Social network looking to boost profits in Asia with direct presence in China
Facebook Inc has leased space in downtown Beijing as the social network prepares to open a China office even though its service remains unaccessible in the country, said people familiar with the matter.
The company signed a three-year contract in May to lease more than 800 square meters of office space in the Fortune Financial Center in Beijing's central business district, said the people, who asked not be identified because the transaction is not public. Facebook has not started outfitting the space, which has views of the Forbidden City, they said.
The company has built up a business in the country via a Hong Kong office selling ads to companies that want to reach international users. It also has "thousands" of application developers in China, Vice-President Vaughan Smith told the Global Mobile Internet Conference in Beijing in May.
HKI China Land Ltd, the developer that completed the Fortune Financial Center tower in September, has been leasing space this year for more than 500 yuan ($80) per sq m a month.
Fortune Financial Center's leasing office did not immediately respond to an e-mailed request for comment about tenants in the building.
Debbie Frost, a spokeswoman for Facebook, declined to comment.
"Chinese exporters and developers are finding Facebook is an excellent way for them to reach customers outside China," Frost said in an e-mailed statement. "Today, our sales team in Hong Kong is supporting these Chinese businesses. We are of course exploring ways that we can provide even more support in the future."
HSBC Holdings Plc, DBS Group Holdings Ltd and Samsung (China) Investment Co lease space in the Fortune Financial Center, which was the first new office project in Beijing's central business district, according to real estate broker CBRE Group Inc.
The CBD is on the Third Ring Road to the east of the Forbidden City, the former imperial palace in the heart of Beijing.
The Chinese capital has six concentric ring roads.
Facebook is working to boost sales in Asia, where the company made $354 million, or 14 percent of its revenue, in the first quarter. That's up from $118 million, or 11 percent, at the time of its May 2012 initial public offering.
In the prospectus for its IPO, Facebook said "substantial legal and regulatory complexities" prevented its entry into China, which is home to the world's largest number of Web users.
Facebook is so far the only tenant on its floor, and the landlord has shown no intention of finding a second one in the near term in case the company needs to expand, a common practice among developers to accommodate the needs of key rental clients, the people said.
The Fortune Financial Center's floors have areas from 2,600 to 2,900 sq m each, according to its website.
