Real estate investors turn focus overseas

Investing in real estate once meant owning rental property downtown or buying shares in a U.S.-based real estate investment trust. Today, it increasingly means putting money in a REIT trading in Singapore or buying a pied-a-terre in a refurbished medieval village in northern Italy.

These days, real estate investing is an international proposition. Nearly a score of global real estate mutual funds have launched in the U.S. in the past two years, more than doubling in number. They now manage some $16.8 billion collectively, with more than $5.8 billion in new money flowing in this year alone, according to investment researchers Morningstar Inc.

Earlier this month, the American Stock Exchange listed its second international real estate exchange-traded fund in the last six months, the WisdomTree International Real Estate fund. And last summer, Northern Trust Corp. launched the first international real estate index fund, Northern Global Real Estate Index, which now has more than $1 billion in assets.
“The reasons Americans tell us they’re buying are the same reasons we hear from all over the world: they don’t want all their eggs in one basket,” says Sophie Moore, international marketing coordinator for Promaga SAU, a Cadiz, Spain, international property-development firm with residential projects in costa brava Spain, Brazil and, soon, Ecuador.

Promaga routinely fields queries from Americans and is slated to launch its first U.S. advertising campaign in the next few months.