Amid the uncertain economic and market environment, real estate investment trusts (REITs) focusing on above average yields could attract investors due to their defensive qualities.

KLCC Property Holdings Bhd's planned REIT and IGB REIT's impending listing could draw investor interest to a sector otherwise deemed as a low-beta proxy to the economy.

Several analysts noted that this could bring in more attention on REITS and eventually lead to a re-rating of the segment.

"These two REITs are huge in terms of potential floatation volume and market capitalisation. For IGB REIT, its asset valuation of RM4.6 billion will make it the largest retail REIT to date," said Loong Kok Wen, Analyst at RHB Research Institute.

Loong added that the large asset base could also lure institutional investors.

"This is a good opportunity to buy into such initial public offering REITs amid the sustained global uncertainties."

Loong said interest in REITs is presently high and could continue as such, should global economic uncertainties persist.

A property analyst at TA Research explained that the dividend yielding nature of REITs also make them more attractive to investors than other fixed-income securities.

"I am positive about retail REITs as their dividends are stable because these cash stream comes from their rents."

"Retailers are resilient amid booming economies in the East. And locally, consumers here are always shopping and buying goods during the weekends," added the analyst.

For the latest property news, trends, resources and expert opinions, visit our Property News section. Home buyers, sellers or property renters looking for Malaysian Properties, may like to visit http://www.propertyguru.com.my today.

Related Stories:

KLCC Property to set up REIT

RM20 billion REIT market capitalisation expected this year

Erratic stock markets could invigorate Malaysian REITs