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Legality of Privatising Public Assets: Link REIT                                                                                                                                                                                                                
Product Ref: 05/241C Company: Link REIT

Product Type: Case Industry: Public Sector & Non-Profit
Real Estate

Related Product(s): N/A
Authors: P.S.Tso   Samuel Tsang
Real Estate Investment Trusts (REITs) have proven to be popular investment vehicles in countries including the US, Australia, Singapore and Japan. They work by using the pooled capital of investors to purchase or manage property. Issued shares are traded on exchanges (in the same manner as stocks and mutual funds) and increase or decrease in value according to variations in the value of the trust's property portfolio, rental income or other factors. To ease a growing budget deficit, the Hong Kong government's Housing Authority made plans to launch the territory's first publicly-listed REIT, in hopes of raising much needed capital from the market. The privatisation plan involved selling retail and car parking spaces within public housing estates to the incorporated Link property trust. However, the listing was held back due to the lawsuit raised by the public housing tenants, who worried the future management of the assets would not meet the needs of the existing tenants adequately. This case illustrates the legal challenges facing a government, and the associated impacts to the key stakeholder groups, in a privatisation program. In addition, it also demonstrates the importance of a well-structured institutional framework in privatisation.
Functional Area : Economics & Business Policy
Finance & Investments

Issues: Challenges in privatisation
Length: Text: 3 pages
Exhibits: 1 pages
Country: Hong Kong SAR

Pub. Year: 2005 Level of Difficulty: 1
This product type is available in the following language(s):      English   Simplified Chinese
Related Information: N/A
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