Attack on Link Reit is pandering to populism
If the government really wants to help those affected by its privatisation, give them a stake and watch them reap the benefits
Poor Link Reit. The chief executive and the chief secretary suddenly decide to pick on its management. Why? Ostensibly, Leung Chun-ying and Carrie Lam Cheng Yuet-ngor are concerned the real estate investment trust – which owns and manages most car parks, wet markets and shopping malls on public estates – has been squeezing out low-cost tenants, pushing up rents and making life difficult for poor and elderly shoppers.
In reality, it’s cheap politics. The reit has been a constant target of pan-democratic and other social welfare groups ever since its privatisation more than a decade ago. Leung, who is clearly aiming for a second term, and Lam, who may well want the top job herself, think they can score a few easy points with grass-roots voters, or at least halt their sliding popularity.
Never mind the Link has been the city’s most successful and honest reit – free of dodgy financial engineering – a classic mom-and-pop investment. Never mind tens of thousands of small investors have benefited from the reit and its management.
As I have said before, the reit and the Tracker Fund, both inadvertently created by the post-handover government, are two of the few things done right by it. (Let me declare a conflict of interest: I have been a happy Link Reit share owner since its IPO.) Now the very top of the government wants to undermine the reit. The Link has increased the efficient usage of the malls and markets, which were mostly run-down and derelict when they were under government management. So of course rents were cheap back then.
My conspiracy theory is that by undermining a good and honest reit, other less popular ones run by developers will have a fighting chance against a dominant competitor. Another official gift for developers?
As for the plight of the poor and old living in public estates, let me propose an unorthodox solution.
There are talks of the government buying back the reit, which is clearly insane: the stock value of Link has increased six to seven times since its IPO. Instead, I suggest spending a small portion of that money to buy Link shares and give them to the poor and needy as pensions so they can watch their investments glow – and let Link managers do their job.
That’s far better than any other government subsidies.