Hong Kong’s biggest property developer recorded growth in first-half profit, in another sign of the city’s real estate recovery.

Sun Hung Kai Properties Ltd’s underlying earnings, which exclude property revaluations, increased 17 percent from a year earlier to HK$12.2 billion ($1.6 billion) in the six months ended Dec 31, the company said in a filing Thursday. The company will provide an interim dividend of HK$0.98 per share, up 3 percent from a year earlier.

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Sun Hung Kai has led a rally in shares of developers in the city this year as the market bets on a sustained industry recovery. Hong Kong’s residential sector has entered a stage of “expansion,” according to JPMorgan Chase & Co analysts, who estimate home prices will rise as much as 15 percent this year due to a resilient stock market and population inflows. The bank upgraded Sun Hung Kai to overweight from neutral.

Property sales contributed HK$4.9 billion of profit for the developer, almost double the amount from a year ago. The firm recorded HK$18.9 billion in contracted sales in the period.

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 “Lower mortgage interest rates, rising home rents and an uptick in home prices will support solid home purchase demand, extending the gradual recovery of the residential market,” Sun Hung Kai said in the statement.