(Yicai) July 13 -- PDD Holdings, the Chinese owner of discount shopping sites Temu and Pinduoduo, has taken over DBS Bank Tower in central Shanghai, continuing the trend among leading domestic tech companies of investing heavily in new office buildings.

"The owner did not list the DBS Bank Tower publicly prior to the sale, making this essentially an off-market transaction," an industry insider from a real estate fund told Yicai. Multiple office buildings along the Lujiazui Riverside, where the tower is located, were put for sale in recent years, with prices significantly down from previous years, the person said, adding that buyers who settle payments in full up front usually enjoy additional room for negotiation.

DBS Bank Tower is a Grade A office building boasting a construction area of about 46,000 square meters, with 19 above-ground floors and three underground levels. The Singaporean lender signed long-term leases for several floors and secured the naming rights upon the tower's completion in 2009.

PDD previously relied primarily on leased office premises, with its Shanghai workspaces spreading across Golden Hongqiao International Center, Yifeng Center, Jingyao Hongqiao, and others. It also bought an office building in Hebei province's Xiongan New Area last month.

In addition to PDD, TikTok-owner ByteDance has built out headquarters campuses and research and development bases across major cities, including Beijing, Shanghai, Shenzhen, and Hangzhou, while JD.Com has opened HQs, logistics parks, and R&D facilities in Beijing, Suqian, Hangzhou, Nanjing, and others. Artificial intelligence startups Zhipu AI and Moonshot AI are also hunting for long-term HQs.

Prices for bulk office property transactions have broadly corrected in recent years, while tech firms are generally flush with cash, analysts from a multinational real estate services firm said to Yicai. Acquiring HQs amid the market downturn locks in long-term office expenses and opens opportunities to capture future asset appreciation gains, they stressed.

"Now is a favorable window to purchase Grade A office assets in core cities such as Shanghai," an analyst pointed out. PDD had cash reserves worth CNY422.3 billion (USD58.5 billion) as of the end of last year, with its multi-billion-yuan acquisition of core Shanghai office premises catering to future workspace demands and forming part of its long-term asset allocation strategy, the person noted.

Owning office buildings shields companies from cost pressures stemming from future rent hikes, while expanding fixed asset volumes and improving balance sheet quality, according to the real estate fund insider.

Real estate and campus asset management job openings have significantly risen among internet and AI firms in recent years, a real estate market practitioner told Yicai. This shift ties closely to the inherent characteristics of the AI sector, the person said.

"AI companies require office spaces capable of housing computing infrastructure and data centers, which drives them to favor purpose-built HQ campuses over scattered leased workspaces," the person pointed out. In addition, local governments offer land and industrial policy incentives to attract tech HQ projects, lowering costs for such firms to build and self-own offices, the person added.

Editors: Tang Shihua, Martin Kadiev