Officials and investors were all smiles yesterday as the price of the Link real estate investment trust rose by more than 15 per cent on its first day of trading. For retail investors who received a 5 per cent discount on the listing price, the surge represented gains of more than 20 per cent. For officials who steered the listing through a long gestation period fraught with political and legal hurdles, the successful privatisation of $19.8 billion worth of shopping malls and car parks in Hong Kong's public housing estates is a huge relief. The listing of Link marks the launch of a new investment vehicle that will further enhance Hong Kong's status as a financial centre. As a highly liquid means of investing in bricks and mortar, reits have long been popular overseas. That they were not introduced here earlier had to do with regulatory hurdles. Sceptics also feared that local investors might be averse to investing in a portfolio of disparate properties managed by faceless managers and structured as a tax avoidance vehicle overseas. For the time being, the immense interest generated by Link and the spectacular windfall profits it has delivered have brushed those concerns aside. Whether the initial euphoria over reits will wear off over time remains to be seen. But it is far more important that the new investment vehicle will boost the depth and breadth of our financial markets. Over the next few months, as many as six reits with a market capitalisation of about US$4.5 billion are reportedly making their way to the local bourse. They should enhance Hong Kong's appeal as a major investment destination. For the Housing Authority, the proceeds of the Link listing is expected to put its finances on a very strong footing for the next 10 years. The funds will enable it to continue its public housing construction programme, although the authority's long-term viability remains an issue. Following the listing, housing officials have been relieved of the burden of managing the divested facilities, a job for which they were not trained to handle. The privatisation is also a major milestone in achieving the government's 'big market, small government' policy. The job of managing 960,000 square metres of retail space and 79,000 parking spaces has now fallen to the Link management. Chaired by veteran businessman Paul Cheng Ming-fun, it has set itself a multiple mission, including providing stable, sustainable and low-risk returns to unit holders and quality service to customers. That goal sounds modest, but achieving it is expected to test the political and commercial skills of Mr Cheng, a former legislator and ex-chief of the Inchcape group. The protest mounted by several hundred public housing residents yesterday showed that the political forces that derailed the Link listing last year when it was first scheduled remain active. That exercise had to be scrapped after an elderly tenant filed a lawsuit challenging the legality of the listing. It was a huge embarrassment to the government and a blot on Hong Kong's image as a financial centre. This time around, activists have not launched further legal challenges as feared. But they have turned their attention to championing the interests of other concerned stakeholders. Speaking for retailers, they want Link to charge the lowest rents at its malls. On behalf of public housing residents who own vehicles, they want parking fees to remain low. Acting as unionists, they demand that Link pay fair market rates to staff hired by its contractors. These demands mean Link can never be like other reits, which can focus on maximising returns to unit holders without having to worry about political pressure. But with a clientele comprising public housing residents, Link will always face demands to put profits second. Whether that will make it a less attractive stock will depend on Mr Cheng's ability to run it as a socially responsible, but also profitable, enterprise.