By Joyce Lee and Elzio Barreto

Lotte Shopping Co Ltd said it is postponing an up to $1 billion real estate investment trust listing in Singapore due to unfavourable market conditions, the second-largest IPO to be pulled in Asia this week.

Volatile equity markets this year have helped undermine sentiment for some of the region's less attractive listings, but Asia-Pacific IPO markets as a whole are still expected to have an upbeat 2014. Issuance for the year so far has doubled to $15.4 billion over the same period a year earlier.

"People are just being more tactical," said Keith Pogson, managing partner for financial services at consultancy EY in Hong Kong.

"If we can see sensible valuations, where investors believe they can get some safety in terms of rewards for taking the IPO risk in getting involved, I think we will see plenty of deals flying out the door."

Lotte Shopping's postponement follows the cancelling of Chinese pork giant WH Group Ltd's Hong Kong IPO, even after it cut the offer size by two-thirds to up to $1.9 billion. In addition to market volatility, rich valuations and negative publicity over executive compensation also helped scupper the deal.

The operator of South Korea's largest department store chain, said it may reconsider an IPO for the REIT if market conditions improve, but is currently looking at a sale and lease back deal through a local public real estate fund as an alternative.

The MSCI Asia ex-Japan stock index has been on a roller coaster ride for much of the year, losing as much as 7 percent in early February but recovering in March. It is now up 1.5 percent for year to date.

Among Asian IPO markets, Singapore in particular has struggled in recent years as most big-ticket listings in Asia opt for Hong Kong where there is more robust demand from Chinese and international investors.

REIT listings had been one of the few bright spots for Singapore though expectations for higher interest rates as the U.S. Federal Reserve unwinds its massive stimulus programme have helped temper demand.

"Investors are generally skittish about investing in REIT IPOs on fears that interest rates are headed higher and growth opportunities in the market across most property segments are muted," Pratik Ray, senior property analyst at HSBC in Singapore.

For the year to date, some 38 initial public offerings have been cancelled or withdrawn in the region while 138 deals have been completed, Thomson Reuters data showed. For the whole of 2013, 75 were cancelled or withdrawn while 407 were completed.

This year the reopening of equity markets in mainland China after a 14-month hiatus and increased activity in Hong Kong is set to boost listings in the region, although initial expectations for a boom in China IPOs are being scaled back somewhat as regulators have taken a cautious approach to approvals.

Australia and New Zealand have also had a bump in new listings, helped in part by the sale of government or state government assets.

In contrast, IPOs in Singapore have had a slow start, with just $773.6 million of deals so far this year compared to $2.46 billion over the same period in 2013.

In Thailand, due to political turmoil, volumes have plunged to $485.9 million for the year to date from $2.18 billion for the same period last year.