GE Real Estate likes Japan and Mexico

By Mark McSherry and Ilaina Jonas

NEW YORK (Reuters) - GE Real Estate, one of the world's biggest property investors, is keen on Japan and Mexico, the head of the real estate arm of General Electric Co. (GE.N: Quote, Profile, Research, Stock Buzz) said at the Reuters Real Estate Summit in New York on Tuesday.

Michael Pralle, chief executive of GE Real Estate, said low property prices and interest rates make Japan an attractive real estate play.

"We love Japan -- we're doing a lot in Japan," said Pralle. "Unlike much of the rest of the developed world, real estate prices and land prices (in Japan) are quite low.

"You also get a very attractive arbitrage in Japan. Even though yields are quite low, maybe four and a half or five percent in central Tokyo, our money costs only one percent."

Pralle said that after 15 years of decline in the Japanese market, that country's economy was "coming back."

"A lot of real estate came back on the market at much, much lower prices," Pralle said.

"We started in Japan in the late 1990s and I wish we had been more aggressive."

MEXICO

In Mexico, the country's huge young population translates into what GE sees as a demand for retail real estate as well as housing.

"In Mexico, the demographics are great," Pralle said. "It is a growing middle class. There is a huge need for additional housing and additional retail."

He said GE has a joint venture for retail in Mexico and has also bought an industrial portfolio.

Like Japan, Mexico also offered a big yield arbitrage, Pralle said.