Surging demand for butler-like concierge service at the millions of condominiums in China is creating one of the hottest sectors in the nation’s stock market.
Property management companies, providing everything from childcare to shopping errands for residents in China’s densely populated communities, have soared this year as the pandemic kept workers at home. A dense neighborhood in China can have as many as 100,000 condominiums, creating a captive market for versatile services.
Ever Sunshine Lifestyle Services Group Ltd., spun off from Cifi Holdings Group Co., has tripled this year. Yincheng Life Service Co. has surged more than 400%, while Times Neighborhood Holdings Ltd. has more than doubled. Overall, housing service stocks in Hong Kong have jumped 60% on average, topping the 47% rise by Chinese consumer stocks in Shanghai and the 29% gain for technology firms.
“The sector has become highly favored by investors, almost like they’re consumer or tech stocks,” said CGS-CIMB Securities property analyst Raymond Cheng. “We have seen global funds from Singapore to the U.S. piling onto it.”
China’s highly indebted property developers are taking note, seizing on the rally to list their service arms in Hong Kong and raise money to pare debt. Thirteen Chinese developers have started or flagged intentions to spin off their management units this year, a record since 2017 when the trend emerged. MDT/Bloomberg