From Socialized Institution to Privatized Corporation: The Link Real Estate Investment Trust Experience “Hey Paul, did you read the news about the major political groups urging the Government to buy back shares of the Link REIT in the newspaper today? If only they listened to you and retained a certain degree of control, we would not have all these protests from the tenants!” Recalling his golf buddy’s small talk, Paul Cheng, ex-chairman of the Link Management Limited couldn’t help but let out a sigh. Since his decision to relinquish the post of chairman of the Link Management Limited over two years ago he had been ‘wondering if, inthe interest ofthe public, he should have brought the disagreement between hhim and the activist shareholder into the open and fought it out. His mind drifted back to how it all started back in 2005 and how he to balance the interests of all stakeholders; investors, tenants, residents and government, In pursuing its investment strategy, the Manager will + maintain a large and geographically diversified portfolio of: ® convenience-based retail properties primarily serving the basic consumer needs of the residents of the Adjacent Housing Estates and other visitors; ‘Though dogged by controversy, Hong Kong’s first real estate investment trust and the world’s largest, The Link REIT, finally began trading on the Hong Kong stock market on November 25, 2005. While the board cheered the more than 15% climb in share price on its first trading day, the listing was also greeted with a protest mounted by activist and public housing residents outside the stock exchange. They demanded the company continue charging the lowest rents at the properties. The protestors were afraid that with the privatization of the malls, and car parks, The Link REIT would exploit the full commercial value of these properties. Protestors felt this would deprive the residents of suitable facilities made possible by the concessionary rental charges borne out of the Hong Kong Housing Authority’s stated social conscience, ‘To aggravate matters further, within a few days of listing, British hedge fund The Children’s Investinent Management (TCI) bought 18.35% of The Link REIT’s shares and became its largest shareholder. Seeking to reap profits quickly, their views did not exactly tie in with ‘The Link REIT executives. Nor did they support Cheng, the chairman appointed by the goverment to balance the interests of public housing tenants and the Link’s shareholders, in his strategy to pace upgrading of assets and rent increases to give tenants time to adjust, Cheng refused to adopt TCI’s aggressive stand and finally announced his resignation in January 2007, Since the beginning, there were run-ins between the tenants and The Link management over rental increases. Activist groups urged the government to intervene and certain legislators attempted to influence the management of The Link REIT but failed. After Cheng’sLink REIT 2 departure, under leadership of the new chairman and new senior management, asset improvement and rent inerease sped up, prompting more protests from tenants. During the latest protest, staged by the tenants of one of the indoor markets, one shopkeeper complained of a 360% increase in rental. When a legislator asked the government to urge The Link Management to help small tenants, the Secretary for Commerce and Economic Development said “the management has the right to determine its business strategy and operate in accordance with market principles.” Indeed, The Link REIT responsibility is to provide a return to shareholders and to abide the law. This continuing saga led Cheng to wonder if the Hong Kong Housing Authority (HA) should have listened to his suggestion and kept certain control over the Link. He coulda’t help but ponder the difference between social and corporate responsibilities. Could divestment of similar assets in the future could be done in a more optimal way?” THE HONG KONG HOUSING AUTHORITY ‘The Housing Authority (HA) is a statutory body established in 1973 under the Housing Ordinance with origins dating back to the great fire of 1953 which wiped out the homes of some fifty thousand people at the Shek Kip Mei squatter area. This tragedy forced the Hong Kong Government to break from its tradition of non-intervention to enter into the housing market, With a tight public purse and an influx of refugees from China, progress was slow in the early years. When Sir Murray MacLehose took over governorship of Hong Kong in late 1971 he was appalled by the inadequate and harsh living conditions of much of the population, With ‘more money in the public purse than his predecessors the new governor set out an ambitious fen-year housing program and HA was formed with a mission to meet the housing needs of people who could not afford private housing. Over the years, as Hong Kong became more affluent, the scale and scope of involvement grew relentlessly. The government evolved from building basic accommodation to developing modem self-contained communities including commercial, recreational, educational, welfare and transport facilities. Prior to the