Over 75% of the 27 countries surveyed by RICS saw a rise in fire sales in the commercial property market in Q2, according to a research report published this week by the UK-based organisation. The report also foresees transaction activity in distressed properties set to rise in 2010 'as interest from specialist funds gains traction'.

Over 75% of the 27 countries surveyed by RICS saw a rise in fire sales in the commercial property market in Q2, according to a research report published this week by the UK-based organisation. The report also foresees transaction activity in distressed properties set to rise in 2010 'as interest from specialist funds gains traction'.

The biggest pick up in distressed sales in Q2 was reported in South Africa, followed by the US, New Zealand, Malaysia and Hungary with the Caribbean, Ireland, Spain, Russia and the Ukraine making up the remainder of the top 10.

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.

Those markets at the forefront include Italy and the UK, with Germany, US, Hungary, Spain and Ireland closely behind. RICS attributed the growing interest of bargain hunters to the scale of property price declines which have occurred in some of these markets since the onset of the credit crunch. 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, the report concluded.

RICS also asked member firms and agents to comment on the speed at which they thought banks are foreclosing on commercial property deals compared to three months earlier. Less than two in 10 respondents on average are reporting a rise in the speed at which banks are foreclosing compared to three months earlier.

Commenting, Oliver Gilmartin, RICS senior economist said: 'The number of distressed properties coming to market rose across every global region in the second quarter although record low interest rates may be limiting the pain for some landlords. Falling rents and rising corporate bankruptcies are likely to increase the incidence of distressed properties in the coming quarters as problems for landlords in meeting income covenants pick up and refinancing costs remain elevated.'