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RICS Global Distressed Property Monitor, Q2 2011

Date

25 Aug 2011

Sections

Euro & Finance

European investors remain hungry for distressed property as global supply grows

Key points:

While investor demand increases dramatically, the level of distressed properties* coming to market is set to continue to rise globally, says RICS.

Released today, the latest RICS Global Distressed Property Monitor reveals that over half of the countries surveyed anticipate a rise in forced selling of commercial buildings for the coming quarter. Not surprisingly, the Republic of Ireland, Spain and Italy expect the highest number of foreclosures, while Brazil, Malaysia and Russia expect the lowest.

Property professionals in Russia foresee a continued decline in the level of distressed property, albeit at a slower pace than previously expected. This, together with a positive swing in investor demand, will likely stabilise distressed property prices in the country over the course of the coming quarter.

Germany remains a strong performer as well, with supply of distressed properties expected to rise at a slower pace from July to September compared to the second quarter.

Interestingly, the survey also highlights a surge in worldwide demand for distressed properties. Over 80% of the countries surveyed reported increased levels of interest from specialist funds from April to June. Investor demand rose most dramatically in Hungary, while RICS members also reported noticeable shifts in Italy and Poland, where demand is now back to positive. Asian commercial property markets also echo this global trend, as demand outstrips expected supply in Japan, China, Singapore and Hong Kong.

However, while demand for distressed properties is broadly increasing, expected supply still exceeds demand in 11 of the 25 countries covered by the survey.

* Distressed property: A distressed property is defined as a property that is under a foreclosure order or is advertised for sale by its mortgagee. Distressed properties usually fetch a price that is below their market value. An increased rate of distressed properties entering a country’s market can be seen as a negative economic indicator while a decrease may signal recovery.

For more information:

Kate Symons

PR Manager (secondment) - RICS Europe

T: +32 (0)2 739 42 27

M: +32 (0)479 35 43 38

E: ksymons@rics.org 

W: www.ricseurope.eu  

Gael Bassetto

Communications Assistant

T: +32 (0)2 289 25 30 

E: gbassetto@rics.org  

W: www.ricseurope.eu  

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