divestment in 2005, HA managed over 10% of Hong Kong's retail space and was the planner, designer, developer and operator of everything from homes for the elderly to shopping arcades and car-parks. As of 2008, approximately one-third of Hong Kong population lived in public rental housing units. HA, operating within the bureaucratic framework of the public sector, has often been influenced by public policy and socio-economic considerations. Its properties were ustally leased out at sub-market rates to small retailers. By the early 2000's, the agency operated at a deficit each year and was expected to run into imminent financial crisis. In search of greater efficiency and prompted by a desire to move from the role of provider to facilitator, the HA looked for greater private sector involvement. Spurred on by the increase in credible private sector management firms, in July 2002, the HA commissioned a consultancy project to investigate the feasibility and means of divesting its retail and car parking facilities. As a result, in 2003 HA approved a plan to divest these assets. The decision was prompted by the need for greater efficiency and to address its serious financial problem, but was also in line with the Government's commitment to ‘free market’ and ‘small government” andLink REIT 3 would enable the HA to focus on its core business of providing subsidized public rental housing to people in need, While the proceeds from the divestment would be used to cover the deficits, Michael Suen, Chairman of the HA, believed the plan would provide a win-win situation, “Commercial and domestic tenants are likely to benefit from the change to private ownership and management of the retail and car-parking facilities, as it will bring about enhanced quality, improved services and faster response to customer demand.” ‘The Portfolio A total of 180 facilities comprised of 149 integrated retail standalone retail facilitics and 29 standalone carpark facil divestment. This portfolio of approximately 960,000 square meters of retail space and 79,000 car parks were all located within Government Housing Estates. These properties constituted roughly 9.1% of Hong Kong's total retail space and 13.7% of Hong Kong's total conimercial carpark spaces. They served the daily needs of approximately 40% of Hong Kong’s population, who lived in the adjacent public housing estates. Diagram 1, Geographical Distribution of the Properties Retail Facilities: Carpark Facilities: Breakdown by internal floor area Breakdown by number of carpark spaces Hong Kong Hong Kong pri Island 7a 7.8% Kowloon 5% Kossoon New 33.2% Monies New (nclading Tervtories ‘Lantau (nctuding Island) Lantau sland) 594% arm ‘THE FIRST ATTEMPT After more than 12 months of structuring and preparation work, the Link REIT public offering was set to go on November 25, 2004. The government was expected to reap up to HK$32 billion in listing, However, the plan was derailed by two pensioners who believed that the divestment of the ialls and the car parking spaces would deprive them of the “suitable facilities” they enjoyedLink REIT 4 under the ownership of the HA. They were concerned that privatization would lead to higher retail rents resulting in inereased in prices on merchandise, With support from certain legislators they applied for judicial review on December 8, 2004 claiming that HA was breaching the housing code in selling the assets. Aside from ‘undermining the livelihood of the residents’, the government was also criticized of selling Hong Kong out to foreign interests. Only 10% of the Link REIT was allotted for public float. The strategic investor, CapitaLand Limited, and most of the nine comerstone investors were foreign owned. The ease quickly became politicized and a media sensation. Although the Court of First Instance and the Court of Appeal both ruled in favour of HA, the legal proceedings got in the way of the original schedule, The listing scheduled for December 2004 had to be scrapped as the pensioners moved the case to the Final Court of Appeal. Final judgement upholding earlier rulings was eventually handed down on July 20, 2005. Three months later the government announced its decision to re-launch ‘The Link REIT. ‘THE LINK REIT Reacting to public opinion and negative press during the first listing attempt, the government cut out the nine cornerstone investors in favour of small, local investors; Hong Kong assets to Hong Kong people. Initially 30% of the units under the second Global Offering were allotted to Hong Kong small investors. As the offer was 18 times over subscribed, additional units amounting to another 9.9% representing HA’s total unit entitlement as part of the consideration for the sale of the properties were allocated to the public, In the end about 40% of the total units were allotted to local public investors. A 5% discount was given on all Hong Kong Public Offering units. The Link IPO, the largest REIT in the world, was successfully executed on November 25, 2005. Net proceeds received by the HA from the divestment amounted to HK$33.8 billion, ‘The Link REIT Structure Upon completion of the Global