What happened: China’s e-commerce giant JD.com has acquired 100% ownership of the Jade Palace Hotel in Beijing for $400 million. The Nasdaq-listed company is planning to transform the building into a space for technology innovation and commercial businesses. The hotel, which started operation in 1998, posted a net loss of RMB 47 million ($6.93 million) for the nine months from January to September 2018.
Why it’s important: JD’s purchase of the iconic building comes as a surprise given that it already has very large headquarters in the southeastern suburbs of the capital. The hotel’s convenient location at the center of Beijing’s Haidian District, where it enjoys proximity to top universities and the high-tech area of Zhongguancun, could be a big factor in the deal. JD’s move to strengthen its foothold in downtown Beijing bucks the trend among Chinese tech firms who are escaping tech hubs and shifting their R&D centers and headquarters to second-tier cities where they can access more affordable space, avail of lower salaries and tap preferential policies offered by local governments.