LONDON-Interest in distressed property is rising dramaticallyworldwide, especially in Ireland, the US and Spain, says a newreport by the UK-based Royal Institution of Chartered Surveyors. In3Q10, only Russia saw an easing in specialist interest indistressed assets.

In its Global Distressed Property Monitor, RICS found that 20countries experienced increased interest in distressed propertiesin the third quarter, compared to 11 in 2Q10. While overall,distressed listings fell or grew at a slower pace across mostmarkets in 3Q10, with the exception of New Zealand, Italy, Spain,the UAE and Czech Republic, respondents expect distressedproperties coming onto the market in 4Q10 to increase across 16 of25 countries surveyed—a rise of two over 2Q10. Professionals expectIreland, the US, UK, Spain, Portugal and Hungary to show thebiggest rises. Conversely, much more positive news comes from HongKong, and significant falls are also expected for Russia, SouthAfrica, Brazil and Germany—the latter experiencing the most notableturnaround in sentiment.

RICS senior economist Oliver Gilmartin commented: “With thecommercial property recovery faltering across several countriesthere is expectation that banks might be becoming less lenient inextending terms for real estate loans. Renewed falls in rentalvalues may also be making banks more nervous as to the size ofproperty loan books... Ultimately banks hold the key as to how ...distressed property listings will evolve in the coming year.”