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RICS: Distressed Sales Increase Worldwide Except Hong Kong with Little Change


RICS Research Commercial Property Distressed Sales Q2 2009

Hong Kong, Aug. 26 /PRNewswire-Asia/ -- Over seventy five percent of countries surveyed have seen a rise in distressed sales in he commercial property market, says RICS research published recently. A distressed property is defined as a property that is under a foreclosure order or is advertised for sale by its mortgagee. Distressed property usually fetches a price that is below its market value.

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During the second quarter of 2009, RICS surveyed members and other real estate executives in 27 countries across the globe to ascertain the volume of distressed sales in the commercial property market. Respondents in seventy five percent of the countries surveyed reported an increase in distressed sales compared to three months earlier. The biggest pick up in distressed sales was reported in South Africa, followed by the US, New Zealand and Malaysia.

Regarding situation in Hong Kong, Mr. Denys Kwan, spokesperson of RICS Hong Kong, said, "We do not see a rise in distressed sales in Q2 of 2009 for commercial properties following their growth in price in Q2. According to Government statistics, there was an average increase of about 10.4% from Q1 for the prices of Grade-A offices in core districts and around 8.8% for that of retail properties. Rent for the same period, however, dropped around 12-14% for offices and remained more or less the same level for retail properties. The quick recovery of the whole real estate market in Hong Kong was mainly due to the low deposit interest / mortgage rates. Banks on the other hand were very aggressive in expanding their mortgage market share, having failed in other sectors of the financial market."

RICS members work on both sides of any distressed property transaction. Consequently, the survey asked surveyors whether the level of interest from specialist funds in distressed properties was increasing. Unsurprisingly, the majority of agents are reporting a rise in specialist funds expressing interest in distressed commercial properties. One obvious reason for current interest must undoubtedly be the scale of property price declines which have occurred in some of these markets since the onset of the credit crunch drawing bargain hunters in. Furthermore property yields, compared to other asset classes, are starting to offer value in some markets when compared to historical averages which may start to attract the interest of long term equity players such as life and pension funds.

Full details of RICS Research Commercial Property Distressed Sales Q2 2009 and press releases can be downloaded from the website: http://www.ricsasia.org

About RICS & RICS Asia

RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 140,000 members globally and represents, regulates and promotes the work of property professionals throughout 122 countries.

The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.

The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information about RICS, please visit http://www.ricsasia.org .

Media enquiry, please contact:

RICS Asia Public Relations Representative

Ms Belinda Chan / Ms May Cheung

Tel: +852-2372-0090

Fax: +852-2372-0490

Mobile: +852-9379-3045 / +852-9099-2218

Email: belinda@creativegp.com / may@creativegp.com

Source: Royal Institution of Chartered Surveyors
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