Social responsibility is as important as profit for Link Reit
The company’s suspension of some new business activities is welcome as its unpopularity grows
With the Legislative Council polls due in a few months time, the government must be trying hard to avoid stirring up trouble. This is understandable, as any step in the wrong direction may backfire and turn into an election issue.
The steady-as-it-goes approach has apparently spilled beyond the public sector. Amid growing discontent over its business strategy, Link Reit, which now owns and runs shopping malls and car parks at public housing estates, has suspended further sales and contract-outs of its properties and management pending an internal review.
Given the prevailing economic and political sentiments, it makes sense for Link Reit to put on hold controversial business ventures. It said it was aware of the recent negative feedback and was willing to listen to different views.
The government hived off all retail and parking facilities at public housing sites to Link Reit in 2005, making it the first listed real estate investment fund and a major landlord in the city. Many retailers catering for low-income tenants have since been priced out as the shopping malls moved upscale. Moves to re-sell properties and to outsource management also led to complaints and lawsuits.
Whether the government has sought to rein in Link Reit with pressure remains unknown. But officials cannot possibly distance themselves as public discontent deepens. The issues surrounding Link Reit are reportedly one of the “three mountains” facing the government. Attempts by officials to discourage the company from engaging in further unpopular business ventures will certainly be welcomed by the people.
As a listed investment fund, Link Reit is accountable to its shareholders. But with its facilities primarily used by public housing tenants, social responsibility is as important as profitability. While it strives to maximise profits for investors, it cannot cast public interest aside.