By Scott Malone
NEW YORK (Reuters) - Looking to capitalize on the surging economies of India and China, executives at U.S. real estate companies are stepping up their focus on foreign markets, opening new offices and raising funds to invest in properties in the developing world.
They are not limiting their efforts to those two obvious engines of economic growth, but also looking for properties in Russia, Mexico and parts of South America, as well as recovering Japan.
"If you look around the world and you say ... 'Where's the white-collar growth going to be in the labor market?' It's certainly going to be in Asia and, interestingly, parts of South America," said Richard Kincaid, chief executive of Equity Office Property TrustEOP.N, said at the Reuters Real Estate Summit in New York.
While Equity Office, the largest publicly traded owner of office space, hasn't yet jumped into the international market, New York-based private equity firm Apollo Real Estate Advisors has started raising a $500 million fund to invest in Indian real estate, primarily office buildings and apartments.
"Like China, it's rapidly urbanizing and there's a rapidly growing middle class," said John Jacobsson, a managing partner in Apollo. However, he added that India seems a safer place to invest in real estate, since a clearer legal system and a longer established banking system make the going a little easier for Western firms.
"China has very little in the form of developed common law or contract law," Jacobsson added.
CHINA A 'NECESSARY INGREDIENT'
Still, China's rapid economic growth -- its gross domestic product grew at a 9.9 percent annual rate last year -- has prompted many Western companies to take on the market, regardless of the administrative challenges. Continued...
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