Mall owner Yau Man Investment cannot be expected to bear social responsibilities of The Link
Reit spun off from government-owned properties agreed to subsidised rents for charity groups; the new, profit-driven owners have no such obligation
A Lam Tin shopping mall operator has been accused of using “immoral tactics” to make non-profit tenants pay management fees equivalent to 80 per cent of their rents.
It’s easy to round on Yau Man Investment, which bought Kwong Tin Shopping Centre from The Link Management last year. Its tactics are a bit underhanded, but it’s not clear why it has to subsidise tenants that are charities and other NGOs when it’s not in the business of, well, charity. That forced commitment, even if it’s contract-bound, is not tenable in the long run.
The Link, the previous owner, emerged from the privatisation of shopping malls and parking lots of public estates. But the listed company, running as the city’s most successful reit, or real estate investment trust, took on many social responsibilities, such as not being able to charge NGOs and charity tenants market rates for rents. But should and could this social responsibility be passed on in perpetuity every time a new company buys a property from The Link? That seems ridiculous.
However, the Housing Authority has reminded Yau Man that social welfare organisations are entitled to a discounted rent.
The Labour and Social Welfare Bureau has promised to look into the matter.
In buying the shopping centre, Yau Man has apparently agreed not to raise the rents for welfare groups among its tenants. But its bosses probably knew from day one that nothing could stop them from raising management fees. That’s exactly what it’s doing now.
It’s exploiting a loophole, because the “no rent hike” guarantee was not watertight in the contract. But there is a bigger principle involved. Why should this social obligation – which may well hold for The Link in other properties it owns – be passed on to a new owner every time The Link makes a sale? In any case, the new owner, like Yau Man, will always find a way around it.
Privatisation means becoming profit-driven. And companies are not in the business of charity. The government and such charities’ paymasters as the Jockey Club are, though. They should make sure welfare groups can pay for their current locations. Failing that, it’s their responsibility to help them find cheaper premises.