Offering, The Link REIT became the beneficial owner of all the properties. Management responsibilities were vested in The Link Management Limited (the Manager), an entity incorporated in February 2004 as a wholly-owned subsidiary of HA prior to the divestment. The Manager’s role was defined as, “1o manage The Link REIT in accordance with the Trust Deed and, in particular to ensure that the financial and economic aspects of The Link REIT's assets are professionally managed in the sole imerests of the Unitholders.” The Trustee, HSBC Institutional Trust Services (Asia) Limited, held the shares of the Manager on trust for the benefit of Unitholders.Link REIT CapitaLand Limited, one of the largest property companies in Asia, was engaged as a strategic partner to bring the necessary experience and skills to assist the Manager. With this support, the Manager is responsible for the Link REIT’s investment and financial strategies, asset enhancement, acquisition and disposal policies as well as overall management of the properties To align interests, CapitaLand invested US$120 million worth of Units atthe time of the Global Offering as part of the terms of the agreement. The Manager Singe March 2005, the Manager has been managing the portfolio under the direction of HA ‘and in line with HA’s policies. Subsequent to the divestment it operates within the framework established by the Board. Diagram 2. The Link Management Limited ~ Organizational Strueture Board Compliance & Internal Audit Chief Executive Officer Finance and | [ Human Resources Project and Asset Investment and Corporate Planning Management Management Services Although the government did not retain any equity interest in The Link REIT after the IPO, HA put into place certain corporate governance policies to ensure that the Manager would operate in a way that serves the interest of the unit holders as a whole. ‘To balance the interest of the public housing tenants and The Link REIT’s shareholders, Paul Cheng Ming-fun was appointed chairman and Victor So Hing-woh the chief executive officer by HA. Formerly chairman of Inchcape Pacific Limited, Cheng had been active both as a corporate leader and in politics. He was a member of the Hong Kong Legislative Council prior to the handover and also served on the Provisional Legislature after 1997. So was formerly executive director and the chief executive officer of the Hong Kong Housing Society, a non-government organization and the second largest public housing provider after HA. Prior to joining the Manager he was executive director of Sun Hung Kai Properties Limited. At the time of divestment, about 25% of the staffat The Link Management were previously employees of HA. OBECTIVE, GUIDELINES AND STRATEGYLink REIT 6 “vou hey objective ..... is to provide Unitholders with stable distributions per Unit with ...... sustainable long-term growth of such distributions. ..... accomplish this objective through optimizing the performance and enhancing the overall quality .... of assets To help achieve the objective of providing the shareholders with stable sustainable return, a set of investment guidelines was stated in the Offering Circular: + invest in properties for the long-term; + focus on sustainable-income producing properties with potential for long-term income and capital growth; and + maintain a large and geographically diversifies portfolio of : ‘0 convenience-based retail properties primarily serving the basic consume needs of the residents of the Adjacent Housing Estates and other visitors; and ‘© carparks serving the tenants and customers of the retail properties, the residents of the surrounding neighborhoods and other visitors. Both the Trustee and the Manager were required by the listing agreement to adhere to the investment policy for three years. Governed by the REIT Code in Hong Kong, the Manger was required to distribute at least 90% of its audited net income, At the time of listing, yield to shareholders was forecasted to be around 5.53% on a listing price of HK$10.30 per unit. Other key strategics included proactive management style, expansion of the portfolio through selective acquisition, and enhancement of financial management expertise. Furthermore, to ensure that a prudent capital structure was maintained, gearing ratio was caped at 45%, Bearing in mind the interest of shareholders and the livelihood of the tenants, under Cheng and So adopted a strategy of gradual enhancement of assets to improve income. Cheng’s plan was (o pace asset enhancement so that the tenants would have time to adjust not just to the new environment but also higher rent. He hoped that with improved accessibility and supporting facilities, more traffic would be attracted to the malls and income for the tenants ‘would improve overtime. .Gncome from) the shops enabled many of the operators to put their children through school, we can't just raise the rent drastically within a short time span,” Paul Cheng Pressure from ‘Public’ Nevertheless, even with restraint on the scale of rental increase, such exercise faced and continues to face strong resistance from tenants used to sub-market