Strong investment opportunities in Latin America seen, as radical change is experienced in Europe due to EMU.

A new PricewaterhouseCoopers real estate analysis identifies Latin America - particularly Argentina and Chile - as a region where investors may find "opportunities for well-planned real estate investments," providing "favorable risk-adjusted returns."

The observation was part of a compendium of real estate-related overviews and thought-provoking articles presented in the Spring 1999 edition of PricewaterhouseCoopers Global Real Estate Now, which was released on April 28th.

The publication was decidedly less bullish about immediate investment opportunities in Japan and Russia, viewing longer-term possibilities with "cautious optimism."

"The past year has proven that real estate truly is a global marketplace - from the economic turmoil in Asia, to the crisis in Russia, to the upheavals in Latin America, to the turbulence in U.S. commercial mortgage backed securities," said Nick Cammarano, PricewaterhouseCoopers global real estate leader. "Nothing occurs in a vacuum. Events - and reactions to them - can have domino effects and ramifications that crisscross the globe."

The new issue of PricewaterhouseCoopers Global Real Estate Now offers perspectives and insight on many of the industry's most timely and significant topics.

Elsewhere, PricewaterhouseCoopers real estate professionals suggest that the European Monetary Union (EMU) will "radically change" the financing of corporate property in Europe, with "important strategic implications" in what is now the second largest single trading area in the world.

Overall, the firm predicts a number of dramatic developments affecting real estate worldwide over the next several years, including important changes in the capital markets, corporate boards of governance, governmental institutions, and real estate service providers - all having significant impact on U.S.-based as well as non-U.S. stakeholders.

In Latin America, PricewaterhouseCoopers observes, significant economic and demographic growth throughout the 1990's has been accompanied by more available financing for real estate development.

In Argentina, initial yield expectations on property acquisitions are in the 12 to 14 percent range for core-type properties. In Chile, the real estate market is much smaller, but the economic outlook is brighter due to government reforms now underway. Bee use of this, "Chile should be considered within any diversified real estate program for Latin America, with particular attention given to development opportunities."

By contrast, domestic policies in Brazil need to be further stabilized to allow the country to continue to attract foreign capital.

In Europe, the EMU has created "huge potential" for pan-European bond and equity markets, according to PricewaterhouseCoopers, That prospect also portends the growth of more innovative financing .arrangements, such as securitization and synthetic leases, an area in which Europe currently lags well behind the United States.

In addition, because currency restrictions that previously limited cross-border investment have been eliminated, "there is likely to be an increase in demand for property investment from institutional investors." This may lead to the emergence of pan-European indirect property investments, similar to U.S. REITs, the firm predicts.

In Japan, where the nation's banking and liquidity crisis has impeded the turnaround of the real estate market, several "significant events" in recent months underscore the opportunities for increased investment by Western capital sources, according to PricewaterhouseCoopers.

These include: the enactment of a new "servicer" law, allowing the establishment of a professional loan servicing capacity in Japan; the creation of a new class of corporate entity - the Special Purpose Company (SPC) - to provide an alternative legal structure with pass-through characteristics for securitization purposes; and the restructuring of troubled financial institutions.

In Russia, although very few are planning immediate investment, "many regard the market as attractive in the long-term," the firm said. "Because the lead time for developments in Russia is typically longer than in the west - perhaps three to four years from start to finish - companies looking to acquire sites now should aim to bring properties to market in 2002 or 2003." This would provide them "a very different perception of the likely market," PricewaterhouseCoopers said.

Also included in the new issue of PricewaterhouseCoopers Global Real Estate Now are articles on: "Global Real Estate in the 21st Century," which introduces a new way of envisioning where trends and events may be leading; "The Year 2000 Challenge," on the so-called "Y2K bug" and the potential perils it presents for the real estate industry; and a feature interview with Ronald Smeets of Fortis Investments, providing an overview of this Netherlands-based financial conglomerate and its growth in international real estate investing.

To obtain a copy of PricewaterhouseCoopers Global Real Estate Now, or to be placed on the mailing list, call Thomas Derr at [phone].