Confidence among US and European investors in Asia Pacific real estate has recovered, with capital once again allocated to regions outside their home countries, according to CBRE.

The advisory firm said Asia Pacific remained a major focus for international investors, with an increasing number of new groups looking at the region for portfolio diversification and long-term investment.

CBRE, however, said it was still challenging for cross-regional investors to invest directly in Asia Pacific due to the lack of transparency in many markets and lack of experience in the region.

Investors are therefore channelling their capital to newly formed funds.

First-time investors, CBRE said, are looking to pan-Asia Pacific vehicles to spread their risk and minimise exposure to a single asset class or market.

Conversely, experienced investors, particularly from Europe, are more attracted by direct investment and joint investment opportunities in country or sector-specific real estate funds.

In 2014, the Asia Pacific real estate private equity fund environment totalled $14bn, its highest since the global financial crisis, though still well below the $28bn peak of 2007.

CBRE predicts 2015 will continue to see a positive environment for fund-raising.

The firm, however, does not expect further significant increases, with 2013 and 2014 both active years.

Last year saw funds raised by 42 APAC private equity real estate funds, an increase from previous years, driven by ongoing demand for access to the region.

CBRE said the majority of raised funds would translate into direct real estate investments in the region in the coming year, helping to drive up the turnover of overall capital activities by 5% this year.