rent. At the time of divestment, HA was charging HK$12 per square foot at some malls while neighboring malls were charging HK$40-50 per square foot. Rental increases were greeted with protests and media coverage, Acti concemed parties, wanted the Manager to charge the lowest rentat the malls, lowest parking fee at the carparks and demanded fair-market pay to cleaners, security guards and other staffLink REIT 7 hired by its contractors. A civie organization comprised of workers, activists, tenants and academies, Linkwatch, was created to keep watch on operations of the Manager. Certain legislators saw this as an opportunity to win favor and be champions for ‘grass-root” stakeholders called for involvement of Legco. With Cheng refusing to appear in front of the Legeo to ‘explain’ the management of the malls and carparks, opinions were divided with certain sectors of society questioning the wisdom and legitimacy of Legeo's attempt to interfere with the operations of a private company. Pressure from ‘Significant Unit Holder’? While Cheng was busy defending the Manager’s rights and obligations in securing a reasonable return for its investors, he was at the same time under pressure from a significant sharcholder who emerged after three days of listing to improve the return to shareholders at a faster pace, With the issuance allocating 60% to cornerstone investors and 40% to retail investors, fund managers had to buy from the market to invest in Link REIT. The demand quickly pushed up the price of the units. Within three days of listing it went from the subscription price of HK$10,30 to close at HK$12.25. Taking into consideration the 5% retail investor discount, the investment went up 25% very quickly. As a result, many small investors took profit. ‘Thus, within a few days TCI was able to buy up to 18.35% of Link REIT from the market and became a major shareholder of Link REIT. TCI, one of the world's most suecessful funds, has a reputation for interfering with the corporate strategy of companies in which it invests to reap profit quickly. Their goal, therefore, conflicted with Cheng’s vision of balancing the interests of public housing tenants and Link REIT’s shareholders. John Ho, the head of TCI office in Hong Kong, in July 2006 was appointed to the Board as 4 non-executive director. He subsequently pressured for quick rate inereases and an aggressive rental policy. With Cheng said to have repeatedly ignored the hedge fund’s requests for a more aggressive investment strategy, Cheng eventually stepped down as chairman on March 30, 2007, one year before the expiry of his contract. At the time of the announcement a spokesman of Link REIT said Cheng confirmed that there was no disagreement with the board. However, Cheng later admitted that the rent-rise row forced him to resign from the Manager. “My resignation was the result of a clash between shareholder's interests and social responsibility... Many of these retailers are small businesses operating fo earn money for their children's education.” NEW ERA.Link REIT 8 Changes in Top Management After Cheng’s resignation, the board appointed Nicholas Sallnow-Smith as the new chairman. Before joining Link Management Limited, Sallnow-Smith, a veteran in Hong Kong’s property industry and 10 years Cheng’s junior, was the Chief Executive of Hongkong Land Limited, a leading property company with over 460,000 square meters of prime office and shopping space in the central district of Hong Kong. Shortly after Cheng’s resignation, Victor So, the chief executive also announced that he would not renew his contract upon its expiry in July of the same year, Although he remained until November after his successor was found, similar to circumstances surrounding Cheng’s departure, there was speculation that So left because “the company’s management found him not aggressive enough in improving the Link's performance.” Nevertheless, Sallnow-Smith stressed that there was no pressure to remove So, Replacing So as the executive director and chief executive in November 2007 was Ian Robins, the then Divisional Director and Head of Asia for Macquarie Real Estate Asia Limited. While So was Hong Kong educated and had worked in both public, private as well as non-governmental organizations in Hong Kong, Robins was educated in South Australia and spent most of his then 20-year career working in Australia and other parts of Asia. In May 2008, two more executives were brought in from Macquarie Countrywide Trust in Australia, sister company of Macquarie Real Estate Asia. One was to be the chief operating officer and the other the director of strategy. Although Macquarie Countrywide, a Sydney- based listed property trust that manages community-based retail facilities has an asset value that similar to Link REIT, media questioned whether experience gathered there might be applicable to managing low-end shopping malls that serve the needs of residents in Hong, Kong's government housing estates. DIRECTION Mission Statement To build Link REIT as a market-driven and value-creating asset manager offering: + inviting shopping experiences to