Link Reit

Estate of affairs

PUBLISHED : Monday, 31 July, 2006, 12:00am
UPDATED : Monday, 31 July, 2006, 12:00am


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Calm and softly spoken, security guard Ah Ming, 53, describes herself as a diligent worker. During her six years as a public estate guard, she says she did her best to help residents and visitors at the Siu Sai Wan Estate mall.

The mother of two said that although her monthly wage of $6,900 was not high, it was enough to supplement her husband's income and helped finance the studies of two children and support her mother-in-law.

But last month her life changed. Eight months after the newly privatised Link real estate investment trust took control of 180 former Housing Authority malls and car parks in the city, Ah Ming, along with 31 colleagues working at the Siu Sai Wan Estate mall, has been left on the unemployment scrapheap by security contractor Sun Cheong.

Jobless and fearing what the future may hold for her and her family, Ah Ming is the human face of a tragedy unfolding across Hong Kong after last year's Link takeover. The battling mother now regrets that she didn't join the protest against Link buying out the public assets of the Housing Authority last year. She reflects wistfully on the highly publicised campaign by public housing tenant Lo Siu-lan, now 69, whose unsuccessful Court of Final Appeal battle last year failed to halt the sale of the government assets.

Ah Ming says that, unlike Ms Lo, she was complacent and didn't see the dangers in the privatisation. Now she views herself as one of Link's victims.

The government's Link privatisation plan was given the green light by the Executive Council in 2003. But with no public consultation, many in Hong Kong were unaware of the breadth and possible impact of the move until Ms Lo's high-profile court battle, which ended with a Court of Final Appeal ruling that the sale could proceed as it didn't breach the Housing Ordinance.

To many, it seems the problems foreseen by Ms Lo began to materialise as soon as the dust from the court case had settled. The properties came under Link's control in November. To boost profits the listed company, which at one point had pledged publicly to freeze rents and sackings, has since laid off hundreds of workers across its estates. It has also ordered some shopkeepers to leave and raised rents, sometimes by as much as 50 per cent.

Some of the moves have outraged labour activists and lawmakers such as legislator 'Longhair' Leung Kwok-hung and unionist Leung Yiu-chung. As the full effects of the sale unfolds, unionists are warning that as many as 4,000 workers will lose their jobs.

Because Link refuses to reveal figures, despite written requests, it is not known how many estates have been affected, how many shops have closed and how many businesses have been hit with rent rises.

Major Link shareholder TCI, a British-based hedge fund, has now joined the board of directors, raising fears of a further of squeezing workers and businesses - through layoffs and rent rises - in the pursuit of higher profits.

Established in the 1970s, housing estate malls and wet markets have been part of community life for decades. The businesses have become a crucial part of the community fabric, supplying necessities such as clothes, food and medicines to residents at affordable prices, and providing jobs for Hong Kong's grass-roots communities.

Tin Shui Wai's Chung Fu mall and market is a typical example of the difficult times heralded by the Link privatisation. In February, when the market vendors' contracts expired, the contractor, Modern Market Management, which had won the tender from Link Management to sub-lease to the vendors, imposed a general 20 to 30 per cent rent rise on shops, with one outlet facing a 50 per cent increase. 'The contractor said Link charged them a 30 per cent rent rise, so they charged us the same increase,' said grocery shop owner Ma Wai-piu, chairman of the Chung Fu Market Shop Keepers' Rights Association.

Mr Ma and another five shop owners who refused to pay the new rents are now being sued by the contractor. They have appeared once in court, and will return to the District Court in September.

Ah Ching, who operates a sewing shop in the Chung Fu market, is one of the many operators worried about her future. 'I earn just $3,000 to $4,000 a month from my sewing shop,' said Ah Ching, in her 40s. 'Now they want to increase the rent by $2,500, which I can't afford. I will have to close my shop. My parents rely on my income for a living. I think I will have to get welfare.'

A number of legislators such as Albert Chan Wai-yip and Lee Cheuk-yan have joined concern groups such as Link Watch to express outrage at what they see as Link's exploitation, and have accused the company of ignoring its social responsibilities.

'The shopkeepers are middle-aged and lowly educated,' Link Watch member Florence Cheung Man-wai said. 'Where can they find jobs? Link has ignored their social responsibility by creating middle-aged unemployment. They squeeze blood money from the poor for the big shareholders.'

