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Since the financial crisis erupted in 2008, the resulting wave of loan foreclosures and the plunge in housing prices served to dim investor interest in real estate. The economic recession that followed was so severe, in fact, that it caused real estate values to slump worldwide, prompting lenders to withdraw financing for new projects and tenants to demand lower rents.
While it may take years to sort out the U.S. housing market, commercial real estate markets overseas are doing quite well. Rents, as well as capital values for commercial real estate properties in major cities such as Tokyo, Singapore, and London are set to rise at least 10% in 2011, according to a November report from international real estate consultants Jones Lang LaSalle, and global direct commercial real estate investment could jump as much as 35%.
There are 11 exchange-traded funds (ETFs) that invest in foreign real estate. There are global and international (ex-U.S.) funds, most of which target the developed world. As yet, there is no real estate ETF for emerging markets specifically, though there is one for China, the Guggenheim China Real Estate ETF.