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Peggy Ye

JD.com’s rapid expansion in Hong Kong could challenge the property model that has long made the city’s busiest streets and shopping centres its most valuable, analysts say.
The Chinese e-commerce giant has invested more than HK$10 billion (US$1.3 billion) in Hong Kong property over the past two years, building a network of stores, warehouses and other assets that analysts said could reduce the importance of footfall for some retailers while increasing the value of logistics hubs and other strategically located sites.
The investments are part of a broader push into Hong Kong by JD.com, which in June said it had invested HK$35 billion in the city across retail, logistics, technology and other businesses.
For decades, Hong Kong property values have largely been driven by location: the more people passing through a street or shopping centre, the higher the rent it could command.
If Hong Kong continues to reduce everything to land prices, rental values and footfall, then JD will be mistaken for just another big tenant
Francis Neoton Cheung, Chief Executive’s Policy Unit Expert Group
Analysts said JD.com was testing a different model. Its stores, warehouses and logistics facilities were valued not only for the income they generated, but also for their role in a wider network moving goods to customers.
JD.com did not respond to a request for comment regarding the investment strategy.
Francis Neoton Cheung, chairman of think tank Doctoral Exchange and a member of the Chief Executive’s Policy Unit Expert Group, called JD.com’s expansion a “stress test” for Hong Kong’s traditional property model.
“If Hong Kong continues to reduce everything to land prices, rental values and footfall, then JD will be mistaken for just another big tenant,” Cheung said.
JD.com’s purchases span warehouses, supermarkets, offices and student housing. The mix should be seen as part of the company’s logistics-driven strategy rather than a simple bet on property, analysts said.
“I don’t see JD Property [the company’s infrastructure investment platform] as an important driver for JD.com,” said Chelsey Tam, senior equity analyst at Morningstar.
The acquisitions suggested the group remained focused on its core e-commerce and logistics businesses, she added.
Hong Kong is also part of subsidiary JD Logistics’ broader international expansion, with the company similarly building out infrastructure in overseas markets, including Europe.
Yan Yuejin, vice-president of Shanghai E-house Real Estate Research Institute, said student housing illustrated the wider strategy.
While it had no obvious link to JD.com’s core business, it could provide stable rental income and access to a concentrated customer base, he added, creating opportunities to bring the company’s retail, delivery and other services into a residential setting.
Over time, logistics facilities and other income-producing assets could also be recycled into a real estate investment trust or another property platform, allowing JD.com to release capital while retaining access to infrastructure, Yan said.
“Whether for its own use or operations, the fundamental purpose is to improve JD.com’s supply chain system in Hong Kong,” he said.
The potential implications are most visible in retail. Hong Kong retailers were already facing pressure from residents spending across the border in mainland China and the continued growth of online shopping, while the value of some prime street shops had fallen sharply from their peak, according to market data.
JD.com’s model separates functions traditionally concentrated in a single store. Yan said shops could serve as showrooms, experience centres or service points, while inventory and fulfilment are handled elsewhere.
Retailers selling standardised goods may no longer need a prime location to store inventory, complete transactions and serve customers.
“That could reduce the importance of footfall for some retail property,” Cheung of the Chief Executive’s Policy Unit Expert Group said.
On the contrary, the same shift could raise the value of industrial and peripheral sites if they connect warehouses with customers and cross-border markets. Analysts cited JD.com’s latest involvement in Hung Shui Kiu as an example of how this model could extend beyond individual properties.
The company has won Hong Kong’s first large-scale investment in the mega Northern Metropolis project, along with Sino Land and other state partners.
JD Logistics plans to build an automated hub where robots sort goods and autonomous vehicles help move them through a network linking Hong Kong, the mainland and overseas markets.
For JD.com, the value of the site lies not simply in what can be built on it, but in what can move through it.
By bringing its own logistics flows and business activity, the company could create value in a peripheral area rather than simply paying a premium to locate where that value already existed, Cheung said.
He added that the challenge for Hong Kong was whether its planning model could adapt to an economy increasingly organised around the movement of goods, data and services.
“Hong Kong has to decide whether it wants to remain a consumer end point or become a supply chain node,” Cheung added.


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Chinese e-commerce firm builds network of stores and warehouses that analysts say may reduce reliance on footfall for some retailers


Chinese e-commerce firm builds network of stores and warehouses that analysts say may reduce reliance on footfall for some retailers.


JD.com’s US$1.3b expansion could test Hong Kong’s footfall-driven retail property model

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Chinese e-commerce firm builds network of stores and warehouses that analysts say may reduce reliance on footfall for some retailers

Chinese e-commerce firm builds network of stores and warehouses that analysts say may reduce reliance on footfall for some retailers