Link Reit will not reduce wet market rents, says low occupancy is due to poor facilities
While admitting their wet markets have a lack of tenants, Link Asset Management said it is working to renovate buildings to attract customers and lowering rents would not help the situation
The Link Reit has said it will not consider cutting rents at its wet markets to attract tenants, despite admitting that some of them have high vacancy rates.
“Rent is not a determining factor for tenants. The most important thing is to increase the traffic flow,” Link Asset Management’s corporate communications director Lo Bing-chung said.
“Some of the wet markets don’t even have air conditioning, that’s why we need to renovate them to improve the shopping experience,” he said.
Ten of the Link’s wet markets have undergone facelifts so far this year as part of the company’s plans to spend HK$700 million each year on revamping its wet markets and shopping malls.
But the Link’s business model of renovating its public housing estate malls and markets has come under fire, with critics saying the company has been pushing up rents and driving out small tenants.
Lau Wah-keung, a 66-year-old resident who lives in Tin Shui Wai, said he cannot afford to buy groceries at stores after they were renovated.
“The markets have become more high-end, they’re selling things like Wagyu beef. But most of the residents here live in public housing, how can they afford it?” Lau said.
There are five wet markets in Tin Shui Wai, with four owned by the Link and only one run by the government.
“They’ve completely monopolised the market, now I have to travel to Yuen Long just so I can get cheaper groceries,” Lau said.
Lo admitted that some public housing wet markets had low occupancy rates, but would not specify which markets were most affected or how low the rates were.
“Out of our 78 wet markets, there is indeed some that do not have many tenants, and their businesses aren’t going well,” Lo said.
A survey, conducted by Link Watch, found that the average vacancy rate at 12 Link-operated shopping centres was about 11 per cent, while the vacancy rate for their wet markets were even higher at 30 per cent.
According to the company’s annual report, the Link’s shopping malls have a 97.1 per cent occupancy rate overall, while markets and cooked food stalls are 89.1 per cent full.
The occupancy rate however, is calculated based on the total area leased and does not reflect the number of vacant stores.
