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LCQ11: Management of the shopping centres and markets under The Link

     Following is a question by the Hon Wong Kwok-hing and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (November 9):


     It has been reported that The Link Management Limited (The Link) had recently requested shop tenants of the fresh markets under its management to install Octopus processors on the grounds of improving the operation environment and increasing consumer flow; the reports pointed out that the shop tenants had to hire the device from the Octopus Holdings Limited (OHL) and pay commissions to OHL based on the transaction value, and some tenants in Tai Yuen Market of Tai Po worried that rejecting to install Octopus processors might have impact on the renewal of their tenancy agreements, and thus were forced to accede to the installation.  In this connection, will the Government inform this Council:

(a) whether the Government knows at present, apart from Tai Yuen Market, in which of its shopping arcades and fresh markets had The Link requested the shop tenants to install Octopus processors, and whether it had consulted and obtained the consent of such shop tenants beforehand; whether the Government has assessed if, by requesting the shop tenants to install the device, The Link is involved in a breach of contract in that it has unilaterally changed the tenancy terms;

(b) whether it knows the respective amounts of monthly charges and commissions payable to OHL by the shop tenants for hiring the Octopus processors; given that the aforesaid measure implemented by The Link will enable OHL to gain direct benefits from the use of its services by the shop tenants, whether the authorities have assessed if a transfer of benefits between The Link and OHL is involved;

(c) whether it knows, since The Link took over the shopping arcades and fresh markets of the Hong Kong Housing Authority in 2005, the respective numbers of individual small shop operators who had moved out from the premises in these shopping malls and fresh markets on their own accord or whose tenancies had been terminated, as well as the number of chain stores moving in to occupy such shop premises each year; and

(d) whether the authorities will consider increasing the number of public markets managed by the Food and Environmental Hygiene Department, so as to offer more alternatives for the operation of small businesses as well as more shopping variety to members of the public, and safeguard the small shop operators from facing more operational difficulties as a result of the monopolisation of shop premises?



     The Hong Kong Housing Authority (HA) divested its 180 commercial and car-parking facilities through the listing of The Link Real Estate Investment Trust (The Link REIT) in November 2005.  The Link REIT is a private organisation which is entirely independent of the Government and the HA, and the management of its properties is solely the responsibility of The Link Management Limited (LML).  The Government and the HA cannot and will not intervene in the day-to-day operation and business management of the LML.

     The first three parts of the question involve the private properties of The Link REIT managed by the LML.  As mentioned above, The Link REIT is a private organisation, and it is entirely independent of the Government and the HA.  The day-to-day operation and management of the properties of The Link REIT is taken up by the LML.  The Government and the HA do not keep any of the information requested in the question.  However, we have sought information from the LML in this respect.  Having consolidated the information provided by the LML and the Food and Health Bureau (FHB), my responses to the four parts of the question are as follows.

(a) According to the LML, with an objective to increase the competitiveness of their tenants in their markets and to help them to adapt to the trend of electronic payment, the LML is conducting a first trial programme in its Tai Yuen Market in Tai Po to assist the tenants to install the Octopus payment facilities.  The LML hopes to improve the shopping experience of customers in markets by providing them with another payment mode and choice other than cash, thus minimizing the need to handle change and making the payment process cleaner and faster.  The relevant trial programme has not been implemented in other shopping centres and markets.  The LML emphasises that it has consulted tenants concerned before the trial programme of Tai Yuen Market started.  Tenants can make their own decision whether or not to participate in the programme.  The relevant trial programme does not involve the tenancy arrangement between the LML and tenants in Tai Yuen Market.

     Under the trial programme, the LML is currently cooperating with Octopus Cards Limited on the installation of the necessary hardware and software to allow for Octopus payment facilities by interested tenants in Tai Yuen Market.  Training will be given to tenants to assist them to adapt to the use of electronic payment.  The LML said that most participating tenants were satisfied with the effectiveness of the Octopus payment facilities installed.

(b) According to the LML, interested market tenants will have to pay the monthly reader rental fee and relevant administration fee to Octopus Cards Limited for using the Octopus payment facilities.  Octopus Cards Limited has offered to waive the first three to six months of the reader rental fee for tenants in Tai Yuen Market.  For the monthly reader rental fee and relevant administration fee to be borne by tenants, the Octopus Cards Limited would not disclose the arrangement details as these form part of the commercial agreement between Octopus Cards Limited and the tenants concerned.

     According to the LML, other than the trial programme launched in Tai Yuen Market, it has not requested any tenants at its other shopping centres or markets to make use of Octopus payment facilities.  Under the trial programme, the LML assists interested tenants in installing Octopus payment facilities and has not received any fee from the Octopus Cards Limited.

(c) According to the LML, the number as well as the total rental internal floor area (IFA) of shops under 1 000 square feet (excluding the top 50 tenants paying the highest monthly rent) in its portfolio have in fact increased in the past six years.  The number of shops increased from 2 911 (total IFA of 1 427 000 square feet) in March 2006 to 3 305 (total IFA of 1 605 000 square feet) in March 2011.  The LML also said that as there is no clear definition on "chain store", no related figures can be given for reference.

(d) According to the FHB, public markets are built by the Government with the primary objective of resiting on-street hawkers so as to improve environmental hygiene and provide places for daily shopping (in particular for fresh provisions) by neighbouring residents.  Today, the number of licensed hawkers has substantially decreased whereas supermarkets, fresh provision shops and various kinds of restaurants are available in every corner of the territory.  The public's shopping and dietary habits have also changed.

     Given the high cost of building a new public market, the Government must take full account of the cost-effectiveness of relevant facilities before considering the construction of such facilities so as to ensure the optimal use of public money.  According to the Hong Kong Planning Standards and Guidelines, the planning for new markets should be considered on a case-by-case basis, taking into account not only the population of the area, but also a host of other relevant factors (such as demographic mix, community needs, provision of both public and private market facilities nearby, and the number of fresh provision shops in the vicinity, etc.).  In the past, the Audit Commission has criticised the Government more than once for the high vacancy rate of market stalls.

     According to the FHB, the Food and Environmental Hygiene Department currently has no plan to construct a new market but will study carefully the views and recommendations of all stakeholders.

Ends/Wednesday, November 9, 2011
Issued at HKT 12:40


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