KUALA LUMPUR: Malaysia's real estate investment trust (REIT) sector remains well-positioned to deliver resilient earnings and attractive distributions, with rental growth, asset enhancement initiatives and acquisitions expected to drive its next phase of expansion, according to RHB Research.

The research house maintained its "Overweight" call on the sector, citing resilient earnings, stable occupancy rates and attractive dividend yields despite rising bond yields and economic headwinds.

It said the recent decline in REIT valuations was largely driven by market conditions rather than a deterioration in underlying business performance.

The research firm named Axis REIT and Pavilion REIT as its top picks, citing their growth prospects and potential to deliver stronger distributions to unitholders.