TNAG-1362-FCO40-1808-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 127

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this upset rent, the premises are put out to tender again, very often without any upset rent. In the past six months

some 32 premises were let with tendered rents well below

90% of the assessed full market value.

Once an agreement is signed the Housing Authority

does not think it is reasonable to lower a tendered rent

during the period of the tenancy, because to do so would

be unfair to unsuccessful tenderers. While we do not like

to see tenants run their business at a loss, we do not feel that the Authority can be expected to ensure that all its shop tenants can make a profit.

On the other side of the coin, the Authority does not increase rent during an agreed tenancy term even if the enterprise is making very good profits.

When tenancies are due for renewal, the advice

of the Rating & Valuation Department is sought on the current market rent for particular premises. But considera- tion is given not only to this figure but also to the viability of tenant's business.

In many cases the rent

eventually agreed with commercial tenants on renewal is

lower than the current market rent.