I refer to the letter from Chan Pak-hei ('High prices causing real problems', September 17).
Since our initial public offering in 2005, The Link Reit has been gradually enhancing customer experience with a growing array of shopping and dining choices, while continuing to meet the daily needs of residents. In keeping with Hong Kong's time-honoured free market principles, we have stayed customer focused and market driven in running our properties to create better value for our stakeholders.
Product prices and rents are a reflection of market conditions and other factors.
As shown in rent-to-turnover figures collected by us, rent is not the biggest or most influential cost component for retailers. Moreover, according to an internal analysis on publicly available price data, rental levels at The Link's fresh markets surveyed is not correlated to their general price level.
Our retailers' business can only stay viable by keeping prices competitive and affordable for shoppers. In reaching a mutually agreed rental rate with our retailers, The Link takes into consideration factors like retailers' affordability, location, size and the trade of each shop. It is only when our retailers succeed that our business can be sustained.
Our leases usually cover three years, and based on recent leases signed, the rental increase is around 6.7 per cent per year.
Through asset enhancement works encompassing improvements in trade mix, customer service, promotional activities and physical structures, we are also progressively enlivening the community's retail infrastructure, and creating a better business environment for our retailers.
The retail market is highly competitive in Hong Kong. Different retail shops of varying sizes and price levels exist in malls and fresh markets run by The Link and other landlords in Tin Shui Wai, which cater to people's needs for daily necessities, and contribute to a vibrant retail market in the district.
We are aware of the surveys conducted by some community groups on prices of fresh food and groceries in Tin Shui Wai. In view of the variations in product quality and other varying factors, such as supply sources and product freshness, we need to take a more prudent approach in analysing the results of these and other similar surveys undertaken by different parties at different time periods.
Shirley Wong, portfolio manager, The Link Management Limited