet [1]