A number of metrics capture the growing interest by U.S. investors in overseas commercial real estate. U.S. investors placed $2.6 billion in funds that invest in overseas commercial property in the first quarter of 2013, according to Lipper. Real Capital Analytics reports that last year U.S. institutional investors placed $38.71 billion in foreign-based properties, a year-over-year increase. The FTSE EPRA/NAREIT Developed ex-U.S. Index rose 38.6% in 2012.
U.S. REITs are firing on all cylinders for investors, agreed participants at NAREIT's annual investor forum, held this summer. Elsewhere in the world, though, the storyline for REITs is different. While the Americas sector of the FTSE EPRA/NAREIT Global Real Estate Index delivered a 3.99% total return last year, the rest of the world posted negative returns.
FTSE Group, in partnership with NAREIT and the European Public Real Estate Association, has launched the FTSE EPRA/NAREIT Emerging Markets indexes. This family of commercial real estate indexes will help
investors gauge performance of REITs and other listed real estate companies in 13 emerging markets around the globe.
The FTSE EPRA/NAREIT Global Real Estate Index Series will expand its coverage with new indexes to cover listed property stocks in developing countries. "The huge demand for real estate investment in the fast-growing emerging market countries has propelled the sector onto the radar screen of investors as one of the more interesting investment asset classes of the future," said Mark Makepeace, chief executive of the FTSE Group. About 80% of the world's population lives in developing countries.