Zhi Tong Cai Jing·2025-10-20 08:33Core Viewpoint - Morgan Stanley reports that Hong Kong has recently recorded its largest office building sale in years, with the sale of the Mandarin Oriental Hotel for HKD 7.2 billion, indicating a potential stabilization in the office capitalization rates in Hong Kong [1] Group 1: Transaction Details - The Mandarin Oriental Hotel was sold for HKD 7.2 billion, with Alibaba (09988) and Ant Group acquiring the top 13 floors of the One Island East building [1] - The estimated monthly rent for the property is assumed to be HKD 65 per square foot, leading to a capitalization rate of 3.3%, which is comparable to the average capitalization rates in Wanchai or Causeway Bay [1] Group 2: Market Implications - This large transaction is believed to help stabilize the capitalization rates for office buildings in Hong Kong and reduce commercial real estate risks to some extent [1] - The transaction is expected to impact Kowloon Warehouse Holdings (01997), as Alibaba's lease at Times Square is set to expire in 2028, likely leading to a relocation [1] - There is an expectation that more leading companies from mainland China may show interest in purchasing office properties in Hong Kong for their regional or non-mainland headquarters [1] Group 3: Beneficiaries - The stabilization of office capitalization rates is seen as beneficial for major office leasing developers in Hong Kong, specifically Hongkong Land and Swire Properties (01972) [1]