Global direct commercial real estate investment reached a new high of $682 billion in 2006 - an increase of nearly 40 per cent year on year with cross border investment accounting for 42 per cent of this total, according to fund manager Fidelity International. The Asia Pacific region accounted for $94 billion or 14 per cent of the total investment and saw a 50 per cent rise in the amount of cross border investment, with Japan and China taking the largest share of the flows. “The Asia Pacific property market is extremely diverse. Local markets remain distinct and there is a low correlation between the countries. The region benefits from having both mature and emerging property markets and there are a number of factors in play which should support growth for some time to come,” said Polly Kwan, manager of the Fidelity Funds - Asia Pacific Property Fund. Until very recently Asia’s property market was a very local business but with increasing transparency and the strong growth of REITs, cross-border commercial property investment has begun to increase on both an inter- and intra-regional basis. Transparency of listed property securities has improved in more than half the countries in the region. Japan has seen the most improvement with the development of the J-REIT market and the expansion of internationally listed trusts with Japanese assets. China, India and Indonesia have also seen improvements in accounting and corporate governance as they move to meet higher international standards. “Governments throughout the region are also encouraging the development of REIT structures and this area is expected to see strong growth in the next five years or so. The Japanese REIT market is expected to grow by more than 160 per cent in the next 6 years and further initiatives to enhance the S-REIT regulatory regime in Singapore should also attract listings from across the region,” said Ms Kwan.