Francis Neoton Cheung

Opinion | Don’t blame mall owners or Link Reit for problems at public housing estate shops

Issues over provision of retail facilities to estate tenants go back a lot further than recent sales by Link to private buyers

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Lok Fu Place in Kowloon, a shopping centre managed by the Link Reit. Photo: Sam Tsang

Francis Neoton Cheung

Published: 8:33pm, 16 Mar 2019Updated: 8:08pm, 19 Mar 2019

In the past few years, buyers of shopping centres at public housing estates sold by Link Reit have come under increasing criticism for the changes they have made to their acquisitions.

Public housing tenants complain about the gentrification of malls that are supposed to serve them, while steep rent rises have forced out many small businesses, leaving increasing numbers of vacant shop spaces. There are even claims that the new owners of certain former Link shopping malls have deliberately kept store spaces empty so they could be rented out at higher rates later.

Last month, New People’s Party chairwoman Regina Ip Lau Suk-yee mooted a private member’s bill in Legco to cap rent rises at the Link’s current and former shopping malls. She also called for a vacancy tax on stores left empty for more than six months. Pan-democratic lawmaker Au Nok-hin joined in, demanding a complete ban on any further rent increases as well as on any change of use at the malls.

However, many of the common criticisms are misplaced. From a planning and urban governance perspective, the issues surrounding former Link shopping malls stem from the government’s poorly conceived decision to hive off huge swathes of the Housing Authority’s retail facilities 15 years ago.

More importantly, any attempt to control the business decisions of private owners of shopping centres in public housing estates would go against the principles of Hong Kong’s free market economy. That would be a very questionable and dangerous path for any politician to tread.

The original purpose of shopping centres in public housing estates was that they formed, physically and socially, an integral part of the residential communities they served. Public housing tenants were naturally the primary customer base of these retail hubs. Subsidised by the government and effectively run as government facilities, they operated outside the dictates of free market economics. They provided affordable goods and services that satisfied the day-to-day needs of low-income families.

All that changed in 2004 with the privatisation of the Housing Authority’s shopping malls, wet markets and car parks. The divestment of these former public assets created Link Reit, which is today Asia’s largest real estate investment trust. Market forces took over as the provision of public housing amenities ceased to be government responsibilities.