Link said the lay-offs were 'in line with the market's best practice'.

'A detailed study of market practices and practical needs of individual centres found that there was substantial over-staffing in the frontline ... The new deployment has ensured sufficient manpower in all frontline management functions,' a Link spokeswoman said in a written reply.

The company also refused to say whether they paid less to the contractors of security guards and cleaners than what the Housing Authority previously paid. 'We do not comment on commercially sensitive issues,' the spokeswoman wrote.

Link also did not reply directly to the accusations that they lacked social responsibility for imposing lay-offs and rent rises, forcing people out of jobs and business. 'The Link aims to deliver to our customers a more dynamic shopping and leisure destination right at the doorstep of their homes, and is happy to partner with operators, regardless of their operation mode and scale, on a mutually beneficial basis,' the spokeswoman wrote.

She said Link had provided comprehensive training programmes for middle-aged guards to take up newly created customer service positions in malls. But she didn't reveal how many guards had been given jobs.

Shopkeepers are finding it hard to put up a decent fight against Link Reit, with some malls and markets having no associations to unite people. Those that have formed groups are struggling in their battle. Mr Ma thought of closing his shop when he was ordered to pay an extra $4,000 rent, taking the monthly total to $38,000 for his tiny market space. 'But if I close my shop and leave, who will help the others fight?' he asked. Some group leaders, including Mr Ma, said they had received threatening anonymous phone calls, warning them not to be vocal in their opposition to Link's rent rises. Police were called in after Mr Ma and other shop owners reported the calls, but many shopkeepers are now afraid to speak out.

While Link's move to bring in large retail chains is viewed as a tactic to increase rental income, the company's claim is that it wants to make the malls more upmarket by attracting trendy shops to draw more shoppers.

Now, chains such as Sasa, Baleno, U-Right, Walker Shop, City Lifestyle and Starbucks have entered public estates. But whether the residents want these shops is questionable. 'Even in peak hours, it's very quiet. There are few shoppers going into the new shops,' said one fashion chain assistant at Tsz Wan Shan Shopping Centre, one of three malls revamped by Link.

Meanwhile, the small shopkeepers live in fear of what have become known as 'death notes' - notices to vacate premises. Sitting in the Kam Pak Hop Kee noodle shop at Siu Sai Wan Estate - another site reeling from the impact of the takeover - Chan Wun-chun looks exhausted and depressed. He's been ordered by Link Management to move by the end of next month.

'The company claimed that I prompted a lot of complaints about hygiene and obstructing the market, but I've never been aware of these complaints. They used this as an excuse to get rid of me,' the 48-year-old said.

The father of three teenagers not only fears for his family, but also for the livelihoods of his nine workers. He's not the only shopkeeper on the estate being told to move. Four shops in the upstairs mall also face closure and have been given temporary tenancies that will expire in November.

Among the four is an electrical shop owned by Choy Man-ngai, 48. Standing in the store he's run for 16 years, Mr Choy worries for himself and his four employees. 'When I told them that Link had only given me a temporary tenancy, they were shocked,' he said. 'They knew that we would have to close. We are all in our 40s and 50s, so where can they find jobs?'

In the months since the takeover, Siu Sai Wan Estate's shopkeepers and workers feel they have exhausted every avenue in their fight. They've been to district councillors, unionists and legislators, and even marched and protested, but with no success.

Now the Siu Sai Wan estate shopkeepers' group's leader, Tsoi Chung-keung, and other owners are joining forces for what feels like the last stand. The group is contacting shopkeepers in other housing estates, urging them to close their shops or refuse to pay rents in protest. 'If we all refuse to pay rent, even their chairman has to step down,' Mr Tsoi said.

Meanwhile, residents at Tsz Wan Shan are angry that the increasing rents are pushing up food prices. Fish that previously sold for $20 per katty now costs more than $25. 'Everything is more expensive. Before, a tea set at a fast food shop was just $10, now it's $12. I live on welfare and now don't go for tea,' said 72-year-old Chow Chung-chee of Tse Ching Estate.

'Link has hurt people so much. It fires workers and increases rents. Link said that it would improve public housing residents' quality of life. But instead it is damaging our lives and adding to our pain.'