Hong Kong Legco approves motion to ‘counteract’ dominance of Link Reit with more public markets

Lawmakers seek to quell public discontent over rising rents driving out small stall owners in markets under investment giant

PUBLISHED : Thursday, 24 November, 2016, 12:54pm
UPDATED : Thursday, 24 November, 2016, 8:44pm

The Legislative Council has approved a motion calling for the government to set up more public markets and temporary bazaars to “counteract the market dominance” of property investment giant Link Reit, a target of criticism for its profit-driven business model.

Earlier this year, the Link came under fire from government officials for pushing up rents and driving small tenants from its public housing malls and markets. The issue was listed as one of the three major challenges for the government.

Speaking before the motion was put to a vote in Legco Thursday, Secretary for Food and Health Dr Ko Wing-man said the administration agrees that more public markets can be built in new towns such as Tung Chung, because of “unstable factors” concerning the operation of markets under the Link. Ko did not elaborate on what the factors were.

Link Reit insists refurbished wet markets attract more shoppers, amid calls for lower rents and food prices

He also said his bureau discussed organising more bazaars with various district councils. “We are also exploring new models of managing public markets … and studying the feasibility of installing air conditioning system at nine public markets,” he added.

The motion, tabled by New Territories East lawmaker Eunice Yung Hoi-yan from pro-establishment New People’s Party, is non-binding, however, meaning that the government has no obligation to follow up on its approval.

Yung criticised the Link for “arbitrarily renovating shopping arcades and significantly raising shop rentals … in pursuit of returns maximisation”.

“The Link Reit has ignored the affordability and living necessities of grassroots people, thereby aggravating the burden on their livelihood,” she said.

Secretary for Transport and Housing Professor Anthony Cheung Bing-leung had said it was not in the public’s interest to spend a large sum of public money to buy back the Link’s shares or commercial facilities, as some critics had proposed.

“Buying back the company’s shares or properties would only benefit the Link’s institutional investors …The government would rather spend the money on increasing public housing supply and livelihood-related facilities or services.”

Yung said with the Link’s estimated market value exceeding HK$120 billion, instead of using public money to buy back the company’s shares, the government should “vigorously promote healthy market competition” by building more public markets.

“It should also request the Competition Commission to expeditiously investigate whether Link Reit has violated the Competition Ordinance,” she added.

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Democratic Party’s Andrew Wan Siu-kin from New Territories West argued that was not enough. He proposed an amendment to Yung’s motion, adding that the government should not only ensure there are enough public markets across the city, but also that the markets should have enough stalls to serve every community’s population.

Wan’s amendment and Yung’s motion were both approved with majority support from political parties across the political spectrum.

In an exclusive interview with the Post in June, Chief Executive Leung Chun-ying questioned whether the company linked the compensation of its executives with rental revenues to maximise profit.

Leung also vowed to provide alternatives to the company’s facilities, saying Chief Secretary Carrie Lam Cheng Yuet-ngor, had led the way in tackling public concerns.

In May, Lam reportedly told pro-establishment lawmakers that she had identified The Link, repeated MTR fare increases and the offsetting mechanism of the Mandatory Provident Fund as three “big mountains”, or challenges, she would focus on to tackle public discontent.