NEW YORK (Reuters) - Equity Office Property Trust EOP.N, the largest publicly traded owner of U.S. office space, is considering expanding internationally, especially in Asia and Latin America, Chief Executive Richard Kincaid said on Monday.
"We've been thinking about going international, but it's hard to see a lot of opportunity right now," Kincaid said at the Reuters Real Estate Summit in New York. "The issue is, you have to find a risk-adjusted return that makes sense."
Kincaid said growth would likely come in parts of the world where labor markets are creating more white-collar positions, including Asia and Latin America, rather than regions where population growth is stagnant or falling, such as Western Europe and Japan.
"Demographically, from an office viewpoint, it's hard to make a bullish case for office demand if population is not growing," Kincaid said.
Equity Office, whose investments are concentrated in key U.S. urban markets such as New York and Washington, is in no rush to get into fast-growing overseas markets, he said, with any investments more likely in a 5- to 10-year timeframe.
"I don't see us anytime soon putting a ton of capital of there," he said, adding that currency and legal risks in entering a new market would need be balanced by the prospect of higher returns.
The most likely avenue would be to invest with a local partner who needs international expertise, he added, though Equity Office would also consider investing in a regional REIT, or real estate investment trust. Kincaid pointed to existing REIT-like investment vehicles in Singapore and Hong Kong and to upcoming offerings in Britain and Germany.
"You don't see anyplace that really sticks out as being real attractive yet, but I think there will be," Kincaid said.
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