HONG KONG--Malaysia's KLCC Property Holdings Bhd (5089.KU), which is partly owned by state-run oil and gas company Petronas Nasional Bhd, is seeking to raise as much as US$1 billion via a listing of a real estate investment trust, people familiar with the deal said Tuesday.

Petronas has invited various local and international banks to submit their proposals for the REIT that will be based on KLCC Property's assets, which include the 88-storey Petronas Twin Towers, one of the world's tallest buildings, Suria KLCC shopping mall, Mandarin Oriental hotel and office buildings in Kuala Lumpur's central business district.

Petronas, which owns a 31.7% stake in Kuala Lumpur-listed KLCC Property, could have a dual Malaysia-Singapore listing for the REIT, or list it in Malaysia only, the people said.

The listing could propel Kuala Lumpur further ahead as Asia's top initial public offering market, with US$5.79 billion raised there so far this year. It is followed by Hong Kong, with US$5.6 billion raised in the territory.

Malaysia has bucked the lull in the global equities market this year, hosting the world's second and third-largest initial public offerings--the $3.1 billion offering by palm oil plantation company Felda Global Ventures Holdings and the $2 billion one by Malaysia government-backed hospital operator IHH Healthcare Bhd.

KLCC Property first flagged plans to restructure the company in late June, and said it was looking into creating a structure as a REIT to optimize shareholder value. It said at that time that its plans were subject to approvals of relevant authorities, the board of KLCC Property and shareholders.

In a report after that announcement, Malaysian brokerage and bank Maybank said KLCC Property was likely to inject its mature assets into the REIT first, and properties it is developing later on to ensure earnings stability.

Petronas couldn't immediately be reached for comment.


--Jason Ng in Malaysia contributed to the story.

Write to P.R. Venkat at venkat.pr@dowjones.com and Prudence Ho at prudence.ho@dowjones.com