Many small shops in Link Reit's malls
I refer to Albert Cheng's column ("Link's campaign for more flexibility for Hong Kong reits should raise eyebrows", January 17).
Tenants are our partners, and the strong presence of small retailers is a key characteristic of our portfolio. Small tenants as at March 31, 2013, accounted for about 60 per cent of the total retail shops in our portfolio, the same ratio as at the time of our initial public offering in 2005.
To help small tenants stay abreast of latest market trends, we set up the Link Tenant Academy in 2008, which has offered regular seminars and workshops to nearly 9,000 tenants and their staff. Also, we regularly organise promotional campaigns to drive footfall at our shopping centres.
The second-generation members of family-run small retailers are now much more willing to take up their parents' businesses.
The fact that the overall occupancy rate across our portfolio has risen from 91.4 per cent at the time of our IPO to 94.1 per cent shows that rental rates of our properties remain competitive.
Since our IPO, the value of our assets has increased significantly, thanks to the efforts of our tenants and staff, who have worked together to turn our shopping centres into popular meeting and shopping destinations for visitors.
It is estimated that over 10,000 jobs have been created by asset enhancement projects undertaken by us since our IPO. Total capital investment for asset enhancement projects completed, under way or under planning amounts to HK$5.8 billion. Furthermore, since our IPO and up to March 31, 2013, The Link has paid the government HK$3.2 billion in profit taxes, government rents and rates.
While Singapore and other developed economies offer reits the flexibility to invest a small portion of their assets in the purchase of land and the building of property for investment purposes, Hong Kong remains the only developed market in the world without such flexibility.
To enhance the long-term competitiveness of reits here, such flexibility is necessary to bring Hong Kong in line with the common practice of other reit markets around the world.
The expansion of the reit sector will inevitably spur demand for financial services from a wide range of stakeholders, including stockbrokers and commercial and investment banks.
We trust these points will shed light on and facilitate discussion about the issues raised in Mr Cheng's column.
K. T. Poon, director, government and community engagement, The Link Management Limited