SELF-MANAGED super funds and private buyers are capitalising on the distressed assets that are hitting the market in Victoria.
Jeremy Gruzewski, Colliers International's director of investment services, said the balance of the distressed assets in Victoria came onto the market in the second half of last year. However, the number had been minimal compared with the northern states, he said.
According to Colliers research, 598 distressed properties were recorded on the market in 2010, compared with 775 in 2011 (not including properties under $1 million), a rise of almost 30 per cent.
Mr Gruzewski, who is also Victorian team leader for Insolvency Property Services, said self-managed super funds mostly wanted leased assets valued at $1 million-to-$3 million.
''The majority of development sites on the market are vacant possession, non-income producing sites,'' he said. ''There are also a lot of hospitality-based assets on the market in Victoria, such as hotels, pubs and clubs.''
Mr Gruzewski said investors were perceived to be waiting for prime, leased properties to become distressed. ''But these types of assets generally make a profit, so they will be waiting a long time - nine out of 10 won't become distressed,'' he said.
''Buyers with the ability and funds to redevelop and lease a vacant possession, non-income producing development site are the buyers with a real opportunity in the Victorian market.''
Colliers handled 200 distressed properties across the country last year - 21 per cent of national market share. Most were in Queensland (106) and New South Wales (84), with eight in Victoria.
Colliers estimates that those controlling distressed assets, such as banks and receivers, still have large portfolios to process and are expected to bring similar volumes to the market this year.
Matthew Meynell, Colliers NSW team leader for insolvency property services, said banks and receivers were gaining confidence in the depth of the self-managed super fund market.
''Any property that has a strong tenancy profile has attracted significant interest from this buyer group,'' he said. ''SMSFs are adopting traditional property fundamentals, being multiple income streams with an ideal mix of retail, commercial and residential assets.''
