The Link Reit Management, which recently appointed Nicholas Sallnow-Smith as its chairman, plans to renovate more shopping centres and raise rents instead of selling its assets to boost returns, according to company sources.
Such a strategy is good news for investors including major shareholder The Children's Investment Trust, but the company is also likely to face more protests from tenants who claim that rising rents are forcing them out of business.
By raising rent levels, the company would favour improving shareholder value rather than carrying out social responsibility, as all the centres it manages are in public housing estates catering to low-income families.
According to a source, that dilemma was partly responsible for the resignation of Paul Cheng Ming-fun as The Link Reit's chairman. He had wanted to leave six months before the official announcement but agreed to stay longer to allow the firm to find a successor.
The Link Reit early this month said that Mr Cheng would quit at the end of March - a year before his three-year term expires and would be replaced by Mr Sallnow-Smith, retiring chief executive of Hongkong Land Holdings.
A friend of Mr Cheng's said he decided to quit because 'he felt that he was in the most difficult job in the world as he faced demands from TCI to achieve a better return while tenants protested against rising rents.
Mr Cheng considered it better to just quit and enjoy his retirement.