It seems like it's just some magic accounting trick to not count the revenue that the tax payer would have received for the land currently being given tent free.
In other words, public transport is just not a profitable business.
Maybe the tax payer at some point subsidized this effort, but it doesn't have to keep doing so to get the benefit. The government was unlikely to develop and run these malls themselves, so it seems like they government would've just sold the land and then had to run the MTR itself.
Seems like a win-win to me.
On the other hand, the company is majority owned by the government anyway, so this is probably still the smart thing to do (depends on how that $1 Billion plus a year profit gets fed back into the government funds via their shareholding and whether social benefits are driving their construction plans rather than short term profit).
The ticket prices are low as well so almost everyone actually uses the MTR. Pretty prime conditions for a profitable public transportation system.