Concern group urges Hong Kong government to buy five high vacancy malls back from Link Reit

Link Watch claims plan would cost HK$2.8 billion and be important first step in improving lives of residents in nearby public estates

PUBLISHED : Tuesday, 26 July, 2016, 3:19pm
UPDATED : Wednesday, 27 July, 2016, 12:06pm

A concern group has called on the government to buy back five shopping centres with high ­vacancy rates from the Link Reit in order to improve the lives of residents at public housing estates.

The Link’s management of malls and wet markets acquired from the government in 2005 has come under fire, with critics saying the company has been pushing up rents and driving out small businesses.

While the government recently identified the problem as one of three contentious issues it aimed to solve, the administration has been adamant that it will not use public funds to take over the real estate investment giant, stating that it would be too costly.

But Link Watch, a concern group that monitors the company, said the government should consider acquiring individual shopping centres as a solution to the problem.

Between May and July, the group identified 12 shopping centres operated by the Link that are in locations with no alternative malls nearby.

It found that the average ­vacancy rate at the centres was about 11 per cent.

Of the malls surveyed, the one on the Shun On Estate in Kwun Tong had the highest vacancy rate, with 28 per cent of shops standing empty.

As for the wet markets at shopping centres, the average vacancy rate was even higher at 30 per cent.

Seventy per cent of the shops at the Shek Wai Kok wet market in Kwun Tong were unoccupied – the highest vacancy rate among all the markets.

Based on its findings, the group urged the government to buy back five shopping centres with relatively high vacancy rates as the first step to solving the problem.

The malls are at Fu Shin Estate in Tai Po, Shek Wai Kok and On Yam Estate in Kwai Chung, Sun Tin Wai Estate in Sha Tin and Shun Tin Estate in Kwun Tong.

“The Link has not done anything to improve the vacancy rate at these shopping centres for years, and the government has also failed to monitor the situation. Since these shopping centres are located on inconvenient ­estates, the residents there cannot get what they need daily,” Link Watch chairwoman Sophia So Lok-yee said.

Based on the Link’s own valuation of the five shopping centres, the group said, buying them back would cost the government around HK$2.8 billion.

“Buying back individual shopping centres is not unfeasible,” So said.

“If the government can repurchase these shopping centres, the public can then monitor how they are run and also take a more active role in how they are managed.”

In response, the Link said the group’s findings did not reflect the actual situation at the malls.

“The occupancy rate, based on building area, is much higher than the figures cited by the group,” a spokesman said.