Raymond Ho (SCMP, 19 February 2007)
The Link Management is the company attracting most public attention in Hong Kong, not because of its size but because it was once a part of the government. Recent controversies over leasing issues have brought it into the media’s focus. Public opinion is almost unanimously against the company following recent incidents, including a rally against its refusal to renew tenancies and doctors’ complaints about proposals to relocate their clinics.
It is unfair for a listed company to have to face pressures akin to those applied to government departments. We should look more rationally at the implications of the selling off of public assets.
The privatisation of these assets through The Link Reit embodied the “small government and big market” principle, as it involved releasing to the market assets once held by the government, and putting the proceeds back in the hands of the Housing Authority for the provision of public housing. The listing brought in HK$34.1 billion for the authority.
This is a gain for society as a whole rather than just a small group of people. As a private company, The Link Management shuns bureaucratic practices. Under its management, occupancy rates rose 1.3 percentage points to 92.3 per cent from April to September last year, involving a newly leased area of about 150,000 square feet. Thanks to The Link Management’s leasing work, floor space that would have been left vacant under bureaucratic management is now being used to provide consumers with more choices and create job opportunities.
Bureaucrats know little about working with businesses. The lack of banking outlets in public housing estate shopping malls, which created much inconvenience for residents in the past, is a case in point. As a commercial organisation pursuing a market-oriented strategy, The Link Management is adept at accommodating the needs of businesses.
Since it took over management of the shopping centres, it has made banking services more accessible to residents by adding 33 bank outlets, including branches and ATM machines from nine bank networks.
Faced with ever-changing market demands, greater flexibility in operations and the drive for higher profits, The Link Management has taken strong steps to meet society’s needs, which the bureaucrats did not do well.
As for criticism that the company has disregarded its social responsibility by bringing in retail chains and being harsh on small tenants, we should be clear about the nature of that social responsibility. As a market-driven company, The Link Management’s social responsibility is to serve consumers by being shrewd and innovative in meeting their expectations and needs. It is by gaining consumers’ support that a company ensures its survival. Instead of being adversaries, The Link Management and the small tenants are like the manager and members of a football team. The manager works hard for the team’s development, while players give their best on the front line.
Drawing on their deep understanding of residents’ shopping habits, small tenants are uniquely positioned to serve their customers, undaunted by the entry of chain stores. As The Link Management gets better at its co-ordinator role, a business-sector dream team is being born.Raymond Ho is an associate scholar at The Lion Rock Institute, a Hong Kong-focused free-market think-tank.