Sovereign Wealth Funds - Next Big Thing?

From Marketwatch.com

Sovereign funds eye Japanese REITs - report
By MarketWatch

SAN FRANCISCO (MarketWatch) -- Despite a general decline in large real estate deals due to the ongoing subprime loan crisis, sovereign wealth funds such as Government of Singapore Investment Corp., or GIC, have been stepping up investments in the Japanese market, according to a report in the Friday edition of the Nikkei Business Daily.
Large recent deals include Morgan Stanley's (MS:) sale for 77 billion yen ($750 million) of The Westin Tokyo to GIC, the Nikkei reported. Sovereign funds like GIC are government-controlled, and have stirred some controversy as they've invested in politically sensitive industries abroad. See related story.
But investments by sovereign funds in Japanese real estate have helped prop up real estate transactions in there, as they snap up properties and invest in the real estate investment trust market, the Nikkei reported.
GIC, which has over $200 billion in assets, has also acquired the Hawks Town commercial facilities in Fukuoka, and holds a 5% stake in Japan Prime Realty Investment Corp. (JP:8955: news, chart, profile) , an REIT affiliated with estate developer Tokyo Tatemono Corp (JP:8804: news, chart, profile) , the Nikkei reported.
Other sovereign funds boosting their presence in the Japanese real estate market are based in Dubai and other Middle Eastern countries, the Nikkei reported, citing unnamed sources.
The total market value of Japanese REITs on the Tokyo Exchange fell sharply in the second half of last year, the Nikkei reported, drawing the interest of sovereign funds.
In addition, the Nikkei reported that the Japanese market boasts a large amount of high-quality real estate that is generally under-priced compared to foreign equivalents

My Thoughts: The dollar is at a 13 year low in relation to other currencies. The Federal Reserve Bank of Atlanta keeps track of such things, and the chart below is from their website and shows a trade weighted basket of currencies against the dollar. Not a good time to go overseas on vacation or to buy foreign exports, since a weak dollar means you will be paying more for the same service.

I mentioned earlier why this was happening, and this is just another example of the effects.

If history is to be any guide as to what property types would benefit most from cash loaded foreigners, we only need to look at history. ( *cough* Japan). Over-valued trophy properties are likely candidates and industrial warehouse / distribution centers are not. (Unless you are a cash rich company with a legitimate business interest here in the United States).

But, we have seen what happens to foreigners who have a legitimate business interest and it doesn't set a very good example for future industrial purchases. (*cough* Dubai).