The Q1 2011 RICS distressed property monitor points to the largest rises in the number of distressed properties coming onto the market in Q2 in Spain and Ireland. Investment demand in Ireland will not be strong enough to absorb this space. In Spain, evidence that investment demand is rising means the situation is less clear. But if we are right that Spain’s economic recovery will lose traction this year, a rise in distressed sales poses a downside risk to the outlook for capital values.