Cross-border property transactions in the Asia-Pacific region increased in the third quarter of 2013, with China seeing the greatest share of the investment, a report from real estate service provider CBRE showed.

Asia-Pacific cross-border activity rose by 5.5 percent quarter-on-quarter to $5.2 billion in the third quarter, according to CBRE Research.

Australia, China and Japan saw the greatest share of non-domestic buyers, with China and Australia, in particular, seeing strong activity from buyers from outside the region.

Although there was increased activity from international investors, domestic investors continued to dominate in most markets because they were able to move faster given their local advantages, the report showed.

One emerging contributor to the cross-border flows was Asian high-net-worth investors.

The quarter saw high-net-worth investors involved in several major deals, with overseas investment by this segment totaling $631 million, a rise of 69 percent quarter-on-quarter and 571 percent year-on-year.

"High-net-worth investors are becoming more positive about the market, but increasingly they see value and returns coming from direct investments like real estate. As a consequence they are diversifying away from their traditional equity and bond holdings to increase their exposure to real estate," said Greg Penn, Managing Director of?Capital Markets, Asia.

In terms of the overall market growth, commercial real estate transaction volume in the Asia-Pacific region totaled $21.6 billion in the third quarter—an increase of 10.8 percent on the $19.2 billion recorded in the second quarter of 2013.

Market sentiment diverged during the quarter, and upbeat markets were led by Australia, China and Japan, all of which saw steady buying activity from local groups combined with sustained interest from foreign investors.

China saw another busy period in the third quarter with several major transactions completed, although individual markets continued to diverge, according to Robert J. Rupar, Executive Director, Head of Investment Properties, CBRE China.

First-tier cities continued to see strong interest from buyers despite rising prices and the limited supply of quality assets available for sale.

"State-owned enterprises were particularly active in buying office assets for self-use as they look to escape high rents. Activity in second-tier cities was more muted by comparison with plenty of assets on the market but increasing concern among buyers about oversupply," Rupar said.

The outlook remains upbeat for the remainder of the year with the steady flow of deals expected to continue. In first-tier cities many investors have been making unsolicited bids for buildings they're interested in.

"Domestic property funds will remain active in comparison to their overseas counterparts as their investment criteria is more flexible and not so focused on the type of core asset that ticks all the boxes," Rupar added.

CBRE expects investment volume in the Asia-Pacific region to remain high in the fourth quarter of 2013 as there is a pipeline of deals in Australia, China and Japan, with other markets, such as New Zealand, also likely to remain active, the report showed.