Judging by the huge turnout of 1 600 property players (including 300 foreign delegates) at the 2007 ICSC Retail Real Estate World Summit recently held in Cape Town, the global retail party is far from over.

However, the message sent by a number of speakers is clear: the new money will flow to emerging markets, such as India, China, Eastern Europe, South America, the Gulf and some parts of Africa. That's a trend that developers/investors in South Africa have already picked up on, with a number of local players starting to look for growth outside SA.

Some of SA's biggest property owners and managers - including the likes of Old Mutual, Investec and JSE-listed property funds Madison, Sycom, Diversified and SA Corporate - have now added foreign real estate as a target. Old Mutual Investment Group Property Investments (OMIGPI) is making a bold move into India, with plans to build 10 shopping malls (in conjunction with an Indian partner) over the next four years. They will be similar in scale to OMIGPI's Gateway (Umhlanga) and Menlyn Park (Pretoria).

The malls will be housed in a US$500m (R3,450bn) development fund - Triangle Indian Fund - which OMIGPI plans to launch in January next year. The unlisted fund will be aimed at SA and offshore institutional investors looking for a capital growth play.

The minimum investment is $500 000 (R3,45m). Why India? Colin Young, head of institutional investment at OMIGPI, says India is one of the world's fastest growing economies, currently ranking as the 10th biggest globally with a population of 1,1bn. Yet it currently has only 13 malls larger than 50 000sq m.

Says Young: "That creates huge scope for new shopping centres. While India's trading environment is still very informal, a wave of organised retail will permeate the country over the next few years, which will radically change India's retail property landscape." Young says SA's property owners can no longer afford not to tap into foreign real estate markets. Angelique de Rauville, global head of Investec Property Investments, agrees that SA players will have to start looking for growth offshore owing to a shortage of suitable investment stock in SA. Investec recently entered into a joint venture with global property operators GLL Real Estate Partners to form a "special opportunities" investment.

De Rauville says it's already begun buying property assets in Santiago, Chile. Further acquisitions are being considered in the Ukraine, Romania, Bulgaria, Hungary and Argentina. De Rauville says some of those countries still offer yields of around 9% to 10%, while financing costs can be as low as 6%, creating scope for positive cash flows.

That's quite different from the current SA scenario, where yields for prime shopping centres, offices and industrial buildings have dropped to between 6% and 8% and debt-funding costs have shot up to more than 10%. Investec is also in the process of forming an African Real Estate Investment product that will invest in property throughout Africa (excluding SA). JSE-listed property funds Diversified and Sycom have also added offshore real estate to their SA offering.

The Resilient group recently listed a portfolio of mostly Romanian properties on London's AIM in which Diversified, Resilient's sister fund, has a sizeable stake. Sycom last month acquired 22,5% of the Stenham European Shopping Centre Fund for close to R260m. Stenham owns Nova Eventis, a regional shopping centre in Germany.

Meanwhile, Madison is focusing its immediate expansion plans on Africa. Madison executive director Mike Flax says they're following the oil money to Angola. They're also planning large retail developments in Namibia. Fellow JSE-listed fund Vukile is also upping its exposure to Namibian property, with a recent listing on that country's stock exchange.