Faced with lower growth stateside, more and more U.S. REITs are looking overseas. On Aug. 13, Vornado Realty Trust, a New York City-based diversified REIT with a 30-million-square-foot U.S. retail portfolio, became the latest REIT to join that bandwagon when it announced it had entered into a joint venture with Reliance Industries Ltd., India's largest public company, to develop, acquire and manage shopping centers in India.

According to the terms of the deal, both entities will contribute $250 million to the venture, focusing on grocery-anchored shopping centers in major Indian cities ranging in size from 500,000 square feet to one million square feet. The centers will be owned and operated by Reliance. Vornado has already invested approximately $91 million in other joint ventures in India, with additional capital commitments of $92 million.

The deal comes at a time when Vornado's domestic profits are expected to take a hit. It managed to get average returns of up to 12 percent on its U.S. properties over the past five years, but “profits will wane over the next two years, as the slower economy takes a toll,” wrote Morningstar analyst Mike Ford-Taggart in August.

India continues to be one of the most attractive countries in the world for retail development and investment. It ranked as No. 2 behind Vietnam on the 2008 Global Retail Development Index compiled by A.T. Kearney, a global consulting firm. The firm cited India's positives include projected GDP growth of 8 percent this year in addition to a 25 percent increase in its retail industry, which totalled $20 billion in 2007. Consumer spending has increased 75 percent since 2004, totalling $511 billion.