Emerging markets, primarily in developing non-Western countries, represent the far frontier of real estate investment.
As with emerging capital markets, risk is high but the upside potential is great. However, unlike most mutual fund investments based on emerging economies, real estate investors’ horizons are long, funds are not diversified and their ability to exit is limited.
Developing economies can ride through massive swings of inflation and recession. While most Western countries have relatively stable economies, political structures, currencies and established real estate markets, these factors may be less secure in other parts of the world. How does an investor understand where to find the best opportunities?
This issue of Global Perspectives looks at factors driving emerging market investments—and which markets appear most promising. Once the seeds are sown for economic growth, multinational corporations move in, looking for property and facilities that meet their needs. Where employment improves, middle classes emerge, creating consumers hungry for Western style goods and shopping experiences. With them, the growth cycle expands further, prompting the development of more malls, hotels, office property and other commercial investments. So take a ride around the globe and tour the hot markets that are currently drawing investments—and changing the lives of many people in developing countries.