Ant Group buys land to expand HQ as fintech firm and Alipay operator emerges from shadow of China’s tech crackdown

The affiliate of Alibaba Group Holding pays 1.54 billion yuan (US$210.5 million) for a parcel for new office buildings in Hangzhou
Move is a ‘clear sign’ that Ant is ‘back on its growth track’, a property investor says, after the company got hit with a 7 billion yuan fine in July

Alibaba

Daniel Renin Shanghai

Published: 7:30pm, 20 Oct 2023

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Financial technology giant Ant Group has bought a land parcel near its headquarters in Hangzhou, showing that the company is entering a growth phase now that the dust from a two-year crackdown on the technology sector has settled, according to analysts.

The company, an affiliate of Alibaba Group Holding paid 1.54 billion yuan (US$210.5 million), or 11,344 yuan per square metre, for the land, which can accommodate 135,000 square metres of gross floor area, according to records on the website of Hangzhou’s city planning and natural resources bureau. Alibaba owns the Post.

The parcel, located in West Lake District, will be used to build new office buildings as Ant, one of the world’s largest fintech companies and the operator of the Alipay mobile-payment service, seeks to regain its growth momentum after it was handed a financial penalty of 7.123 billion yuan in July.

Two people with knowledge of the land purchase deal told the Post that new office space will be added to the existing headquarters amid an increasing number of employees in Hangzhou, the capital of China’s eastern Zhejiang province which is also home to Alibaba’s headquarters. The local government said earlier that total investment on the land parcel would amount to 5 billion yuan.

Ant Group established its headquarters after buying a plot of land in Hanghou in October 2020. Photo: Shutterstock

Ant did not immediately respond to the Post’s request for comment on Friday.

Ant paid 2.7 billion yuan, or 5,194 yuan per square metre, in October 2020 for the parcel where its headquarters now stands, which offers 519,000 square metres of gross floor area. The company shelled out another 1.3 billion yuan in August 2021 for a site that can yield a total gross floor area of 325,795 square metres, as a way of expanding the headquarters.

“Construction of new offices is a clear sign that Ant is back on its growth track,” said Yin Ran, a start-up and property investor in Shanghai. “The price of the land piece seems reasonable, as the Hangzhou government offers its support to the fintech behemoth.”

Ant Group’s Alipay+ expands support for Asian e-wallet and payment apps in China

The penalty that the People’s Bank of China handed to Ant in July was widely seen as the end of a crackdown that lasted more than two years.

The PBOC said in a statement that the fine targeted the “violations of laws and regulations of Ant Group and its subsidiaries in corporate governance, financial consumer protection, participation in business activities of banking and insurance institutions, payment and settlement business, fulfilment of anti-money-laundering obligations, and development of fund sales business in the past years”.

Ant’s planned dual listing on the Shanghai and Hong Kong stock exchanges in late 2020 was called off at the last minute.

Chinese fintech giant Ant Group launches own AI large language model

The financial penalty on Ant amid Beijing’s pledge to “normalise” management of Ant and other fintech firms also triggered speculation that the obstacles for Ant’s initial public offering had been lifted.

However, even if Ant is back on track to float shares in Hong Kong or Shanghai, its valuation would be significantly lower than in October 2020, when the spin-off was aiming for a US$37 billion listing, giving it an estimated valuation of US$300 billion.

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