More property buyers investing private wealth in distressed markets

Property buyers are investing an increasing share of their private wealth in distressed markets, with demand for real estate in struggling economies rising during the fourth quarter.

According to new research from the Royal Institution of Chartered Surveyors (RICS), the last three months of 2011 were accompanied by rising interest in distressed assets from investors in 21 of the 25 countries it looked at.

This was a significant rise from 19 in the third quarter.

Simon Rubinsohn, chief economist for RICS, said: "Given the ongoing and intensifying problems in Europe, it is little surprise that respondents in many of these countries are more pessimistic.

"That said, the rise up in the number of countries reporting rising investor appetite for distressed assets may be viewed as an indication that prices in the market place are getting closer to offering value."

For investors who want to place their money in distressed properties, particularly in the commercial sectors, real estate investment trusts provide them with a way of pooling funds with like-minded individuals and businesses to make more substantial purchases.

They also offer significant tax breaks.

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