TikTok rival Xiaohongshu has reportedly rented a 7,000-square-foot office in Causeway Bay after rumors of a supposed Hong Kong listing plan surfaced last year.

The Chinese social media platform, which gained global fame as RedNote, is said to have leased a space in Times Square for its Hong Kong office, with a rent of HK$40 per sq ft, according to local media.

The move is viewed as a step forward in the platform's plan for a Hong Kong listing.

Times Square has leased offices to a number of large Chinese enterprises, such as Alibaba (9988).

The e-commerce giant took the 26th floor of Block 1 for its headquarters and is now renting more than 100,000 sq ft of floor space in the tower.

Early last year, mainland food delivery platform Meituan (3690) leased an entire floor at Tower 535 in Causeway Bay at a rental rate of around HK$40 per sq ft.

Last year, the Financial Times reported that Xiaohongshu was planning to apply for a Hong Kong listing.

RedNote turned profitable in 2023, recording a net income of around HK$3 billion. This was mainly driven by the growth of its high-margin advertising business and transformation of its e-commerce model.

The Shanghai-based firm is said to have appointed underwriters, including China International Capital Corporation, for its public listing.

Backers of Xiaohongshu are looking to sell a part of their stake to the likes of Tencent (0700) among others, a deal that could value it at US$20 billion (HK$156 billion) at least, Bloomberg News reported.

A deal will propel Xiaohongshu's valuation back to levels last seen during its peak in 2021, as the app welcomes a flood of American users fleeing TikTok. That would be a boost for an initial public offering that could happen as soon as this year.