The idea behind the Link real estate investment trust (reit) looked dubious last year. Now that the Court of Final Appeal has finally cleared its launch, the concept still looks fishy.
In one way, it appears even worse. One of the reasons given for the Link's original listing, before it was hastily cancelled last December, was that the trust's launch would kick-start a reits' market in Hong Kong.
That argument has evaporated. Since the Securities and Futures Commission published new regulations governing the sector last month, a clutch of private sector issuers have begun queuing to float their own property trusts on the stock exchange.
If the Link is now listed before the end of the year, as Housing Authority Michael Suen Ming-yeung hopes, it could well be the third or even the fourth reit to reach the Hong Kong market.
So, if the Link is not going to act as a government-sponsored trailblazer for a new investment market, it will have to stand on its own merits. Unfortunately, these look pretty thin.
The Link was originally proposed to allow the government to kill two birds with one stone. By selling off its shopping centres and car parks, the Housing Authority would be able to raise cash to plug its budget deficit. At the same time it would be able get out of the commercial property management business and refocus on its core task of providing low-cost housing.
But although plugging deficits and getting the government out of business are laudable aims, it was never clear that launching a reit was the best way of achieving them.