About a 40-minute drive southeast of London, a huge retail development called Bluewater has been erected above the quarries and lakes of the area. The project stands out because of its size at 1.5 million sq. ft. and because of its international scope. Developed in the Kent countryside by Australia-based Lend Lease, the center contains in-line stores that hail from 13 countries while the regional mall concept is very American.

In England, most large retail centers are central-city, urban projects. In all of the United Kingdom, there's probably fewer than 10 regional shopping centers, and Bluewater may be the last for a while. "The government has come down hard on approving them because they are trying to protect cities and town centers," explains Peter Walicknowski, chief executive for Lend Lease-Europe. "These things are rare animals."

Unique yes, but Bluewater has created nothing but opportunity for American retailers. When it opened in March, London-area shoppers flocked to stores such as Gymboree, Gap, Nine West, Nevada Bob, Sunglass Hut, Dockers, Claire's, Levis, Eddie Bauer, Timberland, Starbucks, McDonald's, Burger King, Pizza Hut and Supercuts.

For over a decade, real estate investors and developers have been heading overseas, principally to Europe and Asia, to expand their portfolios of office buildings and hotels. Meanwhile, U.S. real estate interests abroad concerning retail have taken a back seat.

However, as a number of U.S. markets reach maturity and shopping centers come to full value, retailers, investors, developers, architects and managers have turned their attention to far-flung lands. It's not just Western Europe. American companies are involved in retail or mixed-use projects in Asia, South America, Central America, the Middle East, Eastern Europe and Russia.

Golub-Europe, an affiliate of Chicago-based Golub & Co., at the end of 1997 completed the $30 million redevelopment of a 180-year-old building in St. Petersburg, Russia, and turned it into an office and retail site. TrizecHahn Corp. of Toronto is working on a number of projects in Europe, including a mixed-use center in London's financial district; another mixed-use center with a 14-screen cinema complex in Budapest, Hungary; and a 170,000 sq. m. retail development with hypermarket (warehouse retail) in Bratislava, Slovakia.

Central and South America seem to be catching their fair share of attention from Norte Americanos. "A lot of U.S. retailers are looking for locations and expanding their horizons on the international front, and we are working with a number of restaurants expanding throughout South America," says Jeffrey Finn, president and COO of Hightstown, N.J.-based New America International. "We are also working with big-box retailers now going into Central and South America, as well as Europe."

PriceSmart Inc. is expanding through Central America and the Andean Pact countries, while Home Depot is moving into Chile and Wal-Mart is in Argentina, reports Paul Caine, New America's managing director for its Latin American Group. He adds that Sears and JCPenney have entered Mexico and Chile.

"There are lots of opportunities in Latin America because North American goods are really sought out," says Caine. "And Latin Americans are great consumers. Shopping warehouses are going into places like El Salvador, Honduras and the Dominican Republic because they see a stable, business-friendly environment."

Opportunities for retailers International activity started to pick up in earnest about two years ago, with further acceleration in the past year. Finn reports a number of interesting trends in the international arena:

* Anchors are attempting to bring along co-tenants to surround them in the market;

* Developers are working in conjunction with retailers to find locations;

* Local retailers are being acquired; and

* Retailers themselves are acting as developers.

The ever-growing list of American retailers with strong beachheads on foreign shores now includes Toys 'R' Us, Blockbusters, Wal-Mart, NikeTown, Tommy Hilfiger, Disney, Warner Brothers, Domino's, Kentucky Fried Chicken and Baskin-Robbins. Following the success of Hard Rock Cafe and Planet Hollywood, a second wave of entertainment-oriented concepts like AMC Theatres and TGI Friday are already overseas.

Sega GameWorks - besides entering Rio de Janeiro and Sao Paulo - is stepping into Asian territory through joint ventures in Guam (a U.S. possession in the Pacific that caters to Asian tourists) and in Seoul, Korea.

"There are opportunities today in Asia for the stronger, branded-name, well-positioned retailers, because Asia has not successfully generated many of its own retailers," says David Mudgett, currently executive vice president at Newport Beach, Calif.-based Donahue Shriber, and former president of the Asia division of Koll, also of Newport Beach. "There are more European retailers in Asia than American retailers."

Not only have American companies narrowly focused on the North American continent, adds Mudgett, but they also failed to recognize that, even with struggling economies, there is still plenty of disposable income in Asia.

With only 18 U.S. locations, Dallas-based Dave & Buster's already has made the big leap overseas. It opened its first foreign restaurant in 1997 in Birmingham, England, and its second in 1998 in Bristol. The stores in England are opened through a joint venture with Bass PLC, which is committed to seven stores over the next 10 years.

In October 1998, Dave & Buster's announced it signed a multi-store licensing agreement with SVAG Development Corp. to develop the European markets of Germany, Switzerland and Austria, with the first site planned for Dusseldorf in late 1999.

"We have been working on international deals for quite awhile," says Dennis Paine, Dave & Buster's vice president of communications. "The company has spoken with investor groups in Canada, Sweden, Finland and Australia."

The company has also signed a licensing agreement with Taiwan's TaiMall Development Co. to develop Dave & Buster's throughout the Pacific Rim, particularly in Taiwan, China, Singapore and Hong Kong. The first Dave & Buster's location under this agreement is slated to open in late 1999 in a suburban Taipei mall.

The entry level for Dave & Buster's is fairly steep - a typical installation costs $10 million to $12 million to open - but the company is not interested in doing one-off deals internationally. "We are looking for quality players that can commit to multi-store packages," Paine says.

