With stock markets in a state of dislocation, by contrast real estate markets in Asia Pacific are continuing to function well with a succession of deals being completed by a range of investors, according to Jones Lang LaSalle.

“The biggest markets in Asia Pacific are China and Australia, and international investors are actively returning to Japan”, said Megan Walters, head of research for Capital Markets at Jones Lang LaSalle in Asia Pacific.

“This year the market for direct commercial real estate investment is estimated to be worth around a US$100bn in Asia Pacific in terms of transaction volumes. Yields on prime office stock range from 3.6% in Tokyo through to Shanghai 6.1% and Sydney 6.9%”, she added.

In China around $5bn in commercial real estate investment deals were concluded in the second quarter of this year and JLL report that more investors are now looking for opportunities in Japan also.

However, the most attractive market for international investors recently has been Australia, one of just two countries in Asia Pacific with an S&P AAA credit rating, the other being Singapore. In the quarter to end June 2011, the total direct investment volumes in Australia real estate were just under $4bn, of which $1.7bn was from overseas investors.

This interest in Australia is expected to continue, as the economy is much more closely tied to China than to the US.

“Real estate is likely to be an attractive investment option in the current climate. We still have a lack of supply of good quality real estate in many Asia Pacific cities, which means that with sustained demand rents will continue to grow”, said Stuart Crow, head of Capital Markets at Jones Lang LaSalle Asia Pacific.