customers; + prosperous business opportunities to tenants; and + rewarding financial returns to investors. Asset Enhancement With the new executives and new board, asset enhancement took on a frenzy emulating the mission statement that first appeared in the 2007 annual report, Eleven new projects were announced in 2007, bringing the total asset enhancement projects to 26, As of March 2008, five were completed, one was deferred and 20 were in progress with two of those scheduled (o start in 2009, With improved facilities, upgraded physical structures and promotional activities, Link REIT hoped to attract more shoppers to the malls. The trade mix of the tenants had also been closely monitored and refined. Specialty shops and food and beverage outlets were introduced despite the accusation by some that there has been a trendLink REIT 9 in favoring popular chain stores. These exercises all aimed to improve asset value of the properties and higher returns in the form of increased customer traffic and rent, Corporate Citizenship Other than upgrading the properties, Link REIT was also active in launching seminars, which help tenants and running activities that built community relationships. For the Tenants Information and Skills Upgrade From 2007 Link REIT had been organizing seminars for its tenants. Topics on security, ‘management concepts, industry trends, retail techniques, customer servicing were areas of interest, These seminars also served as sharing platforms. According to the 2008 annual report, more than 600 participants had taken part in these seminars, As a result of positive feedback, the Link Tenant Academy was formally launched in 2008. Renovation and Designs Made Easy Another service provided by Link REIT was the establishment of The Link Tenant Information Centre. With renovation and enhancement of the shopping malls, many existing tenants needed to change their shop design to stay in tune with the new environment. To assist the tenants in starting new outlets or renovating existing shops, The Link Tenant Information Centre was established to offer one-stop access to information on shop designs and products. For the Community Workshops and Activities In addition to providing nearby residents a convenient shopping environment, Link REIT also used the malls as communi centers, The Link Fun Academy was established during the second half of 2007 to organize various workshops and activities for the public, Workshops and activities included calligraphy, acting workshops for children, jewelry workshops, musical training workshops, a youth soccer scheme, parenting talks and others. Since its inception, The Link Fun Academy has organized over 40 activities attracting around 8,000 participants from targeted neighborhoods. Through this, Link REIT hopes to create a cohesive and harmonious neighborhood. Charity and Community Services As a service to the community, Link REIT set aside 86,438 square meters or 8.5% of the total lettable intemal floor area for renting to non-profit-making organizations at concessionary rates. Furthermore, Link REIT also sponsored venues for community organizations for fund raising, civie education and health and environmental protection education,REACTION AND FEEDBACK Link REIT was named “Caring Company” by the Hong Kong Council of Social Services in February 2008 for contribution to and support of community activities. It was also awvarded the Prime Awards for Corporate Social Responsibility by Prime Communications Limited and the Hong Kong Institute of Directors on October 31, 2008. Amongst other judging criteria, it scored high in readiness for taking up corporate social responsibility and showing concern for social needs. Shoppers Results of three independent surveys conducted by organizations commissioned by the Link REIT in 2006 and 2007 showed that customers’ overall ratings on the shopping malls showed marked increases, from more than 4 points to more than 7 points after asset enhancement. The survey conducted in June 2006 also revealed that shoppers increased their visits after the mall completed its enhancement, ‘The asset enhancement projects coupled with various activities organized by the ‘management seemed to have sueceeded in attracting more visitors to the malls. “Running a restaurant requires a good understanding of customers tastes and market trends. Since reopening with a new look .... more popular... also attracted many from outside our neighborhood...” uring weekends, we like having family time at shopping centers, We Joined this promotional activity as a family unit and are very excited...” ‘Tenants With asset enhancement came tental increases, While some existing tenants were able to upgrade with the malls and some new tenants signed up, others resisted and protested against each rent increase. “We took the opportunity to renovate our shop in parallel .... The shop Jront has now been given a much trendier outlook ...... t0 attract more customers and upgrade hand in hand with the shopping center..." “We believe in the new business approach and have therefore extended the branch network to Link REIT’s shopping center for