Number of distressed commercial properties on market soars
The level of distressed Irish commercial properties coming to the market increased dramatically in the first half of this year -- but the level of international buyer interest in these has fallen.
In a survey of estate agents in 25 countries, the Royal Institution of Chartered Surveyors (RICS) ranks Ireland highest in terms of the proportion of agents recording distressed properties coming to the market in the first half of this year.
One Dublin agent, Paul McDowell, attributed this dramatic increase to the changed attitudes of the banks.
"Up to the end of last year there was very little activity but this year the banks have been biting the bullet and appointing receivers. This is a good thing as we need to get stuff on the market and take the hit as soon as possible," he said.
Mr McDowell, who is managing director of Knight Frank Ireland, was appointed by NAMA as receiver to a number of Dublin properties owned by Derek Quinlan and his family and agreed prices for the sale of five of them.
He declined to say which properties until such time as the sales are completed.
Commenting on the RICS survey he agreed with its findings but said he believed that other countries such as Spain may be ranked lower because they had not yet fully recognised the scale of their property problems.
The survey shows that interest by specialist funds in distressed Irish properties fell in the first quarter of this year to half the interest level seen in the last quarter of 2010.
Mr McDowell said this could be because of the uncertainty caused by the Government's yet-to-be-published legislation on upward-only rent reviews. But he also pointed out that very few properties had come to the market which would attract international investment funds.
"There's definitely international interest and this is reflected in the decision of investors such as London and Regional as well as Hines to set up offices in Dublin," he added.
The survey suggested that the supply of distressed property continues to outstrip demand in some countries, most noticeably in the Republic of Ireland, Italy and the UK.
RICS chief economist Simon Rubinsohn said: "It needs to be borne in mind that the results are very country-specific with generally negative numbers coming from those markets where the economic pain is most intense."