Hong Kong’s Link Reit accused of renting car park slots to outsiders
Lands Department has launched an investigation into the allegations after news agency raised concerns over use of spaces
The Lands Department is investigating allegations that the Link Reit, Hong Kong’s first real estate investment trust, has been breaching leases and renting public or subsidised housing estate parking spaces it owns to non-residents.
On Thursday, the department promised to look into the matter as concern groups and lawmakers demanded the Link Reit reveal details of how it rented its 69,000 parking spaces, and urged the government to make sure they were reserved for tenants specified in the leases.
The concerns were raised after news agency FactWire released an investigative report, saying it had visited 192 Link Reit-owned car parks providing 14,500 hourly rental spaces, and was told by some of the security guards that anyone could rent a space there.
The agency said it had also checked the ownership of 116 private cars at Tin Shing car park in Tin Shui Wai between 10pm on September 12 and 1am the next day and found 36 of them registered to addresses outside the housing estate.
If all the 14,500 spaces were rented to tenants not specified in the leases – other than residents or occupiers of the corresponding housing estates, and their “bona fide guests and visitors” – the Link Reit may have dodged an annual waiver fee of HK$163 million to the government for temporarily modifying the leases, according to the report.
But the Link Reit argued that the report could not prove the hourly rental spaces had been leased to unqualified people.
“As long as the users of hourly and monthly parking fulfil the relevant legal requirements, no [waiver fee] is payable,” a Link Reit spokesman said. “We are very disappointed with [FactWire’s] report, which lacks legal grounds.”
FactWire said the 14,500 hourly rental parking spaces involved 146 land leases, which all required the spaces to be reserved for residents or occupiers and their guests.
But the Link Reit spokesman said fee boards were displayed prominently in its car parks, clearly stating that the spaces were only for use by the individuals specified in the land leases.
“We have been, as far as practicable, doing our best to ascertain the identity of the users, and require them to produce proof to ensure lease compliance,” he said.
A Lands Department spokesman said: “The [department] will investigate [the report] seriously and consult legal advice if necessary.”
He said if the department found land leases were being breached, it would first issue warning letters to the Link Reit. If no action was taken within a set period of time, he added, the department would announce the breaches in the publicly available Land Registry and might even take back the property.
The Link Reit has been found to have exploited the system before. In 2010, the Lands Department made it pay an outstanding waiver fee of about HK$30 million for renting 700 parking spaces to non-residents between 2005 and 2009.
Between 2010 and May 2016, the government approved 96 Link Reit applications to exempt some 900 parking spaces temporarily from land lease terms, but officials did not have a record of how many of those waivers involved renting spaces to non-residents.
The report, citing government information it had obtained, said that among the 900 parking spaces, only one was waived to be rented to non-residents to park their private cars.
The Link Reit, however, said the report had failed to establish connections between this information and the accusation that it misused its 14,500 hourly parking spaces.
The company said although the waivers only involved one private car parking space, it also included 291 motorcycle spaces and 16 goods vehicle spaces for non-residents.
On Friday the Link Reit said it would issue a lawyer’s letter to FactWire regarding its “erroneous report”, while reserving the right to seek “redress for the reputational damage arising from the misstatements carried in the report”.
“The [report] shows an ill-informed understanding of car park operations and management,” the company said.
“As car parks are subject to their respective lease provisions, which vary from case to case, making sweeping conclusions on the whole car park portfolio from an individual case amounts to speculative, misleading and biased reporting that shows a lack of legal knowledge and factual basis.”
From 2011 to 2015, the Link Reit paid more than HK$53 million for waivers, government figures show.
Sophia So Lok-yee, chairwoman of concern group Link Watch, said the government had never told the public how it had been enforcing the land leases to make sure there were no breaches or abuses.
She said the group had previously visited several Link Reit car parks and found security guards there never asked for any proof of residency.
She said the Link Reit had sold some of its car parks to private owners, which would make enforcement even more difficult, even though the new owners would also need to respect the leases.
“The government has the responsibility to administer the execution of land leases,” So said, adding it should require the Link Reit to publish rental details of all its 69,000 parking spaces in public housing estates it managed, not just the 14,500 hourly rental ones.
Lawmaker Alice Mak Mei-kuen, of the Federation of Trade Unions, said she would write to the Lands Department seeking details of its enforcement measures and discuss with other lawmakers whether the issue should be brought to the Legislative Council’s housing panel, which she chairs.
Democratic Party lawmaker Wu Chi-wai said he would also write to the government to follow up on the issue, but there was also the matter of inadequate or unevenly distributed parking spaces in different districts.
In 2005, the government privatised its 180 shopping and car parking facilities by listing the Link Reit, raising HK$34 billion. The government did not own any share in the trust, leaving the malls, markets and car parks completely in private hands.
Today the Link Reit has a market value of HK$141 billion, owning 73 wet markets, 125 malls and some 69,000 parking spaces.
FactWire on Friday also fought back, saying it “deeply regretted” Link Reit’s “untrue accusation”. The agency said it had surveyed all the 192 car parks providing hourly rental and the related 146 land leases, and had asked land lawyers, surveyors and former Link managers for comments during the reporting.
It added that it also asked Link Reit five areas of questions but the company only responded briefly in 90 characters.