Asia's cross-border commercial investment is on the rise, with Japan leading the pack.

According to CBRE, cross-border real estate investment increased by 125 percent quarter-on-quarter to US$10.2 billion in the fourth quarter of 2014. With a total turnover of $30.8 billion, the overall investment momentum remained high. Significant investment activity by institutional investors and newly-raised property funds drove up cross-border investment turnover to US$10.2 billion. Investors' primary emphasis remained on the office market. Sale in Qatar | Property Hunter Qatar | Apartments

Japan and Australia, on a country-by-country basis, remained bullish, emerging as the region's top market for total investment value. Meanwhile, strong growth was seen in New Zealand as a result of a rise in institutional acquisitions, as well as in China as a result of lower asking prices. South Korea saw the biggest drop quarter-on-quarter, but this was attributed to the distorting impact of the previous quarter's largest-ever commercial real estate deal in Asia Pacific—Hyundai Motor Company and KIA Motors' US$10 billion purchase of the KEPCO headquarters in Seoul.

Dr. Henry Chin, CBRE Asia Pacific's Head of Research, said, "As the year came to a close, investment in the area remained high, with the office sector attracting the most attention. Opportunistic investors, on the other hand, are gradually turning their attention to other sectors with higher returns, such as residential and hospitality. To name a couple of markets, we saw investment rise in China and India, owing to improved economic growth in both countries, including interest rate liberalization in the former and further government steps to raise FDIs in the latter.

We expect another good year for investment activities in APAC in 2015, fueled by strong investor appetite and adequate debt financing. Continued economic growth, along with favorable demographic and wealth factors, will continue to drive APAC's real estate fundamentals, while the recent sharp drop in oil prices has reduced the pressure for short-term interest rate hikes, bolstering the regional real estate sector even further."

Other notable highlights include: Logistics remained a hot market, with new logistics supply in Asia Pacific estimated to be 50% higher than the five-year historical average in 2015, thanks to developers reacting to strong occupier demand. 3PL, e-commerce, and automotive companies drove strong demand in China, Hong Kong, Japan, and South Korea in Q4.

Meanwhile, the region's office markets tightened even further in Q4 due to a lack of new supply and the highest quarterly net absorption rate of the year. The quarter saw 10.5 million square feet of office demand, bringing the total annual demand to 38 million square feet, up 29 percent year over year.

Despite the solid fundamentals, office new construction fell below the five-year average to just 36 million square feet, and office rental growth slowed.

In the office sector, tech firms—particularly e-commerce—remain active, while non-banking financial services firms are also expanding in Asia. Falling oil prices have impacted significant office requirements from the oil and gas sector in Kuala Lumpur, while the energy and downstream engineering sectors continue to contract in many Australian markets.

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