Property shocks prompt investors to spread wings

"Although there's still hot money rushing into China seeking short-term lucrative opportunities, it is very obvious that long-term capital is flowing outward for investment opportunities globally," said Pu.

But some international investors are still actively seeking opportunities in China. Blackstone Group LP, for instance, raised a real estate fund targeting the Asia Pacific at the end of last year. It was the first time for Blackstone to raise such a fund.

"For long-term capital, there are still quite a number of opportunities in China, but the investment needs to be more careful and selective," said a managing director of a large-scale international real estate fund who declined to be named.

And for international real estate funds that have raised money for the Asia-Pacific region or China, their new investment targets are logistics, industry experts said.

Mao Daqing, executive vice-president of China Vanke Co Ltd, China's largest property developer by market value, said the real estate section of Blackstone has contacted Vanke seeking logistics opportunities in Hebei province.

According to international real estate service provider CBRE, three trends are underpinning the outlook for huge demand in the logistics sector: increasing expansion of organized retail, growing online user bases and surging e-commerce sales across the Asia-Pacific region.

Jonathan Hsu, director of Asia-Pacific research at CBRE, said that the warehouse market "sits atop fundamental and far-reaching structural trends, such as rapid urbanization, emerging consumer bases and evolving trade hubs that are shaping the economies of the Asia-Pacific region".

With an improving economic outlook, these fundamental trends will emerge in the form of the expansion of organized retail, growth of e-commerce and the increasing prominence of third-party logistics companies, forming a solid demand outlook for the region, Hsu added.

Ji said: "There are more international real estate funds showing interest in the logistics and warehouse sector."

CBRE sees China as the key growth market in the Asia-Pacific region, since it has the most compelling prospects for urbanized market growth over the next 10 years and strong potential for development in lower-tier cities.

Online user bases are expected to increase dramatically in the coming years, with an estimated 346 million additional online users in the Asia-Pacific region by 2020 and 156 million in China between 2013 and 2020, according to CBRE.

Operational success of e-commerce rests on inventory management and rapid delivery, requiring well-stocked and well-located logistics facilities.

While overall supply will increase by 80 percent year-on-year in 2014, low vacancy rates and strong demand will help offset the impact of increased completion.

CBRE expects that overall rental growth in its APAC Logistics Index will reach 3 to 4 percent in 2014, led by Hong Kong at 7.5 percent, followed by Tokyo, Shanghai and Guangzhou at 4 percent.

Property weakness overhangs recovery	Realty price swings may pose short-term risks