the first time. The result is surprisingly good ....” “The cooked food stalls .... have donned a refreshing look and enhanced environmental hygiene after renovation. Customers... have demonstrated their support of the positive changes with their patronage.” In spite of the positive comments, rental inereases continued to result in protest from certain tenants and attracted media coverage. Wet market tenants who occupied 11% of total retail floor space at time of listing, together with vendors who sells traditional medicine, incent sticks and other non-mainstream goods, continued to challenge Link REIT’s every increase in rent,Link REIT 11 On August 21, 2008, 78 vendors in Choi Ming wet market closed their businesses to demand assurance from the Link Management for a “reasonable rent increase”. A vendor Who operates two seafood stalls said expressed concer. “The rent has risen twice since the opening of the wet market in 2002. ‘My initial rent was about HKS20,000. It is now about HKS30,000."" October saw two more protests from different properties. One shopkeeper in Yu Chui Court indoor market complained of a hefty increase in rent, “For one chicken shop, the rent was increased from HKSS,000 a month 10 HK$23,000 a month. How can this possibly be sustained? Yet another in Lok Fu Shopping Centre protested against the Link REIT after it increased rents from HK$30 to HK$130 per square foot. Although the rent inereases, as explained by companies managing the mails for the Link Management, was simply a move to be in line with market level, tenants continued to protest and seek support from politicians, Sallnow-Smith’s comment in a news briefing further reaffirmed the commercial pricing strategy the Manager has adopted. “Bvery rent ... is a market rent, and it will be different with every tenant because the siore is different, the location is different and the potential income is different.” In response to the protests, the government tried to exert influence. Rita Lau, the Secretary for Commerce and Economic Development, said on November 13, 2008 that the government had written to Link REIT’s management to relay the concerns of its tenants about rent increases and to appeal on behalf of small shop tenants with no response. It seemed while some directors have argued that the small -to-medium retailers which formed “the backbone of the malls and provide necessities for nearby residents” could not accord big rental increases, activist shareholders of Link REIT have been attacking ‘management for not acting in the interest of shareholders by inereasing rents faster With the financial meltdown, more pressure has been put on Link REIT to cut rent. On November 26, 2008, HA announced that they would reduce the rent in malls they still controlled by 50% for tivo months thus providing the 6,000 tenants temporary relief during the current economic downturn, Legislator Tommy Cheung told the media that he hoped this would put pressure on private mall owners including Link REIT. However, prepared to help tenants though, Link REIT’s management held different views. A spokeswoman stated that boosting consumer spending was the way to help tenants. To this end, a HK$10 million promotional program was launched to stimulate consumer spending at the malls in the coming months. CONCLUSION Coming out of SARS in 2004, the Housing Authority was pressed for financial resources in order to continue to provide for the housing needs of the population who could not affordLink REIT 12 private properties. The assets divested were run down, mostly in secondary and non-prime locations and were inefficiently run. The rent charged was a fraction of the market price. Privatization of these assets enabled HA to solve its financial eri Yet the new organization, the Link REIT, inherited a group of tenants who were used to highly subsidized rent. In reaction to criticism from its first listing attempt and overwhelming response from publ investors to the listing offer, HA gave up all its unit entitlement to public investors. This allowed TCI, a UK-based hedge fund, an opportunity to come in and exert influence on management, With social responsibility at heart and in tune with HA, Cheng resigned in .greement thus giving way to a team of foreign executives, ‘The new management team under Sallnow-Smith and Robins has taken a more commercial stand, The company has been upgrading the assets and increasing rent at a faster pace, Yield on investment has improved under new management, yet protests have also become more frequent. Nevertheless, Link REIT has also been doing its part in being a good corporate citizen as ean be seen from the various community services and projects it has initiated and undertaken. However, certain legislators still cling to HAs old operating mode and hold Link REIT responsible for the livelihood of small commercial tenants, Recently when the Link REIT announced the sale of parking spaces and revealed their ‘commercial compensation system, the Chief Executive took them to task, Background of the 2016 Advisory Board ‘Against this backdrop and in reaction to continuing complaints, the