The Food & Health Bureau has proposed introducing a new rental-adjustment mechanism for public market stalls and setting the minimum monthly rent at $600.

According to a paper submitted to the Legislative Council today, the bureau said the proposal can set a reasonable basic charge of providing tenants with basic market facilities and management services.

This will also help avoid cases of tenants not trading in stalls, or using stalls for storage purposes, or even leaving their stalls vacant when they only need to pay an extremely low rental.

Proposal details

Under the proposed mechanism, in the first tenancy period of three years, tenants paying less than 60% of the open market rental for their stalls will have their rents increased by three equal annual increments so rentals reach 60% of the open market prices.

Tenants who are already paying 60% or above the open market will not be affected by the adjustment.

For a stall with 60% of the open market rental being below $600, the rent will rise by three equal annual increments so the rents reach $600 during the first tenancy.

If the open market rental of a stall is below $600, the rent will be increased by three equal annual increments so the rental will reach the open market rate.

Second tenancy

During the second tenancy of three years, tenants paying less than 80% of the open market rental for their stalls will have their rents increased by three equal annual increments so prices will reach 80% of the open market rental.

Tenants who are already paying 80% or above of the open market rental will not be affected by the adjustment.

A cap of $1,500 will be imposed on the monthly rental as the maximum annual increase, the bureau said, adding the whole arrangements are applicable to tenants who will have their tenancy renewed upon the ending of the rental freeze on June 30 next year as well as tenants affected by re-siting projects.

For tenants whose tenancy will expire after June 30, and new tenants who obtain a stall through open auction, the rental of their new tenancy upon tenancy renewal will be based on the prevailing or open market rent, whichever is higher.

Review arrangements

When public market rentals generally reach 80% of the open market rate after the sixth year, the bureau will review the operation and utilisation of public markets and other factors, before determining the need for further adjustment.

The bureau said the implementation timetable of the rental-adjustment mechanism should be subject to the general economic situation. For the mechanism itself, the bureau will consult traders' associations and Market Management Consultative Committees.