INTERVIEW-UPDATE 1-Dubai World says subprime slowed investment

* says subprime crisis slowed investment this year

* holding on to U.S. properties amid downturn

* no plans for Nakheel IPO, prefers to spin off REITs

(Updates with quotes, details)

By Daryl Loo

SINGAPORE (Reuters) - Dubai World, the investment firm of the Dubai government, said on Tuesday it is holding on to U.S. real estate assets amid a subprime housing crisis that has slowed its investment decisions this year.

Dubai World, with a portfolio of over $200 billion, is still seeking investments in transport and logistics, financial services and for opportunistic deals in a battered real estate market after a credit crisis that has rattled global markets.

"I'm more cautious because I don't think there's total transparency on how bad the situation is. At the moment we don't know, and it means a lot for our investment planning," its chief investment officer Yu Lai Boon told Reuters in an interview.

He said the concern is that the contagion, which has caused Western banks to write down billions of dollars and caused liquidity to dry up, could spread to Japan and China.