Global Growth
Lures Developers
International markets, especially
those with emerging economies,
are ripe with opportunity
By Danielle Douglas
WHILE COMMERCIAL REAL
estate players are feeling the pain from
the economic uncertainty and slowdown
in the US property sectors, for developers
active in foreign markets, the issues stateside may not pose a significant threat to
their bottom lines. For these firms, globally diversified portfolios are translating
into solid returns.
“If things don’t go well in the US, they
may continue to do very well in China,
for example, and therefore our revenue
streams become more diverse,” explains
Ted Antenucci, president and chief
investment officer at ProLogis. The
Denver-based executive says the firm’s
international activities have helped to
assure shareholders that profits are still on
the horizon.
As interwoven as today’s global
economies are, there is still great deal of
separateness among markets, producing
varying levels of growth. “The advantage
of global development is that various
parts of the world tend to be in different
cycles. If things slow down in one market,
hopefully there is still activity and opportunity in another,” says Charles M.
Baughn, executive vice president at
Houston-based Hines. “Right now, there
are certainly places in other regions of the
world that aren’t as affected by the current credit issues here.”
Surely, in some foreign markets the
real estate business has been touched by
US credit woes. NAI Global’s New York
City-based executive director of global
solutions, Jean-Claude Goldenstein,
points out that last year, the UK commercial property sector produced a negative
total return for the first time since 1991,
with values falling by 10%. “In most
Western European markets, investors are
adopting a wait-and-see attitude, and it is
believed that there will be reduced activity in the first quarter with, hopefully, a
degree of recovery later this year,” he
remarks. “Asia Pacific appeared largely
decoupled from the US and Europe.
However, evidence that the region was
