If the three rules of real estate are location, location, location, it s worth noting that some of the best-performing locations, at least when it comes to real estate stocks since the March lows, have been located outside of the United States. As an asset class, real estate has bounced. Aided by a weak U.S. dollar, foreign real estate has bounced even more.

Foreign Real Estate Besting U.S.

Domestic Real Estate Exchange Traded Funds (ICF, IYR) vs. Foreign (IFAS, WPS, DRW, RWX)

What s changed dramatically since we started looking at foreign real estate in 2002 has been a wide proliferation of funds and alternatives. What used to be a relatively unattainable asset class for individual investors has become easy to buy, simple to trade, and probably most surprisingly, commonly found in many portfolios. Foreign real estate simply isn t as contrarian as it was seven years ago.

How ubiquitous has foreign real estate become? Back in 2002, U.S. investors with an interest in foreign real estate could invest in Alpine International Real Estate (EGLRX) and that was about it.

Now there are hordes of options, including SPDR Dow Jones Intl Real Estate (RWX), iShares S&P Dev ex-US Property Index (WPS), iShares FTSE EPRA/NAREIT Developed Real Estate ex-US (IFGL), iShares FTSE EPRA/NAREIT Europe Index (IFEU), iShares FTSE EPRA/NAREIT Asia Index (IFAS) and WisdomTree International Real Estate (DRW), not to mention a large number of closed- and open-end mutual funds. These products simply didn t exist when we started writing about international real estate.

Despite the increased popularity of foreign real estate, there remains a number of intriguing companies that trade, albeit very lightly, as American Depository Receipts (ADRs). From my perspective, that obscurity is part of the attraction: Even within the asset class, these names are far from picked over by the herd. An excellent source for information on all foreign stocks trading in the U.S., including real-estate ADRs, can be found in the Bank of New York s extensive directory.

But because of the relative illiquidity of companies, even large ones, investors would be well-advised to include them only as reasonably sized position trades. These are not names to try and scalp. Ideally, the idea would be for an investor to assemble their own world-wide portfolio of off-the-beaten-path real estate they d be comfortable holding, even when the market corrects. Here are a few of the most promising:

Bandar Raya Development

Bandar Raya Developments is a Malaysian property developer with both commercial and residential interests. The company, one of the country s first listed property development firms, is developing upscale projects in the Malaysian cities of Kuala Lumpur and Johor Bahru, as well as Lahore, Pakistan. From the middle of 2007 to early 2009, the ADRs lost roughly 80% of their value, although they have recently enjoyed a meaningful bounce.

Bandar Raya Development 5 year

Daibiru

Daibiru is a major Japanese commercial property owner, with more than 20 properties located in the cities of Tokyo and Osaka. In addition to extensive office space, assets include both student residence halls and condominiums. The company manages properties for third-party owners as well as its own.

Daibiru s ADRs were cut in half from 2007 to 2008 but have recently steadied near $18 a share, not far from the 52-week high of $22.15.

Daibiru 5 year

Wihlborgs

Wihlborgs is a Swedish real estate company with 247 commercial properties located in the cities of Malm , Helsingborg, Lund and Copenhagen. Only trading as an ADR in this country since the end of last year, the company is unusual in that it explicitly aims to deliver a return on shareholders' equity that exceeds the risk-free interest rate by at least four percentage points. Like the broad market, the stock now sits at a new high for the year.

Wihlborgs - YTD

Westfield Group

If the consumer is back, Westfield Group (WFGPY) is likely to benefit. The Australia-based mall developer is the largest retail property company in the world, with a portfolio of 119 shopping centers in Australia, New Zealand, the U.S. and the U.K. More than simply a mall owner, Westfield also designs, develops and constructs properties, almost all of which are branded as Westfield Malls or Westfield Shoppingtown. It is a major listing on the Australian Stock Exchange and a prominent holding in most international real estate mutual funds.

The U.S.-listed ADRs, which traded as high as $40 in late 2007, traded close to $10 earlier this year but have since jumped to near $18.

Westfield Group 3 Years