Link REIT

For other uses, see The Link (disambiguation).
Not to be confused with Hong Kong Link.

Link Real Estate Investment Trust (Chinese: 領展房地產投資信託基金, or 領展;SEHK: 0823), previously known as The Link Real Estate Investment Trust (Chinese: 領匯房地產投資信託基金, or 領匯), managed by Link Asset Management Limited, is the first real estate investment trust in Hong Kong and currently the largest in Asia in terms of market capitalisation. It is wholly owned by private and institutional investors.

Link REIT's portfolio consists of properties with an internal floor area of approximately 11 million square feet of retail space and approximately 80,000 car park spaces, based almost entirely on the assets formerly operated by the Hong Kong Housing Authority.[1]

History

Initial public offering

IPO of The Link REIT, delayed for a year until 2005 through legal action by housing tenants worried that rents would rise, was eventually 18 times oversubscribed.[2] About 510,000 Hong Kong residents, or seven percent of the city's population, placed US$36 billion of orders while institutional investors were ready to commit US$40 billion.

The IPO's joint global coordinators were Goldman Sachs, HSBC Holdings plc, and UBS AG. JPMorgan Chase & Co. was the financial adviser to the Housing Authority.

The proposed flotation of The Link REIT by the Housing Authority was delayed when a public housing tenant, Lo Siu Lan, challenged the legality of the proposed divestment of the properties. She represented a concern among many residents of public housing that existing amenities would no longer be public and that The Link REIT would raise rents, thereby raising prices in shops, without due consideration of the public good. Some NGOs also were concerned that the reduced income of the Housing Authority would eventually lead to rent rises for public tenants.[3]

Renovation of properties

Since the listing in 2005, Link has engaged in a process of 'asset enhancement works', seeking to raise the value of the properties through upgraded physical structure, replacing low-end utility local shops with higher-paying brands and chains, enhanced 'customer service', and promotional activities. By November 2011, Link had completed a total of 23 asset enhancement projects, namely:

Acquisition of properties

In mid 2010, Link acquired the shopping mall portion of Nan Fung Plaza with parking facilities in Hang Hau, from Nan Fung Group, for a total of $1.17 billion.[4]

In late 2010, Link acquired the shopping mall portion of Maritime Bay Shopping Mall with parking facilities in Hang Hau, from Sino Group, for a total of $588.4 million.

In mid 2014, Link acquired The Lions Rise Mall with parking facilities in Wong Tai Sin, from Kerry Properties, for a total of $1.38 billion.[5]

Link is currently negotiating with China Vanke on a possible acquisition of an 80% interest in Longgang Vanke Plaza's retail centre, street shops and car parks.

On 27 January 2015, The Link with Nan Fung Group jointly bought land lot NKIL 6512 in Kwun Tong from the land auction, for a total of $5.86 billion.[6]

On 24 March 2015, Link announced the acquisition of Beijing EC Mall, the REIT's first purchase in mainland China, for a consideration of RMB 2.5 billion. The deal was completed on 1 April 2015.

On 19 February 2016, a subsidiary of the Link purchased the Trade and Industry Department Tower in Mong Kok (formerly the Argyle Centre Tower II) from the government for a sum of HK$5.91 billion.[7]

Sale of properties

In mid-2014 Link REIT sold four commercial properties, to four different buyers, for a total of $1.24 billion. The properties are Hing Tin Commercial Centre (in Lam Tin), Kwai Hing Shopping Centre (Kwai Chung), the Tung Hei Court shopping centre (Shau Kei Wan), and Wah Kwai Shopping Centre (Pokfulam).[3][8]

In late 2015 they sold five properties, namely: Fung Wah Estate Retail and Car Park, Ka Fuk Shopping Centre, Kwong Tin Shopping Centre, Siu On Court Retail and Car Park, and Tin Wan Shopping Centre.[9]

Renaming

On 19 August 2015, Link officially announces the changing of its corporate names.[10]

Criticism

The Link was called a "bloodsucker" by housing estate residents after the company acquired the Housing Authority shopping centres, renovated them, and raised rents. This has led to local shops being pushed out, higher prices, and the dominance of chain stores within the estates.[11][12]

A 2012 campaign by The Link to promote "nostalgic restaurants" in its shopping centres was widely derided on social media as hypocritical. Users on Golden Forum and Facebook wrote that the company "first killed the shops, then makes money from their death" and criticised the company for only allowing chain stores in their properties.[12]

The Link cut thousands of staff, a move "fiercely criticised by unionists, who said Link Management had dishonoured a pledge to protect the welfare of its frontline workers when it took over the operation from the Housing Authority". The Link replied that "the job cuts were in line with private practice".[13]

Market management

Cheung Fat Market, rebranded by The Link as "Cheung Fat Modern Market"

In addition to indoor shopping centres, The Link also acquired many local estate markets in 2005. Such markets are covered facilities with small stalls and shops let out to local residents, generally offering fresh meat and vegetables as well as daily necessities and home wares. As with the shopping centres, The Link has raised rents and also renovated some properties, leading to increased food prices and financial hardship on low-income households.[14]

In Tin Shui Wai, where The Link exercises a near-monopoly on commercial space, the company was criticised by local residents and Legislative Councillors in 2015-16 for planning to convert the Tin Yiu Market into a conventional shopping centre.[15] The market supplies fresh vegetables, meat, and fish to residents of the surrounding public housing estates. The next closest market is 5 to 10 minutes' walk away.

