DISTRESSED sales of commercial property are on the increase across the world, according to a new survey.
The Royal Institution of Chartered Surveyors (RICS) asked for feedback from real estate executives in 25 countries.
The study showed that 80% of the countries had seen an increase in distressed sales during the third quarter of this year.
The biggest pick-up in distressed sales was reported in South Africa, followed by the US, Portugal and France.
But the pace of increase moderated across the majority of markets compared to the second quarter. And China, Hong Kong and Brazil reported a decline in the number of distressed properties coming on to the market.
Real estate professionals expect the number of distressed properties coming onto the market to increase into the fourth quarter across 19 of the 25 countries surveyed.
Russia, US, Spain and Ireland are expected to see the biggest rises with New Zealand, Italy, Malaysia and Germany next in line. However, surveyors are more optimistic in Brazil, Hong Kong and India, and expect fewer distressed property listings in these countries.
RICS members work on both sides of any distressed property transaction and the study asked surveyors whether the level of interest from specialist funds in distressed properties was increasing.
Levels of interest rose across 18 out of 25 countries and at a faster pace than the previous quarter with China, Russia, Australia, India and Ukraine leading the way.
RICS also asked member firms and agents to comment on the speed at which they thought banks are foreclosing on commercial property deals, compared to three months earlier. The respondents suggest, that, as yet, banks are not overly hasty on foreclosing on properties in breach of loan agreements, with fewer than two in 10 surveyors reporting an increase in the speed of foreclosure, which was in line with the previous quarter.
Oliver Gilmartin, RICS senior economist, said: “Distressed property listings are likely to become a bigger feature of the global property landscape in the coming year as loan refinancing, and improved pricing in some markets, provides a window of opportunity for banks to manage down some of their property loan exposure.”
