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Letters | Hong Kong free market is no excuse for Link Reit to rip off low-income residents
- Link Reit has been raising rents at double-digit rates annually at markets in low-income areas, and selling properties in poorly located areas at record prices
- When free markets run counter to the public interest, lawmakers have every reason to step in
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Why you can trust SCMP
I refer to Francis Neoton Cheung’s oped article, “Don’t blame mall owners or Link Reit for problems at public housing estate shops” (March 16).
Cheung made it sound as though Link Reit and others who bought retail and car park facilities from Link Reit are doing no more than making a reasonable return on their investments, after renovating the premises to attract more customers.
The facts tell a different story. After upgrading the facilities, Link Reit has been able to make a big profit by hiking rents at double-digit rates every year, thus boosting its stock price nine-fold. From 2005 to 2017, rents at Link-controlled shops and markets have risen 132 per cent while rents at malls across the city have risen only 72.8 per cent.
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The outcome is that prices at the Link-controlled premises have soared way above the affordability of local tenants. In Link-controlled premises in unfavourable locations, hygiene conditions and daily upkeep are far from satisfactory. In Sui Wo Court in Sha Tin, owners accuse the Link Reit and the successor owner for failing to pay their fair share of management expenses.
Since 2015, the Link Reit has been selling many of its more poorly located properties, some of which could fetch record prices. The shopping centre at On Ting and Yau Oi estates in Tuen Mun was bought by a consortium led by Gaw Capital Partners in 2017, for a whopping HK$5 billion.
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