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Alibaba obtains half stake of $1.2 billion Singapore skyscraper

The AXA tower will be redeveloped and expanded as part of the deal

Alibaba has bought half of a $1.2 billion skyscraper in Singapore, making it the biggest commercial deal in the Asian city-state since 2017.

The e-commerce company’s local subsidiary will purchase the stake in the 50-floor AXA Tower in downtown Singapore from a group led by Perennial Real Estate.

In one of the largest property deals that Alibaba has made outside of China, it will also help to expand the tower by nearly a fifth when the deal closes later this year.

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The AXA Tower already houses a number of Alibaba employees and is the headquarters of its Lazada subsidiary, one of the region’s leading online retailers.

It is said that the tower will be redeveloped once all its existing tenancy agreements expire over the coming years. Planning approval has already been obtained for the new building to also include a hotel or apartments.

Like other Chinese companies, Alibaba has made Singapore the centre for its expansion into south-east Asia. It is also the second-largest shareholder of logistics company Singapore Post.

At the same time, Ant Financial, Alibaba’s sister company, is one of the companies on the shortlist for a digital banking licence from the country’s central bank.

Alibaba is counting on expanding internationally to grow its customer base, both in e-commerce and in new initiatives like cloud computing.

ByteDance, the parent company of TikTok, has also been growing its presence in Singapore as it expands globally. Baidu, the Chinese internet search company, last year also expanded its presence after launching cloud services in the city.

Alibaba had Rmb102 billion ($14.6bn, £11.6bn, €13.3bn) of property and equipment on its balance sheet as of last year.

FURTHER READING: Alibaba stock forecast: how coronavirus has affected the outlook

FURTHER READING: Alibaba Cloud to invest $28bn in infrastructure

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