Western real estate funds, which have been underweighting the Asia-Pacific region, have regained their interest there, setting their sights on countries with higher-yielding assets. Japan and Australia are their primary focus, but the funds are also looking for opportunities in China's logistics sector. "Funds have increased their allocations in Asia and increased direct real estate investment," said Stuart Crow, JLL's head of capital markets for Asia-Pacific. The funds were now looking for income-producing assets, and Japan and Australia would benefit as their markets were more transparent, Crow said. Crow said he had seen new funds coming in from North America and Europe. They include TIAA Henderson Real Estate, with US$71 billion in assets under management, and Chicago-based real estate investment management firm Heitman. "We are scouting opportunities across the major markets in Asia-Pacific," said Mary Ludgin, managing director of Heitman. The firm has private equity property investments under management in the region of about US$900 million, US$21.2 billion in North America and US$5.2 billion in Europe. "Clearly, Tokyo is an area of significant potential," Ludgin said. She said investment funds could not neglect China, and her company was eyeing the logistics sector in the light of the rapid development of e-commerce. Other new names in the Asian real estate scene recently include Sofaz, Azerbaijan's sovereign wealth fund. Its Norwegian counterpart Norges is reportedly also looking at Asia. Greg Penn, managing director for capital markets at CBRE Asia, said that over the past two years, Japan had become a very popular market, partly because of recovering economic growth. "But we found that funds are still looking at China, even though the country's gross domestic product is softening," he said. According to a recent CBRE survey, international investors are keen on developed Asia, including Japan, South Korea, Hong Kong and Singapore. But Asian investors are opting for emerging Asia, including China, India and Southeast Asia. In an earlier version of this story, the last name of Mary Ludgin, managing director of Heitman, was misspelled as "Lugdin".