THE commercial real estate investment market on the Chinese mainland remained the most liquid in Asia-Pacific in the third quarter of this year, despite a drop in value of transactions.

Investment in commercial real estate on the mainland totaled US$11.9 billion between July and September, a quarterly decline of 21 percent, according to a latest research released by DTZ, an international real estate services provider.

That, however, still accounted for 40 percent of overall activity registered in Asia-Pacific during the period, according to the research.

"Additional restrictions imposed by the Chinese government in the residential sector have continued to impact on commercial real estate investment with volumes continuing to fall in the country, though slowing from a quarter earlier," said David Green-Morgan, head of DTZ Asia-Pacific Research.

He pointed out that despite the slowdown in bank lending in China, "investment activity in the region kept rising, with more investors starting to look outside their own domestic markets for opportunities."

Across the region, the value of commercial real estate transactions rose 8 percent in the period to US$29.6 billion, with Australia and Hong Kong both recording quarter-on-quarter increases of more than 40 percent, according to DTZ research.

Stuart Crow, head of capital markets for Asia-Pacific at Jones Lang LaSalle, said that the Asia-Pacific investment market "is benefiting from an optimistic business sentiment, a resurgent investor confidence and strong economic fundamentals" and that transaction volumes in commercial real estate may rise 15-25 percent from 2009.