EGYPT. Egypt and other emerging markets like Brazil, Mexico and China remain some of the best places for property investments as the global financial crisis drags on, real estate mogul Sam Zell said on Tuesday.

Those countries have a shortage of affordable housing and infrastructures that support foreign investment, Zell, Chairman of Equity Group Investments,, said at a forum in New York sponsored by the University of Pennsylvania's Wharton Business School.

Brazil is self-sufficient, has a strong pool of skilled professionals and otherwise unlimited resources, he said. The country also offers scale, he said, citing same-store growth for Equity Group Investments-owned malls of 12% over the past year.

In April, Zell said Brazil's biggest mall operator was seeing retail sales growth of 10% annually.

"If you look at all of the facts, I don't think there is a better environment in all the world than Brazil," said Zell, who has suggested the country could surpass China in economic might in 30 years.

Similar conditions hold true in Egypt, where "there is an enormous shortage of housing," he said.

In Brazil and Mexico, funding for housing has been unaffected by the turmoil in capital markets that has frozen or dampened housing elsewhere, he said. Zell said he is also investing in low-cost housing in China, where results have been "so far so good."

Much of the financial crisis that has taken a toll on confidence stems from demand in the US and Europe that "wasn't real," supported by leverage, he said. True demand, such as that seen in Egypt, will have to re-emerge to lead any recovery elsewhere, he said.

"Where is [the market] going to recover? It starts with demand," he said. "Where demand overcomes the environment."

Countries to avoid include Japan, which has a shrinking population, and India, where licensing and "bureaucracy beyond belief" discourage foreign investment, he said. He said he also stays away from Russia where tax authorities could literally steal companies from their owners, and from Turkey, where he fears authorities could use the press against foreign investors.

In the US, the biggest issue is a lack of confidence that has spread beyond the subprime mortgages that triggered the crisis, he said. A drumbeat of negative news from companies, such as General Electric's announcement on Tuesday that fourth-quarter profit would be at the low end of forecasts, adds to the deficit in confidence, he said.

"When you don't have confidence, nothing good happens," he said.

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