Link Reit says its main responsibility is to provide ‘sustainable returns to its unit holders’, after Hong Kong Chief Executive CY Leung says it must serve the public
Operator of facilities at public housing estates refutes Leung Chun-ying’s reminder to serve the needs of public housing tenants
The Link Reit says its primary social responsibility is to provide “sustainable returns to its unit holders” in response to a strongly worded reminder from Chief Executive Leung Chun-ying that the company should serve the needs of public housing tenants.
The listed real estate investment trust also says it is not a monopoly, despite comments by Leung in an exclusive interview with the Post alluding to such a status.
“The Link Reit’s primary social responsibility is to provide sustainable returns to its unit holders through the provision of commercial properties which attract tenants to operate in and shoppers to visit,” a spokeswoman for the company said. “Accordingly, we have achieved very positive results.”
She cited a number of awards as proof of the company’s commitment to sustainability, such as a “Best year-on-year change for Hong Kong” award in 2014 from the Carbon Disclosure Project, a Britain-based organisation.
She said the reit offered concessionary rates to about 200 non-governmental organisations every year and that it had invested over HK$200 million since 2011 in building barrier-free access to properties, and had donated about HK$10 million each year to charitable programmes.
Leung said the Link had a “particular corporate social responsibility” to provide public housing tenants with affordable shopping facilities. He went on to say the government had not promised the Link a monopoly on the supply of shopping malls, and he vowed to provide alternatives for public housing residents.
The government’s Housing Authority sold 180 retail and car parking facilities to the trust in 2005. Today the Link runs 155 car parks, 131 malls and 78 markets on the authority’s public housing estates, according to its website and the spokeswoman.
The spokeswoman said the Link’s total leasable area made up about 8.5 per cent of the city’s total retail space and that it ran 78 out of 205 fresh food markets in Hong Kong, so it should not be called a monopoly.
Sophia So Lok-yee, chairwoman of concern group Link Watch, said she welcomed alternatives such as the government making use of vacant shops to provide more affordable markets.
But she said such short-term relief would not help solve the fundamental problem of the government not having any shares in the Link and thus having no say in decisions such as to sell less profitable malls and parking spaces to speculators.
So believed the government should buy back shares or at least buy back malls when the company offers them for sale.
Link Reit hands out HK$38 million to directors
The Link Reit paid its 15 directors a total of HK$38 million in the 2015-16 financial year, which marked an 8 per cent increase on the previous 12 months, figures show.
That amount included almost HK$19 million in performance-linked pay, which has led Chief Executive Leung Chun-ying to question whether the senior management team were offered incentives to maximise profits for the real estate investment trust. Leung has previously said the company has a social responsibility.
A spokeswoman for the company said factors assessed when handing out performance-related pay included development and execution of strategic plans, leadership competency and market competitiveness. She said the chairman and chief executive officer were not members of the board of directors’ remuneration committee, which is in charge of determining remuneration, so as to ensure its independence.
The company’s annual reports show its chief executive, George Hongchoy Kwok-lung, received about HK$22 million for 2015-16, a 15 per cent increase on the previous year. That included HK$14.4 million in performance-related pay – 18 per cent higher than the year before – and HK$7.6 million in base pay, a rise of 9.7 per cent.
Chief financial officer Andy Cheung Lee-ming received around HK$8.6 million in total cash pay, up 11 per cent from the year before and including HK$4.5 million in variable pay – an 8 per cent rise – and HK$4 million in base pay, 15 per cent higher than previously.
