U.S. Real Estate Looking Up but Emerging Markets Rising Even Higher: Cohen & Steers

"Emerging markets not only make up a larger percentage of global GDP than just a few years ago, but they have grown faster than developed markets," Yablon wrote in a real estate securities note. "This is a trend that we expect to continue into the future, partially because they are less leveraged than developed markets. They also tend to have stronger balance sheets marked by lower debt/GDP ratios."

Meanwhile, housing data so far in 2013 signals that the U.S. real estate market also is looking up. On Tuesday, an S&P/Case-Shiller home price index release showed that U.S. home prices rose in December, up 0.2% in 20 cities, while the Commerce Department reported that U.S. new home sales jumped nearly 16% in January, to their highest level since July 2008, "a sign that the housing recovery is accelerating," The Associated Press reported. On Wednesday, the National Association of Realtors said that its pending home sales index rose 4.5% to 195.9, its highest level since April 2010.

"The single-family market is beginning to have an impact on the U.S. real estate market," Yablon said Tuesday.

He pointed to both positives and negatives, but overall, he said Cohen & Steers believed in the U.S. real estate market's fundamental recovery. The big winners are the industrial and self-storage subsectors, which are benefiting from economic and jobs growth, while the losers are health care, defense and generic office in Washington, D.C., as the federal government struggles with budget woes.

Three-year total returns are 12.11% as of Tuesday for APFAX, which is one of the only emerging markets real estate funds in the United States. Total assets for the six-year-old fund are $44.8 million, expense ratio is 1.80% and load is 4.50. That compares with three-year total returns of 17.56% for Cohen & Steers Realty Shares (CSRSX), the firm's 21-year-old flagship fund that focuses solely on U.S. real estate. Total assets are $4.9 billion, expense ratio is 0.96% and there is no load.

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