Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor has promised to build public wet markets in newly developed areas to help counteract the near monopoly of the Link Real Estate Investment Trust (Link Reit), but people said the ineffective management of public wet markets remains a problem to be solved.
The Office of The Ombudsman said in an investigative report that public markets have accumulated more than HK$1.6 billion deficits over the last five years because of below market rents and problems about management. The report called the Food and Environmental Hygiene Department’s Rental Management of Market Stalls revealed a host of management problems, including some tenants used the stalls as storage areas instead of selling goods.
“The management of public wet market, at this moment, is a waste of public resources," said Kwong Chun-yu, a member of Yuen Long District Council.
There are 99 markets managed by the Food and Environmental Hygiene Department (FEHD), representing about 45 percent of all operating markets in Hong Kong, and the Link Reit owns 61 markets or about 38 percent of the total.
However, lower rentals failed to attract stallholders to operate in public wet markets; as a result, many public wet market stalls are vacant. The report published in August said the overall rentals of public wet market stalls are at low levels of between HK$200 and HK$3000 per month, or 30 percent below the market value. Even so, more than 30 percent stalls are unable to rent out in the nine public markets being researched.
“The cheapest stall in Yuen Long Tung Yick Market costs HK$837 a month, but still there are more than half vacant stalls in the wet market,” Mr Kwong said.
(Caption: Empty stalls in Tung Yik Market)
While the stalls in Long Ping Market operated by the Link Reit in the same district ask for about HK$28,000 per month each, 33 times higher than those in Tung Yick Market. Even though the rental of Link markets is much higher than public wet markets, their occupancy rate stands at 92.9 percent. Total retail sales of Link’s markets increased by 8 percent year-on-year as at the end of March 2018, according to the annual report of the Link Reit for 2017 and 2018.
Ms Lam also said based on her observation; not all residents are dissatisfied with the performance of the Link Reit.
Stallholders are willing to pay higher rents for to better-operating environment and heavy streams of customers in the Link’s wet markets.
Last year, the Link Reit refurbished 12 wet markets with new escalators, better air-conditioning systems and fire safety facilities, the annual report said.
A stallholder at Lung Hang Market managed by the Link Reit said, “The wet market renovated as a supermarket that can attract more younger customers indeed.”
Link's Lung Hang Market finished refurbishment within three months in 2016, while in the same district, Tai Wei Market managed by FEHD took six years just for the installation of air-conditioners.
A HK01 research found that the environment of public markets is poor and only 19 out of 76 public markets installed with air-conditioners. Poor maintenance in Tung Yick Public Market exacerbates the low vacancy rate problem. “About 58 percent of stalls of Tung Yick Market has been withheld from letting out for 23 years due to a water seepage problem,” said Mr Kwong.
Poor maintenance in public wet markets has affected the profitability of stallholders. Chan Wei-man, the owner of a vegetable stall at Tung Yick Market said, “The worst case I had is only one or two customers came a day.”
The occupancy and operating rate in public wet markets are inconsistent. Since rents are low, some tenants use the stalls for storage instead of doing business. For example, the Sai Kung Tui Min Hoi Market, a public wet market with a high occupancy rate of 85 percent, has zero operating rates because all stalls are used for storage, according to Momentum 107 research.
Some public markets had been closed down because of too many vacancy stalls and low patronage such as Tsuen King Circuit Market and Shau Kei Wan Market, which were closed several months ago. Sai Kung Tui Min Hoi Market will be closed down in the coming year. Mr Chan said, “I hope the government speed up maintenance work and add more ancillary facilities even though I may have to pay more rents for that.”
《The Young Financial Post 新報人財經》
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