KUALA LUMPUR (Aug 6): Shares of several property developers rallied on Tuesday, reversing some of the previous day’s decline as analysts noted that the sector's fundamentals remain strong, driven by data centre land sales.

Sime Darby Property (KL:SIMEPROP), which is building a hyperscale data centre at its Elmina Business Park, saw its shares surge as much as 14 sen or 11.2% to an intraday high of RM1.39 on Tuesday, before paring some of the gains to close at RM1.36, still up 11 sen or 8.8%, valuing it at RM9.25 billion. The stock has climbed over 121% year-to-date.

The counter saw 89 million shares change hands, three times its 90-day moving average, making it one of the top 20 most active stocks on Bursa Malaysia.

Meanwhile, UEM Sunrise Bhd (KL:UEMS) also attracted buying support, climbing 11.5 sen or 12.85% to an intraday high of RM1.01 before closing with a reduced gain of 8.5 sen or 9.5% at 98 sen on a turnover of 36.5 million shares, more than double its 90-day moving average. Since the beginning of the year, the stock has risen by over 21%.

At 98 sen, UEM’s market capitalisation stands at RM4.96 billion. In June, the company sold two parcels of freehold land totalling about 11.7 hectares to an undisclosed buyer for a data centre development in Johor.

Elsewhere, Mah Sing Group Bhd (KL:MAHSING), which announced a joint venture to develop a data centre in Bangi, saw its shares climb 14 sen or 9.33% to an intraday high of RM1.64. The counter closed at RM1.62, still up 12 sen or 8%, valuing the group at RM4.15 billion. The stock has gained over 101% year-to-date.

Bursa Malaysia's property index, which tracks 97 stocks in the sector, rebounded from its nearly three-month low of 980.14 points and settled up 4.6% at 1025.27 points.

"While sentiment on property stocks could remain weak in the near term, sector fundamentals remain intact, driven by resilient property sales, especially from the industrial property segment," Maybank Investment Bank (Maybank IB) said in a note.

Maybank IB upgraded the property sector to "positive" from "neutral", saying the recent sell-downs have made valuations more attractive. It advised investors to position themselves for upcoming news, including data centres, the Johor-Singapore Special Economic Zone, and the high-speed rail project.