Hong Kong must keep its public housing malls from private hands
Albert Cheng says we must monitor Housing Authority plans for the commercial facilities under its care, to prevent any further sell-off
History has a habit of repeating itself, but unfortunately we don't always learn our lessons. I recently wrote about The Link Reit trying to join hands with the Housing Authority to redevelop old shopping centres to boost its income.
This joint venture is said to be aiming to group all old Housing Authority estates and arcades under The Link Management, with car parks and other rundown facilities to be redeveloped.
But, according to the rules on real estate investment trust, it is not allowed to get involved in property development in any way.
I also warned that the Housing Authority is planning to sell off its shops, as it did in the floatation of The Link Reit nine years ago. This was immediately refuted by director of housing Duncan Pescod, who said the authority would continue to manage its commercial facilities and had no plans for further divestment.
Many people still remember 2005, when the authority sold off public assets for HK$20 billion, far below market prices, in the floatation of The Link Reit. Those assets are now estimated to be worth more than HK$81 billion.
If The Link and the Housing Authority are to jointly redevelop old shopping arcades, there is no guarantee that the same mistake would not be repeated.
The Link would seem to be preparing for these redevelopment plans. According to news reports, last year it sought approval from the Securities and Futures Commission to relax the rules guiding its redevelopment scope. And, a few months ago, the Monetary Authority proposed relaxing the monitoring rules for The Link, which is seen as clearing the obstacles.
There are a lot of things wrong with this situation.
First, these are public assets which belong to every Hongkonger. Any such deal would not be in the public's best interests. We allowed it to happen once before. That could be seen as an oversight. If we allow it to happen again, it's stupidity that cannot be forgiven.
Even though the Housing Authority has denied there are plans for further divestment of public assets, it's still better to err on the side of caution, rather than drop our guard.
Second, the primary objective of the authority is to provide subsidised public housing to the needy and to maintain and improve its financial situation so as to achieve the former objective. Any attempt to follow The Link Reit model of using revitalised shopping arcades as an excuse to put up rent should never be considered. This will hurt existing tenants, especially small businesses, which are being pushed out and replaced by chain stores and powerful big businesses.
The authority has a responsibility to safeguard the interests of small tenants and help preserve the colourful nature of the community.
In many of The Link malls, a lot of shops sell things that public estate residents don't want at prices they can't afford, while essential ones that serve the community are nowhere to be seen because they can't afford the rent.
It's not true to say that The Link is a proven success, and that people like the changes and are happy to pay the prices.
If it is such a success, why doesn't the government further divest public assets? As for the small shop tenants, if The Link is doing the right thing, why are so many of them moving out to less popular locations? And why are residents complaining?
Take Lok Fu as an example. Jusco was replaced by the UNY department store because of higher rent demands. Now business at the new Lok Fu mall is only a fraction of the old days, because UNY offers more expensive products that tenants cannot afford.
In the end, public estate residents suffer most as they are forced to travel to shops that are more affordable.
The questions we should be asking are: how many small shop owners have already left or been kicked out as a result? How many have downsized because of higher rents? How many shops have had to relocate to less attractive locations to give way to chain stores?
Our politicians know only too well that The Link is not welcome by locals and hence they want the government to buy back these assets.
Those who support The Link have obviously not been to its shopping malls.
In a recent column in this newspaper, Jake van der Kamp criticised the Housing Authority, saying it had no business being a shopping centre landlord and suggested it sell off its malls to The Link. No one seems to have echoed his proposal. Even the authority has insisted it will focus on managing its commercial facilities, which I totally support.
We need to remain vigilant and not allow The Link to take another big bite out of the Housing Authority apple.
Albert Cheng King-hon is a political commentator. email@example.com