As countries graduate from poor to rich, the biggest investments they make are in buildings and infrastructure. That makes real estate companies key to their stock markets, generating massive internal growth and profits in the transforming economies.

In the Pacific Wealth Portfolio, about 20% of our holdings are devoted to real estate, with four of our 32 holdings directly involved in real estate management and development as their main business, and three other holdings in major real estate.

Although real estate helped Pacific economies make giant leaps, it also produced some spectacular flameouts. Most notoriously, the Japanese bubble of the 1980s pumped up real estate more than stock markets. The emperor’s palace garden in Tokyo (1.32 square miles) peaked in value more than the state of California.

Since 1990, Japanese real estate has sunk in nominal value by around 80%, while the great real estate empires that dominated the 1980s Japanese stock market have mostly vanished. So we have no Japanese real estate holdings in our portfolio, as the Japanese companies still struggle with problems of the past.

Real estate, more than any other industry, is subject to interest rates because much of it is bought with debt. The prolonged period of ultra-low interest rates since 2008 caused much overbuilding, some of which will implode in the next downturn.

But Australia, where we have three holdings, is something of a haven among rich-world real estate markets. This is because at 2.4%, its short-term interest rate is still safely ahead of inflation (1.7% as estimated by the Economist team of forecasters for 2015). With the country enjoying substantial growth, excellent property rights, and little danger of overheating, Australian real estate is an excellent holding for both safety and long-term gain.

Our other real estate holdings give us excellent diversification in markets and property types. These holdings include residential, retail, office, commercial, and hotel or resort properties. Our strongest holdings are in Singapore, which has both solid monetary policies and an income level 50% higher than the United States. However, we are also well represented in the Philippines, which I regard as the best growth opportunity currently in the Pacific region, because the country combines sound fiscal and monetary policies with a healthy balance of payments surplus.

We have substantial holdings in Hong Kong and the richer regions of China, but not in the Chinese real estate sector, which through state patronage and cheap credit was overbuilt. I believe that the rapid growth and sound monetary policies of the Western Pacific countries make their real estate markets more attractive than those of the Eastern Pacific Latin American countries, where getting credit is tougher.

Besides our direct real estate holdings, you should bear in mind that our agribusiness companies—Industrias Bachoco (NYSE: IBA; Mexico), PT Indofood Sukses Makmur Tbk (OTC: PIFMY; Indonesia), Olam International (OTC: OLMIY; Indonesia) and Wilmar International (OTC: WILMY; Singapore, Indonesia and Australia)—own a substantial amount of rural land that will benefit from any rising tide of population growth and prosperity.

In the Pacific Wealth portfolio we have three holdovers from the Australian Edge portfolio:

GPT Group Limited (OTC: GPTGF), in our Conservative Portfolio, is one of Australia’s largest listed diversified real estate groups, with $13 billion of assets under management, of which about half is owned directly and half consists of real estate funds that GPT manages. Today, GPT owns and manages a high-quality portfolio of Australian office, logistics, business park and prime shopping center assets.

Retail represents 50% of its portfolio, office 36% and logistics 14%, with all GPT’s assets in Australia. GPT has a total return target of 9% per year. The company trades on a P/E of 11.7 times, at a 5% premium to book value, with a prospective yield of 5%.

Stockland Corporation Limited (OTC: STKAF), in our Conservative Portfolio, is Australia’s largest real estate group, with assets of $23 billion. It’s focused primarily on residential real estate (68% of assets), retirement living properties and retail properties, with smaller operations in logistics and office buildings, in Australia. Stockland currently trades on a P/E of 14.1 times, at a 14% premium to book value, and yields 5.5%.

Crown Resorts Limited (OTC: CWLDF), in our Aggressive Portfolio, is a leading luxury tourism operator. This hotel and casino owner has properties primarily in Australia, including Melbourne and Perth, and projects in Sydney and Brisbane. Outside Australia, Crown owns a casino, Aspinall’s in London, and has joint venture casino resorts in Macao, China, and Manila, Philippines, as well as a development site in Las Vegas. The company yields 2.8% and trades on a P/E of 18.9 times and at 2.1 times book value.

We have one non-Australian company devoted to real estate in our Conservative Portfolio, and one with a substantial real estate component in its operations:

CapitaLand Limited (OTC: CLLDY) is one of Asia’s largest real estate companies, based in Singapore, with $52 billion of real estate assets. Of those, $34 billion are directly owned and the rest are in funds managed by CapitaLand. Its real estate portfolio includes integrated developments, shopping malls, serviced residences, offices and homes.

Although most of the revenue (55%) came from Singapore real estate last year, 22% came from China (including Hong Kong), 14% from Asia (excluding Singapore and China), and 9% from Europe and other locations. The company trades on a P/E of 13.8 times and at 15% below book value.

Keppel Corporation (OTC: KPELY) is a Singapore conglomerate featured in Pacific Wealth last month that has a substantial, majority-owned real estate subsidiary, Keppel Land (KPPLF). Its operations generated 26% of Keppel Corporation’s net income last year. Keppel Land owns $11 billion worth of assets, with office and commercial properties in Singapore, Beijing, Shanghai, Ho Chi Minh City and Jakarta.

It’s also Asia’s premier home developer, with 70,000 properties in Singapore. It managed $3.2 billion in real estate fund assets. Keppel trades on 8.0 times earnings, at a 40% premium to book value, and yields 5.4%.

We have two non-Australian companies with major real estate operations in our Aggressive Portfolio:

Alliance Global Group (OTC: ALGGY) is one of the Philippines’ largest conglomerates, with operations in real estate, tourism, gaming, food and fast foods. Alliance Global owns controlling interest in Megaworld, a Philippines real estate developer of residential, office and mixed-use developments. Megaworld provided 34% of Alliance Global revenues and 43% of its net profit in 2014. Alliance Global trades at 19 times trailing 12-month earnings, but only 15 times expected 2015 earnings, with a dividend yield of 1.4%. Each ADR represents 50 shares.

Allied Group (OTC: ALEDY) is a Hong Kong–based real estate investment and finance company. Real estate accounts for 70% of company revenues, with real estate interests held mainly through two companies, Allied Properties (H.K.) Limited (75% owned) in Hong Kong and Tian An China Investments in China. Allied invests in retail, hotel and office properties in Hong Kong, while in China, TACI concentrates on cyberparks and has done well in southern Chinese cities, although progress has been slower in northern China. Allied also has a hotel joint venture with the Japanese construction company Kajima, which owns the Sofitel in Manila. Allied’s shares stand on a historic P/E ratio of 4.8. times and at about 42% of book value, and yield 4%.