Stall operators at Cheung Fat Estate on Tsing Yi have gone on strike, in 2010 and 2016, to protest rent increases.[14] By the latter strike it was reported that rents had doubled in ten years. Some local residents stated that they visit a government-run market in Tsuen Wan instead owing to the higher prices at Cheung Fat.[14] The Cheung Fat stall owners also protested the outsourcing of the market's management to Uni-China (Market) Management Limited, which they feared will lead to untenable rent increases.[16]

Barriers set up by management at Leung King Estate against hawkers

Uni-China (Market) Management also manages the market at Leung King Estate in Tuen Mun, which is also owned by The Link.[16] In February 2016 a group of men dressed in dark jackets with "manager" (管理員) printed on the backs acted in an intimidating manner toward hawkers in the area of the shopping centre since 2 February. More than 200 showed up to protest against the men combating hawkers on the night of 8 February. Some minor clashes broke out between the self-proclaimed managers and the protesters, and required mediation by the police.[17] Two protesters were arrested and one reporter was injured during the clash.[18]

Conflicts between the management and the public reoccurred on the night of 9 February. The men were filmed beating up protesters while police stood by and prevented others from being involved. A reporter was also beaten up by the control team.[19] A 31-year-old man was arrested for causing disorder in a public place. He allegedly interfered with a worker performing his duties at Leung King Estate. The Link REIT distanced itself from the clashes and denied the hawker control team was part of its staff.[20]

See also

References

  1. ↑ Asia's REIT Push, Forbes Magazine, 29 Sep 2006
  2. ↑ Forbes magazine, 25 Nov 2005
  3. 1 2 Cheng, Albert (13 June 2014). "Link Reit's sale of shopping centres will leave poorer residents worse off". South China Morning Post. Retrieved 14 November 2014.
  4. ↑ Chan, May (10 June 2011). "Link Reit buy points at new direction". South China Morning Post.
  5. ↑ Sito, Peggy (19 August 2014). "Link Reit agrees to buy Wong Tai Sin shopping mall for HK$1.38b". South China Morning Post.
  6. ↑ "Hong Kong Property Market Monitor" (PDF). Jones Lang Lasalle. February 2015.
  7. ↑ "Tender result for government property at Trade and Industry Department Tower in Mong Kok announced". Hong Kong Government. 19 February 2016.
  8. ↑ Sito, Peggy (22 May 2014). "Link Reit sells four malls for HK$1.24b". South China Morning Post. Retrieved 14 November 2014.
  9. ↑ "Link REIT Disposes of Five Properties Offers Exceeding Appraised Value by Over 30%". Link REIT. 27 October 2015.
  10. ↑ "Link Unveils New Corporate Identity - Linking People to a Brighter Future". 19 Aug 2015.
  11. ↑ Ng, Joyce; But, Joshua (7 June 2013). "'Callous' career man Victor So takes helm of Urban Renewal Authority". South China Morning Post. Retrieved 29 August 2014.
  12. 1 2 Lee, Ada (11 April 2012). "Hundreds hit out at Link Reit 'hypocrisy'". South China Morning Post. p. 3.
  13. ↑ Wu, Helen (30 May 2006). "Link Reit to shed at least 1,400 jobs. Unionists say management ignored promises to protect non-skilled workers". South China Morning Post. p. 1.
  14. 1 2 3 Yuen, Chantal (15 February 2016). "Stall owners to close up shop for 7 days in anger over outsourcing of market management". Hong Kong Free Press.
  15. ↑ "Conversion of Tin Yiu Market by Link Asset Management Limited" (PDF). Legislative Council. 7 December 2015.
  16. 1 2 Yuen, Chantal (24 February 2016). "Feature: Paranoia and fear in the fight to save Cheung Fat Market". Hong Kong Free Press.
  17. ↑ "【新春小販】不滿領展「管理員」禁錮良景小販　市民聲援爆衝突". HK01. 8 February 2016.
  18. ↑ "良景邨夜市爆衝突　記者被推倒在地　兩男子被捕". Ming Pao. 9 February 2016.
  19. ↑ "惡煞「管理員」暴力趕良景小販 高永文避答". Apple Daily. 10 February 2016.
  20. ↑ Fung, Owen; Lee, Eddie (10 February 2016). "'I will be here until they kill us' – street vendors at Hong Kong estate defiant after simmering unrest turns violent". South China Morning Post.

External links

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