Considerations on Buying an International REIT ETF

A reader left a comment on an old post in which I opined that 20% in REITs, per David Swensen, is too high for my liking. The reader asked:

What is your opinion of WPS? WPS is in its lower range. Do you see WPS gaining in the forthcoming days? Is international real-estate moving better than domestic?

WPS is the iShares S&P World Property Ex-US. Like many broad, foreign Real Estate ETFs, the largest holding is Westfield Group which is an Australian mall operator with about half of its properties in the US. Also like other similar funds it is heavy in Japan and Hong Kong.

I don't really know what to expect for WPS in the coming few months let alone "the forthcoming days," so I responded with questions for him to think about and I thought it would be useful to post here in terms of exploring process a bit.

A lot of what I have read lately talks about the real estate crunch just now getting to places like Australia, Ireland and Spain (here is a synopsis from Mish). How does this impact Westfield, if at all?

Further, WPS is 20% in Japan. Personally I want no part of Japanese equities or real estate, I have never been in the camp that this is the year for Japan and that has not been wrong very often.

The peg of the Hong Kong dollar to the greenback does strange things to interest rates and inflation in Hong Kong which would seem to pose some sort of risk. Clearly real estate companies in Hong Kong have done quite well this decade, but the peg creates a risk I don't think I can quantify especially as the dollar has gone from being generally weak to getting pasted.

Lastly, I asked the reader if he was interested now because it was down from where it had been or because he had some sort of forward looking reasoning for thinking it would go up from here.

I have no idea whether the reader should buy WPS, but in deciding whether or not to buy the fund these are the issues I would want to sort out before doing so.