Since 2008, cross-border property investment in Asia has been at an all-time high.

The market is being driven by Asian institutional investors and fund managers. Business directory

According to CBRE, cross-border property investment in Asia accounted for 36% of total turnover year-to-date, up 36% quarter-on-quarter to $10.6 billion, the highest total since 2008.

Investment turnover increased 20% quarter-on-quarter to $25.6 billion in Q3 2015, according to preliminary CBRE estimates, despite the year-to-date investment volume being down 24% compared to the same period in 2014. Investor enthusiasm remained high in Australia and Japan, which accounted for 56 percent of total regional turnover in the third quarter. The Pacific region attracted a lot of Asian finance, which was attracted by the high yields. Due to stable fundamentals being relatively affordable in these markets, compared to assets in their own domestic markets, Australia—particularly in Sydney and Melbourne—attracted high investor interest from Asian investors.

CBRE Asia Pacific's Senior Director of Research, Ada Choi, remarked, "This quarter saw a surge in activity in the region's investment climate, thanks to revived interest from western investors and the rise of Asian institutional investors and fund managers. International institutional investors continued to add to their real estate portfolios in the region, indicating that they are looking for long-term investments that will provide returns above inflation."

"Asian investors continue to be lured to offshore prospects, turning abroad to diversify a growing pool of local wealth globally, as cross-border investing gains traction."

"Big-ticket deals across a number of asset classes drove investment volume in Q3, including the sale of the InterContinental Hong Kong hotel to GAW Capital for $940 million and CIC's purchase of a $1.7 billion office portfolio from Investa in Australia. This demonstrates the high thirst for big-ticket deals among large-scale institutional investors "Ms. Choi remarked.

In addition, the research revealed that India has seen a surge in capital inflows from large international investors, owing to its faster GDP development than China and one of the strongest business moods in the region. The occupier markets in India are showing excellent activity, bolstered by strong office demand from the e-commerce and BPO sectors.

Despite the substantial investment activity in the quarter, the occupier markets in the region showed weaker rental growth.

CBRE Asia Pacific's Head of Research, Dr. Henry Chin, said, "On the back of weaker fundamentals such as weaker business and consumer mood, occupier markets reported slower rental growth in Q3 2015. In the office sector, a 20 million square foot NFA is expected to be completed in Q4 2015, making it more difficult for landlords to retain tenants. The majority of leasing activity occurs in decentralized areas in important markets and large BPO outsourcing destinations like India. As a main driver of decentralization, cost-cutting relocation has superseded flight-to-quality."

Overall rentals declined 0.3 percent quarter-on-quarter in the retail sector, while Hong Kong had its biggest drop since 1998 (-9.1 percent quarter-on-quarter) due to a shift in mainland Chinese visitor spending patterns combined with weaker tourist arrivals. In contrast, Hong Kong's office market remained healthy, with vacancy in the Central CBD remaining below 1%.

"Tourism is still a factor, with changes in visitor consumption and travel habits, particularly among mainland Chinese tourists, affecting the retail industry in numerous markets. The weakened tourism industry impacted Hong Kong and Singapore's retail markets the most, and retailers are delaying expansion plans in China due to fears about China's economic growth. In Q3, most Chinese cities had virtually modest rental growth. In contrast, visitor numbers in Japan continued to rise as a result of the low Japanese yen, resulting in increased leasing demand in Tokyo, primarily from upmarket retailers. In Australia, demand for prime space from overseas retailers remained robust, notably from premium brands and food and beverage merchants "Dr. Chin agrees.

In other news, the recently negotiated Trans-Pacific Partnership (TPP) is projected to boost trade flows, cut the cost of goods, and improve employment prospects for Asia Pacific countries who participate. The industrial sector will be the main benefactor, with Vietnam, Australia, and New Zealand receiving preferential treatment. Because the TPP has a long way to go before it is fully implemented, these benefits will only be realized in the long run.