Supply of distressed commercial properties to outstrip demand: Royal Institute of Chartered Surveyors

Alistair WalshFebruary 13, 20120 min read

Despite growing demand from investors for distressed listed Australian commercial properties, supply is set to easily exceed demand during the first quarter of 2012, according to research by the Royal Institute of Chartered Surveyors.

The report shows levels of distressed commercial properties on the market increased from quarter three to quarter four, the RICS Global Distressed Property Monitor found.

Globally, demand for distressed commercial properties increased as more distressed commercial properties entered the market.

The levels of increasing demand are unprecedented, according to the report, with 80% of the countries surveyed reporting increased investor interest.

“Indeed, in most cases the pace of rising demand picked up at a faster pace than previously seen,” writes RICS economist Matthew Edmond

“The rise in the number of countries reporting rising investor appetite for distressed assets may be viewed as an indication that prices in the market place are getting closer to offering value.”

Scandinavia, UAE, Italy, France and Japan led the push for increasing demand from investors, and only three counties surveyed reported decreasing demand.

Countries at the centre of the eurozone debt crisis are expected to have the fastest rising levels of distressed commercial property entering the market, with the Republic of Ireland, Portugal, Spain and Italy topping the list.

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“Given the ongoing and intensifying problems in Europe, it is little surprise that respondents in many of these countries are more pessimistic,” writes Edmond.

“The continuing debt crisis in the area is clearly adversely affecting sentiment, as property professionals in France and Germany also anticipate further rises in distressed selling.”

Ireland and southern European nations also top the list of countries where supply outstrips demand.

An expected fall in supply was reported by seven counties, two more than in the previous quarter, but the majority of respondents in Europe still expect supply to exceed demand.




Alistair Walsh

Deutsche Welle online reporter
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