Another company finding potential in Asia is Koll. The developer's Asia division has united with a Thailand company to form CP Koll, which now boasts development in two Asian countries. A mixed-use development on 12,000 acres is planned in Kuala Lampur, Malaysia; and a 1.4 million sq. ft. shopping center is currently going up in Shanghai, China.

"When you look at the macro-economic trends, you have to ask yourself, 'How is the company going to grow and thrive for the next century?'" says Jim Mueller, general manager of CP Koll in Shanghai. "The United States is a relatively mature market, so you have to look for immature markets where there is still decades of growth left."

Taipei, Mueller adds, is a wealthy, underserved marketplace with very little shopping center retail.

"There is a tremendous amount of development activity, and for retailers, now is the time to get into the Taiwan market," he says. Who's looking? Everyone from restaurant chains to big-box retailers.

A market with even more potential is Shanghai, which Mueller calls the most sophisticated, cosmopolitan city in China (also with the highest income level). "It is underserved, especially in the area of entertainment because of government policy over the years," he says. "There is untapped demand and enough spendable income in Shanghai for restaurant and entertainment businesses."

How to "do" Europe Most American money in Europe is concentrated on center-city offices, reports Bryan Ellinthorpe, deputy director of CIN LaSalle in London.

"There has been no major shopping center purchases by Americans," he says. "The investment retail market has been strong in the United Kingdom with a lot of product turnover, but the principal acquirers were British property companies followed by British insurance companies."

U.S. property investors, whether they seek retail or office, probably see better value on the Continent than in England, as the rest of Europe is behind in the economic cycle and the markets aren't as well developed, Ellinthorpe adds.

If investors aren't yet willing to shop for retail opportunities in Europe, the same cannot be said of retailers. Gap, Disney and others are in most big UK shopping centers. Victoria's Secret is now making a push, while upscale clothiers Ralph Lauren and Donna Karan have found locations as well.

Also moving into Europe are some of the restaurant and entertainment chains, says Charles Aug, chairman of Garrick-Aug Associates. The New York-based company has a division that works with a number of retailers looking to expand in Europe, including a themed restaurant, fast-food chain and movie theater company.

Interest in Europe coincided with coalescing of the European common market and is now starting to steamroll, says Aug.

Unfortunately, there is no one way to "do" Europe, he says. Some companies have chosen to become established in the Western European countries of France, England, Italy, Germany and Spain, while others are looking mostly at the former East European bloc of countries.

"It depends on what the company is trying to sell," Aug says. "If it is selling luxury goods, then Poland may not be the best place."

Regardless of where one decides to go in Europe, it's important to note the market differences between Europe and United States, which means local laws, local real estate regulations and, most of all, local consumer tastes. Fashion statements in Europe generally have a slightly different resonance than in the United States.

Architects, developers till foreign soil Beyond the retailers, Europe remains wide open for and architectural services and for developers.

Baltimore-based RTKL International has been so busy in Europe it long had a division in London. About 30% to 35% of the company's gross billings come from international projects. The company currently is working on projects from Lisbon, Portugal, to Krakow, Poland, and numerous stops in between.

About a year ago, RTKL helped open Colombo, a 1.4 million sq. ft. shopping center it designed. The $450 million project located on the outskirts of Lisbon has been one of the biggest developments in southern Europe, says Paul Hanegraaf, a managing director of RTKL-UK Ltd.

The company is also working with New York-based Tishman Speyer Properties on an urban mixed-use project adjacent to the historic city center of Krakow. The project incorporates an existing train station, retail, office space and a hotel for a total built area of 150,0000 sq. ft. It is in the first phase of development.

RTKL has also redeveloped Churchill Square in Brighton, England, and designed Centro Comercial y de Ocio Bonaire, a 150,000 sq. ft., retail-driven urban mixed-use development near Valencia, Spain.

"The outlook for investment in central Europe and Spain is very good, and there are numerous developers there now," says Hanegraff.

TrizecHahn, for example, which first looked around Europe for opportunities in 1996, is now in a joint venture with Polus Investments of Hungary on a mixed-use development called West End City Center in Budapest.

The project, which broke ground in October, will carry 516,000 sq. ft. of retail-entertainment, 82% of which is already committed. Guess, Calvin Klein, Tommy Hilfiger, Clinique, Estee Lauder, Reebok and Nike will all be represented under licensing arrangements. The development is adjacent to the West End Railway Station, which was originally designed by Gustave Eiffel, designer of the Eiffel Tower.

Joint ventures will be the way TrizecHahn operates in Europe going forward, says Brian Jenkins, chief development officer for the joint venture.

"This way, we apply our expertise on the development (while others do the other tasks)," he says. However, Jenkins cautions it's not easy to be a foreign developer in Europe. "You have to assume that skills and expertise transfer, which is not always the case."

Tishman Speyer is now established in four countries: England, Germany, France and Poland. In Berlin it has worked on three major mixed-use projects and is working with RTKL in Krakow. Among the North American retailers coming into Tishman Speyer projects are Footlocker, Sunglass Hut, IMAX and Planet Hollywood.

The tough part about Europe is that most retail is still in city centers, and it's a very fragmented market, says Michael Spies, senior managing director for Tishman Speyer whose job it is to oversee European business.

"You have to fight like hell to get a good location because there is very little turnover," he notes. "Also, all the retail markets in Europe are very expensive."

Still, there is huge potential in Europe. "By virtue of the common currency, there is a lot more cross-border retailing," Spies notes. "So you see a lot of English, French, Italian and Swedish retailers crossing borders. We expect U.S. retailers to find it easier to enter Europe as well."