Jakarta is Asia Pacific's top real estate investment market.

Jakarta, whose vibrant postage stamps have delighted stamp collectors for centuries, is now being hailed as the next untapped real estate market for international investors. The Indonesian capital was named first in a five-country list that is expected to usher in a new era of global real estate investment. Property hunter

The Urban Land Institute (ULI) of Washington, DC, and PricewaterhouseCoopers (PwC) of New York City collaborated on the list and report, Emerging Trends in Real Estate Asia Pacific 2013.

Jakarta, Indonesia, Shanghai, China, Singapore, Sydney, Australia, and Kuala Lumpur, Malaysia were the top five emerging Asia Pacific markets named.

Other markets with strong investment potential include Kowloon in Hong Kong, Beijing in China, Tokyo in Japan, and Bangkok in Thailand.

Analysts in the Asia Pacific region believe it's apparent why Jakarta was chosen as the market with the biggest potential for foreign investors.

Jakarta, on the northwest coast of Java, is Indonesia's and Southeast Asia's most populous metropolis, with a population of ten million people. According to Wikipedia, it is Indonesia's economic, cultural, and political capital, and it is the world's 13th most populous city. It has gotten little attention from big-name real estate investors until now.

However, investor concerns that premium assets in key Asia Pacific real estate markets are getting overpriced are bringing a number of previously neglected markets to their notice. As a result, markets outside of core cities are becoming more appealing for investment and development, according to the report.

"With high rents, high capital values, low yields, and an abundance of local capital, many international investors are struggling to find attractive investment opportunities in Asia Pacific's prime real estate markets," said Richard Price, Chief Executive, Asia Pacific for CBRE Global Investors, and ULI Trustee and ULI North Asia Vice Chairman.

"As a result, as they seek enticing investment opportunities, investors are broadening their horizons." Some are looking at emerging economies like Indonesia, while others are revisiting underappreciated capitals like Kuala Lumpur and Bangkok, which explains their excellent showing in this year's study. Price discovers secondary markets, such as Hong Kong's Kowloon and China's second-tier cities, are also seeing rising interest from international buyers. Simultaneously, core investment markets in many mature, western cities are seeing a rise in demand from newly created Asian Institutional Investors looking to profit on post-global financial crisis corrections."

"Investors' interest in alternative asset classes is also apparent in our report," says PwC Hong Kong Asia Pacific Real Estate Tax Leader. Due to a general shortage of investible possibilities throughout Asian markets, some opportunity players have shifted their focus to more specialized specialty tactics, particularly if these demand an aspect of knowledge that domestic players lack."

"These alternative asset classes not only give a measure of protection against cheaper local money, but they are also reasonably insulated from economic volatility," he argues.

Several interviewees praised the logistics sector, particularly in Japan, where distribution infrastructure has been reorganized in the aftermath of last year's earthquake, and in China, where domestic consumer demands, particularly in the e-commerce arena, continue to outstrip the capacity of local logistics networks that have traditionally been oriented toward meeting those demands.

Real Estate's Up-and-Coming Trends Asia and the Pacific The year 2013 gives an overview of real estate investment and development patterns in Asia Pacific, as well as real estate finance and capital markets, as well as trends by property sector and metropolitan area.

More than 400 internationally known real estate professionals, including investors, developers, property firm representatives, bankers, brokers, and consultants, contributed their thoughts.

The report will be unveiled in a series of events organized by PwC and ULI Asia Pacific in December, which will serve ULI's almost 1,000 members in the Asia Pacific area.