The growth of REIT (Real Estate Investment Trust) markets has contributed to the expansion of the spatial and functional scope of finance capital by increasing the mobility of ownership rights to overcome the ‘spatial fixity’ inherent in real estate. This paper explores the distinctive characteristics of liquid capital operating within the “‘indirect investment and securitized channel’ (Theurillat and Crevoisier 2015). Taking Hong Kong REITs (H-REITs) as a case study, the paper highlights the strong institutional embedment of REITs despite the standardization or securitized instruments. It shows a very uneven pattern of H-REIT development according to the different business models of the domestic players. In contrast with the ‘passive’ behavior of Hong Kong family-based group business models, the Link REIT is showing a particularly aggressive policy of value enhancement. Run by an international financial consortium, this REIT holds 180 welfare retail and parking facilities that were privatized through an ‘en bloc’ sale in 2005. The embedment of finance capital in the social housing estates has resulted in the double deprivation of Hong Kong citizens, denying residents of the estates access to affordable community shops, and small investors to rewarding investment vehicles. From a political perspective, the experience of the Link carries particular resonance at a time when China is considering experimenting with property securitization and transferring part of the social housing pool to REIT structures.
Natacha Aveline is a planning and urban policy expert, currently Faculty member at the French National Centre for Scientific Research, Paris. She is leading the FINURBASIE research project funded by ANR, entitled ‘Expansion of market finance and urban development in Asia, the case of China and India’.