LONDON-Interest in distressed property is rising dramatically worldwide, especially in Ireland, the US and Spain, says a new report by the UK-based Royal Institution of Chartered Surveyors. In 3Q10, only Russia saw an easing in specialist interest in distressed assets.

In its Global Distressed Property Monitor, RICS found that 20 countries experienced increased interest in distressed properties in the third quarter, compared to 11 in 2Q10. While overall, distressed listings fell or grew at a slower pace across most markets in 3Q10, with the exception of New Zealand, Italy, Spain, the UAE and Czech Republic, respondents expect distressed properties coming onto the market in 4Q10 to increase across 16 of 25 countries surveyed—a rise of two over 2Q10. Professionals expect Ireland, the US, UK, Spain, Portugal and Hungary to show the biggest rises. Conversely, much more positive news comes from Hong Kong, and significant falls are also expected for Russia, South Africa, Brazil and Germany—the latter experiencing the most notable turnaround in sentiment.

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