By Jason Chau
Shares of Chinese property developers surged Friday, as market sentiment received a boost from the central government's five-year plan targeting urban renewal.
The rally was led by Country Garden, whose Hong Kong-listed shares closed more than 16% higher. Meanwhile, China Vanke's Shenzhen-listed shares rose 7.3% while its Hong Kong-listed shares jumped 6.7%.
Other developers also posted strong gains, with Longfor Group, Sunac China Holdings and China Resources Land climbing 5.0%, 6.7% and 2.4%, respectively, in Hong Kong. Mainland-listed China Merchants Shekou Industrial Zone Holdings and Poly Developments & Holdings Group advanced 5.1% and 2.9%, respectively.
Friday's property rally was driven by improving sentiment toward the sector, supported by Chinese authorities' urban renewal agenda, said Sinolink Securities analyst Zhang Xinyue. She also attributed the gains to investors' rotation out of technology stocks.
The urban renewal plan released Thursday by the State Council outlined specific housing development targets that Beijing aims to achieve within the next five years.
Authorities seek to renovate 500,000 units of dilapidated urban housing and redevelop around 115,000 aging urban residential communities by 2030, according to the plan.
Policymakers are also planning upgrades to public spaces and utility pipelines.
China's property sector has been mired in a multiyear slump, sparked by a drop in consumer confidence and driving declines in home prices, weighing on the broader economy.
The urban renewal plan may signal the potential relaxing of housing rules in Beijing, which Morningstar analyst Jeff Zhang said could provide further momentum for property stocks.
"Despite a lack of details, we think Beijing government will likely follow the practices of Shenzhen by relaxing the number of properties each individual can buy in the central districts," he said.
Write to Jason Chau at jason.chau@wsj.com
(END) Dow Jones Newswires
05-29-26 0602ET
