Facebook Said to Rent Beijing Space in First China Office

Facebook Inc. leased space in downtown Beijing as the social network prepares to open a China office even though its website remains blocked 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 (8,600 square feet) 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 isn’t public. Facebook hasn’t started outfitting the space, which has views of the Forbidden City, they said.

While China blocked Facebook’s website in 2009, 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 for more than 500 yuan ($80) per square meter a month this year, from less than 400 yuan when subscription started last year, as higher floors, typically more expansive, are opened to tenants.

Fortune Financial Center’s leasing office didn’t immediately respond to an e-mailed request for comment about tenants in the building. Debbie Frost, a spokeswoman for Menlo Park, California-based Facebook declined to comment on whether Facebook is opening an office in China.

Chinese Clients

“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.”

The Beijing office, facing north and west in the top third of the 61-story, 265-meter-tall tower, offers workers a view of the centuries-old Forbidden City palace as well as modern buildings such as the National Stadium, the main venue for the 2008 Beijing Olympics known as the Bird Nest, the people said.

HSBC Holdings Plc, DBS Group Holdings Ltd. and Samsung (China) Investment Co. lease space in Fortune Financial Center, which was the first new office project in Beijing’s central business district in seven quarters, according to real estate broker CBRE Group Inc.

The district is on the Third Ring Road to the east of the Forbidden City, the 15th-century former imperial palace in the heart of Beijing. The Chinese capital spreads out across six concentric ring roads.

Boosting Sales

Facebook is working to boost sales from Asia, where the company made $354 million, or 14 percent of revenue, in the first quarter. That’s up from $118 million, or 11 percent, at the time of its May 2012 IPO.

In the prospectus for its 2012 initial public offering, 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 needs of key rental clients, the people said. The Fortune Financial Center’s floors have areas from 2,600 to 2,900 square meters each, according to its website.

— With assistance by Dingmin Zhang, and Sarah Frier

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