Shanghai is the second-most attractive investment market after Tokyo in the Asia-Pacific region, a report said on Thursday.

Despite stagnant rental growth, real estate in the nation's financial hub continues to draw international investors because Shanghai is widely perceived as a well-known, low-risk market for those who are unwilling to venture into lesser-known cities, according to Emerging Trends in Real Estate Asia-Pacific 2014, a real estate forecast jointly published by the United States-based Urban Land Institute and financial services firm PricewaterhouseCoopers.

Shanghai offers a "level of comfort" to funds with a mandate to place money in China, the report said. And it's the fourth most promising development market for 2014 in the eyes of industry leaders, the report said.