Investment bankers said the Housing Authority's plan to sell its car parks and shopping malls through a real estate investment trust (REIT) should be attractive to investors, but they say the necessary market framework would need to be put in place first. Edmund Ho, vice-president of investment bank JPMorgan, said: 'The interest rate for bank deposit is close to zero. An REIT which has a stable rental income could offer investors a higher return.' If the planned REIT could offer a return of 9 per cent to 10 per cent, it would be very attractive, he said. He said the authority's move would help the local promotion of REITs, which were already well developed in the United States, Australia and Japan. One reason unit trusts linked to property had not taken off in Hong Kong was the high level of existing property exposure among the public, he added. A UBS Warburg spokesman said the firm earlier this year completed a consultancy project assessing the potential privatisation of the Housing Authority's car park and shops. But he declined to comment on whether the bank had a mandate to prepare the property holdings for privatisation and a subsequent share offering. There is as yet no REIT in Hong Kong, and the Securities and Futures Commission is still working on rules governing the launch of REITs. An SFC spokesman last night said REIT regulations would be ready within this quarter. Local legislators, meanwhile, expressed cautious optimism. Legislator Ng Leung-sing, an authority member, supported the scheme, saying it will relieve the authority's financial burden and release the commercial potential of the facilities. Rents might go down as the new management would avoid the government's huge administrative costs and enjoy greater flexibility, Mr Leung said. Albert Ho Chun-yan, a Democrat legislator and the vice-chairman of the housing panel, said his party would support the scheme if its benefits outweighed its potential disadvantages. But Mok King-po, the convenor of a coalition of housing department staff union, was worried about job security and pay cuts as a result of privatisation.