Chief Executive of the Hong Kong SAR has decided to invite a newly formed Link REIT Advisory board to discuss the option of buying back into the Link REIT. As a major shareholder, the Government could thus gain a seat(s) on the board to temper the impact on the many speci interest groups affected by the rapid changes in the malls and parking lots and theie rising rents and costs. The members of the Advisory board will recommend to the Chief Executive of Hong Kong whether to use some of the resources of the Hong Kong government fo buy enough shares to gain input into the operation of the Link REIT in response to extreme public pressure and the Chief Executives concerns. LINK REIT ADVISORY BOARD MEMBERS Chairman: William Chan, Chief of Staff, HKSAR Government Members: John Ho, Ditector, TCL Nicholas Sallnow-Smith, Chairman, Link REIT Paul Cheng, past Chairman, Link REIT Mei Ha Soi, Shopkeeper and Government Housing Estate Resident Victor Hing, Unit Holder Gary Kwong, Government Housing Estate Resident Charles Ving Chu, Permanent Secretary for Transportation and Housing, HKSAR Government 3-8 INEDS - Hong Kong Citizens selected for thei concern for Hong Kong.Link REIT 13 Mr, William Chan Chief of Staff, HKSAR Government Mr. Chan manages the affairs of the Chief Executive's office. He is a neutral party seeking what's best for Hong Kong. Mr John Ho, the ambitious Director of hedge fund TCI, was Harrow School educated and graduated from Oxford University in 1970. A successfull businessman in booming 1980s London, Mr Ho is extremely focused on maximizing profits. His recent purchase of Link REIT shares is TCI’s first major play in Hong Kong and he is excited to reap the benefits of the investment in Hong Kong real estate. ‘Mr. Nicholas Sallnow-Smith Current Chain chairman succes ng Mr. Chen, Aged 58, Mr. Salinow-Smith has been Chairman of the Board of the Manager and Independent Non-Executive Director of the Manager since April 2007. He is Chairman of the Finance & Investment Committee and the Nomination Committee of Link REIT, He ‘was a long time real estate professional with Hongkong Land where he served as CEO. Aged 69, Mr. Cheng is a member of the executive committee of the PRC-based All-China Federation of Industry and Commerce and serves as an adviser to the China National Committee for Pacific Economic Co-operation and the China Center for Economic Research of the Peking University. In Hong Kong, he is a member of the Chinese University of Hong Kong Council and is an adjunct professor at both the Chinese University of Hong Kong and the Hong Kong University of Science and Technology. He ‘was also a steward of the Hong Kong Jockey Club, Ms, Mei Ha Soi Government Housing Estate Shop Tenant & Apartment Tenant Ms. Mei Ha Soi has been running her shop selling candles and small gifts for 20 years. Her shop is located in the same government housing estate she lives in which is in Fanling in the New Territories, She graduated secondary school from a little-known, low quality school and speaks very little English. Her shop has generated enough income to supplement her husband's taxi driving job to put two children through local universities in Which they are both current students, She has initiated soveral protests representing her fellow shop keepers over rising rents in her Fanling Mall.Link REIT 14 Victor Hing ‘Shareholder / Public Investor Aged 59, Mr. Hing is a registered professional housing executive and a fellow member of the Royal Institution of Chartered Surveyors. He runs a medium-sized realty firm. He was an early investor in the Link REIT at a personal level but has emerged as a representative of all minority shareholders. Mr. Gary Kwong. Government Housi Gary Kwvong has lived in public housing in the district of Tseung Kwan O in Hong Kong since his marriage 30 years ago. He has raised two children in the estate and plans to retire from his job as a security guard in five years. He will remain in the public housing apartment post retirement since he cannot afford to buy in the extremely costly Hong Kong market. He has emerged as a leader among his fellow complex dwvellers in opposition to the Link REIT price rise. Charles Chu Permanent Secretary for Transport and Housing, s Chu has been with the Hong Kong government for his entire career starting as re officer afier graduation from Hong Kong University. He has worked in several other bureaus, but has been with the Transportation and Housing office since before the Link REIT came to market. Hong Kong Citizens The Advisory Boatd has eight permanent residents selected as INEDs due to their proven dedication to the wellbeing of Hong Kong, As supplemental members, thei attendance is not required at meetings but welcomed. Teabella Chong, prepared he hitial case In 2000 wider the supervision of Professor Steven.J. DeKrey, PhD. HKUST Business School, solely as the basis for class discussion. 1t has been edlted by colleagues atthe Financial Times and the author with footnotes and most exhibits eliminated and Fictitious elements added for ‘a special INED training sesston for the Financial Times INED Diploma program,