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are required to move out. In 2005, 546 better-off tenants, including 428 households which acquired their own flats under the various subsidised home-ownership assistance schemes, returned their public rental housing flats to the HKHA.
Allocation
In 2005, 42 567 rental flats were allocated by the HKHA and the HKHS to various categories of applicants. Of these, 26 301 were new flats and 16 266 were refurbished: 65.9 per cent were allocated to waiting list applicants, 4.86 per cent to tenants affected by the HKHA's Comprehensive Redevelopment Programme, 0.81 per cent to families affected by clearances, 2.46 per cent to junior civil servants, 22.43 per cent to sitting tenants for transfers (including overcrowding relief), and the remainder to victims of fire and natural disasters and compassionate cases recommended by the Social Welfare Department.
Flats are allocated in accordance with the order of registration and applicants' choices of district. Applicants are required to satisfy comprehensive means tests (covering income and assets), not to own any domestic property and to meet the residence rule in Hong Kong before being admitted into public rental housing. To speed up the letting of some less popular flats, the HKHA launched the Express Flat Allocation Scheme and invited all eligible applicants on the waiting list to select a flat from among the vacant flats with prolonged vacancy periods in all districts. During the year, 1 624 households were successfully rehoused under this scheme.
Divestment of Commercial Properties
To concentrate on its primary mission of providing subsidised public rental housing to people in need, the HKHA decided in 2003 to divest its retail and car parking facilities through a public offering of a Real Estate Investment Trust, The Link REIT. Proceeds from the divestment will help the authority to meet its funding. requirements in the short to medium term for construction of public housing for people in need.
The initial public offering (IPO) of The Link REIT took place in December 2004. Two public housing tenants applied for a judicial review of the HKHA's power to divest its retail and car parking facilities one day before the close of the public offer period. Although the HKHA's power to divest was affirmed by both the Court of First Instance and the Court of Appeal, it could not achieve finality on the legal challenge before the deadline for the listing. So the authority decided that it would prepare for a re-launch of the IPO after the conclusion of all legal proceedings.
In July 2005, the Court of Final Appeal unanimously ruled that the sale of the retail and car parking facilities by the HKHA to The Link REIT is within the capacity of the authority. The re-launch of the IPO of The Link REIT took place in November 2005 and it was listed on the Stock Exchange of Hong Kong on November 25, 2005. After the divestment, the HKHA does not own any equity interest in The Link REIT or the Link Management Limited, the company set up to manage the REIT. They are fully independent of the HKHA.