Just as the manufacturing world has beaten a path to Asia-Pacific, multifamily developers also see that region as a land of great potential.

ING Real Estate Investment Management, which publishes an annual global vision report, forecasts that the long-term outlook for multifamily in Asia remains very good, although rising interest rates and tighter monetary policy could cool development in some areas.

Tim Bellman, ING's global head of research and strategy, points to "phenomenal demand" in multifamily for-sale housing in rapidly urbanizing areas of China, Thailand, Vietnam, Malaysia, and India. ING, for example, has raised $350 million in its China Opportunity Fund, which it plans to invest in joint ventures with local Chinese partners in giant residential projects in cites such as Shanghai and Chongqing.

"These are typically 5,000-unit projects with 10 to 15 residential towers, and they typically sell out in a few days just from plans," Bellman notes.

Bellman says that India presents similar opportunities for widespread development--and Western companies are responding. For instance, New York City-based Vornado Realty Trust is contributing more than $71 million in a joint venture with India's Chatterjee Group in a nine-year project involving residential, office, and retail product in India's national capital region.

A newly released report on Asia-Pacific development from the Urban Land Institute and PricewaterhouseCoopers also underscores the strong multifamily growth prospects in these emerging countries. However, some markets have become so hot that land and property prices are up, compressing yields. The report gives the example of a residential site in Shanghai's Yanpu district, which sold for $154 a square foot in June 2007--a 90 percent jump from the sale price of a similar site nearby just seven months earlier.

As a result, notes the report, more Western multifamily investors are now looking to secondary cities in China, such as Changsa, Hangzhou, and Guangzhou. Also considered promising markets for rental apartments are Ho Chi Minh City, Vietnam, and the Indian cities of Mumbai and Bangalore.

Several experts interviewed in the ULI report described Vietnam as a land filled with entrepreneurs and "looking like China 10 years ago." Even so, the report warned that, along with the promise of high yields, emerging multifamily markets such as Vietnam pose substantial risks from construction delays, quality control problems, and confusing or non-existent real estate law. Vietnam, for example, ranks dead last in Jones Lang LaSalle's real estate transparency list.

Editor's note: This Web exclusive is part of Multifamily Executive's larger story on overseas investment, which appears in the January 2008 issue of MFE arriving in mailboxes this week, or you can visit it online here.